Making the Most Of Customer Complaints

Dealing with service failures means a lot more than just

fixing the immediate problem. Here's how to do it right.
By 
STEFAN MICHEL, 
DAVID BOWEN and 
ROBERT JOHNSTON
September 22, 2008

Nobody's perfect. That's a fact, not an excuse.

Which is why it's crucial for companies to realize that the way they handle customer complaints is
every bit as important as trying to provide great service in the first place. Because things happen.

Customers are constantly judging companies for service failures large and small, from a glitch-ridden
business-software program to a hamburger served cold. They judge the company first on how it
handles the problem, then on its willingness to make sure similar problems don't happen in the future.
And they are far less forgiving when it comes to the latter. Fixing breakdowns in service -- we call
this service recovery -- has enormous impact on customer satisfaction, repeat business, and,
ultimately, profits and growth.
PODCAST: Thunderbird's Stefan Michel describes what he calls the Titanic effect -- when a company believes it's not subject to customer-service
problems -- and how to tell if your company has this mind-set.
 Listen to the podcast
ONLINE DISCUSSION: At your company, do tensions between departments get in the way of dealing with service problems? What strategies can
address that and foster effective service-recovery management? Share your thoughts in a forum with Stefan Michel.
 Share your thoughts in a forum with Stefan Michel
The Journal Report
 See the complete Business Insight report.
But unfortunately, most companies limit service recovery to the staff who deal directly with
customers. All too often, companies have customer service sort out the immediate problem, offer an
apology or some compensation, and then assume all is well. This approach is particularly damaging
because it does nothing to address the underlying problem, practically guaranteeing similar failures
and complaints.

What businesses should be doing is looking at service recovery as a mission that involves three
stakeholders: customers who want their complaints resolved; managers in charge of the process of
addressing those concerns; and the frontline employees who deal with the customers. All three need
to be integrated into addressing and fixing service problems.

Tensions naturally arise in and among the groups. For example, customers can be left feeling that
their problem wasn't addressed seriously, even when they've received some form of compensation.
 Service reps can start seeing complaining customers as the enemy, even though they point out flaws
that need fixing.

Managers in charge of service recovery, meanwhile, can feel pressure to limit flows of critical
customer comments, even though acting on the information will improve efficiency and profits.

However, successfully integrating these three perspectives is something that fewer than 8% of the 60
organizations in our study did well.

Based on our research and our own years of work in service management, here is a look at the three
stakeholders in service recovery, focusing on their different perspectives and the tensions that arise
among them. We then make recommendations on how to address these tensions and integrate the
aims of all three to achieve better -- if not perfect -- service.
The Customer

Fairness is typically the biggest concern of customers who have lodged a service complaint. Because
a service failure implies unfair treatment of the customer, service recovery has to re-establish justice
from the customer's perspective.

Say a bank customer requests a deposit receipt from an ATM but the machine fails to print one. The
customer becomes worried and goes to one of the bank tellers. The teller checks the account, and
assures the customer that there is no problem, that the deposit was made. But if the teller only
focuses on the fact that the account was credited, he or she has ignored what in the customer's view
was the most severe and critical aspect of the service failure: the worry initially felt, and the extra
time it took to verify the deposit.

More Management News & Ideas

WSJ.com has a newsection devoted to management issues , with expanded coverage. Highlights this week include:
 Why crises catch boards off guard
 Macy's CEO's favorite leadership books
 Jeffrey Pfeffer: Executive, Blame Thyself
 Podcast: Charles Elson, governance expert and board member, on preparing for crisis
Customers often want to know -- within a reasonable time -- not only that their problem has been
resolved, but how the failure occurred and what the company is doing to make sure it doesn't happen
again.

A customer's faith can be restored using this kind of approach -- once. We have even noted
something referred to as a "recovery paradox," in which customers can be more delighted by a
skillful service recovery than they are by service that was failure-free to start with.
 But there is a flip side to this as well: Customers have more tolerance for poor service than for poor
service recovery. And if a customer experiences a second failure of the same service, there is no
recovery strategy that can work well. In all likelihood, that customer will be lost forever.

Our research suggests that after a failed service recovery, what annoys -- and even angers --
customers is not that they weren't satisfied, but that they believe the system remains unchanged and
likely to fail again.

For Further Reading

See these related articles from MIT Sloan Management Review.

 Linking Customer Loyalty to Growth

By Timothy L. Keiningham, Lerzan Aksoy, Bruce Cooil and Tor Wallin Andreassen (Summer 2008)  
The authors argue that there is no single metric that equates the entire customer experience. 

http://sloanreview.mit.edu/smr/issue/2008/summer/14/
 Listening to the Customer: The Concept of a Service-Quality Information System
Leonard L. Berry and A. Parasuraman (Spring 1997) 
The authors advocate a listening system that uses many research approaches in combination to capture, organize and disseminate information. 

http://sloanreview.mit.edu/smr/issue/1997/spring/5/
 Understanding Customer Delight and Outrage
By Benjamin Schneider and David E. Bowen (Fall 1999) 
The authors base their conceptualization on people's needs rather than the more conventional model that focuses on customer expectations about their

interactions with a firm. 

http://sloanreview.mit.edu/smr/issue/1999/fall/3/
 Recovering and Learning From Service Failure
By Stephen S. Tax and Stephen W. Brown (Fall 1998) 
Effective service recovery is vital to maintaining customer and employee satisfaction and loyalty, which contribute significantly to a company's revenues

and profitability. 

http://sloanreview.mit.edu/smr/issue/1998/fall/6/
 Giving Customers a Fair Hearing
By Anthony W. Ulwick and Lance A. Bettencourt (Spring 2008) 
The authors studied 10,000 customer need statements from many industries and discovered that companies have not even established a definition of what a

customer need is or how user input should be standardized in terms of structure and format. 

http://sloanreview.mit.edu/smr/issue/2008/spring/14/
The Manager

The chief aim of managers in service recovery is to help the company learn from service failures so it
doesn't repeat them. Learning from failures is more important than simply fixing problems for
individual customers, because process improvements increase overall customer satisfaction and thus
have a direct impact on the bottom line.

But companies generally obtain and study only a fraction of the service-failure data that could be
gathered from customers, employees and managers. Even when managers agree that customer
feedback is essential, there is often poor information flow between the division that collects and deals
with customer problems and the rest of the organization.

In some cases, one study revealed, the more negative feedback a customer-service department
collects, the more isolated that department becomes, because it doesn't want to be seen by the
company at large as a source of friction. Some companies even create specialist units that can soak
up customer complaints and problems with no expectation of feeding this information back to the
organization. Others actually impede service recovery by rewarding low complaint rates, and then
assuming that a decline in the number of reports indicates customer satisfaction is improving.

Some managers in our study saw conflicts between providing great customer satisfaction and
achieving high productivity. For instance, incentive structures sometimes placed equal values on
sales and on customer service. But as one manager noted: "If you want to achieve 100%
[satisfaction], you don't have time for selling. It's questionable whether you can score 100% on
service quality and 100% on [sales] objectives."

In any kind of business, there comes a point at which a service recovery can become excessive in the
company's eyes, and be seen as giving away the store. However, many customers don't want a
payoff. They simply want to have their problem fixed and to be reassured that it won't happen to
other people in the future.
The Employee

Frontline service employees have the greatest job satisfaction when they believe they can give
customers what they expect.

