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Benchmarking data provided by 144 organisations across four industry sectors are consolidated and mined to generate insights into the relationship between complaints-handling processes, as defined in ISO 10002, the International Standard for Complaints Handling, and a number of marketing-related outcomes. Factor analysis of the 17 complaints-handling process variables yields five factors accounting for 62.6% of the overall variance. The most important factors are: visibility and accessibility of the complaints-handling policy and process; easy-to-use process for all complainants; and responsiveness of the complaints-handling process. Collectively these factors account for 24% of the variance in the desired marketing-related outcomes, most notably levels of customer advocacy and customer satisfaction. Although there have been a number of empirical investigations of International Standards, this is the first empirical study to investigate the influence of ISO 10002-conformant complaints-handling processes on marketing-related and broader outcomes. We conclude that complaints-handling processes that conform to ISO 10002 can yield significant marketing-related benefits, and we make recommendations for marketing practitioners.

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Complaints-handling processes and

organisational benefits: An ISO 10002-

based investigation

Lawrence Ang

& Francis Buttle

Macquarie University, Australia

Version of record first published: 14 Oct 2011

To cite this article: Lawrence Ang & Francis Buttle (2012): Complaints-handling processes and

organisational benefits: An ISO 10002-based investigation, Journal of Marketing Management,

28:9-10, 1021-1042

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Journal of Marketing Management

Vol. 28, Nos. 9–10, August 2012, 1021–1042

Complaints-handling processes and organisational

beneﬁts: An ISO 10002-based investigation

Lawrence Ang, Macquarie University, Australia

Francis Buttle, Macquarie University, Australia

Abstract Benchmarking data provided by 144 organisations across four

industry sectors are consolidated and mined to generate insights into the

relationship between complaints-handling processes, as deﬁned in ISO

10002, the International Standard for Complaints Handling, and a number of

marketing-related outcomes. Factor analysis of the 17 complaints-handling

process variables yields ﬁve factors accounting for 62.6% of the overall

variance. The most important factors are: visibility and accessibility of

the complaints-handling policy and process; easy-to-use process for all

complainants; and responsiveness of the complaints-handling process.

Collectively these factors account for 24% of the variance in the desired

marketing-related outcomes, most notably levels of customer advocacy and

customer satisfaction. Although there have been a number of empirical

investigations of International Standards, this is the ﬁrst empirical study

to investigate the inﬂuence of ISO 10002-conformant complaints-handling

processes on marketing-related and broader outcomes. We conclude that

complaints-handling processes that conform to ISO 10002 can yield signiﬁcant

marketing-related beneﬁts, and we make recommendations for marketing

practitioners.

Keywords ISO 10002; customer relationship management; customer complaints;

complaints-handling processes; customer satisfaction; customer advocacy;

organisational reputation; organisational outcomes.

Introduction

Customer complaints are a fact of organisational life. If customers' expectations are

underperformed or if customers believe they have been treated unfairly, they are

likely to be dissatisﬁed (Oliver, 1997), and where such dissatisfaction extends beyond

the zone of tolerance, complaint action may be taken (Gwynne, Devlin, & Ennew,

2000; Parasuraman, Berry, & Zeithaml, 1991; Zeithaml, Berry, & Parasuraman,

1993). Complaints are likely even in the best-run businesses, because whilst customer

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1022 Journal of Marketing Management, Volume 28

expectations may remain unchanged, service delivery processes fail, products don't

work as promised, service encounter staff feel unwell, or technology crashes.

From a marketing perspective, it is important to handle complaints well. Excellent

complaints-handling might pay off on the one hand by avoiding undesirable outcomes

and on the other by achieving desirable outcomes. Negative word-of-mouth and

switching behaviours are undesirable outcomes that a well-designed complaints-

handling process might be able to pre-empt. Research suggests that negative

word-of-mouth can be very inﬂuential on others' beliefs, intentions, and purchase

decisions (Buttle, 1998; Sampson, 2006). Social interaction effects can multiply the

negative effects of an unsatisfactory customer experience. Although up to two-thirds

of customers who are dissatisﬁed do not complain to the organisation, they may

complain to their social networks (Kozinets, de Valck, Wojnicki, & Wilner, 2010;

Richins, 1983). On the positive side, however, some studies have suggested that

companies that operate well-designed complaints-handling processes may experience

higher levels of customer retention and loyalty (Ang & Buttle, 2006; Homburg

& Fürst, 2005). It remains a challenge for organisations to handle complaints

consistently well. Marketing managers may not be aware that a management standard

(ISO 10002) exists for organisational complaints handling.

