Customer Complaints Handling Procedure

Executive summary

A wide range of laws and regulations focus on the recommended approach of marketing products and services and stipulate compliance requirements in the market environment. Organizations are required to abide by these laws and regulations in their transactions. The cardinal principle enshrined in these rules and regulations is that all forms of marketing must of necessity be accurate, truthful and current. The primary areas of compliance therefore, include: the nature of information organizations may gather from customers and what they may carry out with such information; information that organizations can convey concerning their products and services and how they may convey such information; information that can be communicated by organizations concerning their competitors and the products or services offered by such competitors. Other pertinent areas of concern in compliance include: endorsement, comparative claims, contests and sweepstakes, collection and use of marketing information, telemarketing, marketing to children, digital marketing, special offers, and negative-option marketing. This paper aims to examine compliance requirements in regard to handling of customer complaints. It will essentially examine how organizations handle complaints from dissatisfied customers and the procedures employed by such organizations to forestall consumer apathy occasioned by dissatisfaction in products or services offered by an organization.

Introduction and Overview

The past years have been epitomized by unprecedented growth of competition in companies. Furthermore, the stagnation or shrinking of markets in the contemporary business environment makes it difficult for companies to grow or continue making profits in the long run (Bitner, Booms, and Tetreault, 2009). The rapid enhancements and perpetual improvements of production technology as well as the products themselves have heralded a market full of substituted products. These prevailing market dynamics have necessitated sale of efficient service even where goods were previously the primary concern of an organization(Rambaud, 2006) . This significant shift in general market conditions has subsequently lead to an emphasis on customer orientation. Companies have awakened to the reality that satisfied customers are a contingent part of successful organizations. Moreover, focus of organizations has also moved from acquisition of new customers to retention of existing ones. This change of tact has been spurred by empirical findings which indicate that acquisition of new customers and recovery of lost customers is considerably more expensive than retaining existing ones (Checkland, 2000).

From the perspective of the customer, one critical benefit of compliance is that goal attainment and satisfaction with processes of service delivery is dependent on compliance with roles that impact on behaviour outside an organization (Albright, and Roth, 2009). For example, although certain products may include several instructions on usage, the consumer is obligated to comply with the instructions in order to realize the aim of the product (Foster, Gupta, and Sjoblom, 2010). Satisfaction has been shown to stem from the variation between what the customer anticipates and what they actually receive (Checkland, 2000).

According to Carter and Kulbok (2002) consumer compliance is an integral element of service production. They contend that without the direct involvement of customer, the organization productivity is bound to be affected, as well as its positioning in relation to its competitors. Consequently, the quality of services dispersed to customers would be impacted leading to customer dissatisfaction. For example, the healthcare services, whose productivity depends on collective effort and compliance by both the customer (patients) the services employee. The research question for this study is therefore: “Is consumer compliance with product or service instructions linked to satisfaction with goals of such products or services?”

Literature Review

Introduction

Literature in Market and management is full of market oriented philosophies which attribute performance and profitability to customer loyalty and satisfaction (Bosch, and Enriquez, 2005). In practice, however, customer orientation hardly ever attains a recognizable level in the operations of businesses. The efficiency of processes in organizations has traditionally been fostered by process-based management teachings such as total quality management, activity based management, lean management, business process re-engineering, continuous improvement and supply chain management (Foster,Gupta, and Sjoblom, 2010). Even though many scholars have touted the important role played by consumers in the advancement of business processes (Cardy, and Dobbins, 2006), critics have in the past argued that such praises fail to pay enough attention to the consumer (Rambaud, 2006). In essence, contemporary strategies aimed at addressing the plight of consumers in marketing and management literature do not lay enough emphasis on pertinent issues affecting the customer. Therefore, the gist of this paper is to advance an argument that is customer focused and specifically considers effectiveness of procedures involved in handling complaints presented by customers.

Studies have examined the role of customers in the advancement of an organization through service creation. For example, Simpson et al (2000) posit that service organizations have a tendency of treating customers as quasi employees. This notwithstanding, compliance requirements are largely affected by a failure of most organizations to invest in customer participation outside of the service company (Checkland, 2000).

Other studies have also established that customers complain when they experience one of two conditions: they sense that they have been treated unfairly or their expectations are underperformed to a degree that falls outside their zone of tolerance (Albright, and Roth, 2009). According to Cardy and Dobbins, (2006), customers also have a tolerance threshold for product and service performance. The extent of tolerable performance will be determined by importance attached to a product or service or the specific attribute of the product, which occasions the complaint. Important products and services will tend to have a stricter tolerance compared to products and services deemed less important (Foster, Gupta, and Sjoblom, 2010).