These workers have the difficult task of dealing with customers who hold them responsible even
when the failures in question are completely out of their control. The attitudes of customer-service
workers, positive and negative, spill over onto customers.

Yet companies do surprisingly little to support them.

To be successful, these workers need to feel that management is providing the means to deliver
successful service recovery on a continuing basis. Alternatively, when employees believe
management doesn't support them, they tend to feel they are being unfairly treated and so treat
customers unfairly. They display passive, maladaptive behaviors and can even sabotage service.
 This alienation is compounded when the workers believe that management is not improving the
service-delivery process, which keeps employees in recurring failure situations. Even though
complaining customers represent an opportunity to fix problems and improve satisfaction, alienated
employees often see them as the enemy. In a study of a major European bank, employees in
Switzerland consistently indicated that they did not consider reports of missing account statements to
be complaints. As one said: "These things happen. There is nothing we can do about that."

At companies that reward low complaint rates, frontline employees become tempted to send
dissatisfied customers away instead of admitting a failure has occurred.

Craig Frazier
Resolving the Tensions

Our experience with managers interested in improving service recovery indicates that most hope for
a quick fix of some specific tensions. But quick fixes only treat the symptoms of underlying
problems. Real resolutions should involve closer integration among the three stakeholders, such as
gathering more information from customers and sharing it throughout the company, and adopting
new structures and practices that make it easier to spot problems and fix them.

We suggest the following five strategies:

 Create a "service logic" that explains how everything fits together. This should be a kind of mission
statement or summary of how and why the business provides its services. It should integrate the perspectives of all
three groups:

What is the customer trying to accomplish, and why?

How is the service produced, and why?
What are employees doing to provide the service, and why?
The results should serve as a guide both for delivering service and for help with service recovery. It
should include a detailed study of internal operations; map out how the company responds to
 customer complaints; and describe how the company uses that information to improve service-
recovery processes. Similar mapping should detail every step of customer experiences, including
those of real customers with complaints, highlighting their thoughts, reactions and emotions along
the way. Highly skilled managers and employees who can think outside the box are a must.

TNT NV, a Netherlands-based global delivery company, developed a service logic to help it grow in
a mature market. Using a small, high-powered management team backed up by customer discussion
forums, the company mapped its processes from a customer point of view, including a map of
customer emotions during both regular processes and service recovery. The mapping exercise and the
service logic that it produced led to a redesign of processes by managers and field staff that cut
across traditional functional boundaries.

For example, previously a driver running late for a scheduled delivery had to call into the control
center, which would then contact customer services, which would then contact the customer. Such
calls often arrived after the delivery already had been made, thus further annoying the customer and
embarrassing the driver. Since the process redesign, however, a driver running late is allowed to
contact the customer directly. TNT drivers frequently visit the same customers almost every day, so
their customers know them and appreciate the personal contact. The drivers also appreciate being
able to make the calls directly.

 Draw attention to the successes of customer-service groups. Companies use in-house publications,

intranets and training programs to share stories that emphasize their values and culture. Employees who come up
with cost-saving ideas, for example, are often singled out for praise. But rewards and recognition also should flow to
heroes in service-recovery stories. Such heroes can be on the operations side, helping to develop cost-efficient
systems for handling complaints, and on the marketing side, giving a customer extraordinarily helpful treatment
after a service failure.

Recovery Mode
 The Issue: Every business can expect complaints from customers. It's how a business handles the complaints that matters most, and many do
so poorly.
 The Problem: When companies don't give upset customers a fair hearing or some assurance that the problem won't happen again, they are
putting repeat business, profits and growth at risk.
 The Solution: The key is to address tensions that arise among front-line employees who handle complaints, the managers of those
employees, and the customers themselves. Steps include starting a complaints database that managers can analyze and use to improve service, and
rewarding service employees not for reductions in complaints but for providing exceptional solutions to problems.

Singapore Airlines Ltd. C6L.SG +0.67% , in its in-house magazines, frequently tells stories about

employees who have provided not only outstanding service, but exceptional service recoveries.
Senior managers, too, will not hesitate to swoop in anywhere there is an issue, creating more stories
about internal vigilance.
When customer-service employees believe that their goals are in line with the organization's values,
they are more willing to exert the extra effort required in a failure-and-recovery situation.
 Give customer-service staff as much freedom as your business strategy allows.When a business has
very few routines and its ties to customers are based on individual relations, service representatives should have
more autonomy in resolving complaints. For such businesses, spending more time on service recovery -- and
retaining customers -- has a clear effect on the bottom line. By contrast, in a highly standardized business with
purely transactional customer relationships, such as a fast-food restaurant, employees should adhere to procedures in
resolving complaints. Customer satisfaction in such businesses is closely aligned with high productivity, so there is
less to be gained by customizing resolutions of complaints.

Ritz-Carlton, for example, the luxury brand of Marriott International MAR -0.23% Inc.,

authorizes personnel at the front desks of its hotels to credit unhappy customers up to $2,000
without asking a supervisor's approval. On the other hand, in one of our consulting projects, a
client reacted very negatively to this approach, claiming that such a policy would be too
expensive for his company. We replied that the high cost of poor service is exactly what makes
this system work so well: It forces management to eliminate service failures in the first place.
 Collect as much data as you can, and share it widely. Companies must gather more feedback about poor
service, record it and make it accessible. Managers and other employees have to be armed with strong information to
be effective at resolving disputes.

It should be easy for customers to file complaints. One way to achieve this is by offering many
communication channels. A regional airline in Asia, for example, uses annual passenger surveys,
interviews with frequent fliers, focus-group discussions, customer hot lines, critical-incident surveys,
onboard suggestion leaflets and even live call-in radio shows.

Software should be used that serves as a database for both positive and negative communications
with customers. Employees and managers should be trained to mine the data and put it to use easily
and quickly.

 Use meaningful measures of employee performance -- rewards and demerits. Positive reinforcement

and incentives should be offered for solving problems and pleasing customers. A system for measuring customer
satisfaction should be devised to help rate employee performance. Salary increases and promotions then should be
linked to an employee's achieving certain levels. There also should be disincentives or demerits for poor handling of
customer complaints. Performance reviews thus may include a balanced scorecard -- one that recognizes the need
for both productivity and customer satisfaction.

—Dr. Michel is associate professor of marketing at Thunderbird School of Global Management,

Glendale, Ariz. Dr. Bowen is the Robert and Katherine Herberger chair in global management and a
professor at Thunderbird. Dr. Johnston is professor of operations management at Warwick Business
School, University of Warwick, Coventry, England. They can be reached at reports@wsj.com.
Make Your Travel Complaint Count

While traveling, there's always a risk that you will

encounter problems beyond your control -- tour
operators go out of business, hotel rooms fail to measure
up to their star ratings and airlines leave passengers
stranded on the tarmac. But what can you do if one of
these disasters happens to you?

When the worst happens, it's important to know where

you can turn to make a complaint, particularly if the
company concerned has failed to resolve a situation to
your satisfaction. Read on to see which agencies can help if you have a complaint about your trip --
and what you can do to prevent problems in the first place.

 Hotel Complaints
The best way to avoid a crisis at your hotel is by doing your research before you
book.TripAdvisor.com and every major booking site offer millions of first-hand reviews from real
travelers that can alert you to potential problems.

If something goes wrong after you book and you need to make a complaint, it's important to know
your rights. Read What's in a Hotel Guarantee? to find out what you're entitled to when you feel
mistreated by a hotel.

