Feature, continued

     Then the complainer was billed too much for an order. Finally, the complainer said he was taking his business elsewhere because it was slightly less expensive.  "I wish the guy would just leave and take his business elsewhere instead of telling me for two months that he is leaving," said the company president, "We have corrected all of our mistakes and made good on them, but this guy just insists on telling us every time we do something wrong.  Why doesn't he just go to our competitor?"

   What is wrong with this situation?  There are a series of problems that have created tension between the two companies.  The selling company has received indications that his customer is leaving for a lower priced competitor and is bothered by the fact that he has been told several times and the customer has not left.  What is really happening here?  The complainer is telling the selling company what it will take to keep his business. 

   Many companies assign junior managers to oversee customer service functions and deal with the complainers.  Most companies empower the young manager to settle the issue and appease the customer within specified limits, but they generally do not give these young managers the authority or even the opportunity to turn the complaints into a series of continuous improvements to correct problems.  Continuous improvement was discussed in a previous newsletter.  The more humorous aspect to this scenario is that these companies often hire expensive consulting firms to evaluate their business operations and to make improvements that their complaining customers are already telling them.

   Good companies listen to the complaining customers and keep statistical records of these complaints.  They address the source of the complaints, but they also investigate causes and trends that suggest there is an underlying problem in the organization.  Good companies recognize that most customer complaints are an indication of either something going wrong in the company or an indication of changes in the market that affect the company's products.

   Complaining customers can also be considered as part of a company's ongoing study of their market.  Marketing managers often bring people together as a focus group to provide input to the company on how they are doing.  That may be exactly what the complaining customer is doing.  Good companies recognize that most complaints start somewhere within their own company and represent areas that need improvement.  Let's take a look at how a good company addressed the complaints of the customer illustrated at the beginning of this article.

   The first problems is with the customer's credit information being put incorrectly into the computer.  This assumes the customer correctly completed any and all paperwork and that the paperwork could be easily understood.  The company is treating this as a simple mistake, but it is not possible to go any further without an investigation.  Mistakes can happen without being an indication of larger problems, but they might be opportunities to improve.  In this case, the credit application was correctly completed and the information was simply transposed by the accountant who added the customer's credit limit to the computer.

   A further evaluation of the situation revealed that it had only happened a couple of times, but the Continuous Improvement consultant led the company to create ways to improve their operations while preventing this from happening in the future.  They chose to have the accountant notify the customer's account representative when the credit line has been set and required the account representative to call and discuss the credit line with the customer.  The account representative will use the computer information to speak with the customer and they felt significant mistakes would be caught in the representative's review of the information in the computer.  They created a check and balance that doubled as another opportunity to have a positive contact with the customer.

   The next problem was that they mixed the complainer's order with that of another company and created a serious delay.  Many companies would correct the mistake and discipline the person who caused the problem.  The good company seeks to understand what happened before taking action.  In this case, the selling company had suffered from a flue epidemic and was attempting to fill all of the orders with a reduced staff while avoiding overtime.  An analysis of the incident indicated that adherence to a company policy had created the environment that caused the complaint.  The company changed their overtime policies to provide as many employee hours each week as needed to get the job done correctly when people are out sick. 

   The next problem was that the customer had been billed too much on an order.  The company apologized for the error and quickly corrected the bill.  They even gave the complainer a credit to appease him for the mistake.  An evaluation of the situation revealed that the complainer's people had made a mistake on the original order and changed the order several times.  This caused delays in filling the order, but the order still had to be shipped in time to meet the needs of their customer.  The selling company rushed the order through and was just barely able to meet the shipping deadline, but decided to clear up the paperwork after the shipment was completed and out the door.  The billing error was actually caused by the confusion generated by the complainer's business practices.

   Apologizing and making things right caused the mistake to be born by the seller and the truth of the situation was not known by the buyer.  It became another incident that made the seller appear incompetent to the buyer.

   I explained to the company president that complainers are telling them many of the things needed to improve his business.  He took my advice and followed through on each of the issues that caused his customer to  threaten to take his business elsewhere.  We arranged a meeting between the two company owners and worked through the various issues that led to the frustrations.  The meeting lasted about an hour and the only surprise was to reveal the fact that the billing error had been caused by the buyer's people.  A very small discount was negotiated and the two continue to do business.

   This case study illustrates how two companies can improve their business relationship by listening and following through on complaints.  Acting on complaints is not enough.  It is necessary to investigate the underlying cause of the complaint to determine if it is isolated or caused by environmental factors.  If your company has a continuous improvement program, those complaints will be reduced and they may become the subject of future improvements in operations.

Keith Chiles

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