This paper explores a unique data set provided by a collaborating commercial

organisation, LP. LP has conducted a number of intra-sector benchmarking studies

of organisational complaints-handling processes. Those studies have collected

two categories of data relevant to our research: data that indicate how well

those organisational complaints-handling processes conform to the international

complaints-handling s tandard, ISO 10002, and organisational outcomes obtained

from those complaints-handling processes. Each sectoral study was somewhat

differently designed, in part due to the historical phasing of the studies, and in part

due to the requirements of LP's commercial clients.

ISO management standards

The International Organisation for Standardisation (ISO) has published a number of

leadership and management standards, including ISO 9001, ISO 14001, ISO 26000,

ISO 31000, and ISO 10002, the subject of our research. These standards can be

divided into those that are subject to certiﬁcation – ISO 9001 and ISO 14001 – and

those that are not certiﬁable but that provide best-practice guidance – ISO 26000,

ISO 31000, and ISO 10002. Table 1 summarises the standards.

ISO maintains that these standards are based on best practice because they

have been developed by workgroups comprising international technical and subject-

matter experts drawn from different industries. The detailed speciﬁcations of these

standards emerge from a lengthy process of consultation and consensus building with

stakeholder groups across the world.

Where best practice is claimed, academic scrutiny can be expected. However,

most of the published academic work examining these standards has focussed on

ISO 9001 and the family to which it belongs, ISO 9000. ISO 9001 has been

implemented in more than a million organisations in 176 countries (ISO, 2010),

and over 560 scholarly papers have investigated the ISO 9000 family of standards.

It isn't our purpose to review this literature. However, because ISO 10002 is aligned

with ISO 9000 in the sense that it recommends guidelines for complaints-handling

processes, we highlight a number of issues. Gotzamani and Tsiotras's (2001)

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Ang and Buttle Complaints-handling processes and organisational beneﬁts 1023

Table 1 Management and leadership standards from the International Organisation for

Standardisation.

Standard Certiﬁable? Description

ISO 9001 Yes Provides a framework for taking a systematic

approach to managing the organisation's processes

so that they consistently turn out products that

satisfy customers' expectations.

ISO 10002 No Provides guidance on the process of complaints

handling related to products within an organisation,

including planning, design, operation, maintenance,

and improvement.

ISO 14001 Yes Speciﬁes requirements for any organisation that

wishes to establish, implement, maintain, and

improve an environmental management system,

and to assure itself of conformity with its stated

environmental policies.

ISO 26000 No Provides guidance on social responsibility.

ISO 31000 No Provides guidance on risk management.

review of the literature suggests, 'there is a general confusion and uncertainty

regarding the effectiveness of the [ISO 9000 family of] standards and their long-

term contribution to the companies' (p. 1326). They identify two conﬂicting views

in the research evidence. The optimistic view is mainly based on the assertion that

ISO 9001 offers a well-structured approach to quality management, and certiﬁcation

increases both responsibility for and commitment to quality. The pessimistic view

concludes that companies focus mainly on quick and easy certiﬁcation, without

real commitment to quality. This may result in the development of a static system,

increased bureaucracy, reduced ﬂexibility and innovation, and no assurance of

real and continuous improvement of products and processes for the improved

satisfaction of customers. More recent studies, however, have tended to support

the optimistic view that ISO 9000 accreditation can assist business performance.

Corbett, Montes-Sancho, and Kirsch (2005) ﬁnd that ﬁrms' decisions to seek their

ﬁrst ISO 9000 certiﬁcation is followed by signiﬁcant abnormal improvements in

ﬁnancial performance, which is still observable even three years after certiﬁcation.

Han, Chen, and Ebrahimpour (2007) ﬁnd that ISO 9000 certiﬁcation efforts enhance

organisational competitiveness, which in turn improves business performance. Singh

(2008) ﬁnds that consistent processes brought about by capable employees and

reliable supplier inputs create the consistent quality outputs that satisfy customers,

which in turn positively impacts on business performance.

Less research has been done on ISO 14001. The Business Source Premier database

cites 147 scholarly papers since the standard's publication in 2004. ISO 26000 is the

focus of four scholarly papers and ISO 31000 just two papers, neither of which is

empirical.