Make your complaint immediately, while you're still at the hotel. It's nearly always more effective to
talk to someone in person than to call an 800 number a few weeks later and speak with a customer
service agent who wasn't in any way involved with the incident. If your complaint involves problems
with your room -- such as bed bugs or uncleanliness -- snap a few photos to help bolster your
case.

If the hotel can't resolve your complaint immediately, continue to follow up by phone or e-mail after
you return home. As a last resort, you can bring your dispute to the Better Business Bureau in
the U.S. or Canada (or your own country's local consumer protection agency).

 How to Take On Travel Trouble

 Airline Complaints
Unfortunately, air travelers seem to have plenty to complain about these days. We've put together
guides to help you deal with some of the most common problems, including lost or delayed
luggage, overbooked flights and airport delays. For a more comprehensive overview of air
travel problems and solutions, see our review of airline passenger rights.

Many travelers don't think to check an airline's reviews and ratings before booking the same way
they check a hotel's, but it's a good idea -- and there are a number of sites out there to help,
including AirlineQuality.com and the aforementioned TripAdvisor.com.

We always recommend programming your airline's phone number into your cell phone so that you
can call immediately if there's a problem during your trip. Don't wait till you get home to make your
complaint; if your checked bag goes missing, for instance, file a claim before you leave the airport.

If you've followed up with your airline by phone or e-mail and still can't get a satisfactory resolution,
you can take your complaint to the Aviation Consumer Protection Division of the U.S.
Department of Transportation. In Canada, you can try the Canadian Transport Agency;
elsewhere in the world, seek out your government's transportation agency.

 Travel Agent and Tour Operator Complaints

Most travel agencies are legitimate businesses that are extremely helpful when planning a trip.
However, there are always horror stories about agencies that open for a week and take thousands of
dollars from unsuspecting clients only to completely disappear a week later. Although cases like this
are rare, you should be aware of them. We recommend booking only with agents that are part of a
professional organization, such as the American Society of Travel Agents (ASTA) or
theAssociation of Canadian Travel Agencies  (ACTA). These organizations can also help
mediate if a dispute arises that you and your agent can't resolve.

When choosing a tour operator, check to see whether

the company you're interested in belongs to a
professional organization such as the United States
Tour Operators Association (USTOA) or
the Canadian Association of Tour
Operators (CATO). These tour operators tend to be
more legitimate and financially stable -- and less likely to
go out of business, taking your hard-earned money with
them. We also recommend checking the company's
record with the Better Business Bureau to see how it's
dealt with past complaints.

The USTOA, CATO and the BBB are also three organizations you can turn to for mediation if you
run into a problem with your tour operator.

 Eight Tours for People Who Don't Like Tours

 Car Rental Complaints

Before you rent, know which hidden costs you can expect to be added to your bill, and carefully
read the terms and conditions of your rental agreement. If you have a complaint about treatment you
received when renting a car, handle it in the same way you would if it were any other business -- call
the Better Business Bureau in your area or file a complaint online.

 Credit Card Disputes

If you made a travel purchase with your credit card, always check your bill carefully, particularly
whentraveling abroad. If you cancel reservations and are promised a full or partial refund, be
certain that your account was not billed. If you do see an error on your bill, contact the merchant
immediately to try to resolve the issue.

If you can't, notify your credit card company in writing within 60 days of when the statement
containing the error was mailed to you. The company must respond to your letter within 30 days and
then has 90 days to resolve the dispute.

For more information, see the Federal Trade Commission's page on fair credit billing.

 Get Our Best Travel Deals and Tips!

 Tips for More Effective Travel Complaints

 Consider purchasing travel insurance, which can protect you from many mishaps including
baggage loss, flight delays or cancellations, and tour operator default. But be sure to read the fine
print -- not all policies cover all potential losses.

 Confirm every part of your trip -- including flights, hotel bookings and car reservations -- a few
days before you leave. This will give you a little bit of time to make other arrangements if you
encounter a problem. (For more ideas, see 10 Things to Do Before You Leave Home.)

 In the unfortunate event that something does go wrong, be sure to lodge your complaint
immediately -- preferably before you leave the airport, hotel front desk or car rental counter. Ask to
speak with a supervisor if necessary. If your dispute can't be resolved in person, write down the
names of anyone you spoke with, and keep all receipts, confirmation numbers, tickets and other
documentation.

 Continue to follow up with your travel provider by phone, e-mail or written correspondence. State
your complaint clearly, mention what you perceive the resolution to be, and try to be as polite and
friendly as possible. Keep a log of all conversations and correspondence, including dates, names
and what was said.

 In this new age of social media, disgruntled customers have more

options for dealing with disputes than throwing themselves at the mercy
of an airline call center. More and more travelers are airing their
complaints in their blogs, on their Facebook or Twitter accounts,
ontravel message boards, in YouTube videos and beyond. An
airline that's been refusing to listen to your calls just may perk up and
take notice if you start broadcasting your complaint to hundreds or
thousands of people. (See How Social Media Is Changing
 Travel for more on this trend.)

 Share Your Travel Gripes on Our Message Boards

 If all else fails, take your complaint to small claims court. You don't need a lawyer and it's much
easier than filing a lawsuit. Often, you can take on hotels and even airlines in their operating
jurisdiction. Visit your county office of consumer affairs for further information.

--updated by Sarah Schlichter

How to Complain at a Hotel

Get satisfaction when you have a valid complaint during your hotel stay
By Charlyn Keating
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Even in the best hotels, things go wrong occasionally. Patience, persistence, and smile go a long way toward getting results when
you have a valid complaint at a hotel.
Identify the Problem
Make sure you can explain the problem clearly and concisely. Don't exaggerate; be honest and tell it like it is. Get evidence if you
can. A photo snapped with your cell phone can be a powerful image.

If it's just a small annoyance, consider letting it slide. Life is short, and that goes double when you're on vacation. Save yourself
some stress by picking your battles, keeping your sense of humor and being flexible when faced with a minor issue you can live
with.

Identify the Solution

Before you complain, figure out what your expectations for solution are. Do you need something fixed in your room? Need a new
room assigned? What's your timetable?

Be realistic about compensation for problems. You shouldn't pay for services you didn't receive. But you are unlikely to have
your entire stay comped because because one thing was not working in your room.

One helpful approach is to tell the manager that you are not looking for compensation, you just wanted to let him/her know there
is a problem so it can be addressed.

Time Your Complaint

Complain as soon as you know there is a problem. Don't wait until the next day or when you are checking out. Still, if there's a
long line at the front desk and all the phones are ringing, you may want to delay until a quieter time so attention can be paid to
your problem.

Complain in Person
Don't call the front desk with your problem. Go down in person and talk face to face. Explain the situation and let them know
what your expectations are. Keep your story short and to the point.

Remain Calm
Be polite and calm. Even if you feel frustrated or angry, never raise your voice or lose your cool. A smile goes a long way toward
helping people want to help you. Losing your temper will make the situation worse, and may even get you escorted out of the
hotel. Tell your story once, without exaggeration or drama ("My whole trip is ruined!"), and what you'd like done about it, and
wait for a response.

Find the Person With the Power

You should be able to determine fairly quickly if the person you are speaking to is willing and able to fix the problem. If not, ask
for the manager on duty or GM (general manager). Calmly and candidly explain the situation to the manager and what you would
like done. Let them know who else you've talked to and when.

