Consumer complaints

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Consumer complaints

• Propensity, behaviour and
• service recovery

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Why study?

• Complaints is an information source
• Effective complaint handling can have a dramatic
  effect on retention

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ACSI model from 1996
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(No Transcript)
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A tip-of-the iceberg
Unsatisfied non-complaining customers (not
identifiable)
Harari(1992) 70-95 of dissatisfied consumers
do not bother to complain
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Consumer response styles to dissatisfaction
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Three reactions to dissatisfaction

• Hirschmans exit-voice theory
• Exit
• The consumer leaves the company
• Economic action, the market is expected to do the
  changes
• Voice
• The consumer tells the company about
  dissatisfaction
• The consumer attempts to change company practice,
  constructive response
• Should be maximised
• Loyalty (no real reaction)
• Often not included in studies because it is not
  observable

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Maute Forrester study

• Journal of Economic Psychology,1993,
• p.219-247

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Response as a function of

• Magnitude of the dissatisfaction problem
• Exit barriers
• Attractiveness of other exchange relationship
  alternatives

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Hypotheses
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Experimental design23 between subjects design
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Six items
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Results
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Results
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Complaint behavior- DayLandon(1977)
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Who is complaining?
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What determines the consumer response ?

• Consumer characterstics
• Education
• Personal power
• Redress environment variables
• Sellers willingness to redress consumer
  grievances
• Probability of success
• Dissatisfaction problem characteristics
• More severe problems
• The seller is clearly responsible

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Modelling approachesEconomic model
Economic loss
Ÿ
Time and effort
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Perceived costs
Product involvement
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Money back
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Replacement
Ÿ
Compensation
Ÿ
Perceived
Complain
Deduction
Ÿ
benefits
Apology
Ÿ
Satisfaction
Ÿ
Reputation of company
Ÿ
Threat to the company
Ÿ
Probability of
Ability and experience
Ÿ
success
in complaining
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Modelling approachesBehavioural model
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Knowledge of formal
complaining system
Accessability
Ÿ
Ability to
Ability to
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complain
communicate
Experiences
Ÿ
Complain
Cultural norms
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Formal complaint
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institutions
Motivation
Identity of complainer
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Conflict avoidance
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Experiences
Ÿ
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Consumer complaints- propensity and behaviour

• Carsten Stig Poulsen
• Hans Jørn Juhl
• John Thøgersen

Financed by the National Consumer Agency of
Denmark
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Main issues to be covered by the surveys

• frequency of satisfaction/dissatisfaction
• frequency of different reactions to
  dissatisfaction (exit, voice,loyalty)
• attribution of responsibility
• measure propensity to complain by extending the
  instrument used in the 78 survey
• describe and model the complaint process

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Survey design

• Exploratory telephone interviews using open ended
  questions
• Descriptive telephone survey covering experiences
  of complaints and measuring propensity to
  complain by using (hypothetical) scenarios
• Postal survey to give a broader description of
  actual cases of dissatisfaction and hypothetical
  scenarios and the consumer reactions

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Measuring actual cases of consumer
dissatisfaction and reactions
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Complaining process
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Hypothetical situations

• 4 categories
• Low/high complexity
• Product/Service
• Furniture remover
• Mobile phone bill
• Shoes
• Personal computer

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Scenario description
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Shoes example
You have bought a pair of boots in STORE. The
price was PRICE You are quite satisfied with
the boots and uses the boots nearly every day,
but after a period PERIOD the soles begin to
split.
Company reactions 1) In the store they
understand your dissatisfaction, but answer,
that with your intensive use it is not that
strange that something like this can happen
PRICE 600, 1000, 1400 STORE DISCOUNT,
SHOE PERIOD 4,8,12, months
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Framework