About ISO 10002

ISO 10002 emerged in mid-2004 and has been positioned as the international

standard on complaints-handling (ISO, 2004). It is intended to guide the development

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1024 Journal of Marketing Management, Volume 28

and implementation of an effective organisational complaints-handling policy and

process. It is drafted to be compatible with, and i s a guiding and supporting document

for, ISO 9000. ISO 10002 describes how implementation of an effective complaints-

handling process can deliver beneﬁts to both customers and organisations. The

standard is international in scope and is intended to be applicable in both traditional

and e-commerce contexts.

ISO 10002 evolved from ISO 10018, the draft international standard for

complaints-handling released in February 2003. Australia had been an early mover

in the development of a national standard for complaints-handling, AS4269. This

standard, created by Standards Australia and published in 1995, is the intellectual

parent of both ISO 10018 and ISO 10002.

The best-practice complaints-handling processes recommended in ISO 10002 are

founded on nine normative guiding principles, as shown in Table 2. The standard

shows how these guiding principles should be evident in the policy framework that

supports the complaints-handling processes, the planning and design of complaints-

handling processes, their operation, and in the audit, maintenance, and improvement

of the processes. The operational best-practice guidelines deal with detailed matters

such as complaint reception, complaint tracking, complaint acknowledgement, initial

assessment, investigation, response, communication of decisions, and closing the

complaint ﬁle.

Research into complaints-handling processes and ISO 10002

It is well documented that many companies are poor at handling customer

complaints. Andreassen (2001) found that 40% of consumers who complained

about service failures were subsequently dissatisﬁed with the ﬁrms' handling of their

complaints, and notes that 'companies in general must improve their complaint

resolution efforts dramatically' (p. 47). Other research suggests that an even

higher proportion, estimated at 50%, is dissatisﬁed with their complaints-handling

experiences (Estelami, 2000; Grainer, 2003). These studies strongly suggest that poor

complaints-handling processes account for additional dissatisfaction over and above

that which originally gave cause for complaint.

There have been very few academic studies that have focussed on, or even

referred to, ISO 10002. Hughes and Karapetrovic (2004) have published the

only academic investigation dedicated to ISO 10002. A case study was chosen

to demonstrate the applicability and explore possible beneﬁts of ISO 10002. The

case context was a single service provider in the US electricity utility industry.

Interruption to electricity supply causes inconvenience and can potentially jeopardise

customer safety, while problems with billing, employee conduct, and timeliness of

complaint resolution may lead to customer dissatisfaction. Based on tracking seven

complaints through the organisation's complaints-handling processes, the authors

ﬁnd that the utility company was diligent in recording and classifying complaints,

but failed to close some complaints in a reasonable period or to follow-up with

complainants to see if they were satisﬁed with the resolution, both of which are

best practices recommended in ISO 10002. Consequently, the authors identify

some areas for improvement, particularly in using feedback from complainants

to assist in improving complaints-handling processes and, in turn, organisational

performance.

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Ang and Buttle Complaints-handling processes and organisational beneﬁts 1025

Table 2 ISO 10002 guiding principles.

Guiding principle Description

1. Visibility Information about how and where to complain should be well

publicised to customers, personnel, and other interested

parties.

2. Accessibility A complaints-handling process should be easily accessible to all

complainants. Information should be made available on the

details of making and resolving complaints. The

complaints-handling process and supporting information

should be easy to understand and use. The information should

be in clear language. Information and assistance in making a

complaint should be made available in whatever languages or

formats that the products were offered or provided in, including

alternative formats, such as large print, Braille, or audiotape, so

that no complainants are disadvantaged.

3. Responsiveness Receipt of each complaint should be acknowledged to the

complainant immediately. Complaints should be addressed

promptly in accordance with their urgency. Complainants

should be treated courteously and be kept informed of the

progress of their complaint through the complaints-handling

process.

4. Objectivity Each complaint should be addressed in an equitable, objective,

and unbiased manner through the complaints-handling process.

5. No Charges Access to the complaints-handling process should be free of

charge to the complainant.

6. Conﬁdentiality Personally identiﬁable information concerning the complainant

should be available where needed, but only for the purposes of

addressing the complaint within the organisation and should be

actively protected from disclosure, unless the customer or

complainant expressly consents to its disclosure.