Be Patient
In many cases, the situation can be resolved right away. Hotel staff are in the customer service business, and for the most part,
they want you to be satisfied. Keep in mind that some problems are beyond their control, and some take time to fix. If you have a
specific time frame (e.g., you have a dinner meeting and need to use that broken shower); ask them for a backup plan (use of a
shower in another room or in the spa).
 Be Persistent
If you are speaking to the right person (the one with the power to fix the problem), and they seem unwilling to do so, ask again,
and then a third time. Remain polite and keep your cool, and be persistent in stating your need for a solution.

Be Flexible
If they can't offer the fix you requested, consider any alternate fixes they've offered with an open mind. Is it really going to ruin
your entire vacation if you don't have a view of the pool as you imagined? Keep your sense of humor and focus on the positives.

Take It Home
It's best to resolve the problem when you are still at the hotel. If for some reason they can't fix the problem to your satisfaction
while you are in the hotel, keep notes of what happened, who you talked to, when, and what was said. Once at home, you can
dispute the charges with the credit card company (always pay with one) and write a letter to the General Manager of the hotel.
You should expect a reply within a couple of weeks with an apology, a partial refund, or an invitation to return to the hotel at a
reduced rate in the future. If the hotel is part of a chain, don't escalate your letter writing to the CEO unless you are unable to get
a satisfactory response from the hotel staff.

Even if you have a complaint, remember: hotels (and the people who work in them) aren't perfect, and things go wrong more
often than any of us would like. If you find a hotel that solves your problems efficiently, show them your appreciation by
becoming a repeat customer.

Hotel Horror Stories: Real Guest Complaints

 Dirty, Dirty Hotels

 Surprise! Unexpected Charges
 Uncomfortable Rooms, Uncomfortable Beds
 Not Getting the Room You Reserved
 Bugs, Bats and Other Critters
 Noisy Rooms, Noisy Guests
 Items That Go Poof! Stolen From Rooms
 What's With the 'Tude? Rude Hotel Staff
Hotel Secrets
 Keys to a Room Upgrade
 Save Money in Shoulder Season
 Never Book a Hotel With a Debit Card
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Smoky Surprise
"We were surprised and disappointed to learn that ALL the rooms were smoking rooms, and it was
obvious. The person at the desk gave us a can of spray (wow!) and our attempt to neutralize 20 years
of flaming tar and nicotine fell pathetically short." -Brad (Michigan)
One Word: Fungus
"There was actually a mushroom fungus growing on the carpet under the sink." -A. Evans (Virginia)

Unmade Bed
"Check in was the best part. After that we got to our room right away we noticed the jacuzzi was
filthy. My husband and I pulled the covers back and it was obvious the sheets had not been changed,
there was hair and trash all over the bed and a roach fell out of the bed linen. The pillows had dark
yellow stains and even blood. We were offered a new room but they were not better, but worse."
-Sissy (Arkansas)

Itchy Hives
"I took my 7-year-old son swimming. He swam for 1-1/2 hours, not straight, he got in and out quite a
few times. That night my son itched all through the night, almost to the point where it was waking me
up and annoying me. The next morning, my son was still itching and i lifted his shirt and his whole
body was broke out in these HUGE hives. Needless to say we spent the next 3-1/2 hours in the
emergency room!!! I have e-mailed [the hotel] twice and have received no response. They're not
trying to make the situation better whatsoever." - TanyaB (Minnesota)

Mysterious Goo
"As I dried my hair after my shower, I noticed there was a patch of something that was white, and
gooey, sliding down the wall behind the TV and behind the dresser. When I say behind, it's not like it
was hidden. It looked like something the consistency of hair conditioner, yet organic. I had no desire
to touch the substance or try to identify it. I fought back the vomit, and notified the front desk."
-Brrrse454 (Mississippi)

Pool Scum
"Pool had scum on the sides so bad, people had written their names and messages in the residue of
the scum." -Pat (Indiana)

Afraid to Fall Asleep

"This place is absolutely filthy. There were splatters on the walls which I don't even want to imagine
what they are from. As soon as nighttime came around, roaches came out of just about every nook
and crack. I was afraid to fall asleep. In the bathroom I didn't even want to touch anything because
everything was so dirty." -Cwoods (Oklahoma)

The Worst Kind of Flood

"We walked into our two-bedroom suite to be greeted by an awful and overwhelming smell. The
carpets in the master bedroom and walk-in closet were wet and filthy. By late afternoon on day two
we went to the desk only to be told there was nothing they could do. As I was walking back to my
suite another guest approached me and asked what room I was in, she then proceeded to inform me
that she overheard the staff at the desk talking about the room that had been flooded from a plugged
toilet! Not only were we disgusted and shocked, we were stunned that they would knowingly put us in
room with bacteria filled, untreated carpets with our infant and pre-schooler. Management offered to
comp the stay and add on four days if we kept the room and they ripped out the carpet in the closet
and treated the bedroom properly. We agreed and then endured three more days of hell. They ripped
out the carpet and underlay, leaving us with a dirty, noisy fan to dry the room. Came back to replace
the underlay, and then, if you can believe this...brought back the old carpet and put in back in. The
smell was enough to make you ill." -Tickedoff (Alberta, Canada)

Pink Slime??
"Our room was appalling. The carpets were very dirty and covered in dark stains, the A/C was loud,
the bathroom was nasty, there were chunks missing out of the bath tub, the dirt was pushed to the
edges of the bathroom floor and left there, the bath mat was grey in several places, the bathroom
walls had really bad water damage that was simply painted over, there was this pink slimy type of
mold growing on the bathroom door hinges, there were cigarette burns in the comforters, and a
cockroach scurried across the counter when we turned the light on. I yelled at the poor guy at the
front desk as he refunded our credit card and we checked out! We were so disgusted. Our six-year-old
son now refers to all [of this chain] as cockroach motels." -April (California)

Work On Your Aim

"When we turned on the A/C it smelled of urine. The next week we got another room there which
smelled like a men's room and we asked to be moved to another room. The third room was cleaner
but also smelled when we turned the A/C on. We discovered that many people had relieved
themselves on the balcony outside the rooms which accounted the stench. My husband commented
that they may have been trying to piss into the pool below (needless to say we elected not to swim
there). Apparently people were [also] using the walkways as a bathroom." -Sfumato (Las Vegas)

More Hotel Horror Stories: Surprise! Unexpected Charges

Uncomfortable Rooms

Hotel Guests Complain About Uncomfortable Rooms

By Charlyn Keating

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 guest reviews

 hotel secrets

Kristi, Tell Us How You Really Feel. Don't Hold Back.

"Their 'Signature Dream Cloud Bed' was more like a 'Signature Nightmare Slab of Spring-Filled Crap.' This
room was little more than a Motel 6 with a down comforter." -Kristib77 (Lake Tahoe)

Tiny Room
"The room was TINY and I'm not talking single bed tiny, I'm talking that my luggage wouldn't fit through
the door tiny. I was put in a closet basically. I asked for a better room and they gave me one that was
supposed to be 'bigger' but just slightly. The hotel wasn't full in the least, which makes me wonder why
they'd stick someone in a closet if you have other rooms available. The pictures on the [hotel's] website
are a joke. The rooms they show don't exist there." -Dissatisfied (Chicago)

Even Tinier Room

"The room was so small you had to go outside to change your mind (old gag --sorry)." Brad (Michigan)

Sleeping on Rocks and Bricks

"The beds were held up with bricks. There was food under the beds, in the corners, and in drawers. The
beds were hard as rocks." -Haley (Michigan)

Antique Furniture: Good. Antique Mattress: Bad.

