Communications of the ACM

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Attaining Superior Complaint Resolution

By Sridhar R. Papagari Sangareddy, Sanjeev Jha, Chen Ye, Kevin C. Desouza
Communications of the ACM, October 2009, Vol. 52 No. 10, Pages 122-126
10.1145/1562764.1562795
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In 2003, Dell computers shifted support calls for two of its corporate computer lines from its call center in Bangalore, India back to the U.S.⁶ The reason was that its customers were not satisfied with the level of technical support they were getting. Apart from the language difficulties, customers also faced difficulty in reaching senior technicians to, perhaps, resolve their problems more quickly. However, such problems are not just limited to computer vendors such as Dell.

Recent research from Accenture finds that 75% of the sample of consumer technology company executives believed their companies provided average customer service. However, to their surprise, 58% of their customers had rated customer service to be either average or below average. A further grim detail was that 81% of the respondents who rated customer service as below average expressed intent to purchase from a different vendor next time.

This research highlights the importance of customer service for consumer technology companies in retaining their customers. In general, consumer technology companies spend inordinate amounts of time, cost, and effort to get their innovations to market. However, initial acceptance is only the first step towards technology utilization. It is only after a certain amount of use that customers become aware of a technology's benefits and limitations. Having technology is one thing, using it effectively and persisting with it, is quite another. Hence, the study of factors leading to consumer technology repurchase is of critical importance.

Consumer technologies, in particular, demand attention due to their commoditization,⁵ increased complexity, advances in technology, and focus on high serviceability. We can note the following when we think of consumer technologies such as PCs, laptops, or mobile phones:

• The marketplace for these technologies is characterized by fierce competition amongst numerous players leading to a continuous price decline. For instance, almost all computer vendors now offer laptops for a few hundred dollars as compared to thousands of dollars a few years back. As prices continue to decline, it is imperative that companies focus on providing high-level customer service to differentiate from competitors⁵ and retain their existing customers, and prevent them from discontinuing their product.
• Consumer technologies have also become more complex with more functionality being constantly added to the core product. Take the case of mobile phones: What was once a simple device for making phone calls has been morphed to include a digital camera, mp3 player, organizer, and a Web browser, to name a few. With such additional functionality and increased complexity, a customer is likely to encounter problems whose cause is difficult to identify correctly, yet need to be resolved quickly before the customer switches to a competing product.
• Technological advances and a new generation of products have meant that both the technology providers as well as customers have to be knowledgeable in utilizing the consumer technologies. Without proper knowledge of the technology, support staff often struggle to resolve the problems in a timely manner. For example, in resolving problems with new release of operating system like Windows Vista, both the customers as well as Microsoft technical staff are required to have certain amount of knowledge about the system. A crucial aspect of customer service is being able to resolve consumer concerns during their use of technology.¹⁰

These factors contribute to difficulties in retaining customers for the consumer technology companies. One of the ways to have satisfied customers is continuing to address customer complaints effectively. Customers expect to have any service or product failures diagnosed and resolved quickly.

In this context, we chose to examine how the complaint management process can impact customers' intention to continue or discontinue using a given technology. The complaint management process is not just a customer service issue and is not just limited to customer service personnel. It also has to do with the overall policies governing the customer service function. As Dell discovered, their policy of not limiting the time junior technical support personnel spent in resolving customer complaints (instead of referring to senior personnel) had impact on customers' satisfaction. Moreover, encouraging customer participation and feedback while addressing their concerns can lead to innovative practices within the company. For instance, Cingular involves its customers in its usability lab and leverages its interactions with them to design better mobile phone services. Hence, apart from customers' satisfaction, a good complaint management process can also help leverage customers' input to design better offerings.

In our research we open the black box of the consumer technology complaint management process to learn how it affects customer satisfaction and intent to continue/discontinue a given product or service.

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The Complaint Management Process

Figure 1 depicts the complaint management and service evaluation model. The complaint management process is composed of three interrelated, yet distinct, factors: interactional justice (perceived quality of interaction of technology provider with the customer), procedural justice (perceived fairness of service recovery procedures), and distributive justice (perceived fairness of the outcome of the service recovery process). Customers assess their satisfaction with the service provider during the complaint management process, and their perception of equity during the process may influence their repurchase intention.

