Understanding and Addressing Consumer Complaints: A Strategic Imperative for Stakeholder Relations Committee

Archana Venkat

In the ever-evolving landscape of essential services, consumer satisfaction remains a critical metric for business success. Recent data from the Business Responsibility and Sustainability Report reveals that in 2023, the top 1000+ listed companies in India received an astonishing 881 lakh consumer complaints. Remarkably, only 2% of these complaints remained unresolved by the end of the financial year. While this statistic suggests efficiency, it warrants a closer examination to ensure that these high resolution rates genuinely reflect improved customer satisfaction.

Key Considerations for Board Oversight

1. Nature and Triviality of Complaints: The swift resolution of complaints could indicate that many are minor or easily addressed. The ease with which complaints can be registered online, through short forms or emails, might lead to simple queries being classified as complaints.
2. Misdiagnosis and Inter-Departmental Referrals: In industries with complex service delivery chains, there’s often a disconnect between frontline teams and the underlying issues. Misdiagnosed complaints may be swiftly redirected to other departments for resolution instead of being properly addressed at the source. This highlights the need for better training and cross-functional communication.
3. Compliance with Mandated Resolution Timelines: Many companies have a standard 90-day resolution period, and complaints might be marked as resolved when the deadline passes, regardless of whether a satisfactory solution was provided. This approach could mask unresolved issues under the guise of compliance.
4. Customer Service Effectiveness: The closure of complaints without true resolution can be concerning. Ensuring that customer service teams are not merely closing tickets but genuinely resolving issues is vital. This might require revisiting performance metrics and incentives tied to customer satisfaction.

Strategic Recommendations
Customer complaints often stem from unmet expectations or poor communication about the benefits of a service. While a high resolution rate is commendable, the focus should also be on reducing the volume of complaints through proactive measures. Here are some strategic actions that Boards can consider:

1. Invest in Preventive Measures:
   Investing in better service or product education can go a long way in preventing complaints. When customers understand how to use a product or service effectively, they’re less likely to encounter issues that lead to dissatisfaction. Expanding self-service options, where customers can resolve common issues on their own, can also ease the burden on customer service teams and improve overall satisfaction.
2. Link Resolution Abilities to Performance Appraisals:
   To drive a more holistic approach to customer service, Boards can push for considering issue resolution (without escalations) as part of the performance appraisals of on-ground staff. This encourages employees to take ownership of problems and find solutions before they escalate.
3. View Complaints as a Strategic Asset:
   Rather than viewing complaints as a nuisance or a cost centre, Boards should see them as a valuable source of feedback. Complaints provide insights into areas where the company may be falling short and highlight opportunities for improvement and innovation. For instance, a pattern of complaints about product usability could indicate the need for a redesign or feature enhancement.
4. Assess Industry-Specific Trends:
   In different sectors, the nature and volume of complaints can vary widely. For example, in financial services, a high volume of complaints might be related to transaction errors or delays, suggesting a need for more robust backend systems. In healthcare, complaints might stem from communication gaps with patients or their families, indicating the need for better training and clearer information dissemination.
5. Advocate for a Customer-Centric Culture:
   Boards should drive organisations to emphasise the importance of customer satisfaction at every level of the organisation. This involves addressing complaints effectively and proactively identifying potential issues before they escalate. Encouraging a culture of continuous improvement, where feedback is valued and acted upon, can help organisations stay ahead of the competition and maintain high levels of customer loyalty.

Beyond Compliance: A Holistic Approach to Complaint Resolution
It’s crucial to recognise that customer complaints are not operational issues but strategic ones. Overlooking them can lead to eroding customer trust and a potential shift to competitors. Although the BRSR data doesn’t directly correlate complaints with customer loyalty, organisations likely have the internal data to make this connection. Boards can request data that correlates complaint resolution metrics with key financial indicators, allowing for a clearer understanding of the return on investment in customer service initiatives.

Conclusion: Leveraging Customer Feedback for Strategic Advantage
Incorporating these insights into Board discussions can shift the focus from mere complaint resolution to leveraging customer feedback as a strategic asset. By doing so, Boards can guide their organisations toward not just resolving issues but also capitalising on them to enhance customer loyalty, drive innovation, and ultimately secure a competitive edge in the market.

Archana is a seasoned growth advisor with a track record in driving growth strategies through sales, marketing, and operations transformation. She has executed strategic visions and guided management in making pivotal decisions regarding clients, people, and processes. She has 18 years of leadership experience at top-tier organisations.