Customer complaints as the basis of Process improvement

Faults committed when providing customers with products and services have been prioritized based on the cost incurred by a company or an organization’s consumers (Rambaud, 2006). For instance, the Japanese quality philosophy categorizes between systematic and random faults. Systematic errors have a tendency to cause a customer to experience continuous dissatisfaction (Hallen, and Latino, 2003). Such errors stem from myriad factors, which make their identification and analysis a challenging endeavor. On the other hand, random errors stem from relatively simple causes and are therefore, quite easy to identify and correct (Davidow, 2003). The removal of systematic errors has been touted to engender the greatest benefit to an organization, given that their removal has the greatest potential of enhancing quality in an organization’s processes (Albright, and Roth, 2009). A substantial quantity of versatile data is crucial to the identification of systematic faults within an organization (Stauss, and Schoeler, 2004). An important source of generating systematic data entails gathering information that constitutes customer complaints. This source is both valuable and inexpensive.

The adoption of a staff friendly approach of complaint process has an added benefit to the productivity of an organization, given that it enhances employee retention (Zairi, 2000). The basic premise behind the employee-friendly customer complaint process is that recognition of human error makes the management of complaint relatively easier to employees and contributes to a happier workforce (Checkland, 2000).

Other important factors that should constitute essential elements of the complaint process are key attributes which are designed to improve the process by saving the costs involved and consequently impact on the profitability. The nexus between cost and customer satisfaction bolsters the improvement process and makes both parties to the process agents of championing such progress and change (Zairi, 2000). This convergence implicitly alludes to the fact that process improvements significantly affect customer satisfaction and retention just as they affect the attitude and retention of employees.

Therefore, process improvements should be fashioned to address factors that positively affect both customer and employee attitudes. The preferred approach in attaining this goal is by employing customer complaint information with a view to establishing matters that lead to customer dissatisfaction and using the feedback provided as the basis for initiating process improvement strategies (Davidow, 2003). The relevance of this approach stems from the fact that it is aimed at avoiding repetition of errors that could have been occasioned by a failure to observe critical procedural factors in the initial interaction between a customer and employees of the organization (Albright, and Roth, 2009).

Complaint typically enters an organization at various customer meeting points: order processing, accounts receivables; sales engineering, customer service center and logistics. A complaint processing system thus needs to gather complaints from around the business then analyze them in order to ascertain the root causes. From such rigorous procedure a company will significantly reduce the amount of rework needed and it will attain a higher level of first-time reliability (Davidow, 2003). According to Hammer (2010) awareness of an organization’s complaints policy and processes is an effective means of increasing the number of employees who report any nature of issue that causes dissatisfaction. If the failures in an organization can be traced to certain individuals or processes then the organization is well placed to correct such failures (Albright, and Roth, 2009).

This paper advocates for the development of an ideological construction that systematically analyses employees feedback registered by customers in the form of complaints to bolster improvements to business processes both at strategic and operational level. Inherent in the whole concept is the notion that organizations should not just be contented with the improvements achieved by satisfying complaining clients, but that the complaint feedback collated in the process should be integrated into an organization’s processes and specifically target the source of complaint (Bitner, Booms, and Tetreault, 2009). By targeting the exact location where the complaint is alleged to have originated, the problem is eliminated. This proposition is founded on the premise of employing the concept of learning system and loops in feedback to balance the diversity presented by the business environment and operations (Checkland, 2000).

CHAPTER THREE: RESEARCH METHODOLOGYIntroductionThis chapter discusses the methodology of the study and describes the procedures that will be used in conducting the research study. In this chapter, the researcher will discuss the research design, data collection methods and data analysis methods that will be used to realize the research objectives. According to Mugenda and Mugenda (2003), research methodology describes the procedures that have been followed in conducting a study. A research methodology will be developed and a population determined. Data will be collected using questionnaires and analysis will be done to enlighten the research study objectives.

Research designA research design entails a framework or an outline employed in conducting a research. “A research design is the conceptual structure within which research is conducted; it constitutes the blueprint for the collection, measurement and analysis of data” (Kothari, 2004, p. 31).Research design is a way of achieving the research objectives through proven techniques. According to Cooper & Schilnder (2003), a research design is a framework for specifying the relationship among the study’s variable and outlines procedures for every research activity.