The marketing literature has extensively researched the topic of customer satisfaction, and the studies show a positive and significant association between customer satisfaction and brand loyalty and repurchase intention.² We believe in case of an IT artifact customers may trust the existing service provider more, and may not go through the taxing process of hunting another reliable service provider, if they have a satisfactory service recovery experience. Therefore, as shown in Figure 1, we argue for a direct and positive association between customers' satisfaction with the firm and their repurchase intention. Customers evaluate fairness in the complaint management process and, despite the unhappiness about service failure, may find their trust in their service provider enhanced in a case of excellent service recovery. Their positive service evaluation generates satisfaction with the service provider, which in turn boosts loyalty and impacts their repurchase intention. We hypothesized perceived interactional justice has a positive association with procedural and distributive justice, but no direct linkage with satisfaction with the firm and repurchase intention. Further, we hypothesized perceived procedural justice has a direct positive association with distributive justice and perceived distributive justice has a positive association with customers' satisfaction with the firm, which in turn positively influences repurchase intention.

We chose mobile phones as the technology artifact to study the impact of service providers' complaint management process following a mobile phone service failure on customers' satisfaction and their intention to stay loyal to the firm. Since students are conversant with mobile technology, use mobile phones extensively, and are also aware of comparable offerings from different service providers, we tested our conceptual model by conducting a Web-based survey of students of an undergraduate class in the business school of a large public university. A total of 416 students participated in the survey, and we had 394 usable responses after taking out cases with missing data. We measured the constructs using validated scales from previous studies and tested the hypothesized relationships in the conceptual model using structural equation modeling.^a We found support for our model and all the relationships (see Figure 1).

To illustrate the complaint management process and to distinguish the three forms of justices from one another, we draw on service experience of a Dell customer,^b described on a consumer affairs Web site. The customer had purchased a desktop from Dell and experienced problems with the hard drive during the first week of use. The customer had contacted the Dell technical support and they had sent a technician to install a new hard drive.

 Interactional Justice: Are you honest and polite in your interactions?

Interactional justice refers to the perceived quality of interactions that a service provider has with customers during the service recovery process. Previous research⁹ has identified a number of elements associated with interactional justice: explanation (provision of reason for the failure), honesty (perceived veracity of information provided), politeness (well-mannered, courteous behavior), effort (amount of positive energy put into resolving a problem), and empathy (provision of caring, individual attention).

Poor interactions mar customers' opinion about a service provider and diminish their hope of getting an equitable compensation for the service failure. Customers not treated with politeness and honesty, or not provided with adequate explanation, may form a low opinion of the elements of service recovery procedures, i.e. the timing and speed of service recovery, adaptability of service procedures to the specific case, engagement in the complaint process, and the freedom to communicate with the service provider. Similarly, shoddy treatment may also lower their belief of getting an equitable outcome or justified compensation for the service failure. In this scenario, the visiting Dell technician installed the hard drive but asked the customer to request another machine from Dell. However, the customer found the Dell technical support offered a different view from the technician. As the computer hard drive crashed again, the customer felt that the technical support personnel were dishonest about the PC. The customer also felt aggrieved at spending "countless hours on the phone" and "countless days wasted" in getting help with the issue. Such interactions are likely to create a negative perception on the outcome of the service recovery process.

We found that perceived interactional justice had a direct linkage with perceived procedural and perceived distributive justice. In other words, the quality of interaction that a service provider has with her customers influences their perception of the quality of service recovery procedures (procedural justice) and outcome of the complaint (distributive justice). Continuing with this scenario, as the technical support were inconsistent in their recommendations, the customer would have likely perceived the service recovery procedures of Dell as being unfair. Further, this would have likely influenced the overall perception of the outcome of the service recovery process as the hard drive failed again despite the assurance given by the technical support.

In terms of this scenario, if the consumer technology provider does not have fair and effective mechanisms of interaction with the customer, the customer is bound to have negative feelings about the service recovery procedures and the outcome of the service. Thoughts like, "How long will it take to solve the problem? How long will I have to follow up with them? Are the customer service personnel being polite and honest?" can be easily mitigated if the service provider cares to explain and is genuinely concerned about their customers. In this case, for example, if the Dell's technical support had been honest about the hard drive problems with the PC and had exchanged the unit immediately based on the visiting technician's feedback customer would have felt Dell's response as justified.