7. Customer-

focussed

approach

The organisation should adopt a customer-focussed approach,

should be open to feedback including complaints, and should

show commitment to resolving complaints by its actions.

8. Accountability The organisation should ensure that accountability for and

reporting on the actions and decisions of the organisation with

respect to complaints-handling is clearly established.

9. Continual

improvement

The continual improvement of the complaints-handling process

should be a permanent objective of the organisation.

Ang and Buttle (2006) are the only other authors to have identiﬁed ISO

10002 as a theme in their academic research. They ﬁnd that excellence at customer

retention is positively and signiﬁcantly associated with the presence of a documented

complaints-handling process. None of the other variables they tested was signiﬁcantly

associated with customer retention excellence. They note in their conclusions that

ISO 10002 can provide a framework for such a documented complaints-handling

process.

Other papers have focussed on complaints-handling processes more broadly whilst

not making ISO 10002 the speciﬁc research focus. Homburg and Fürst (2005), for

example, compare the relative inﬂuence on customer satisfaction and loyalty of

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1026 Journal of Marketing Management, Volume 28

mechanistic approaches (such as implementing ISO 10002 best-practice processes)

and organic approaches (organisational culture-based) to complaints handling. They

explore a dyadic data set that contains managerial assessments of companies'

complaints-management processes and complaining customers' perceptions of their

own justice, satisfaction, and loyalty. They ﬁnd that both approaches s igniﬁcantly

inﬂuence complaining customers' assessments, but that the mechanistic approach

has a stronger total impact on satisfaction and loyalty. The study also suggests

that there is a complementary relationship between the two approaches. They also

ﬁnd that the beneﬁcial effects of the mechanistic approach are stronger in the

business-to-consumer context than business-to-business.

Even more broadly, there is recognition of the important inﬂuence of complaints-

handling processes in research that deploys justice theory, examines service recovery,

or focuses on the interpersonal behaviours of employees as they engage with

complainants.

It is widely acknowledged that customers evaluate their complaints-handling

experiences. Justice theory is commonly used to explain complainants' cognitive

evaluations of complaint episodes (e.g. Blodgett, Hill, & Tax, 1997; Maxham &

Netemeyer, 2002; Schoefer & Ennew, 2005; Tax, Brown, & Chandrashekaran,

1998). Justice theory suggests that complainants seek justice when they complain.

Three kinds of justice have been identiﬁed: distributive, procedural, and interactional

(Smith, Bolton, & Wagner, 1999). Distributive justice is the complainant's perception

of the fairness of the outcome of the complaint. Was an apology offered?

Was a service re-performed? Was a credit note issued? Procedural justice is the

complainant's perception of the fairness of the complaints-handling process. Was

there an opportunity to present evidence? Was there a chance to cross-examine the

company's position? Interactional justice refers to the complainant's perception of

the fairness of company employee behaviours. Did the employee show concern and

empathy? Was the employee polite and attentive? Did the employee keep promises?

Embedded in all these dimensions of justice are process considerations. Procedural

justice is evidently about the organisational processes that the complainant engages

during the complaint episode; interactional justice is about how employees act when

performing those processes; and distributive justice is about the outcomes of those

processes. Clearly, therefore, any customer complaint research that employs justice

theory implicates organisational complaints-handling processes.

Similarly, the literature on service recovery implicates organisations' complaints-

handling processes. Companies that practise service recovery are performing one

part of the comprehensive complaints-handling process identiﬁed in ISO 10002.

Davidow's (2003) literature review identiﬁed nearly 60 papers that have empirically

tested the impact of various recovery strategies such as apology or redress,

and interpersonal behaviours such as attentiveness or timeliness of response, on

customers' post-complaint response. These corporate recovery actions may invoke

emotional responses, or justice perceptions, in complainants. For example, Holloway

and Beatty (2003) ﬁnd that the majority of customers in two s tudies on service failure

in online retailing felt injustice following the company's recovery actions.

Another tranche of complaints-related research has focussed on the interpersonal

behaviours of employees as they engage with customers during a complaints episode.