"The room was clean, but the mattress should be replaced! The springs were broken and it was very
uncomfortable. Had a horrible backache for days after sleeping there! We couldn't wait to leave. They
had remodeled but failed to replace the most important thing being the mattress! Never again! A
horrible night!" -Reggie (New Mexico)
Just How Old WAS That Wallpaper?
"The pictures were deceiving to say the least. The [hotel] has updated the casino, as well as all of the
restaurants and clubs, but I assure you, the room was STILL circa 1979. The salmon and mauve walls
matched the green shag carpet perfectly. I am certain the wall paper was older than me. The toilet
didn't work, constantly running, and only flushed once in a awhile. The one-foot deep 'Jacuzzi' stunk to
high heaven upon starting up the jets, like mildew. Silly me, I assumed there would be, at the very least,
a coffee pot in the room being that I paid $200 a night, but I was sorely mistaken. I made the trip down
the elevator each morning and dropped $20 on Starbucks. Coincidence they placed a Starbucks there? I
think not. The other hotel patrons waiting in line for coffee at 7:00 am in their pajamas were not happy
either. I'll bet that location is a top earner for Starbucks! As far as their 'Aveda' amenities, that they
were. One tiny, TINY, bottle of shampoo and conditioner, and the smallest bar of soap known to man.
The towels felt like sandpaper, I almost opted for using the box of Kleenex to dry off." -Kristib77 (Lake
Tahoe)

This Room Costs How Much??

"The evening clerk was very rude! She swiped my debit card, and punched in $54,000 instead of the
room rate. She proceeded to say out loud, so others heard, that my card was rejected. There was
enough money in the account for this expense. It was her fault and it cost me later on in my trip.
When I traveled to another state, I had problems using my card for my rental car and a restaurant! I
called the management to complain, but to no avail. Finally, told them that I will never stay there
again, and that I would spread the news of my bad experience." -Sue B. (Michigan)

Bait and Switch

"The booking agent at the hotel, over the telephone, is working a classic 1960s scam involving
charging extra to upgrade to a better room only to find out upon arrival it's a very poor room. Upon
requesting the original room and rate one is then told it was discounted anyway and is now $60 a
night more. Absolutely despicable management and potentially illegal activity." -Tony (England)

Charged More for More People

"This location is a disgrace to the company name and image. We reserved a room for four people via
[the hotel's] website. Upon arriving at hotel was told additional charge was to be added to the rate,
due to having extra people in the room. We were told that they could not honor the rate and it was
just a suggestion. We only had four people as the reservation was made for. Hotel attempted to
charge us extra money on top of the rate for having four people. After arguing with them for over 20
minutes, we finally were refunded the extra money and proceeded to the room." -Wisconsintravler
(Wisconsin)

Uptight Owners
"The owner has strategically placed tiny notes all over the hotel telling guests how to conduct
themselves AT HER hotel. The owner actually called me on my cell 1 hour after I left and accused me
of smoking in the room and tried to charge me $275 when I clearly did not smoke." GandS (New York)

The Dips Who Need a Dip

"When I phoned to book the room she told me they had a pool. When we arrived, the three girls at
the front desk were reading fashion magazines and acted like we were an inconvenience. My husband
said we need a refreshing dip in your pool, which way is it? She said snarkily, 'If we had a pool, you
would have to find us there, cause we'd be there instead of here.' We immediately started calling
other hotels." -Kim (south Dakota)

Yelled At by Front Desk Clerk

"We reserved a room with two queen beds, a sofa bed and a microwave and a refrigerator in it. When
we got there we had two double beds and no telephone. We went down to the front desk and the
reception lady yelled at me, and then another one came out telling me she didn't promise me that
room. I told her I have four kids and two adults, why would I book a room that can only sleep four
and make up the rest? I asked her if they had anything else and she said only smoking. The parking
lot was empty. I asked what happened to the other room, and she yelled at me that the costs are
different. I asked how much. FIfteen measly dollars, they wouldn't reserve me the room and eat the
cost for their mistake? I started to get frustrated and stated just that about the money. She slammed
her papers down and drove the key card into the slot and threw them up on the desk. I travel a lot for
business and have NEVER encountered 'hospitality' such as this." -Jennifer (Virginia)

Too Busy to be Nice

"When I walked into the hotel, I approached the check-in desk. The clerk, who was not wearing a
name tag, did not even bother to look up let alone greet me and welcome me to his establishment. I
tried to hand him a photo I.D., a credit card and a AAA card. He made no attempt to take them from
me to verify who I was or my billing. He never made eye contact with me nor used my name even
once during the transaction. My husband had originally made the reservation for me and had held the
room with his credit card. When I informed the clerk that I wanted to leave the balance on my own
credit card, it seemed to be too big of a concept for him to grasp. I am a front desk manager at a four
diamond rated property. I chose to stay at this property because they had received a three diamond
rating and I felt I would receive great service. Based on that experience alone, I would never
recommend this property." -Shannon (Maryland)

Broken Lift
"My 78 year old mother and I stayed there. On second day the lift was not working, we were on the
fourth floor. Absolutely promised it would be fixed when we returned. Got back, not working, climbed
the four flights. Left next a.m., again absolute promise lift would be working! Not! So, now promise of
you can move to first floor, gee, thanks, it's 5 pm, we are tired, lots of fun going up to move things
down, and then leave next a.m. No thanks! We went to room and stayed. Told manager we expected
a refund of some sort. She said she would consider it. Next a.m., no refund, but I should not to forget
to pay for the bag of chips and can of pop we had from minibar!" -Lorri C. (Paris)

One Word: NICE

"We arrived about an hour before the 3 pm check-in time, went to the desk and asked if we could
check in a little early. The person at the desk, in a rude tone, said one word: 'NO.' He then said that
our room was not ready. He said that we should be able to check in at 2:30. At 2:30 we went to the
desk and this time there were different people behind the desk, who by the way must have also
graduated from the same 'how to be rude to hotel guests' college. I asked again if we could have our
room. You guessed it; we got the same one word response: the big "N-O." -Foodguru2u (Toronto)

If Only I Did Own the Hotel

"You need to retrain your entire front desk staff. I dealt with three separate individuals all poorer than
the next. The first clerk couldn't even tell me where hotel guests can park their cars. She had no clue.
I have to drive to four parking garages until I finally found one that would accommodate me
overnight. I then went back and trained her where she can tell other guests where they can park their
cars. The second clerk: I asked if there was a soda vending machine in the hotel. Told me he knew
there was one but had no idea where it is. I will have to look on every floor until I find it. Doesn't
know what floor it's on but it's in a corner. The third clerk: upon check out I told her I was going to
pay cash for my room charges I used my credit card to hold the room. First she said I could not pay
with cash. I started to say that makes no sense, I would like to pay with cash. Who doesn't except
cash? She told me that I could only use cash if I put down a $200 deposit. I said, I'm paying for my
room, I am checking out, not checking in. Again she told me we don't allow cash unless I leave a $200
deposit, because if you destroy the room. I tell her the room is fine, I would like to pay with cash, you
have my card information if there was a problem with the room. After the other clerk stepped in for
her and took over he allowed me to pay with cash, but she wanted me to know this is a one time
thing. What the hell is going on with this hotel?" -IGotRobbed (St. Louis)

Just No Help
"The staff at the hotel were not friendly, or helpful. When asking train times or a picnic basket as the
rep said they would do this on 24 hours request, they said no. They said they didn't have train
times...did not offer any help at all." - Teresa (San Diego)

Welcome to our Hotel” Front Desk Tactics that Engage

Guests and Employees and Reduce Complaints
By  Joyce Gioia, CEO, Employer of Choice, Inc

The Front Desk is your front line for guest services. Most hotels do a very good job training their front
desk people to be cordial. They understand the opportunity... and the liability. At one time or another, we
have all experienced walking into a hotel and receiving a luke-warm reception from the person behind the
counter. When that happens, in my brain, I hear the words, “Oh boy, I’m in for a mediocre guest
experience here―at best”. In addition, not surprisingly, that less-than-optimum experience usually
happens.

