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A framework of customer complaint handling

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Conference Paper · July 2010

DOI: 10.1109/ICSSSM.2010.5530119 · Source: IEEE Xplore

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 A FRAMEWORK OF CUSTOMER COMPLAINT HANDLING SYSTEM
Amy J.C. Trappey1, Ching-Hung Lee2, Wen-Pin Chen2, Charles V. Trappey3
1
National Taipei University of Technology and National Tsing Hua University, Taiwan
(trappey@ntut.edu.tw)
2
Department of Industrial Engineering and Management, National Taipei University of Technology,
Taiwan (t8749001@ntut.edu.tw)
3
MS, National Chiao Tung University, Taiwan (trappey@faculty.nctu.edu.tw)

ABSTRACT
An effect and efficient response to the complaints from customer is an essential indicator of a service-oriented
company’s performance, especially for a high-end restaurant chain group. Complaints reflect the needs for improvement
for a restaurant, such as food taste, quality and quantity, speed of services, price, service attitude, decoration and
environment factor, and sanitary factor. Customers have strong demands for quick responses to their complaints
nowadays. The paper overcomes the deficient approach of current (as-is) complaint handling through process
reengineering. In this study, a (to-be) framework of complaint handling system is analyzed and developed for a
Japanese restaurant chain. The operations between the headquarter and branches are studied to show the benefits of
proposed complaint handling process. In the first phase of the study, the as-is complaint reporting process is depicted. In
the second phase, the to-be complaint handling model and its process are defined using a formal integrated process
modeling (INCOME) approach. The new framework includes complaint reporting, compensation diagnosis, and
complaint analysis. Furthermore, this paper also discusses the decision supports of complaint resolution automatically
by the system and its benefit comparing to the current practices.
Keywords: Complaint handling, customer satisfaction, data mining

