STIMULATING COMPLAINTS IN FINANCIAL SERVICES

Why financial services companies should stimulate complaints

John Coldicutt, Chief Marketing Officer, Fizzback

Context: Businesses typically think of complaints as a necessary evil. In a perfect world they wouldn’t
happen, but in an imperfect world they serve a useful purpose by providing an external signal that a business
process has failed from a customer’s perspective. How a business reacts to, and indeed embraces,
complaints can make the difference between a good company and a great one. Fizzback see complaints
management as a viable forum for companies to build relationships and trust with their customers, leading
to stronger customer loyalty and higher efficiency deliver via rigorous process improvement.

C learly, financial services companies should not actively seek to generate new complaints; the long term objective of any
customer focused enterprise should be to reduce complaint volumes. There is a right way and a wrong way to do this
however. By making the complaints process difficult and the outcome opaque, customers will be less inclined to complain:
restricting customers from putting forward issues that matter to them is clearly not beneficial for anyone. Worse still, some
companies bury their head in the sand, conveniently ignoring negative customer feedback in the hope that it simply goes away.

The cost of making it hard for a customer to give feedback (and, for those that do collate feedback but do nothing with it) can be
significant. Having broken an amateur musician’s guitar through careless baggage handling, United Airlines were the subject of a
music video the musician made about the experience. The aptly named “United Breaks Guitars” has received almost 8 million
views on YouTube, causing significant damage to the brand.

Customers are becoming increasingly vocal, and with the viral power of the internet, can prove influential to an unprecedented
level. As United found out, the absence of an effective complaints management process that stimulates productive feedback
and dialogue can prove costly. With the rapid rise of social networking sites like Facebook and Twitter, it is increasingly easy for
a customer to broadcast their complaint to a large audience.

Some companies have chosen to monitor their brand image online, and participate tacitly on social media sites in an attempt to
manage reputational risk. But it’s arguably far better to build a bridge to customers: companies therefore need to rethink how
they listen to and act upon customer feedback, including complaints. At Fizzback, we help a number of global brands (such as
Tesco and T-Mobile, see case studies below) do exactly that.

Five steps to complaint management success

Step 1: Stimulate complaints, but only once you’ve designed an effective set of processes to fix customer issues quickly. To
gauge the effort required, pilot this approach with a subset of your customer base, perhaps focusing on customers with high
lifetime value. In our experience, companies that drive significant business benefit from complaints do so by empowering the
customer, asking them to set the context of their complaint. By context, we mean the who, where, how, when, what and why
(see The Context Framework on page three.)

Step 2: Map the moments of truth in your customers’ lifecycle. Prioritise requests for feedback on the real points of inflection,
i.e. when they are really considering their level of commitment. Find the most appropriate way to solicit feedback at these
points, ensuring that the experience is fresh – and make it easy!

Step 3: Understand the root causes of complaints: combine transactional information with verbatim customer feedback to get
both sides of the coin. In the near term, fight fires with the customers worth fighting for and in parallel, fix systemic problems
i.e. the weak links in the chain.

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 STIMULATING COMPLAINTS IN FINANCIAL SERVICES

Step 4: Align employee metrics to minimise complaints and reward great performance. This can only be done with sufficient
volumes of objective customer feedback, so reach out as widely as possible, making it easy for consumers to express their
satisfaction and what drives it.

Step 5: Get behind this as a business. This should not be a snapshot exercise, it needs to be part of “business as usual”, nor
should it be confined to an insight function. It needs to be driven by the leadership team, including heads of every customer
touching function.

Recommendations for financial services companies

For financial services companies, the pressures on handling complaints go beyond purely retail issues, with both regulators and
ombudsmen laying down requirements for the classification and reporting of complaint data. Therefore while complaint
management is for many companies a mandatory requirement, leveraging complaints in the wider sense to drive better learning
and process improvement, and ultimately deeper customer relationships allows financial services companies to extract
maximum value from this strategic imperative.

Case study 1: Tesco, Europe’s largest retailer, previously raised the bar in terms of processing transactional data to ensure their
Clubcard holders receive the most relevant offers and are now setting the standard in listening.