Smart companies will have to find ways to manage both costs and service. We firmly believe that the intention to serve their customers should be paramount in the mind of the service providers, and then they should go about finding ways to interact with customers while keeping costs to a minimum. For example, service providers can proactively provide information about the service status of the laptop through email, phone, or on their Web site where customers can login to find the status. There is normally a disconnect between the after-sales service staff and the factory where repair takes place, so to bridge the gap, the factory staff can themselves provide service update to customers. In other words, uncertainty due to lack of information fuels anxiety, so service providers have to constantly interact with their customers. Lack of information and shifting the onus of finding each detail to customers can prove to be a losing strategy. The challenge is in finding ways to interact with customers, to keep them informed, so that they maintain the same positive perceptions of the service provider despite the product complaints.

It is important to understand that politeness and good interaction alone cannot be enough to satisfy customers. We found that the perceived interaction justice did not directly influence satisfaction with the firm or repurchase intention from the firm. We therefore emphasize that good interpersonal treatment alone is not enough to satisfy customers and that their primary interest still is in the service recovery outcome. For example, in the scenario described above, though the customer wants the service provider to be good to her, she still is focused on the quality of repair her laptop receives. In sum, perceived interactional justice has direct linkage with perceived procedural and perceived distributive justice only and distributive justice mediates between interactional justice and satisfaction with the firm. Poor interactional justice may embitter customers enough to not to deal with the service provider again, but fair interactional justice alone may not be good enough to satisfy them.

 Procedural Justice: Are your policies and procedures fair enough?

Procedural justice has elements of fairness in procedures, policies, and guidelines followed in the service recovery process.³ Fair procedures are defined as consistent, unbiased and impartial, representative of customers' interest, and based on accurate information and ethical standards.³ Fair procedures assure customers that the service provider will follow standard, ethical, and non-discriminatory procedures to arrive at the service recovery outcome. Leventhal⁷ argues that customers are more likely to accept a service recovery outcome as fair, even in adverse cases, if they perceive that service providers followed fair procedures. Evidence from organizational justice literature posits a positive link between perceived procedural justice and perceived distributive justice,⁸ and this relationship has been confirmed in our study. In other words, perception of fair service recovery procedures comforts a customer and influences her perception about the service recovery outcome.

In our case of aggrieved customer, Dell refused to exchange the PC within the 30 days stipulated exchange period and assured the quality of the PC. When the hard drive failed for the second time, they still refused to exchange the PC saying that it was beyond the stipulated exchange period of 30 days. This is in spite of the severe damage inflicted to the customer due to loss of important data on the hard drive. It is evident that the technology provider was plagued by ineffective policies and procedures while dealing with customers in this case. Such experiences are likely to create a negative perception on the policies and procedures of the technology provider and affect the overall perception of service recovery outcome.

Fair procedures here would mean, clearly laid down, nondiscriminatory process of handling each type of complaint. In other words, customers should not be subjected to rude surprises, and service procedures should not vary between customers. How should the customer send her PC for repair? Who keeps record of the customer interactions? Who will bear the responsibility for failed recovery attempts? How will the customer get notified of the progress? Where can the customer check the status of the problem? What will be the time taken for repair? Most of the time service recovery duration is much longer than the promised duration. Again, how much control does a customer have over decisions made in the service recovery process? Can the customer decide which kind of product parts she can have as replacement? What kind of flexibility do the service recovery procedures have? It can be a dangerous ploy of service providers to frustrate customers seeking service recovery.

All this is not figments of imagination, as even reputed companies employ ploys to hoodwink customers. We will again pick Dell for a recent, example. In 2005, Dell removed its toll-free service number from its Web site to discourage people from calling. This is a case of unfair procedure, an ill-advised mistake, thwarting customers' attempt to seek service recovery. Not unsurprisingly, Dell's customer satisfaction rating fell 6.3% in that year, the steepest in the industry. Dell has since put the toll-free service number back on its Web site. In sum, we want to emphasize the criticality of procedures which are designed to serve customers well.

