Dealing with service failures and customer complaints requires more than just fixing the immediate problem. The key for companies is to ensure that they capture and manage the full range of customer complaints and ensure that processes are incorporated, that fix the root causes of the customer complaints.

An article in the Wall Street Journal from September 2008 titled “Making the Most of Customer Complaints” from Prof. Stefan Michel, IMD Lausanne, David Bowen, Thunderbird School of Global Management and Robert Johnston, Warwick Business School summarizes challenges and strategies to ensure the successful management of customer complaints.

Here is an excerpt:

Nobody’s perfect. That’s a fact, not an excuse. Which is why it’s crucial for companies to realize that the way they handle customer complaints is every bit as important as trying to provide great service in the first place. Because things happen.

Customers are constantly judging companies for service failures large and small, from a glitch-ridden business-software program to a hamburger served cold. They judge the company first on how it handles the problem, then on its willingness to make sure similar problems don’t happen in the future. And they are far less forgiving when it comes to the latter. Fixing breakdowns in service — we call this service recovery — has enormous impact on customer satisfaction, repeat business, and, ultimately, profits and growth.

But unfortunately, most companies limit service recovery to the staff who deal directly with customers. All too often, companies have customer service sort out the immediate problem, offer an apology or some compensation, and then assume all is well. This approach is particularly damaging because it does nothing to address the underlying problem, practically guaranteeing similar failures and complaints.

Read the full article “Making the Most of Customer Complaints”.