1. INTRODUCTION the AS-IS model and the TO-BE model are depicted.

Customer's complaint is the best indicator to determine 2. LITERATURE REVIEW

whether a service-oriented business operates well. If a
company does not handle its customer complaint
properly and promptly, further negative customer
responses will cause major damage to the business. In a
restaurant, customer’s response to complaint handling
will directly affect patronages and customer loyalty. If
a service-oriented company, such as a restaurant chain
in this study, did not pay attention toward handling of
customer complaints, it will cause a sharp decline in
corporate competitiveness. In a restaurant chain, some
customer complaint cases in its branch stores are to be
reported immediately to headquarter for complaint
resolution right away. Traditionally, telephone
reporting or faxed descriptions cause communication
gap and information asymmetry. Thus, some trouble
cases may not be handled properly without real-time
decision supports by the headquarter authority. Besides,
when the headquarter received a batch of the complaint
documents periodically (e.g., monthly, not daily or in
real time), the time lag of necessary recommendation is
huge, which cause further customer dissatisfaction
while waiting for resolution. The paper will proposed
an integrated framework of customer complaint
handling system including complaint reporting,
compensation diagnosis, complaint searching, and
complaint analysis. The complaint information of each
branch can be easily searched and shared among
headquarter and branches of the restaurant chain.
Effect and real-time statistic analysis are also designed
in the new process. The benchmarking comparison of
Complaint is a behavior that customers show their
dissatisfactory against their expectations. When
customers feel dissatisfied of foods, services and /or
other factors in restaurants, the behaviors of complaints
occur during or after their visits. Heung & Lam [1]
highlights that the complaint intentions of Chinese
diners were quite low and they were passive about
communicating dissatisfaction with restaurateurs.
Therefore, although customers feel dissatisfied but do
not complaint, the staffs may observe the customers’
dissatisfaction and take appropriate actions to correct
the problems.
In the case study, we found that complaint handling is
to terminate the dissatisfaction and to take remedy and
/or give compensation to enhance customers’
satisfactory levels. The emotional direction includes
apology and explanation. The physical direction is to
do the economic compensation to the disgruntled
customer. Customer complaint handling, both
emotionally or physically, is the method to solve the
consumer’s dissatisfaction. Davidow [2] presented
organizational responses in six separate dimensions
which include timeliness, facilitation, redress, apology,
credibility, and attentiveness. The company could
establish loyalty strategy to customers from the result
of customer complaint handling. The complaint
handling is also called service recovery. Gronroos [3]
considered that the strategy of service recovery is to
take some recovery action when service providers face
the service failure. That means an action to comfort
customers’ dissatisfactory emotions when customers
feel discontent. The information of complaint is very
important to a company, because a company could use
it to modify service strategy. Therefore staffs could
adopt the effect principle to recovery the service
failures. The more critical the customer felt dissatisfied,
the more possible the customer would complain [4].
The research also indicates that to attract a new
customer is 6 times the cost to maintain an old
customer.
Effect complaint handling could not only keep the
customers who have the bad experience, but also
enforce the image identification of the company,
switch them from angry to loyal customer [3].
Therefore the customers who have effect compensation
experience would have more brand loyalty than those
who do not have any experience of service failure [5].
Christo [6] considered that response time and the
satisfactory are an inverse ratio. Hoffman, et al. [7]
proposed eight compensation strategies of restaurant
industry. The strategies are free of charge, discount
offering, coupon offering, manager’s apology, meal
changing, correct meal serving, and apology without
compensation.
3. CASE DESCRIPTION AND AS-IS
COMPLAINT MANAGEMENT MODEL
The high-end restaurant chain group, Shintori, is
established in 1996 in Taipei. Since then, they have
successfully developed two brands of restaurants,
which are Shintori and People with five branch
restaurants in Taipei City. There are 4 additional
branches in Shanghai, China. The different strategies
are implemented in Shintori and People branches.
Therefore, each branch has its unique decoration and
meal (menu) design. Shintori provides Japanese cuisine
and People provides creative Chinese/Japanese food
[8].
The customer complaint handling process of the
restaurant group includes a series of tasks, such as
complaint acceptation, reason investigation, handling
action, analysis and improvement, and record
management. The branch head and department
managers are responsible for the customers’ complaint
of the store. The immediate report of some special
cases to the headquarter is needed to ask for timely
recommendation and help. Complaint handling is an
important and interactive activity among branch stores
and the headquarter.
3.1 As-Is Complaint Handling Process
In a restaurant, customers express their complaints and
displeases to service clerks because of issues, such as
dissatisfactory foods, poor services, bad facilities and
non-ideal dining environment. No matter direct or
indirect accusation to any staff, such as face to face
complaint, telephone complaint, complaint letter, and
electronic message over the web interfaces, all the
complaints should be accepted and properly cared for.
After accepting the complaint information, the staffs
and managers have to apologize and comfort the
customers emotionally, and then try to understand the
reasons. After the reasoning investigation, the
managers have to apologize and explain the reasons to
the disgruntled customers. Then, the managers start to
take remedy and compensation action to handle the
complaint case. There are many quality defects from a
restaurant, such as food taste, food quantity, speed of
serving food, rotten food, foreign matter, price factor,
reservation service, meal service, service attitude,
environment factor, and sanitary factor. After find out
the reason for the case, the managers have to adopt
correct compensation strategies, such as without
payment, discount offering, coupon offering,
manager’s apology, meal changing, correct meal
serving, and apology without compensation. The
managers and staffs have to diagnose the compensation
action by the customers’ feedback and the company’s
