The Service-Recovery Paradox: Why Complaints are Good for an Organisation

By Dr Peter Prevos, author of Customer Experience Management for Water Utilities

Water utilities are very good at providing high levels of service to their customers. Almost every time somebody opens their tap, clean water appears that is safe to drink. Every time a consumer opens a tap is a ‘moment of truth’, an instant in time where their expectations are either confirmed or contradicted. Water should be without taste, colour or odour and be available when the customer needs it. Water utilities around the world provide an excellent level of service because, in the vast majority of these moments of truth, expectations are met. However, in some instances, customers might not be satisfied with the service they receive.

When a customer has a negative experience with their water, they can ignore it, or they can take action. They can talk to their friends and family, often using social media, to express their dissatisfaction. Unhappy customers can also take legal action or contact a consumer advocacy organisation. Customers that feel strong enough about their negative experiences will complain directly to their water utility.

Between the options consumers have when they receive a level of service that does not meet their expectations, a complaint is the best outcome for the water utility. Speaking to friends and family or posting on social media fosters a negative public image for the utility. Legal action or consumer advocacy can be a costly process. Complaints are thus the lesser evil and should not be viewed punitively. Complaints are not punishment but are a gift to the organisation. Customers are the final monitoring device in your supply system, and utilities should embrace any observation from customers about the level of service as valuable information to help us improve.

Many organisations use complaints as a negative indicator of service quality. Instead of using complaints as a negative indicator, they should be viewed as a starting point for improvement. Complaints are very much like radioactivity; too much of it is most certainly not good, but there will always be a natural background level and aiming for zero complaints is futile. Technology can help to avoid complaints, but monitoring equipment is not able to express the subjectivity of human perception and complaints are unavoidable. I would even go further and suggest that water utilities, just like McDonald’s in this advertisement, should motivate customers to complain.

 

The quest for zero complaints can lead managers to subconsciously implement measures that increase the threshold for consumers to complain. Lengthy processes and convulsed forms that are hard to find on the website or defensive phone operators are effective means to reduce the number of complaints.

Best practice in complaint management means that service providers embrace complaints and use them to improve relationships with customers. Research and experience learn that when a service provider manages a complaint well, the customer will be more satisfied than those that do not complain. This effect is known as the service-recovery paradox. It is called a paradox because it does not imply that we should give customers a reason to complain so that we can make them more satisfied.

A complaint is an opportunity for a water utility to forge a relationship with an otherwise anonymous customer. A best-practice complaint handling mechanism lowers the threshold for customers to complain, provides easy communication channels and provides an empathetic resolution experience. Introducing this approach will initially increase complaint levels, but will provide opportunities to leverage the service recovery paradox to improve the utility’s image. A best-practice complaints management approach does not necessarily resolve every single issue or give every individual customer what they want. Tap water is an undifferentiated product so there will always be people whose needs exceed what the utility can provide them. Managing a complaint well is more about procedural justice. Some people just need to be heard and their concerns acknowledged.

This article covers aspects of chapter five of the book Customer Experience Management for Water Utilities (© 2018 IWA Publishing) by Peter Prevos. This book discusses how water utilities can use marketing theory to improve the value they provide to customers. If you like to know more about how to apply marketing theory to your work, get the book here

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