Phase 1: Return on Investment of Effective Customer Complaints Management
In part of Phase 1 the research team studied the complaints management processes of two private sector organisations analysing de-identified and aggregated complaints data from these groups. Hypothetical scenarios where then used to measure the Return on Investment (ROI) of effective customer complaints management with the help of the data provided by the organisations and estimates derived from previous research. The ROI calculations for the hypothetical scenarios showed that the greatest ROI occurs when there is extended benefit generated from the customer complaints management process.
Extended benefit includes such things as improvements of the organisation’s people, process and products, and includes benefits such as customer satisfaction, customer retention, increased Customer Lifetime Value, positive Word-of-Mouth and greater staff satisfaction.
This study makes an important first step in delivering a framework to assist organisations to verify once and for all that complaint departments are not merely ‘cost centres’.
On the contrary, the positive ROI illustrations in this study clearly indicate the substantial financial returns to the organisation when effective complaints management is delivered, particularly when extended benefit is generated. View full report and the summary report.
Watch the video below explaining the research and the research outcomes.
Phase 2: Return on Investment of Effective Customer Complaints Management – Public Organisations
The second phase of the research, which is currently underway, aims to provide benefits to the public sector as well as the ombudsman sector by indicating how government organisations can measure the benefits of effective complaint handling.
When dealing with private sector organisations customers usually have the option of exiting from their commercial relationships and move to another provider, however, this is typically not possible when a public sector organisation is involved.
There are also other differences in consumer behaviour that might occur where public organisations are involved. Such differences can include greater compliance with government approaches and also enhanced perceptions and trust in terms of government decision making and policy. This distinction motivated the development of this study focused on public sector organisations.
The research is innovative because a rigorous conceptual framework will be developed to underpin the measurement of the costs and benefits, and hence the ROI, for public sector organisations associated with their complaints management processes. The adoption of this framework will lead to practical, evidence-based guidance as to how these organisations can improve their customer complaints handling.
Armstrong C, Carlson J, Sourdin T, Watts M, Dean A, (2017). ‘Demonstrating Return on Investment of Effective Complaint Management’. Proceedings of 2017 Academy of Marketing Conference. Hull, England.
Armstrong C, Carlson J, Sourdin T, Watts M, (2019). ‘Return on Investment of Effective Complaint Management: Synthesis and Research Directions’. Conference of the Academy of Marketing Science. Vancouver, Canada.