policy .If the managers need to return the payment, no
matter all payment or partial payment, they have to
find out the meal fee and return to the customers.
Afterwards, they start to fill all the process information
into customer complaint form. Moreover, they still
have to observe if customers feel good or not after the
complaint handling action. If the customers still do not
feel satisfied and still in the store, the manager have to
understand the reason from the customers. If the
dissatisfied customers have leaved the store, they have
to trace the case and take necessary action until they
feel satisfied. Every month, managers of each store
have to gather statistics of complaint case, and then to
announce the analysis result and strengthen the
knowledge of customer complaint handling in the
proper meeting. Finally, monthly customer complaint
statistics should be coordinated to branch head, and
then to gain the approval of General Manager. A
detailed complaint handling workflow is shown in
Figure 1.
3.2 The Disadvantage of As-Is Module
The as-is module for complaint management has some
shortages. First, each branch deals with customer
complaint individually, so the information of each case
is not integrated, shared and cross-referenced among
stores. Second, the head office receives a batch of
complaints every month, so the time lag between
problem occurred and problem solved is large. This
situation makes the service quality suffered when
handling customer complaints. Third, historical and
statistical information of complaints are not managed
and re-used properly. To avoid these short comings, we
propose a new to-be complaint management
framework and depicts its detailed process modles.
 4. TO-BE COMPLAINT MANAGEMENT
MODEL
To solve the difficiency in the as-is complaint handling
approach, this research develops an information
platform that integrates the concept of expert system
and decision making system. The proposed information
simplifies the linkage and knowledge accessing
approaches between the branch and the headquarter.
On this platform, they can search historical reference
Figure 1 The process of a System of traditional complaint handling
4.1 Complaint Reporting
The complaint reporting module offers (a) complaint
reporting , (b) complaint summarization, and (c)
complaint approval functions. When staffs accept the
customers’ complaint, they can solve the customers’
complaint and then use the new web-based system to
report the case before getting off from duty. The
headquarter could get the message at the next day, and
observe the case. If needed, they could give some
suggestion to strengthen the improper handling on the
web. In the complaint summarization interface, the
headquarter could get the newest complaint case from
each store.
4.2 Compensation Diagnosis
The compensation diagnosis module offers (a)
keyword diagnosis, (b)compensation recommendation
and (c)complaint record functions. In the new system,
it could help managers who start to handle the trouble
case by the compensation diagnosis. The managers
could key in the complaint keyword in the
compensation diagnosis system, and it could soon do
the comparison by complaint attribute and keyword
with the reference case, and then give a proper
(similar) cases, trace complaint status, share knowledge,
and even give order to have proper compensation from
the headquarter. The major functional modules of the
platform are discussed in details in the following
subsections. How the new complaint management
platform helps the staffs and managers complaint
handling actions are also described in the following
sub-sections.
recommendation. Besides, all the similar case may
appear in the search list. The managers could easily
read these cases to decide how to explain and apology
to the customer. Moreover, the knowledge could also
used when educating new staff to strengthen the
complaint handling ability. Therefore, the managers
could manipulate the historical knowledge to do the
proper decision to handle the complaint case.
4.3 Complaint Analysis
Complaint analysis is very important for the branch
head to review the quality. The comparison of monthly
statistics for accumulative statistics by classification
and by responsible person is valuable information in
exception analysis. By the system, the comparison
information could be automatically generated by each
complaint classification. Moreover, the complaint
analysis module offers comparison of monthly
frequency with yearly accumulative average. It could
also automatically generate recommendation.
Therefore, the exception classification could be
reviewed efficiently to all staff in the monthly
conference to avoid its happening again. The branch
head could also announce some special cases to
educate all staffs to enhance the complaint handling
ability and knowledge. He could also remind the pass the complaint handling information. After the
person who made mistake too many times by the manager handles the complaint case, he or related
analysis of the system. General Manager could also staffs could key in all the process on the web instead of
substitute monthly approval on paper document for paper documents, the managers of headquarter could
daily approval on the web. Summarily, The complaint reply it soon, and could know what’s happening
analysis module offers (a)comparison of monthly immediately. Therefore, the system could enhance the
frequency with yearly accumulative average and (b) visibility and the efficiency.
automatic recommendation. The framework of the
handling system described before is summarized on the Besides, when trouble case happening, usually it’s not
Table 1. easy to do a perfect apology action for some young
staffs or managers. Therefore, they should ask for some
Table 1 The to-be modules of complaint handling help. They could find the experienced manager or
system supervisor of headquarter to ask for recommendation.
Module Function In the to-be model, the system could provide a
Complaint reporting suggestion by the keyword in the diagnosis function.
The complaint Figure 2 shows the AS-IS and TO-BE model of
Complaint summarization
reporting module remedy and compensation process. We could see the
Complaint approval
The Keyword diagnosis different way which the managers or staffs to generate
compensation Compensation recommendation proper apology action. In the to-be model, the system
diagnosis module Complaint record could provide suggestions and compensation principle
Comparison of monthly automatically by the keyword. Therefore, the
The complaint frequency with yearly complaint knowledge could be efficiently used. And
analysis module accumulative average the valuable historical reference cases could be
Automatic recommendation efficiently found to ensure the quality of complaint
handling. AS-IS and TO-BE Details are described
below (Table 2-5).
4.4 To-Be Complaint Handling Process