Research tells us that the actions of customer contact employees are important

inﬂuences on customers as companies strive to recover from failure (Boshoff &

Allen, 2000; Maxham & Netemeyer, 2003). Gruber, Szmigin, and Voss (2006) ﬁnd

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Ang and Buttle Complaints-handling processes and organisational beneﬁts 1027

that complainants value employees who are competent, friendly, motivated to ﬁx the

problem, and active listeners. This research study reveals that if customers perceive

frontline employees as competent, they also believe they will handle and ultimately

resolve their complaint. Competence gives customers a feeling of security. The

research also suggests that employees who actively listen to their customers create

the feeling that the complaint is being taken seriously. Respondents felt that they

had been taken seriously if contact employees were courteous, ensured transparency,

and were open to suggestions. Customers want to be taken seriously because they

believe that only then will the complaint be resolved. Furthermore, if employees take

customers seriously and show respect, customers may also decide to continue the

relationship with the business and continue to buy.

This literature review shows that a bare minimum of research has been done

that examines the implementation of ISO 10002 and its inﬂuence on customers

and organisations. However, there is a considerable related literature that implicates

organisational complaints-handling processes.

Research objectives

It is clear f rom this literature review that very little research has been conducted into

the implementation of ISO 10002 or its effect on marketing-related organisational

outcomes. We therefore explore, quantitatively, the LP data set to ﬁnd out what it can

tell us about the ISO 10002 complaints-handling processes, organisational outcomes

(especially those with marketing signiﬁcance), and the relationships between them.

Being exploratory, our analysis is not guided by any speciﬁc research

hypotheses. Rather, our purpose is to see if there are any associations between

ISO 10002 processes (how complaints handling is done) and marketing-related

organisational outcomes.

Methodology

Instrument development

As mentioned in the introduction, the data explored in this paper were provided

by LP, an Australia-based company that specialises in solutions and services related

to customer feedback, particularly complaints handling. LP developed a number of

benchmarking instruments based on ISO 10002 and its predecessor, ISO 10018.

These English-language questionnaires contained a number of Likert-scale items

derived from the text of the ISO standard. LP's original process for item development

was as follows. One of LP's subject-matter experts conducted a review of the standard

and developed items for each of the guidelines embedded in the standard. For

example, one of the standard's operational guidelines was that customers should

incur no charges when engaging the process. The matching questionnaire item

created by the LP expert reads: 'None of our complainants incur any cost when

engaging our complaints-handling process'. The expert created an inventory of more

than 100 items, which he believed was a comprehensive reﬂection of the content of

the standard. A second expert independently conducted the same analysis. The two

experts convened several times to agree a ﬁnal edition of the instrument.

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1028 Journal of Marketing Management, Volume 28

Original data collection

The LP benchmarking studies were conducted between 2003 and 2008. They

were therefore founded on slightly different versions of the international standard

in its draft and ﬁnal forms. The LP studies took the form of self-assessments

conducted by individual organisations. The dominant focus of those self-assessments

was conformance of organisational complaints-handling processes to the processes

identiﬁed in the complaints-handling international standard, and it is that data set

that is the major focus of this paper. In addition, the benchmarking studies explored

organisational outcomes of complaints-handling, and it is these outcomes that serve

as the dependent variable in our analysis. These outcomes either are speciﬁed i n ISO

10002 as potential beneﬁts of handling complaints well, or have been investigated

in other published complaints-related research. A number of other attributes, not

relevant to our research, were surveyed at the same time.

The process used by LP to collect the benchmarking data was as follows.

Participants were solicited to participate by the four peak industry bodies that

sponsored the independent pieces of research. Participants were advised to assemble

a small group of knowledgeable individuals of varying seniority who, between them,

understood the participant's existing complaints-handling policy and processes. They

were advised to print a hard copy of the questionnaire that was principally composed

of Likert-scale items (ranging from 1= 'strongly disagree' to 7 = 'strongly agree')

that required responses about the participant's complaints-handling policy and

processes. The questionnaire was available both online and as an e-mail attachment.

It was suggested that the group strive to reach consensus on each Likert-scale

item. Once the questionnaire was complete, the answers were transcribed into

a secure website. Each participant was provided with a De-identiﬁed Participant

Number (DPN) to ensure conﬁdentiality and security. An automated analytical

process then took place immediately, and a participant-speciﬁc report was produced

indicating overall conformance to the standard and its various subsections. The report

included a suggested action agenda focussing on those complaints processes that had

been revealed to warrant attention. An industry-group benchmark report was later

prepared drawing upon consolidated (but de-identiﬁed) data from all participants.

