Companies have tried for decades to improve customer complaint resolution — without notable success. A new approach is needed.

In 1976, the U.S. Office of Consumer Affairs sponsored what many consider the first national survey of customer satisfaction in the United States, asking consumers what problems they had experienced with products and services during the past year and profiling the resulting complaining behavior of those customers. That study found that the expectations of many customers were not being met. Products people wanted were frequently out of stock, quality was often shoddy, and repairs and customer support were often poor. In the nearly 40 years since the original study, companies of every size and shape have identified customer service as an area of tremendous importance for customer retention and branding. In fact, in the minds of many managers, the ability to ratchet up customer service has become an essential element of competitiveness.

Given the amount of attention companies have since paid to improving customer service, they might expect to have seen dramatic gains in the level of customer satisfaction. However, based on the 2013 National Customer Rage (hereafter, Customer Rage) survey,2 which followed the basic methodology of the original U.S. Office of Consumer Affairs survey, complainant satisfaction is lower today than in 1976. Although companies have invested in technology, call centers and other resources (such as staff training) to provide better customer service, many businesses are finding that being able to create satisfied and loyal customers is more difficult today. Hurdles include a daunting rise in customer expectations; challenges posed by the Internet, social media and online word of mouth; and poor execution of upgraded corporate complaint-handling policies.

Since the 1970s, we have been involved in researching changes in customer satisfaction, and in the past decade we have conducted six Customer Rage surveys in the United States as well as variations of this study internationally. (See “About the Research.”) Among the most interesting findings:

• The explosion of online social networking and other communication tools has raised the stakes drastically in the area of customer satisfaction. While disgruntled customers in the 1970s may have expressed their dissatisfaction to 10 friends and family, our 2011 Customer Rage survey found that modern, socially connected consumers reach an average of 280 others each time they post on social networking sites, with the potential for echo effects through “retweeting” and other viral activity on sites such as YouTube.
• When today’s customers get mad, they often tend to get really mad. In our 2013 U.S. survey, 68% of the respondents who had experienced customer problems during the past year were either “extremely” or “very upset.” Thirty-six percent said they had “yelled or raised (their) voice” in connection with their most serious customer problem.
• In addressing complaints, companies are failing in their efforts to create one-stop resolution with technology and people dedicated to resolving customer problems. In 2013, only 21% of complaining customers said they felt that their problems were resolved at the first point of contact; customers reported that they typically needed to make four or more company contacts before achieving a resolution.

Clearly, customer satisfaction remains a major concern. In fact, the share of customers reporting problems has grown. While 32% of consumers reported experiencing a problem with products or services during the past year in 1976, that figure rose to 50% in 2013. So what can companies do to improve the level of customer satisfaction in complaining situations?

For More Information

To read further or comment on this article please visit http://sloanreview.mit.edu/x/55313 or contact the authors at [email protected]

Authors: 

Marc Grainer (Former Chairman, Customer Care Measurement & Consulting)
Charles H. Noble (Proffitt’s Professor of Marketing at the University of Tennessee in Knoxville)
Mary Jo Bitner (Edward M. Carson Chair in Service Marketing and the executive director of the Center for Services Leadership at the W. P. Carey School of Business at Arizona State University)
Scott M. Broetzmann (President and CEO of Customer Care Measurement & Consulting)