How to keep your company off customer complaints registers

From next month, NSW Fair Trading will have the power to name and shame companies that are not meeting customers’ expectations. Brian Shrowder, senior counsel at Edelman Australia, offers his tips on how businesses can get ready.        

Companies are no longer in control. It’s a conversation that communication professionals should increasingly be having with their clients and CEOs.Brian Shrowder is senior counsel at Edelman Public Relations

The simple fact is that Australians have low levels of trust in business. According to Edelman’s Trust Barometer research released earlier this year, 39% of the total population do not trust businesses to do the right thing.

Scanning news headlines, it’s not hard to find reasons for consumer scepticism. From food contamination scares to failures across the auto industry there has been a jump in consumer complaints and product recalls in the past 12 months.

It is a situation compounded by the 500 million tweets created every day and the more than a billion people who log on to Facebook around the world. Social media is now the default mechanism for customers to voice their grievances.

Governments are not immune to this pressure and it comes as no surprise they are increasing their focus on transparency. A good example of this is the introduction of the Complaints Register, a NSW Fair Trading initiative aimed at curbing the 45,000 grievances it receives about businesses on average every year.

Complaint form

How will the Complaints Register work?

A business that receives 10 or more complaints in a calendar month will be named in the Complaints Register.

Based on existing data, there are around 25 to 35 companies that regularly meet this quota.

On a monthly basis, the Complaints Register will be published on the NSW Fair Trading website and be accompanied by a press announcement.

What are the limitations of the Complaints Register?   

NSW Fair Trading itself has conceded there are limitations with the new system.

Most notably, the system isn’t scalable. It is fair to expect that organisations with more customers will experience more complaints. However, the guidelines do not account for this.

Also, there will be a bias to certain industries due to the nature of the product or services offered. Figures released last week show businesses in the electrical goods, furniture, clothing, property and travel sectors are some of the most frequently complained about.

What does this mean for business?

The Complaints Register has put companies operating in NSW on notice.

With social media, a steady consumer affairs news beat and customer advocacy groups ever present, it is a good time for businesses to review their readiness for handling complaints.

Today, almost every customer complaint can be a potential issue and it requires a unified business response to resolve them. Companies looking to better manage their communications in the face of escalated consumer complaints should keep four key points in mind:

  1. Have the systems in place to monitor complaints

Often, the executive team of a business do not have visibility of a problem until it is too late. This is particularly true in the case of large, national businesses, where different teams and different geographies make it hard to connect the dots.

The first step in monitoring complaints is having trained and tested customer service and social media teams who can escalate problems when necessary, with a cross-functional team ready to respond quickly and decisively.

  1. Avoid a defensive mindset

When a complaint is aired in the public domain, it is natural for businesses to want to defend their position. While this is sometimes necessary, if you have already lost the sentiment battle, the finer details won’t sway consumer opinion. In many cases, the facts become inconsequential when compared to the emotional toll a problem has caused.

This is compounded by the fact that complaints are often handled by a company’s legal or liability team. While it is essential they are consulted, a media statement or customer letter written in legal jargon simply won’t resonate.

The same goes for a business’s relationship with regulators. It is essential they are consulted and kept informed. Consumers look to them as the authority on competition and fairness and, down the line when they are asked on live radio how your brand has managed an issue, you want them in your corner.

  1. Be human

Demonstrating you are genuinely concerned goes a long way. Executives should not be afraid to front up to the media. A face on the evening news can make a world of difference.

In our experience, almost all business leaders feel personally accountable and troubled when a customer is not treated appropriately. Too often, overly cautious corporate messages and lengthy processes get in the way of demonstrating this concern.

  1. Do versus say

Apologising for a problem is no longer enough. Customers want to hear that you are going above and beyond what is expected to fix their issue and ensure it doesn’t happen to others in the future.

Often financial investment is a barrier here and that’s a mistake. Business leaders need to consider their reputation as an asset, and solving a customer dispute worth $5,000 at the outset, even if you aren’t legally obliged to, may save thousands of dollars in the future lost as a result of a customer stimulating a negative news cycle that damages your credibility.

Brian Shrowder is senior counsel at Edelman Public Relations


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