In each of their 2,000 stores across the UK and Ireland, Tesco invite all shoppers to submit feedback about anything they choose
through one of five channels including free SMS text, email, free-phone voice via IVR, physical comment cards and the web. There
were two fundamental reasons behind the wide choice of channels:

1. To democratise feedback. Tesco wanted to make it as easy as possible for customers to express their feelings about all
aspects of their in-store experience and wanted to ensure that everyone had the capability to do this

2. To gather fresh feedback, right at the point of experience. Feedback has a half-life, meaning that the further from an
experience in both time and distance, the less likely customers are to express their feedback. This is especially true for
positive experiences. For example, if a member of staff is particularly helpful, consumers want to express their gratitude
there and then, otherwise not at all.

As a result, Tesco customers express a large variety of positive feedback, but in cases where they have a complaint, an alert is sent
immediately to both the store manager and their customer service centre, either of whom are often able to resolve the
customer issue there and then.

Case study 2: T-Mobile, a European Mobile Network Operator, proactively seeks customer feedback at every noteworthy point in
the customer lifecycle, including direct marketing, sales, content consumption, customer service and repairs.

In their effort to assure the customer experience at each of these moments of truth, T-Mobile have aligned employee KPIs to
customer ratings and if the customer has cause for complaint, this is immediately followed up by a store manager or customer
service team leader.

As a result, T-Mobile have seen rapid increases in customer satisfaction and a significant reduction in overall calls into their contact
centre, especially those that are complaint related.

According to Customer Service Director Russell Taylor: “All levels of customer service benefit from immediate customer input which
we will use to identify training requirements, provide coaching and derive robust key performance indicators.”

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 THE CONTEXT FRAMEWORK

WHO? WHERE? HOW?

Census, not sample: Companies can
only address all issues if they invite
all customers to give feedback. The
focus is to fix problems, rather than
to gain insight from a small but
“statistically significant” sample.
At the point of experience: Why ask
a consumer how their holiday was
after the fact? Or how their
supermarket trip was via a web
survey? The richest insight comes
from the location, i.e. the time and
place of the experience.
Make it easy: give consumers a
choice of channel but, critically,
allow them to express their feelings
in their own words quickly and
easily. Customers shouldn’t have to
hunt around corporate websites
looking for a feedback page, or
resort to writing to the CEO. They
should feel that the dialogue
channels are open.

WHEN? CONTEXT WHAT?

At key moments-of-truth in the
customer journey: A consumer has
expectations of the brand at various
points of interaction and continually
evaluates how the company is
meeting those expectations. This
can be thought of as a series of
interlocking links in a shared value
chain. And like any chain, it’s only as
strong as the weakest link.
Let the customer decide: This is in
stark contrasts to web-based
“Companies that drive questionnaires or IVR feedback
significant business which forces consumers to fit their
benefit from complaints actual opinions into the company’s
do so by empowering structure. Fizzback clients
empower consumers by letting
the customer, asking them express themselves as they
them to set the context would to a friend and unique
of their complaint.” natural language processing
technology takes care of structuring
this into actionable information.

WHY?
Tackling problems at source: Time and again we see our clients reduce complaints dramatically (in one case by 61%) by
setting sail on the right course. For example, ensuring that retail sales employees sell the right mobile phone and
contract to a consumer, taking real care to explain what they are buying, can save a huge amount of work downstream in
fixing issues around billing complaints and technological challenges.

To drive accountability: Over many millions of comments collected through Fizzback the human-human experience is
consistently the most important element of the customer experience. Therefore empowering employees to act with
empathy (rather than dehumanising them with rigid process) and incentivising them to delight customers can have a
huge impact on the customer experience, reducing the cause for complaint. With response rates in the 30-40% range,
our clients gather sufficient feedback to base front-line employee’s bonus payments on customer satisfaction, using the
customer’s verbatim comments to coach agents and inform training.

To act rapidly: it’s vital to close the loop with customers, regardless of the sentiment they express. The adage that a
customer that has had a problem fixed well is more loyal than a customer that never had a problem is borne out time and
again in our analysis. Asking for feedback gives companies a new window of opportunity to drive customer equity but
only if they are geared up to act within minutes.

To unite the executive team: We’ve seen a number of our clients build “voice of customer” committees, staffed by their
executive team, and in other cases, there’s a regular slot in management team meetings to discuss customer feedback.
It’s powerful in that it’s totally objective and highlights weak links between departments.