Complaints are a nuisance, right? Customers on the phone moaning about poor service just get in the way. Your call centre is there to act as the first line of defence against the moaning masses. After all that is what CRM is all about, managing and deflecting customers.

How about taking a different tack? What about viewing complaints as a valuable piece of market research and the customer feedback process as providing invaluable data and consultancy? How about turning that moaning into money?

Facing the music

“That’s the theory – complaints as a positive element of CRM,” says Michael Wallis, customer relations manager at holiday firm Travelsphere. “We firmly believe that. There is no point in hiding away from comments and complaints. You need to face up to them, look at why they have arisen and how you can put things right.”

It is a nice idea but in order to maximise it you are going to have to adopt a whole new mindset when it comes to CRM – one that means more than ticking the complaint-handling module in the CRM package functionality list.

"It’s great because the system allows us to identify trends and establish the root cause of issues before they become major problems"

Michael Wallis, customer relations manager, Travelsphere

In reality, complaints handling is not just CRM but a wider management issue. Is there anything more important to the long term viability of a company than addressing customers’ problems? To ignore them might prevent them coming back and lead to damaging word of mouth comment that will prevent new sales from taking place.

Business potential

With a different perspective, you can regard complaints as an opportunity to interact directly with your customers. Customers who complain and have a positive resolution are actually more likely to remain loyal to your brand than those who do not complain at all. Like born again Christians or reformed smokers, the best company evangelists will be those who have complained but then have been pleased with the resolution they received from your company.
“Complaints should be viewed as a productive feedback process,” advises the Chartered Management Institute. “By managing customer complaints [effectively] you can increase customer loyalty and alert yourself to a problem experienced by other customers. Unless you give them what they want they will go elsewhere. So it is important to deal with a complaint quickly and get it right by ensuring that the customer is satisfied with the outcome.”

Accentuate the positive

A properly executed complaints management programme, integrated as part of an overall CRM strategy, can decrease customer maintenance costs, increase revenues and improve a company’s ability to track historical customer and product trends – useful for forecasting future market, product and customer needs.

An effective scheme will improve your company’s reputation, credibility and image while increasing customer trust and satisfaction with your products and services, as well as leading to an improved customer focus.

Travelsphere is a privately-owned, direct sell tour operator. The company specialises in escorted holidays, offering everything from a Paris weekend to a 30-day round-the-world extravaganza. As the largest provider of escorted tours in the UK, Travelsphere sends over 200,000 people away each year.

Because it plans, operates and sells all of its holidays itself, Travelsphere is the sole point of contact for the entire customer experience and, inevitably, even the best laid plans will sometimes go awry.

"It can be too easy to put statistics rather than customers at the heart of the operation"

Tim Sheer, contact centre manager, Yorkshire Water

“In total, if you include all letters of praise, complaints, pre-holiday and miscellaneous queries, we get about 11,000 letters and emails a year. We record absolutely everything that anyone tells us – good or bad,” says Wallis.

“It really doesn’t matter how you contact us, if someone creates a complaint or sends us any form of feedback, it all gets recorded in one file.”

Using manpower

The company had relied on manual processes to handle feedback, complaints and comments from customers but this was proving inefficient due to the volume received. The company decided to automate its feedback handling process using customer service software from Respond.

“Previously a letter would come and be dealt with by hand,” recalls Wallis. “We didn’t scan it. Now that we’ve automated everything we scan all the letters and nothing gets lost any more. The main drivers for investing in the automated system were frustration with the volume of correspondence and a need to reduce the administration involved.”
The complaints management system was integrated with Travelsphere’s reservation system to reduce the need for re-keying customer information and to ensure complete visibility of data for all customer handling staff. This has reduced Travelsphere’s standard resolution time for dealing with complaints from 14 days to seven.

Analysing the situation

Management information reports are also generated which allow the firm to analyse and monitor ongoing situations, be they positive or negative. “It’s great because the system enables us to identify trends and establish the root cause of issues before they become major problems,” says Wallis.

“For example, we had an issue with one of our holidays that generated an extremely high complaint ratio and cost us a lot of money to resolve. All that information was flagged up and we changed the tour agent we were working with.” But in today’s markets it is not enough just to be addressing complaints. You need to be seen doing it. Admitting to problems and then being seen to address them is viewed positively by customers. So companies must be ready to expose their complaints management policies to public scrutiny.

This is uncomfortable for some managers as it means conceding that customers made complaints about the company in the first place. But the reality is that many people simply do not bother to complain because they believe that their complaints will not be handled or treated appropriately. If there is evidence that complaints are being taken seriously there is more chance of turning around the problem.

Publicity backlash

For example, Carphone Warehouse was on the receiving end of masses of complaints after struggling to deal with “unprecedented” levels of demand for its TalkTalk broadband offer –providing free internet to customers paying £20 a month for a landline phone. This was a huge problem and resulted in swathes of negative publicity that became a serious issue. The company has invested in CRM, including an on-demand offering from NetSuite, while re-examining its customer service processes.
Chief executive, Charles Dunstone, says that Carphone Warehouse has made “significant strides” but that it has some way to go until it becomes “best in class”.