The study will employ descriptive research design. descriptive research design is aimed at collecting information from respondents on their opinions and attitudes in relation to the research problem.

PopulationA population entails all items in a field of research. Mugenda and Mugenda (2003), defined population as being made up of the entire group of people a research is going to be conducted before a sample size is selected. The population however must be carefully chosen and defined in order to come up with best results. This is due to the fact that a population that does not have characteristics of the study will lead to different results. A target population is a set of units that have observable characteristics which will be used to generalize the results of the study (Mugenda & Mugenda, 2003). In this study, the target population involves online communities. The choice of online communities was informed by the fact that these group creates value for all parties and stakeholders involved including third parties and host member. The defining criteria in this regard was the need to enhance the perceived value.

Sampling procedure and sample sizeA sampling method is a way of selecting a portion of population such that the selected portion represents the population adequately (Chandran, 2004). Similarly, “Sampling is the process of selecting a number of individual for a study in such a way that the individuals selected represent the large group from which they were selected” (Mugenda & Mugenda, 2003, p.10). When the population is too large, the researcher needs to select individuals to represent the larger group. The primary purpose of sampling was to obtain information about an entire population by examining only a part of it with the assumption that the sample data convey the population parameters (Kothari, 2004). It is therefore imperative that sampling enables the researcher to narrow down the large patients and health practitioner’s population to a manageable sample that provided required data about the study. Using a random stratified sampling, various consumer communities will be selected for inclusion in the study. Membership to online communities and age will be used as the basis for stratification.

According to Chandran (2004), sampling methods are classified as either probabilty or non-probability. The probability sampling method gives an equal chance of selection to each member in the study. Every sampling unit in this case has a known non zero chance of being included in the study (Mugenda & Mugenda, 2003). Non probablity sampling method does not equally select elements from the population to participate in the study and is useful when the researcher is not interested in selecting a sample that is representing the whole population (Chandran, 2004).

According to Chandran (2004), sampling methods are classified as either probabilty or non-probability. The probability sampling method gives an equal chance of selection to each member in the study. Every sampling unit in this case has a known non zero chance of being included in the study (Mugenda & Mugenda, 2003). Non probablity sampling method does not equally select elements from the population to participate in the study and is useful when the researcher is not interested in selecting a sample that is representing the whole population (Chandran, 2004).

The target population will be grouped into strata i.e. patients and health practitioners of the NCC health center in Bahati, the elements in the target population will have an equal and independent chance of being selected randomly to come up with the sample that was used in the study.

This survey will involve a sample size of 150 internet users who have previously used online consumer service. A sample size refers to the selected representative of the larger group. “An optimum sample is one which fulfills the requirements of efficiency, representativeness, reliability and flexibility” (Kothari, 2004, p.56). The ultimate test of a sample is how well it represents the characteristics of the population it purports to represent. From the target population the required number of respondents will be selected in order to make a sample. 10% of the target health practitioners and 30 % of the target patient will be used as the sample of the study..

Pilot study

A pilot study will be undertaken as part of the exploratory research. The pilot study will involve a focus group of 20 respondents who are conversant with using the internet. The focus group will mainly be specialized personnel and practitioners in various fields, and whose work entails using online web spaces to engage consumers. The respondents will be required to map various tools used in online collaborative transactions, namely online communities, blogs and Wikis with regard to the ability of these collaborative web interfaces to establish and convey product, deliver organization an brand value to consumer.

Research Instruments

The study will involve use of questionnaire developed based on the frame of reference and research questions. The questionnaire will be divided into three sections. The purpose of the study will be highlighted at the questionnaire’s headline. The respondents’ views concerning the perceived quality of employing online consumer service will be the focus of analysis in the second section. The last section will be concerned with obtaining information about respondent’s profile with regard to age, gender, education, occupation and remuneration (income). Open ended questions, multiple selection questions, scored questions and a five point Likert-scale neutral will be used. On the Likert scale (1= strongly disagree, 2= disagree, 3=neutral, 4=agree and 5=strongly agree).

