a customer complains to the seller, the original transaction may be less
relevant to their overall satisfaction then the events that follow the
complaint. Customers whose
complaints are quickly resolved tend to be more profitable than those
customers who have never complained at all.”
Source: JD Power and Associates
many organizations today the credit department has been delegated the
additional responsibility of resolving customer complaints. Our experience,
as both a credit manager and department head, is that there are times to
take responsibility for resolving the customers complaint and times to pass
the problem on to those who should handle it, in which case our
responsibility is to check to make certain the person who we passed the
problem on to has, in fact, taken care of and resolved the problem to the
Many years ago we took on an assignment to turn
things around in an organization. This particular organization not only had
problems with its products but also with providing the customer timely
answers to their complaints. Prior to our involvement the customer, upon
contacting customer service and telling his tale of woe, would be
transferred to another department where he would have to repeat his story
and then was usually transferred again after being told that he was talking
to someone who could not help him but the party he was being transferred to
would be able to assist him. In many instances this was not the case and the
customer would continue to be passed from one department to another probably
in hopes he would get tired and go away. This happened so frequently that
customers were not only losing confidence in the customer service department
but the organization itself and were being driven to the competition by the
organizations inability to address customer complaints. This not only had an
impact on sales but revenue as well because unhappy customers often do not
pay their bills.
We began by immediately implementing a customer
response program borrowed from the consumer credit organization, the
American Express Company. The process was very simple and straightforward.
Customer contacts us and informs us of complaint;
Complaint is documented and forwarded to responsible party in
Responsible party has no more than 30 days to determine if
complaint is founded or
unfounded and report back.
Customers account is provided a temporary credit;
Customer is notified in writing of temporary credit and that
complaint is being investigated
and will be resolved in 30 days or sooner;
Follow up is initiated every 7 days by credit department with
responsible party to
determine status of investigation;
If complaint is founded temporary credit becomes permanent and
customer is notified;
If complaint is unfounded temporary credit is re-billed and
customer is notified of reason
complaint is not valid and asked to pay amount that was temporarily
Over time, using this technique, things began
to improve. (Although customer service remained a separate organization, the
customer service manager reported directly to us and was in the same
facility as the credit department so that credit and customer service
personnel could not only develop rapport but also work together on issues
Another method we employed on occasion was to arrange
for the customer to “conference” with both the credit representative and
responsible party (sales, customer service, billing, distribution, etc.,) so
that 1) the customer did not have to tell their story more than once and 2)
it could be determined and communicated what action would be taken and by
whom to resolve the complaint and 3) the time frame for resolving the
complaint. This method often lead to immediate resolution because the
responsible party could usually make a decision “on the spot” especially
if it had been determined there was a “glitch” in the system.
Many feel that complaints are a customer ploy to
avoid paying the bill on time. However, according to customer service
managers, over 80% of customer complaints are valid. As a consultant we have
clients whose accounts receivable problems are entirely a result of their
inability or refusal to address and resolve customer complaints.
Debt collection firms have told us that a significant
number of assignments placed with them for collection are in fact legitimate
disputes and in accordance with the FDCPA they have to return these claims.
One collection agency manager informed us they are now charging their
clients for collection claims that turn out to be bona fide disputes.
We can make the customer happy simply by the way we
resolve the problem. The credit department is often the first to find out
there is a dispute. This is due to the majority of customers waiting until
payment is due to inform the seller that something is not correct. Often,
the person responsible for authorizing payment does not inform the accounts
payable department that there is a problem until they inquire about the
invoice after being contacted by the collection representative.
How do customers want their complaints to be handled?
What leads a customer to think: “That was handled in an excellent
manner” or “This is an excellent company to do business with”?
What customers want usually fall into two categories.
Relating to the complaint – they want it resolved to their
Relating to the manner in which the complaint is received – they
are looking for courtesy, professionalism, helpfulness and a friendly
disposition on the part of our staff. They want us to keep them informed,
keep our word and do what we say we will do. They want to be able to easily
contact the right person and be told in language (verbiage) they understand
what is going to happen and how long it will take.
Always remember that what the customer really
wanted was for us to get it right the first time. A business may not be able
to entirely recover from the way it handles a problem but sometimes, a
problem can be handled so well that customer loyalty is enhanced. Often
though, problems are handled so badly that the memory lives on long after
the problem is forgotten.
Take a moment and think about what you just read.
When was the last time you had a problem resolved to your satisfaction and
how many people did you tell about your experience? When was the last time
you had a terrible experience in getting a problem resolved and how many
people did you tell about it? Statistics show that if you remembered a good
experience, you had to think about it and you told less than five (5)
people. Whereas a bad experience you probably thought “which one” and
you have told at least twenty-five (25) people and are still talking about
Excellent complaint handling involves six elements.
Keep your word. Do what you say you will when you say you will. Have
you ever waited at home for a repairman who never shows when they are
supposed to or never shows at all? The failure of organizations to keep
their word is frustrating and keeping your word is the most important
perception of quality service.
Respond quickly. Always strive to exceed your customers’
expectations. When we issued temporary credit when the customer complained
they did not expect that.
Be easy to contact. Voice mail and called ID is technology that
allows us to “put off” whomever is trying to contact us for whatever
reason. Customers should not have to go through a series of “prompts” on
their telephone keypads. We may not be able to control the telephone systems
our organizations employ but we can control how we use them. Respond
promptly to voice and email. Leave a message informing the caller when you
will return their call or leave a cell phone number where they can easily
contact you. Not responding promptly to a customer is not a sign that you
are either important or busy. Instead it says that you are lazy, incompetent
and not interested.
Keep the customer
informed. This includes getting back to the customer and informing them
their complaint has been resolved. Never promise the customer to do
something within a time period unless you know for certain that it will be
resolved. Customers want to know that their problem will be resolved and the
majority is willing to accept a reasonable timeframe.
Explain things in an understandable way. No company jargon, no
assumption that the person you’re speaking with has industry knowledge and
no unintelligible foreign accents. Those customer service folks in India,
China and other foreign lands are very courteous and friendly BUT they
don’t speak or understand American English and it is difficult to decipher
what they are saying because of the accent.
Be courteous, friendly, professional, helpful and understanding. The
simple secret is good manners and attention. The customer is not your
“buddy”, “pal”, “friend”, “dude”, “honey”, or any other
term you use in your personal life. If you choose not to address them by
name then “sir” or “ma'am” is appropriate. Practice how to transfer
a call without losing it before trying it with the customer. Listen to what
they want and if you’re uncertain ask questions. It’s perfectly
acceptable to ask “What would you like us to do” or “What can we do to
resolve this to your satisfaction”. Often what the customer wants can be
accomplished very easily. Our experience is, that in many cases, they only
want an apology and assurance it won’t happen again
It’s not easy dealing with complaints or
keeping customers happy. However, it’s not uncommon for customers to feel
genuine gratitude to the people who have helped them resolve their problems
especially when it’s those people in the organization who usually created
the problem to begin with.
I wish you well.
The information provided above is for
educational purposes only and not provided as legal advice. Legal advice
should be obtained from a licensed attorney in good standing with the Bar
Association and preferably Board Certified in either Creditor Rights or