However, as in the case of perceived interactional justice, perceived procedural justice does not have a direct linkage with satisfaction with the firm and repurchase intention, as this is mediated by distributive justice. But, it is critical to appreciate that in the eventuality of service recovery outcome not being positive, customers will not blame the service provider completely if they perceive service recovery procedures to be fair and adequate. Imagine the case of a company following erratic and unfair service recovery procedures. Customers, from the beginning of the service recovery, will have little faith in getting their due, which will get resounded upon the failure of service recovery. In addition to the fact that fair procedures kindle faith in the service recovery outcome (distributive justice), they also provide guidance to employees to effectively deal with service complaints. In sum, fair procedures not only reassure customers but also enable employees to handle service complaints well.

 Distributive Justice: Is the outcome of a complaint fair enough?

Distributive justice refers to the fair and tangible outcome of a dispute and it is by far the oldest concept among the three components of organizational justice.³ It has its roots in social exchange theory, which asserts that the continuity of exchange between two entities depends on fairness in exchange and equity in outcome of disputes. Researchers have found a positive and significant association between distributive justice and satisfaction with the firm.⁹ Fair outcome bolsters customers' confidence in the service provider, and despite the service failure, equity in the service recovery process may provide them reasons to be happy and satisfied with the service provider.

Continuing our scenario, even though Dell replaced the hard drive for the second time, the customer had experienced irrecoverable loss in terms of lost data. The final outcome was perceived unfair by the customer who expresses his dissatisfaction by writing that he will never purchase a Dell product again. The customer felt that he had spent countless hours with technical support in resolving a problem in an ineffective manner with an outcome that is less than desirable. Even though, the PC might have been fixed of hard drive problems, the customer was apparently lost in the process. This is not just loss of one customer but a loss of a disillusioned and aggrieved customer, whose dissatisfaction is likely to spread by word through different media. In the present connected world, customers are no longer isolated voices; they can form a community to take on the might of the service provider. Such is the criticality of complaint management process for a consumer technology provider.

However, the direct and positive linkage between perceived distributive justice and satisfaction with the firm also promises that happy customers are likely to stay with the service provider because of all the above discussed efforts that a customer puts in finding a good product. Happy, satisfying experience reinforces faith in the service provider and in all likelihood will prompt them to spread the good word about their service recovery experience. In sum, distributive justice pertains to the perceived compensations customers received upon occurrence of the service failure.

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Attaining Superior Complaint Resolution Processes

The complaint management process does have an impact on customers' satisfaction with the technology service provider, and satisfaction with the service recovery may influence them to stay loyal and repurchase services from the service provider. However, it is important to note that technology service providers should not focus just on the outcome or the distributive justice of the service recovery process. The complaint management process should encompass all three: interactional, procedural, and distributive justice. In other words, while outcome of the service recovery process is important, it is critical to understand that customers should perceive that the service recovery policies, procedures, and decision-making criteria are fair. Customers should be confident that, should another service failure happen in future, the technology service provider has fair procedures to take care of their interests. The importance of interactional justice cannot be stressed enough. It is vital that technology service providers conduct themselves with politeness, honesty, empathy, and sincere efforts throughout the service recovery process, because interaction justice has a direct linkage with procedural and distributive justice. Poor interaction justice may embitter customers and arouse a sense of injustice despite excellent procedural and distributive justice. That said, interactional justice by itself does not have a direct linkage with satisfaction, as customers value the outcome of service recovery process. Similarly, procedural justice does not have a direct linkage with satisfaction and understandably, by itself has little value to customers. Distributive justice mediates interactional and procedural justice and customer satisfaction.

In sum, this study recommends that a holistic approach towards complaint management is pivotal for technology service providers to have a long-term relationship with customers. Positive interactions, fair procedures, and equitable outcomes may go a long way in assuring customers of a fair deal and dissuading them from service discontinuance and trying out a competing service provider. Dell recognized the problems with it's customer service: the "language difficulties" customers had undermined interactional justice, while the "delays in reaching senior technicians" undermined the procedural justice leading to overall dissatisfaction with Dell's complaint management process for some of its corporate support calls to India. Dell, which always had differentiated itself from its competitors on superior technical support, tried to address the issues. Are the other consumer technology companies listening?

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