Measurements employed in the research

Variable No Question Type of scale

Reliability 1 An initial use of online customer service sites reveals that they are right in service dispensation Likert-scale

2 The service delivery in online customer service sites matches the standards promised Likert-scale

3 The service provision in online customer service sites suits consumer needs Likert-scale

4 Task completion in online customer service sites is accurate Likert-scale

5 Consumers can trusts and rely on services offered by online customer service Likert-scale

6 online customer service is quick to address consumer needs and concerns Likert-scale

7 The frequently Asked Questions in online customer service sites are comprehensive enough to address major areas of inquiry resented by consumers Likert-scale

8 There are adequate knowledgeable personnel to address problems presented by consumers in online customer service Likert-scale

9 The rate of processing problems in online customer service sites is fast Likert-scale

Security 10 Account transactions of consumers using online customer service site are accurately kept Likert-scale

11 Security for transactions undertaken using online customer service site is adequate and up to standard Likert-scale

12 Consumers consider online customer service site to be secure Likert-scale

13 Consumers feel a sense of security when using online customer service site Likert-scale

14 Consumers are confident of the level of security offered by online customer service site Likert-scale

Ease of Use 15 Consumers perceive online customer service site to be accessible and easy to use Likert-scale

16 online customer service site employs language that s well understood by consumers Likert-scale

17 Consumers can easily understand the information and text used in online customer service site Likert-scale

18 Instructions relayed to consumers in online customer service site are clear Likert-scale

Access 19 The online customer service site is accessible to customers on a 24/7 basis Likert-scale

20 Customers who intend to contact organizations using online customer service site have provisions in the form of ,inks to email or internet based query facilities Likert-scale

21 Customers can readily access their accounts by logging in anywhere at any time to receive services from online customer service sites. Likert-scale

Value of online customer service 22 Customer believe the online customer service site are an integral element of service provision for the organizations concerned Likert-scale

Customer satisfaction 23 Problems inherent within organizations can be addressed by online customer service site Likert-scale

24 Services offered by online customer service site exceed customer expectation Likert-scale

Customer Satisfaction 25 Customers using online customer service site are motivated to continue using such services.

Likert-scale

26 Customers are likely to continue suing services provided by online customer service site in future Likert-scale

27 Customers are likely to recommend their friends, colleagues and family to use services provided by organizations through online customer service site Likert-scale

Views of online customer service 28 Reasons that are likely to motivate customers to prefer using other forms of customer service instead of online customer service Multiple selection

29 Services or products that customer is likely to include to meet his or her needs Open Ended question

30 Services or products that the customer is likely to prefer remaining integral to the online customer service site Open Ended question

Data Collection methods and proceduresAccording to Levy and Lemeshow (2001), data are the facts present to the researcher from the study’s environment, they include primary and secondary data. Primary data are the original works of research or raw data without interpretation or pronouncements that represent an official opinion or position (Chandran, 2004). According to Bless et al., (2008), secondary information or data sources are data neither collected by the user nor specifically for the user. Thus invloves the collection and analysis of the published materials and information from internal sources. Secondary data may be obtained by collecting information from a diverse source of documentations or electronically stored information. The study collected both primary and secondary data. Secondary data included sources of literature and historical information on the two Adventist universities. Primary data will be collected using questionnaires administered on a drop and pick basis.

Data collection instruments according to Cooper and Schindler (2003), are tools used for gathering empirical evidence in order to gain new insight about a situation and answers questions that prompt the undertaken research. They include: questionnaires, interviews, observations and focus group discussions. The method to use in collecting data largely depends on the type of data, either primary or secondary data (Kothari, 2004). This process consists of examining, tabulating analyzing the evidence to address the initial proposition of the study. This study will use questionnaires to collect primary data.

Questionnaires are a series of written questions on topics about which respondent’s views or perceptions are sought (Mugenda & Mugenda, 2003). Questionnaires contain both open-ended and closed-ended questions. Chandran (2004), explained that open-ended questions or unstructured questions are those for which alternative are provided while close-ended questions or structured questions do not provide alternatives for the respondents to choose from. The questionnaires in this study had both open and closed ended questions and were administered to respondents who were required to complete them. The researcher will exercise care and control to ensure all questionnaires issued to the respondents are returned back, to accomplish this, a register for the issued and returned questionnaires were kept. The use of questionnaires in this study will be advised by the advantage it offers such as ease of administration and the convenience in targeting the response obtained by limiting the respondents to the subject at hand (Wilkinson & Birmingham 2003). Chandran (2004), observed that use of self-administered questionnaires is the only way to elict self-report on people’s opinion, attitude, belief and value. Questionnaires also allow for confidentiality of the respondents (Wilkinson & Birmingham 2003).