“We have now significantly improved our provisioning and customer service processes and are ready to increase the rate of recruitment once more,” he says. “Most notably, we now have no queues for connection and easy access to our call centres with little waiting time.”

Compliant CRM

It is a prime example of a culture of business process improvement growing out of an effective complaints management approach. But if that is still not enough to get the message through to the business paymasters on the board who might be wary of spending yet more money on CRM, you can always remind them of the compliance aspect of complaints management.

Post Enron, there are specific regulatory requirements for capturing, investigating, resolving and reporting customer complaints such that complaints management can be seen as a subset of compliance rather than CRM. Companies such as AXA Insurance have to operate within the regulatory framework set down by the Financial Services Authority (FSA).

This requires the firm to categorise and report back complaint information according to FSA guidelines. AXA reckons that it receives around 1,200 complaints each month across the entire business. Complaints tend to be dealt with at business unit level but can be escalated via a feedback system from Respond, to a customer care team. All feedback – both negative and positive – is automatically passed on to the team at the main office and matched to the relevant FSA categorisation.
AXA has not had to alter its internal capturing process in order to be able to provide the necessary FSA information. “For the FSA, there are a number of categories that you have to use when logging complaints,” says Alison Blackmore, head of customer care.
“We’ve broken the information down to match those categories. We also pick up on the number of complaints acknowledged within the five-day target for the FSA.”

Going the extra mile

The company prides itself on surpassing the FSA requirements. “AXA’s own targets are more stringent,” she says. “Our turnaround time for an acknowledgement is 24 hours. On the resolution side, claims or non-claims can be tracked at the 20 or 40 day point to see how many have been resolved within the target period.”

As well as meeting the regulatory requirements, this robust complaint feedback system has also benefited the bottom line by creating a £1 million saving through process improvements in its complaints handling. It has also seen a two per cent increase in customer satisfaction. “We use the Respond system not only as a feedback management tool but also as a means to pinpoint process improvements and create better products and services,” says Blackmore. “We produce reports for all levels within the company from monthly group reports, FSA reporting and a board report for the CEO who uses it to drive change from the top.

“Dealing with complaints and making improvements is one thing. But using the feedback in a positive way for product developments such as service delivery improvements and contact channel innovations is also very valuable.”

Top-level support

AXA benefits from having top-level executive backing over the importance of complaints management. That senior management support is essential. Companies with poor track records in complaints handling tend to be those where CRM is left to the techies and the call centre managers rather than being distilled down from the top of the organisation as fundamental corporate philosophy. “It can be too easy to put statistics rather than customers at the heart of the operation. For us, it is very important to focus on the customer experience and to be the best compared to our competitors,” says Tim Sheer, contact centre manager for Yorkshire Water.

“Our vision is to be the best water company in the UK and customer service is central to this. A service excellence mindset is firmly entrenched in Yorkshire Water’s business.”

Fast turnaround

“It is imperative we handle and resolve water supply queries as quickly as possible,” says Sheer. “Although most of our customer calls are relatively common and simple to respond to, some are much more complex. Not only are these complex queries hard to answer, providing an incorrect response can lead to a significant increase in costs, unnecessary field visits and customer dissatisfaction.”

Yorkshire Water managed to turn around a poor customer image following the droughts of the mid-1990s. Since then it has racked up three consecutive wins of the Utility of the Year award and is ranked joint top in Ofwat’s overall performance table.
It has maintained its position as the UK’s most efficient water company, met its leakage targets set by Ofwat for the ninth year running and improved its customer satisfaction rating for 10 consecutive years to a high of 93 per cent.
Senior managers must take part in developing and enforcing policies and procedures for complaint resolution that then need to be communicated to the whole organisation, not just those on the call centre front line. Procedures should be reviewed regularly at a senior level and to be able to do that, bosses need to be exposed to the unfiltered reality, not a cleaned up version from middle management.

Paper trail

That means capturing clean customer data and being able to analyse it thoroughly – and Yorkshire Water uses technology from CRM vendor eGain to do that.

Following a call from a customer, the audit trail of what has been discussed and recommended is automatically captured by the eGain system and passed into Yorkshire Water’s own Integrated Customer and Operational Management systems, along with the service request.

Agents no longer need to make notes, which both speeds up case-handling and boosts high-quality data for closed-loop management of the call centre. If field-work is then required, the transcript of the call diagnosis is passed to the most appropriate field technician.

It has always been the case that all the CRM technology in the world will not improve customer relationships if the organisation deploying it is not interested in genuinely interacting with its customers. Those who do, address the processes of interaction, then apply technology as an enabler. Part of those processes is knowing how to manage complaints and turn them from a negative to a positive.

Those who can pull that off will find they have little to complain about.