Complaint Management: Definition, Objectives, Procedure

Definition: What is complaint management?

‍Every company has to deal with bad customer feedback. Complaint management systematically takes measures to deal with this criticism and to satisfy customers again. It is therefore an integral part of the entire customer experience.

What is the difference between complaints and complaints?
Complaints: Customer expectations were not met and the company was unable to deliver on its product or service promises to the customer. Example: Longer delivery time than promised.
Complaints: The product is defective or has defects, or the service is faulty. Example: Ordered dishes arrive broken.

What are the goals of complaint management?

Negative feedback is often frustrating at first. But from another angle, customer complaints are very valuable and can be a real game changer for companies. Because they give them the opportunity to improve. And that is not self-evident: Many dissatisfied customers don't even approach the company in the first place, but simply migrate. For example, companies don't know that something isn't running smoothly or where customers are hurting. It can be difficult to make improvements from this position. But when customers share their criticism, things look different!

The central objectives in complaint management are therefore:

1. Customers who complain, satisfy them again and leave a positive impression on them by processing the complaint quickly and in a solution-oriented manner.
2. Prevent customers from moving away due to bad experiences and instead convince them of the company again so that they remain loyal customers in the future.
3. Improve the product or service and the processes behind it in such a way that there will be no more complaints in the future.

Positive effects of good complaint management

The positive effects that methodical handling of complaints can have show why effective complaint management is so important:

• An dissatisfied customer rarely comes alone, but not everyone contacts companies to complain. If you solve a customer's problem (for example by reducing delivery times), you're likely to make many more happy.
• It improves customer relationships.
• It strengthens customer loyalty. And more loyal customers mean you have to invest fewer resources to acquire new customers.
• Satisfied customers are also more likely to recommend companies online and in person.
• Your image benefits from a customer-friendly approach to complaints.
• It is an opportunity to stand out from the competition.
• By drawing customer attention to potential improvements in services, products or processes through their complaints, costs can be saved.
• The continuous optimizations and suggestions also hold potential for innovation.

How does complaint management work?

In order for complaint management to develop its full potential, it should be divided into two processes:

The two types of complaint management

1. Direct complaint management:
   Here, companies handle the complaint themselves. It is about taking up customer concerns, processing them as quickly as possible and resolving them in a customer-friendly manner.
2. Indirect complaint management:
   In order to actually be able to derive a general improvement from the complaint, indirect complaint management is there. In this process, the company identifies what is the cause behind the complaint and what can be done to fix this issue. This part of complaint management therefore takes place internally and no longer in contact with customers.

By the way: If you are faced with the task of setting up a complaint management system, it may be worth taking a look at the complaint management standard. Die DIN ISO 10002:2019-07 explains key terms, explains principles and tasks, and provides support with tools.

Complaint management measures

From initial customer complaint to resolution, companies should take the following measures in direct complaint management:

1. Stimulate the complaint

You shouldn't just assume that customer complaints will reach you in some way. Instead, you should make it as easy as possible for your customers to contact you. Because nothing is more frustrating than when you want to contact a company with a problem and simply cannot find an opportunity to do so.

Customers should therefore be able to find the contact options quickly and not have to search for contact details on various sub-pages. You should also create as many points of contact as possible, for example chatbots, contact forms on the website, hotline, support on social media or by e-mail.‍

2. Accept the complaint‍

The time has come: A customer uses one of your contact options to complain to you. Then it continues with the following steps:

• The request is recorded, ideally via a digital ticket system.
• The customer receives feedback on what the next steps are and by when the issue will be resolved.

By the way: Chatbots have the advantage that customers receive immediate confirmation that their topic has been received and, on the other hand, they receive information that, for example, a service employee will deal with their problem at short notice. During the chat, customers can then ask further questions or the bot can suggest additional self-service material to them.

3. Review the complaint

After you have received the negative feedback, the next step is to check what type of complaint it is and who is responsible for this issue. The request is then sent to the responsible persons for processing.

4. Process or resolve the complaint

At this point, a suitable solution for the issue is developed. What that may be depends on the nature of the complaint. Examples include:

• The customer receives financial compensation, such as a discount or a voucher.
• The customer receives material compensation by exchanging a product or, if necessary, replacing it with another.
• The service or product is being improved.
• Is there no solution possible? Then you should sincerely apologize to the customer and explain the reasons why.
  

It is important to note that in order for the company to make a reliable impression, the complaint should also be dealt with within the announced time.

And what are the processes and measures in indirect complaint management?

• Evaluation of complaints: All complaints are compiled and the data analysed: What are possible patterns and what are the causes?
• Controlling: Here you can check whether complaints have reached the right place in the company, whether all guidelines that exist for complaint management have been complied with, and what the cost-benefit ratio of the process looks like.
• Reporting & quality assurance: Management or other senior personnel receive a report on this evaluation. Based on this, they can decide which measures they want to take to improve the quality of products, services and processes.

Seven tips on how to manage complaints well

1. Yourself to vindicate Is one of worst methodsto deal with criticism. Even if it's not your fault, you should Not on the defensive guessed. Make customers feel as though you are valuethat they will contact you with their concerns.
2. Be emphatic and show an understanding of customer problems.
3. When communicating with customers, you should always use a cool head Preserve and remain polite.
4. Also a honest apology is often worth a lot to customers. In many cases, they simply want to be heard — so let them know that their opinion is important to you.
5. Retain customers abreast: For example, ship status updates, similar to parcel services, with information on the status of their request.
6. Meet customers and do it for them”cushy”. An example: In the event of complaints involving smaller amounts, Amazon sometimes releases customers whether they want to return or keep the complained product.
7. schools Tell your service staff when dealing with negative feedback.

Conclusion: Complaints are an added value

Even if it doesn't look like it at first glance, customer complaints are a real added value for companies. With the right approach, you can use them to your advantage and take your business to the next level. Methodical complaint management helps you to satisfy disappointed customers again. After all, the best way to retain existing customers and attract new ones is to win them over with your service. If you handle complaints properly, they'll also help you improve your products, services, or processes.

In order to establish well-functioning complaint management in your company, it is a good idea to integrate an AI chatbot into customer service. In our free e-book “The AI Service Revolution”, you can find out how a chatbot can contribute to sustainably improving the customer experience.