It is understood that the best Front Desk people should be warm and welcoming, yet often at smaller
properties managers overlook the important step of training their people to be that way. After a long day
of travel, dealing with the many increased hassles of air travel, no one wants to be met by a sullen
expression and the words, “How can I help you”, spoken in a tone that communicates the person wants to
be anywhere, but there with you.
No Second Chances

“You never have a second chance to make a first impression.” These words are especially true for hotel
and restaurant properties. Besides the design of your façade and the décor of your lobby, it is the
demeanor of your Front Desk personnel that set up the entire guest experience. When handled well,
guests feel welcomed and happy about checking in. When handled poorly, they feel unhappy and
neglected.

Some properties have their people make follow-up phone calls to confirm that the guests are happy with
the accommodations. These calls just reinforce the level of caring exhibited by the property. Some guests
find these phone calls annoying so the solution is to let the guests know that you will be calling. That way,
if the calls are not welcome, your people will not have spent the time and effort to make them, nor will you
have incurred the ire of your guests.
At the Hilton Hotel Sydney, Australia, there is a full-length mirror next to the employee door. Having a
mirror next to the door is not so surprising, however surrounding the mirror are pictures of their team
members in full uniform, looking sharp. This station is a brilliant way to spotlight some of your own
associates and take a step to insure that they will all look up to your brand standard. It also contributes to
your front desk associates making that excellent first impression. Moreover, when people know they look
good, they feel better about themselves and are better able to be warm and gracious to guests.
Handle Problem Situations Right Away

Once upon a time, hospitality consultant David Jarrett was Front Desk Manager at the property that is
now the Walt Disney Company’s Shades of Green Golf Resort. The property had just installed a new
telephone system, during the time that a major client had a conference there. Everything had gone very
smoothly, until the last early morning, when the new system failed. For two hours, guests were unable to
reach the front desk or any other extension to arrange for help with their luggage. “Any time you have a
new technology, you need to plan for eventualities”, said Jarrett. “Having an effective recovery plan is vital
to good guest services; it’s part of making sure you’re taking care of guests’ needs”, he added. Extremely
reliable equipment and services support your delivering the high levels of service that guests expect.
Go Down to the Front

Jarrett also urges Front Desk Managers to be there when people are checking in. It is what Trout and
Ries (Marketing Warfare, McGraw-Hill, 2005) call “going down to the front” and it is the best way to see
for yourself what is really happening at your Front Desk. When you are there in-person, you have an
opportunity to personally experience the problems that your staff encounters, as well as observe any
missed opportunities for enhanced guest services.

Furthermore, from Jarrett’s point of view, “Superior service starts with the manager being right there to
take care of [guest] needs”. Thus, when problem situations arise, as they inevitably do, the front desk
manager is there to handle the situation. It gives guests a higher sense of satisfaction to know that
someone in authority is handling their issue.
Perceived Authority Works

And speaking of authority, the cruise ship lines have discovered an interesting quirk of human nature.
“When front desk people wear uniforms, it reduces guest complaints and increases levels of satisfaction”,
said James Deering, hotel manager of Holland America Cruise Lines. He also noted that when a cruise
line forgets this fact, it inevitably pays the price in complaints and passenger satisfaction scores. In
reaction, the cruise line will go back to having their customer care people at the front desk wear uniforms.
When you think about it logically, any uniformed person enjoys a higher level of credibility and commands
more respect than those in street clothes. Most hotel brands embrace the idea of their front desk people
wearing uniforms; however, some downscale brands have allowed their people to wear street clothes or a
simple combination like black pants and a white shirt. We suggest that you try this tactic and have them
wear uniforms. Our guess is that you will never go back to street clothes again.
Make Work Fun

One of the characteristics of Employer of Choice® awardees is that their people have a good time at
work. Some managers encourage this fun at work by holding events that engage both employees and
guests. Some time ago, I visited The Hampton Inn in Winchester, Virginia. At that time, they were
conducting a contest to determine which department could do the best job of decorating a door for the
holiday. The team members got very creative and had a great time creating their beautiful designs; then
both guests and employees voted. The winners earned a pizza party. This kind of healthy competition
builds camaraderie and supports employees in having fun at work.

Another popular idea comes from the chain of restaurants called Bonefish Grill. This division of OSI, Inc.
engages its servers, bartenders, and other employees by holding many types of daily contests, including
testing them on information about wine and other beverages. Creating quizzes with important information
you need your people to know, which allow people to win prizes, is a fun way to reinforce knowledge.
It All Starts with Adequate Training

Though hotel executives may be tempted to put their new reception hires on the desk right away, it is
much more sensible to give the newbies in-depth training. Without sufficient training, they feel lost and
stressed. While it is helpful to give them a trainer to look over their shoulders, there should be adequate
training before that activity as well. On-the-job training without preparation will only annoy guests and
cause trainees undue pressure.

Marriott provides its Front Desk trainees Compass Training, in-depth computer training for two weeks with
another Front Desk associate. After that, the new employees cross-train for two to three days in each
area by job-shadowing, including the bell-stand, “At Your Service”, and concierge. After that, new
employees are paired with an experienced Front Desk associate for their final, in-depth job-shadowing
session at the Front Desk; thereafter, the experienced person shadows the new person. Before
“graduating” to independent status, new employees must complete an “Overview Training Sheet”, testing
their front office hotel knowledge. Once they have passed this “test” they may work on their own.

Voice training is also recommended for Front Desk employees. The voice conveys a lot―confidence,
competence, enthusiasm, and knowledge. When employees are well-trained with the knowledge and
skills they need, they are more able to “put a smile in their voice”, as The Disney Company teaches all its
people to do.

At Marriott Hotels, they have a saying, “Take care of your associates and they will take care of the
guests”. It’s very good advice, whether you are talking about Front Desk, Housekeeping, Engineering, or
any other team members. Invest in your people and they will take very good care of your guests.
Joyce Gioia is a workforce futurist concentrating on relationship aspects of the future. This arena includes
workforce and workplace trends, as well as consumer, education, and business-to-business trends. Ms.
Gioia is also CEO of Employer of Choice, Inc, a distinction earned only by companies whose leadership,
culture, and best practices attract, optimize, and hold top talent. Employers of Choice® enjoy "a higher
level of performance, greater workforce stability, and the level of continuity that assures preservation of
the knowledge base, customer loyalty, employee satisfaction, and stronger profits". Ms. Gioia can be
contacted at 336-210-3548 or joyce@hermangroup.com Extended Bio..

