WHEN customers are dissatisfied with products and services, they can choose to do either of two things: voice it or walk away.

If they simply walk away, they give the company no opportunity to resolve their dissatisfaction.

However, if a customer chooses to complain, he is effectively offering the company a chance to repair the damage, salvage the situation and, if achieved successfully, increase the chances of him taking up its products and services again.

Companies famous for their customer service make complaint management and resolution a major component of their service culture.

Although complaints have typically been regarded as the unattractive side of customer service management, complaints represent a rich source of information and can illuminate a company’s overall service performance.

Once the negative emotions associated with complaints are put aside, they become far more useful than any compliment.

Customers who complain directly are in fact giving the companies a gift.

Complaints are considered gifts because when they are well managed, they can:

* Provide complimentary business insights you would otherwise pay a research company many dollars to produce.

Complaints are the most efficient and least expensive way of understanding customer expectations about your products and services.

By understanding what your customers want and do not want, what pleases and annoys them, you can make the necessary adjustments to your marketing strategies and processes, and stay ahead of your competitors.

Customers’ complaints also serve to alert a company’s management on potential personnel problems — since employees generally put on their best behaviour only when their managers are around or when telephone calls are recorded.

* Give the company a second chance to salvage the situation with the customer.

The customer is telling the company what is wrong in the hope that the source of the problem will be fixed.

When complaints are managed well, they can generate positive word-of-mouth publicity to attract potential customers.

* Turn indifferent customers into advocates.

Customer complaints, whether they are of major or minor significance, provide an opportunity for a company to form tight relationships with customers.

Companies that reach out and make an effort to be available and accountable to all their customers inspire a sense of trust and loyalty.

Create an effective complaint management framework

To address complaints effectively, a company needs to adopt the right programme to welcome these complaints as gifts.

The critical success factors for effective complaint and resolution management are:

* A simple process for making a complaint;

* Active and empathetic listening by the company’s personnel;

* Open communication with the customer;

* Timely and sincere resolution;

* A clear escalation process if the customer is not satisfied; and

* A system to process the complaint data to aid learning and improvement of the company’s service.

An example of a complaints and resolution management programme that uses these six factors is OCBC Bank’s GiFT Manager®.

The programme encourages customers to make their complaints in a way most convenient to them.

All the bank’s employees are trained to be “receipt owners”, that is, they are able to receive and acknowledge any complaint about any part of the bank or its services.

The programme’s system ensures that more than 90 per cent of complaints are resolved to the customer’s satisfaction within three days.

Embrace a complaint-friendly service culture

Creating a culture where complaints are welcomed as gifts starts from the top.

Janelle Barlow and Claus Moller, authors of A Complaint Is A Gift, say that “company leaders have to provide the direction, the monetary support and the motivational juice to inspire all this activity”.

To encourage a culture where no one gets scolded for receiving a complaint, the company’s leaders must first be supportive and engaged.

OCBC Bank’s chief executive officer David Conner champions a culture of welcoming complaints through the bank’s “5 maxims of complaint management”, namely:

1. Complaints are gifts to us and they are valuable.

2. Complaints are to be resolved at the first point of contact.

3. Complaints are to be logged.

4. Staff take ownership of complaints.

5. Root causes of complaints are to be uncovered and eliminated.

As products become more commoditised and service levels grow increasingly similar, having an effective complaints management and resolution framework will become the next differentiator of good service.

If a company’s leaders let their customers see and know that they and their people genuinely welcome complaints as gifts, they will have an edge over their competitors in generating better customer loyalty and, in turn, profitability.