Data consolidation

The industries participating in the LP studies were health insurers, aged care

residential homes, fast-moving consumer goods manufacturers, and universities,

yielding a total sample size of 144 organisations (see Table 3). The full instrument was

deployed in the health insurance sector. Cut-down versions that employed a smaller

Table 3 Sample composition.

Industry Participants (#)

Health insurance 33

Aged care residential homes 93

Fast-moving consumer goods 11

Universities 7

Total 144

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Ang and Buttle Complaints-handling processes and organisational beneﬁts 1029

number of items were deployed in the other sectors. Prior to our quantitative analysis,

we identiﬁed the questionnaire items that were universal across the multi-industry

data set. We found 24 complaints-handling process items and six organisational

outcome items were common. These were therefore retained for our analyses (see

Appendix for a complete listing of the common items).

A number of quantitative analyses were performed on the common data. First, we

conducted Exploratory Factor Analysis to see if the process items can be collapsed

into a number of underlying factors, therefore reducing the number of process

measures and aiding interpretation. Second, we created a summative index for

each factor, which was used in further analyses. Third, we conducted correlational

analysis to ﬁnd out if there were any bivariate associations between the summative

indices and organisational outcomes. Finally, we performed canonical correlation to

determine if there was a relationship between the entire set of process indices and the

organisational outcomes.

Results and ﬁndings

Exploratory factor analysis

To explore the relationships among the complaints-handling process items, principal

component analysis with varimax rotation was carried out on the 24 process items.

Seven items were eliminated from the ﬁnal solution because of poor or multiple

loadings. Table 4 shows the ﬁnal factor loadings from the principal component

analysis of the 17 remaining items.

Five factors emerged from this analysis, accounting for 62.6% of the overall

variance. All the factor loadings exceed .45, which signiﬁes they are all satisfactory

(Hair, Anderson, Tatham, & Black, 1998; Hair, Black, Babin, Anderson, & Tatham,

2006).

Factor 1: 'visibility and accessibility of complaints-handling policy and process'

Factor 2: 'easy-to-use process for all complainants'

Factor 3: 'responsiveness of complaints-handling process'

Factor 4: 'fair communications with all parties'

Factor 5: 'customer-focussed approach to ﬁnding a resolution'

The ﬁrst factor ('visibility and accessibility of complaints-handling policy and

process') represents the practice of making the complaints policy and processes

widely available to complainants. The second factor ('easy-to-use process for all

complainants') concerns the practice of making the complaints process easy for

complainants to engage. The third factor ('responsiveness of complaints-handling

process') means having a well-deﬁned plan of action and time frame for resolving

customer complaints. The fourth factor ('fair communications with all parties')

represents practices that are fair and objective to both customers and employees. The

ﬁfth and last factor ('customer-focussed approach to ﬁnding a resolution') means that

companies exhaust as many options as possible when trying to resolve the complaints.

These factors are similar to the guiding principles for ISO 10002 implementations,

as detailed in Table 2. Factor 1 is largely concerned with Visibility but also

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1030 Journal of Marketing Management, Volume 28

Table 4 Exploratory factor analysis.

Factor loadings

Items 12 3 45

Information about how and where to complain is well publicised to customers .775 −.018 .298 .165 −.064

Our complaints-handling policy is accessible to all our people .712 .248 −.119 .456 −.059

The organisation ensures that records from top management reviews of the

complaints-handling process are maintained and acted upon

.456 .220 .204 .318 .148

Complainants are always kept informed of the progress of their complaint through our

complaints-handling process

.588 .241 .211 .043 .228

Top management has established an explicit customer-focused complaints-handling

policy for our organisation

.647 .335 −.053 .426 −.141

Information about how to make complaints is widely available to customers .639 .024 .476 −.132 .154

Complainants can access our complaints-handling process at any point or time through

any medium, including telephone, letter, fax, e-mail, or face-to-face

.106 .663 .043 .166 .128

Information and assistance about complaints handling is available in a number of

specialist formats, including Braille, large print, and audiotape.