Handling Customer Complaints: A Best Practice Guide

  Service & Complaints Guides

 A Practical Guide to Handling Consumer Complaints

 Best Practices in Handling Customer Complaints

 A Guide for Consumer Complaints Management

 6 Steps to Achieve Customer Service Excellence

A Practical Guide to Handling Customer Complaints

1. Complaints: A Critical Form of Communication

Complaints are a goldmine of information

Complaints offer businesses an opportunity to correct immediate problems. In addition, they frequently
provide constructive ideas for improving products, adapting marketing practices, upgrading services, or
modifying promotional material and product information.

While occasional problems with service of merchandise are, to some extent, inevitable, dissatisfied
customers are not. Companies can learn to recover from mistakes. A good recovery can turn angry,
frustrated customers into loyal ones.

Recognizing the importance of responding fairly and efficiently to buyer disappointment in the
marketplace, many businesses have established effective and innovative systems for resolving consumer
complaints. Within any industry, those companies with a positive philosophy and a reputation for fair
complaint-management have a competitive edge.

A management philosophy that embraces customer satisfaction as a primary goal of business, instead of
defending the company in the face of complaints, can change the rules of the game for companies. It
shifts the emphasis from the cost of pleasing a customer to the value  of doing so, and trusts front-line
employees to use their judgment.

British Airways' customer-relations department can claim to be a true champion of the customer. The
retention rate among those who complain to customer relations has more than doubled, while its return
on investment (the value of business saved plus increased loyalty and new business from referrals
relative to the department's total costs) has risen 200%. British Airways employees are never happy to
have service failures but are eager to hear about them when they occur because they know that
ignorance is anything but bliss.

2. Why is Complaints Handling Important?

Generate Loyalty, Goodwill and Word-of-Mouth

By talking back when they believe they have not received their money's worth, consumers give
businesses an opportunity to correct the immediate problem and restore goodwill. Experience shows
that consumers who complain about products and services continue to frequent the businesses and buy
the products they complain about if they believe the complaint was resolved fairly.

Research into complaint behaviour reveals that only a fraction of dissatisfied consumers complains to
business and, thereby, gives the company an opportunity to correct the problem. There is evidence that
some consumers do not complain because they are sceptical about business's willingness or ability to
resolve disputes fairly. Consumers simply withdraw their patronage and criticize the company or the
product to others.

Such findings underscore the importance to business of a complaint management system that is well-
publicized and easily accessible. An unregistered complaint may do as much harm as one that is
mismanaged or not resolved.

Careful complaint management can save business unwanted costs. For example, negative word-of-
mouth publicity from dissatisfied consumers means lost revenue and necessitates additional investment
in advertising to attract replacement customers.

Complaints and complaint trends tell business how to do its job better by alerting management to
problems that need prompt attention and correction. Furthermore, they indicate long-range
opportunities for product innovation and problem prevention. A well-planned system for screening and
recording complaint data can provide business owners and managers answers to such important
questions as the following:

 Are products "oversold" or "over advertised?"

 Is advertising clearly understood?

 Are salespeople overzealous?

 Do product disclosures (such as labelling, warranty information and service agreements) need to
be improved?

 Are user's manuals clear, complete and easy-to-read?

 Would changing warranty coverage reduce complaints?

Complaints also provide information about product quality:

 Are there opportunities for product improvements or better quality control?

 Are there indications of safety defects that should be reported and corrected, or that justify a
recall?

To get this valuable feedback, complaint-reporting must generate information swiftly and systematically
to the appropriate managers or departments. Initial screening should trigger immediate action, when
necessary, and statistical summaries should identify trends and long-range courses of action.
3. Complaints Management System: Management's Role

Demonstrate a committment to complaints management

Management attitudes are reflected in the conduct of employees and the performance of the company.
Top-level commitment to effective complaint management establishes the motive and incentives for all
personnel to strive for consumer satisfaction.

Management's responsibility begins with the preparation of written policies and procedures for speedy
and fair complaint resolution. These policies and procedures should be put in writing and communicated
to all appropriate departments, emphasizing the accountability of individual employees to resolve
complaints courteously and fairly. Employees whose primary responsibility is sales or service, for
example, may have difficulty resolving complaints objectively if they feel their performance rating could
be adversely affected. If management establishes clear lines of authority, consumer problems should be
solved quickly and effectively.

Management should regularly review and, when necessary, find ways to improve complaint-
management procedures, paying particular attention to refining communication and coordination
between the complaint-management and operating departments. Periodic surveys of consumers will
reveal whether they feel they have been well served by the complaint-processing procedures, and
whether they find the company's policies on refunds, repairs, exchanges and other forms of redress to
be fair.

4. Customer Retention Strategy: Costs and Savings

Complaint Management Return on Investment

Even though a good customer retention strategy incurs cost, so does a badly performed service. No
business can afford to lose customers, if only because it costs much more to replace a customer than it
does to retain one -- five times more, most industry experts agree. A customer recovery service allows a
business to shift its cost from constantly courting new customers to cutting customer defection.

Also keep in mind that dissatisfied customers almost always get stuck with certain costs: the money they
spend for phone calls, the time they spend making their cases, and the aggravation they must endure
throughout. The customer left stranded on the highway because her car was not repaired properly
might miss an important meeting, have to pay for a tow truck, and spend time waiting for the repair to
be made. Many service companies conveniently overlook these hidden costs, but the customer surely
will not. Companies known for excellent service will go the extra mile to cover all the costs a failure
incurs or, if the inconvenience is so great that the company cannot completely compensate the
customer, respond in a tone that signals the company's regret.

5. Complaint Handling Staff

What Makes a Great Complaint Manager?

Complaint managers need to be patient, articulate, and able to balance fairly the interests of the
company with those of the consumer. They also should be able to communicate legitimate consumer
complaints to management to help determine whether there is a need for changes in company policies
or procedures.

All members of a complaint-management department should be familiar with the operations of the
company and with its products and services. Prior experience in other departments may be an asset.
Training can strengthen interviewing and communications skills and heighten the staff's awareness of
the special needs of consumers from different cultural, economic or educational backgrounds. Also,
complaint-management staff should be familiar with consumer protection laws and with the operations
of third-party dispute-resolution mechanisms to which particularly difficult complaints may need to be
referred.

Finally, customer-relations personnel should have professional status, adequate salaries and
opportunities for advancement consistent with the importance management assigns to the function.

6. Publicizing the Customer Complaint Management System

Visible and Accessible Complaint Management System

A complaint management system must be visible and accessible in order to serve consumers and
accomplish company goals. Management, sales, service and public relations personnel should all
cooperate to make the complaint system accessible to consumers.

How to publicize the complaint management system:

 on posters and signs in the sales and service area

 on contract forms and sales slips

 in charge account mailings

 in the use and care manual

 in advertising -- your company's complaint system could be the theme of an advertising

campaign

 on product packaging and labelling

Instructing consumers of their responsibilities can help avoid misunderstandings and unnecessary
complaints. Include advice in the material that advertises your complaint system and have sales and
service personnel encourage consumers to do the following:

 Carefully read promotional material and product literature before buying.

 Follow instructions in the use and care manual.

  Understand the terms of sale (warranties and guarantees, contracts, credit terms, refund
policies, and so on).

7. Customer Complaint Resolution at the First Point of Contact

Empower Front Line Staff, Distributors, and Sales People

Consumers are likely to turn first to the place of their purchase -- retail store, service establishment,
contractor, and so on -- to complain. Resolving complaints at this level avoids unnecessary consumer
frustration and preserves the direct buyer/seller relationship. Moreover, it is likely to be relatively easy,
quick and economical.

