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'The voice of the customer'

Have you agreed internally on your company's five most critical customer contact points? Are your people aware (on a frequent basis) of the customer feedback which you receive? Do you inform customers of the impact their feedback (negative or positive) has had on your business? Do you know the percentage of disloyal customers that are won back as a result of the direct efforts of your customer care department or frontline employees?

If your company doesn't have an answer to any of these four basic questions you probably only have average customer satisfaction scores, average customer loyalty ratings and a tendency not to listen pro-actively to customer feedback.

Business research shows us that on average and across all industries, only 50 per cent of dissatisfied customers actually register their complaint with a front-line employee. More worryingly, only one to five per cent of total dissatisfied customers will actually escalate their complaint to management.

On average 40 per cent of customers who have a complaint (including those that don't file a complaint) stop doing business with the offending company. My company (a management and business consultancy firm) is currently involved in a local business survey about customer complaint handling practices in Malta, the results of which will be reported as soon as the exercise is complete. What has struck us from the responses received so far is that while Maltese companies in general claim to appreciate the importance of collecting and responding to customer complaints, very few of them conduct independent audits of the customer complaint handling process.

The fact is that customer complaints are actually a positive force and a wealth of information if acted upon immediately. As the saying goes: "Every customer problem is an opportunity for the company to prove its commitment to service". Customer complaints allow you to feel the pulse of your company's service system, to protect your company's brand equity and take corrective action which directly improves your service-delivery system.

This is turn leads to sustained customer satisfaction, improved customer loyalty and organic growth driven by referral business.

It is for this reason that it pays for your company to have its customer complaint handling process independently audited at planned intervals. You need to know if it functions properly, if there are any systematic failures or if it can be improved.

How many companies in Malta take preventive action to eliminate the causes of customer complaints? Don't get me wrong, errors are perhaps inevitable over time but dissatisfied customers are not, and when research shows us that on average it costs five times more to replace a customer with a new one, it amazes me that not enough businesses invest in this type of audit.

From my experience, complainers actually represent the minority of customers. The truth is that the majority of customers are mildly dissatisfied with one thing or another but consider the process of complaining as cumbersome. Try to remember when you last were dissatisfied with a service or product and didn't make it known to the company and then ask yourself why you said nothing at the time yet you still told your family, friends or colleagues afterwards about your poor customer experience and customer dissatisfaction.

But why do most people not speak up? Well because in practice complaining involves monetary or non-monetary costs such as the time taken to lodge the complaint, the aggravation you sometimes have to go through to make that complaint stick or the inconvenience you have to endure to get what you feel you deserve.

Therefore, by having an efficient and effective customer complaint handling process your customers are more likely to lodge that complaint in the first place which increases your chances of trying to solve it and turning a negative situation into a positive one.

In fact, I would go a step further and argue that most customers can't be bothered to complain and business research already confirms this. So let's make it dead easy for them to give us their feedback - positive or negative.

Furthermore, let's be more ambitious and invest in systems and processes that give us the capability to engage in customer recovery.

It may sound far-fetched but this is the next level which your company should be aiming at. The problem, however, is that if it doesn't even have a proper and well-functioning customer complaint handling process, how can it move up to the next level? This is the reason why it pays to keep your employees on their toes with an independent audit of the customer complaint handling process at planned intervals. You need to constantly monitor this important process since ultimately it directly affects customer satisfaction and loyalty which, as we all know, drives profitability.

By listening to the "voice of the customer" and periodically auditing how your company reacts and responds to it, you are ensuring that the business is built on firm foundations. This is not a switch-on-switch-off process; this is a sustained and ongoing effort which will involve a cultural shift internally and the commitment of top management. Listen, measure and take appropriate action.

Mr Fenech is managing director at Fenci Consulting Ltd.

www.fenci.eu

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