CASE OF THE COMPLAINING CUSTOMER

Presented by Group 1 Isha Arora Namita Gupta Rohit Kulshestra Soumitra Kandpal Vaibhav Gupta Yogesh Sehgal

Introduction to the Case

Presto Cleaner, a laundry service has installed a new computer system Mr. George Shelton, the complaining customer, had lost his laundry by the new system Mr. J.W. Sewickley, the president of the company has enquired Mr. Paul Hoffner in response of a complaining letter from Mr. Shelton

Customer Perspective

Old and loyal customer with $1000 worth of business a year Problem caused by introduction of complex system
Complex entry process in the computers Every time a new bag worth $3

Missing clothes Grievance redressal mechanism not effective

No clear information about whom to contact No quick followup of the complain

Expects apology and compensation for the new clothes

Paul Hoffners Perspective

Officer handling customer complaints Got the customer complaint on Aug 25th Suspected that the real reason for the lost clothes was that clothes went to some other customer Spent 10 days checking with the store and plant for the missing clothes Received the memo for the finding of clothes a little late and then did not feel it necessary to followup as the customer had already got the clothes Felt that the customer was very demanding and is unlikely to be pacified by whatever is done

Is the customer always right ?

Most of the time but his demands cannot always be justified

Worth of the Customers

Customer Lifetime Value:

Looking

at income, cost and profit over full period of relationship and not on annual basis

Cost of acquiring a client is more than retaining old once Satisfied customers are repeat buyers Repeat buyers are loyal customers

Customer Loyalty Ladder

Brand Advocate

Repeat Purchase
Satisfaction Complain Trial Switch

Dissatisfied

Switching cost, Opportunity Cost, Lack of Information Barriers

Awareness of Product

Importance of managing complains

Customer Retention Continuous Improvement Building a customer focused organization

Complaints (Resolved) Complaints Non Complaints 19% 9%

70% 54%
46% Minor Problems Major Problems

37%

0% 20%40%60%80% Source: TARP 1986 Consumer Complaints Handling in America, US office of Consumer Affairs

Handling complains

1st step :Encourage dissatisfied customers to complain Specialized complaint handlers Complaint management approach :
Bad news must travel fast Proper and quick feedback Systemizing complaints handling Empowering front line staff

Recommendations

Two times free laundry service Free home delivery service Try to settle for half the compensation of $235 as shirts lost were found Quick response time from mgmt. Centralized database for records of clothes. One time purchase of bag Should have phone numbers and address in database

Recommendations cont

Facility to know lost clothes found at each location. If he settles for non monetary compensation of service then along with apology letter a gift can be given