Data analysis and presentationData analysis according to Bless et al., (2008), is the process of organization, manipulation and consideration of meaning of data collected. Cooper and Schilnder (2003), argued that data analysis involves reducing accumulated data to manageable size, developing summaries, looking for patterns, and applying statistical techniques such as tables, charts, and percentages. Data analysis for this study integrated content analysis, qualitative and quantitative methodology in order to derive meaning from the data collected from the practitioners and patients. Quantitative data collected will be analyzed using statistical package for social sciences SPSS and presented through percentages, means, standard deviations and frequencies. The information will be presented by use of bar charts, graphs and pie charts.

Ethical considerationEthics are beliefs and rules about what is right and wrong. According to Ferrell, Freaedrich and Ferrell (2008), research ethics emphasises on determing what is right and wrong during the research period. The goal of ethics in research is to ensure that the researcher follows the right procedure in the collection, analysis and recommedation of the research findings. Value and judgement plays a critical role when one makes ethical decisions during the research process (Ferrell et al., 2008).Hence the researchers’ judgement on the findings should be true and just to portray the exact situation at hand. However; unethical activities are pervasive and include violating none discloses agreements with the parties who provide data to the researcher, breaking respondents confidentiality, misinterpretation of results, deceiving people and avoiding legal liability.

The researcher will conduct this research observing research ethics by getting approval from the universities to carry out the research. Misuse of privileges given by the universities, confidentiality, privacy and anonymity will be considered while carrying out the research. The researcher will also maintain high levels of integrity and remain objective throughout the study. The respondents will be informed the purpose of the research, its objective and the benefits of the study before they fill the questionnaires.

Conclusion

In order to realize the predominant market philosophy that lays emphasis on a client oriented approach to the attainment of compliance in the business environment, organizations need to focus on processes intrinsic to an organization’s value chain. In particular, focus should be on those processes which add the greatest value to customers. In profitable relationships between customers and an organization, such improvements have been found to play a critical role. Customer complaints serves as an effective means of effecting process improvements that are customer focused and at the same time identify systematic errors that are likely to occur in an organization. Customer complaints are more advantageous than data collected through panel studies and surveying of customers, since customer complaint information is usually a true reflection of the customer’s opinion. By putting in place appropriate mechanisms to address complaints arising from discontented customers, an organization’s financial performance is positively affected. Customer complaint process essentially covers a recovery process, tailored to ensure that complaints of discontented customers are addressed through timely correction of the errors made.

References

Albright, T.L., and Roth, H.P. (2009). Managing quality through the quality loss function. Journal of Cost Management, Winter, pp. 20–37.

Bosch, V.G. and Enriquez, F.T. (2005) “TQM and QFD: exploiting a customer complaint management system”, International Journal of Quality & Reliability Management, Vol. 22 No. 1.

Bitner, M.J., Booms, B.H., and Tetreault, M.S. (2009). The service encounter: diagnosing favorable and unfavorable incidents. Journal of Marketing, 54, January, pp. 71-84.

Cardy, R.L., and Dobbins, G.H. (2006). Human resource management in a total quality management environment: shifting from a traditional to a TQHRM approach. Journal of Quality Management, 1, pp. 5-20.

Checkland PB. (2000). Soft systems methodology: a thirty year retrospective. Systems Research and Behavioral Science 17: pp.11–58

Davidow, M. (2003) “Organizational responses to customer complaints: what works and what doesn’t”, Journal of Service Research, Vol. 5 No. 3, pp. 225-50.

Dee, B.; Karapetrovic, S. and Webb, K. (2004) “As easy as 10001, 2, 3”, Quality Progress, Vol. 36 No. 6.

Foster, G., Gupta, M., and Sjoblom, L. (1996). Customer profitability analysis: Challenges and new directions. Journal of Cost Management, Spring, pp. 5–17.

Hallen, G. and Latino, R.J. (2003) “Eastman Chemical’s success story”, Quality Progress, Vol. 36 No. 6, pp. 50-4

Hammer, M. (1990). Reengineering Work: Don´t Automate, Obliterate. Harvard Business Review, July-August, pp. 104–112.

Rambaud, L., (2006) “8 D Structured Problem Solving: A Guide to Creating High Quality 8D Reports”, Phred Solutions, Breckenridge, CO, USA.

Stauss, B. and Schoeler, A. (2004) “Complaint management profitability: what do complaint managers know?”. Managing Service Quality, Vol. 14 No. 2, pp. 147-56.

Stichler, J.F. and Schumacher, L. (2003) “The gift of customer complaints”, Marketing Health Services, Vol. 23 No. 4, pp. 14-15.

Zairi, M. (2000) “Managing customer dissatisfaction through effective complaints management systems”, The TQM Magazine, Vol. 12 No. 5, pp. 331-5.