It is important that companies coordinate complaint management with others in their distribution
network. Retailers, manufacturers and service outlets mutually benefit from keeping one another
informed of complaints and complaint trends and cooperating when necessary to see that complaints
are fully and satisfactorily resolved.

Manufacturers should encourage consumers and retailers to contact them when a dispute cannot be
resolved at the place of purchase. Complaint systems at the retail level should be structured to isolate
those matters that need the immediate attention of manufacturers. These include complaints that
suggest possible design or production defects that affect product safety and performance. Also,
complaints forwarded from the retail level can help manufacturers evaluate their own policies toward
warranty coverage, for example, or identify advertising or labelling that needs to be clarified, or learn
things about product performance or marketing that are revealed only after wide distribution.

8. Third-party Dispute Resolution

Conciliation, Mediation and Arbitration

If complaints cannot be resolved directly between the consumer and retailer or manufacturer, they
should be referred to third-party dispute resolution. Third-party mechanisms use the services of
unbiased individuals or panels to resolve disputes through conciliation, mediation and arbitration.

 Conciliation:
A neutral conciliator brings the parties together and encourages them to find a mutually
acceptable resolution to the dispute.

 Mediation:
A neutral mediator becomes actively involved in negotiations between the parties. The mediator
can propose a resolution, but cannot dictate a settlement of the dispute.

 Arbitration:
An independent individual or panel hears the facts on both sides of a dispute and reaches a
decision. Usually both parties have previously agreed to abide by the decision, but in some
systems, only the business agrees in advance to abide by the outcome of the arbitration.
Third-party dispute resolution is advantageous to business because it enables expeditious, economical
and fair complaint resolution without government regulation or legal action. In fact, government
agencies encourage the use of third-party mechanisms when complaints cannot be resolved directly
between buyer and seller. Proponents of third-party systems point out that their use can help make
manufacturers and retailers more responsive to consumer problems. By submitting disputes to a neutral
decision-maker, a business can demonstrate goodwill through its willingness to seek unbiased solutions
to consumer complaints.

A small percentage of consumers and businesses seek more formal third-party complaint resolution in
small claims courts. Use of the courts can be cumbersome and costly for both sides and can usually be
avoided if a good faith effort is made to resolve disputes at the company level or through informal
dispute resolution.

9. Basic Steps for Effective Complaint Management

1. Designate a Location to Receive Complaints

Consumers need to know where and how to file complaints or make inquiries.

o Select a place to receive complaints that is visible and accessible to consumers.

o Publicize the complaint system to encourage consumers to voice their dissatisfaction

and to make the good intentions of the company apparent.

2. Develop a System for Record-keeping

Prepare forms for recording, categorizing and filing complaint records.
Design the system to perform functions such as the following:

o communicating complaint data to top management;

o permitting swift identification and response when complaints need to be reported to

other departments or companies in the distribution network, or to law enforcement or
regulatory agencies;

o providing market research through complaint trends; and

o enabling management to monitor the efficiency and effectiveness of the complaint-

management system.

3. Process and Record Complaints

o Log in the complaint and any relevant data.

o Categorize it for resolution and record-keeping. Categories must be clearly defined and
exclusive of one another.
 o Assign the complaint to one person for handling.

o Forward the complaint to another level of authority, if appropriate.

4. Acknowledge Complaint
Consumers do not register complaints with only a casual interest in their disposition.
Complaining involves some inconvenience and, possibly, expense. Loyal customers with strong
feelings are often involved.

o Personalize the response.

o Talk to the customer, if possible, by phone or in person.

o Use letters when necessary, but avoid impersonal form letters.

o Take extra time, if needed, to help consumers with special needs, such as language
barriers.

5. Investigate and Analyze the Complaint

o Be fair.

o Get both sides of the story.

o Keep records in the complaint file of all meetings, conversations or findings.

6. Resolve the Problem in a Manner Consistent with Company Policy

o Forward the complaint to the appropriate level of authority for resolution.

o Keep the consumer informed through progress reports.

o Notify the consumer promptly of a proposed settlement.

7. Follow-Up

o Find out if the consumer is satisfied with the resolution. Was it carried out?

o Refer the complaint to a third-party dispute-resolution mechanism, if necessary.

o Cooperate with the third-party.

 8. Prepare and File a Report on the Disposition of the Complaint, and Periodically Analyze and
Summarize Complaints

o Circulate complaint statistics and action proposals to appropriate departments.

o Develop an action plan for complaint prevention.

o Make sure the consumer viewpoint is given appropriate consideration in company

decision making.

10. Complaint Management System Conclusions

Complaint management systems and company policies on refunds, exchanges and product service vary
widely depending on the nature of the product or service, the terms of purchase, consumer use
patterns, and so on. There is no single formula that will provide universal relief for dissatisfied
consumers.

The commitment and continuing involvement of company management is critical to successful

complaint resolution and to the optimum use of complaints as a management tool. Managers will help
discover new ways to improve both the complaint-management system and the fairness of remedies
offered to consumers.

11. Complaint Management System Checklist

Evaluate your complaint management system

In planning a system for complaint management or evaluating the one you have in place, consider the
following questions:

 Does your company depend on repeat customers?

 Do you have written procedures for your complaint-management system?

 Are staff throughout the company well aware of the procedures and the importance of your
complaint-management system?

 Does top management directly oversee your complaint-handling procedures?

 Do incentives exist to reinforce staff commitment to consumer satisfaction?

 Is your complaint system easily accessible to consumers?

 Do you publicize your complaint system to consumers? If yes, how? Printed media (posters,
advertising, monthly statements)? Communications by sales personnel?

 Is your complaint system organized so that:

 1. front-line employees have clear responsibilities for resolving complaints in one
department or location?

2. larger or more serious complaints are referred to designated senior managers?

 Are you providing adequate training for your complaint-management staff?

 Does the customer-relations staff feel they have equal stature with other professionals in the
company?

 Do you periodically survey your customers to see if they are satisfied with your complaint-
management system? Do you encourage feedback?

 Do you regularly review your complaint-management system and make necessary

improvements?

 Do you utilize your system of complaint management for more than settling individual
complaints? For example, do you use it for quality control and problem prevention?

 Does your complaint system swiftly generate systematic information about causes of complaints
and complaint trends?

 Does this data meet your management needs?

 Do you circulate to top management periodic reports of data from complaint records with
suggestions for action to prevent recurring problems?

 Can you identify areas in the company in which your complaint-management system is having
an effect? Has it been positive or negative?

 Do you coordinate your complaint-management system with others in the distribution chain for
your products or services? Do you have a direct line of communication with them?

 Do you have an adequate understanding of how these external organizations are affecting your
relationship with consumers?

 Do you work cooperatively with local and governmental consumer agencies?

 Do you use third-party dispute-resolution mechanisms for those problems not resolved in-house
(i.e. mediation or arbitration)?

Table of Contents

1. Handling Complaints : A Critical Form of Communications

2. Why is Complaint Handling Important?

3. Management's Role
4. Cost and Savings

5. Complaint Handling Staff

6. Publicizing the Complaint Management System

7. Co-ordination with Others in the Distribution Chain

8. Third-party Dispute Resolution

9. Basic Steps for Effective Complaint Management

10. Conclusion

11. Complaint Management Checklist

12. Entire Guide