All related staffs at any store could use the platform to

Figure 2 The as-is and to-be models of remedy and compensation processes
 Table 2 The activity details for remedy and
compensation process (AS-IS) Table 4 The activity details related to remedy and
Activity Description compensation process (TO-BE)
Remedial When staff receive the complaint and Activity Description
measures understand the reason, they have to Remedial When the staff receives the
consider a remedy for the complaint. measures complaint and understand the reason,
Think and According to the complaint they have to consider a remedy for
analyze by information, the staff can find the the complaint.
experience resolution by analyzing based on Record The Web system reads complaint
experience. information historical records.
Think and According to the complaint on the Web
analyze by information, the staff can find the Develop According to the complaint keyword,
training method by analyzing based on rules Algorithm classification and training rules,
rules pre-established by the company. and complaint diagnosis and handling are
Think and According to the complaint Methodology found in related cases.
analyze by information, the staffs can find the Insert Insert a complaint keyword
complaint method by referring to existing Keyword
record complaint records. Integrate After analysis of the complaint
Integrate After different analysis of remedial handling system, the suggested
and measures, the staff can integrate the compensation action is offered
determine solutions and decide the most suitable automatically.
the action action.
Table 5 The objects (details) related to remedy and
Table 3 The objects (details) for remedy and compensation process (TO-BE)
compensation process (AS-IS) Object Description
Object Description
Understand The staff and manager have to
Understand The staff and manager have to the reason in understand the complaint reason.
the reason in understand the complaint reason. store
store
Experience Experience for complaint handling.
Experience Experience for complaint handling.
Training The training rules of complaint
Training The training rules of complaint Rules handling announced by the company.
Rules handling announced by the company.
Complaint The historical record of complaint
Complaint The historical record of complaint Record handling.
Record handling.
Apology The wording of apology to
Apology The wording of apology to customers. wording customers.
wording
Compensatio The method can be taken to
Compensati The method can be taken to n way compensate customer.
on method compensate customer.
Primary The action is taken to compensate
Primary The action is taken to compensate action customer.
action customer.
 Figure 3 the top-level to-be model of the complaint handling process
When the branch manager wants to review the quality
by complaint analysis, he/she just has to use the system
to get the accumulative statistics by classification or by
responsible staff. The manager can also refer to the
exception situation that the system automatically
generated by each complaint classification. Moreover,
the complaint analysis module offers comparison of
monthly frequency with yearly accumulative average.
The manager can also conduct restaurant improvement
according to the analysis outcomes. Figure 3 shows the
complete to-be complaint handling model.
5. CONCLUSION
This paper presents an analytical framework of an
improved (to-be) customer complaint handling process
based on the current (as-is) customer complaint
handling process. The contributions of this research are
in three folds. First, in communication aspect, the
platform provides real time data and messages to make
the staffs’ communication accurate and efficient.
Second, in management aspect, the new handling
process ensures good controls of complaint cases’ data,
history, and progress reports. Third, in knowledge
application aspect, it provides knowledge mining and
sharing mechanism within hierarchical members of the
restaurant chain. The improvement will benefit the
management of complaint handling processes, and
overall customer relationship management, in a
restaurant chain effectively and efficiently.
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