.484 .559 −.026 −.066 .065

Assistance to customers who want to complain is available in all the languages used by

our customers

.434 .637 .047 .273 −.138

None of our complainants incurs any cost when engaging our complaints-handling

process

.013 .744 .170 .098 −.174

We have clearly deﬁned time limits for resolving customer complaints .045 .163 .852 .059 .058

We have well-developed processes for recording customer complaints .440 .090 .652 .287 .039

If a complaint is about one of our people, we always make sure that that person is given

the opportunity to comment on the complaint

−.008 .264 .141 .661 .018

To ensure objectivity, we treat all complainants with impartiality, conﬁdentiality, and

sensitivity

.249 .000 .094 .701 .148

All our customer-contact people are fully trained in our complaints-handling process .182 −.074 .442 .225 .482

We do not regard complaint ﬁles as closed until all options are exhausted or we know that

complainants are fully satisﬁed with the resolution

.476 .370 .056 −.033 .516

Complainants who reject initial solutions to their complaints are offered alternative forms

of resolution, either internal or external to our organisation

−.076 −.099 .036 .065 .822

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Ang and Buttle Complaints-handling processes and organisational beneﬁts 1031

incorporates some elements of the Accessibility and Accountability guidelines. Factor

2 is principally aligned with the Accessibility guideline, with some consideration of

No Charges. Factor 3 reﬂects the Responsiveness guideline. Factor 4 reﬂects the

Objectivity and Conﬁdentiality guidelines. Factor 5 mirrors the Customer-Focussed

Approach guideline. The published guidelines, of course, are the product of the

deliberations of the standard development team and therefore have face validity. Our

ﬁve factors are, in contrast, empirical constructs, derived from the benchmarking

data.

Overall, the reliability of the 17-item scale is good, as it exhibits high levels

of internal consistency (Cronbach's α = .852). However, factors 4 and 5 ('fair

communications with all parties' and 'customer-focussed approach to ﬁnding

a resolution') achieve a lower than the optimal level of reliability, .426 and

.469 respectively. The other three factors achieve good internal consistency, with

alphas ranging between .676 and .778. Since this study is largely exploratory in

nature, these levels are considered sufﬁcient (Hair et al., 2006).

Summated index

A summated index was then computed for each factor so that a single statistical

value could be deployed in our additional analyses. The ﬁrst step in computing

the index was to identify all the items that loaded onto each factor (see Table 4).

Then the original Likert-scale scores were obtained for each of the relevant items

across the entire sample. Finally, summary statistics including the mean and standard

deviation were computed from each cluster of relevant items loading onto each

factor. The results appear in Table 5 (I1 to I5). For the ﬁve summated indices (each

representing one factor), Cronbach's alpha is .728. As a further validity check, the

sample was split randomly into two halves, and Cronbach's alpha recalculated for half

of the sample. The alpha obtained for the ﬁve indices was still stable at .757. These

internal consistencies are considered reasonable for an exploratory study (Hair et al.,

2006).

Descriptive statistics

The next step in our analysis was to explore the meaning of these summated indices

using simple descriptive statistics. Table 5 shows the ranges, means, and standard

deviations of the ﬁve complaints-handling process indices (I1 to I5), as well as those

of the six organisational outcome measures (O1 to O6).

The higher the index, the higher is the degree of conformance of our sample

of organisations with this factor. Given the use of seven-point Likert scales, the

highest possible index value is 7. Of the ﬁve complaints-handling process indices, I4

('fair communications with all parties') has the highest mean (6.57) and the smallest

standard deviation (.62). The poorest level of conformance is with I2 ('easy-to-

use process for all complainants'), as indicated by the low index mean, 5.03. This

tells us that organisations report they do a good job of conforming to the ISO

10002 standard of being fair in their communications with all parties, but do rather

less well in providing easy-to-use processes for complainants.

Of the six organisational outcome measures, O5 ('reduced costs') has the lowest

mean (4.04) and the largest standard deviation (1.62). In contrast, O4 ('produced

higher levels of customer advocacy') has the highest mean (6.37) and the second

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1032 Journal of Marketing Management, Volume 28

Table 5 Descriptive statistics.

Minimum Maximum Mean Std. deviation

Complaints-handling indices

(independent variables)

I1: Visibility and accessibility of

complaints-handling policy and

process

1.50 7.00 5.76 1.09

I2: Easy-to-use process for all

complainants

2.00 7.00 5.03 1.34

I3: Responsiveness of

complaints-handling process

2.00 7.00 5.76 1.36

I4: Fair communications with all

parties

4.00 7.00 6.57 .62

I5: Customer-focussed approach to

ﬁnding a resolution

1.67 7.00 5.48 1.04

Organisational outcome (dependent

variables)

O1: Improved customer-facing

processes

2.00 7.00 5.93 1.21

O2: Improved products and/or

services

2.00 7.00 6.21 1.03

O3: Produced higher levels of

customer satisfaction

3.00 7.00 6.11 .96

O4: Produced higher levels of

customer advocacy

2.00 7.00 6.37 .98

O5: Reduced costs 1.00 7.00 4.04 1.61

O6: Enhanced reputation 2.00 7.00 6.01 1.18

lowest standard deviation (.98). Our participants are therefore reporting that their

complaints-handling processes have a greater impact on generating high levels of

customer advocacy (positive word-of-mouth) than they do on reduction of costs.

Bivariate correlation

Next, the ﬁve complaints-handling process indices (I1 to I5) and six organisational

outcome measures (O1 to O6) were correlated. Table 6 shows the result.

Looking down the columns of Table 6, it can be seen that of the six outcome

measures, O5 ('reduced costs') has no signiﬁcant relationship with any of the ﬁve

complaints-handling process indices (I1 to I5). The association between the process

indices and the outcome measure 'improved products and/ or services' (O2) is also

weak (r ranges between .145 and .314). This implies that organisations enjoy no cost

reduction and little by way of product/service improvement from their complaints-

handling processes.

However, the associations are stronger between the process indices and outcomes

O4, O3, and O1. The major beneﬁts of complaints-handling processes seem to be

particularly relevant to marketing managers – higher levels of customer advocacy

(O4; r ranges from .212 to .538), customer satisfaction,(O3; r ranges from .194 to

.397), and improved customer-facing processes (O1; r ranges from .266 to .505).

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Ang and Buttle Complaints-handling processes and organisational beneﬁts 1033

Table 6 Correlational analysis of complaints-process indices and organisational outcome measures.

O1: Improved

customer-

facing

processes

O2: Improved

products

and/or

services

O3: Produced

higher levels

of customer

satisfaction

O4: Produced

higher levels

of customer

advocacy

O5: Reduced

costs

O6: Enhanced

reputation

I1: Visibility and accessibility of

complaints-handling policy and process

.381

∗∗

.243

∗∗

.397

∗∗

.538

∗∗

.083 .290

∗∗

I2: Easy-to-use process for all complainants .505

∗∗

.278

∗∗

.463

∗∗

.465

∗∗

.065 .206

∗

I3: Responsiveness of complaints-handling

process

.373

∗∗

.184

∗

.203

∗

.274

∗∗

.165 .078

I4: Fair communications with all parties .394

∗∗

.314

∗∗

.457

∗∗

.434

∗∗

.098 .355

∗∗

I5: Customer-focussed approach to ﬁnding a

resolution

.266

∗∗

.145 .194

∗

.212

∗

.052 .100

∗∗

Correlation is signiﬁcant at the .01 level (two-tailed);

∗

correlation is signiﬁcant at the .05 level (two-tailed).

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1034 Journal of Marketing Management, Volume 28

Looking across the rows in Table 6, we ﬁnd that of the ﬁve complaints-handling

process indices, I2 ('easy-to-use process for all complainants') has the strongest

relationship with the marketing-related outcome measures of O4, O3, and O1 (r

ranges from .463 to .505). Two process indices – 'fair communications' (I4) and

'visibility and accessibility' (I1) – both exhibit the same pattern across these three

outcome measures. The weakest pattern of correlations for all the complaints-

handling process indices is found with I5 ('customer-focussed approach to ﬁnding

a resolution').

Canonical correlation

The objective of canonical correlation is to correlate several (metric) independent

variables with several ( metric) dependent variables simultaneously (Thompson, 1984;

Thomson & Keeves, 1988).

Table 7 summarises the results of the standard canonical correlation analysis.

The F statistics reveal that of the ﬁve canonical correlations, only the ﬁrst one (at

.717) exceeds the critical value at the .05 level of signiﬁcance. This means that, as a

set, the organisational outcome measures, O1 to O6, are signiﬁcantly related to the

complaints-handling process indices, I1 to I5. Since canonical correlation considers

all dependent and independent variables simultaneously, the results provide insight

into the collective association between complaints-handling processes and outcome

measures, which is shown in this data set to be signiﬁcant.

We also performed redundancy analysis on the data, since relying solely on the

F-statistics may be too restrictive (Steward & Love, 1968). Redundancy is deﬁned

as the ability of a set of independent variables (i.e. I1 to I5), taken together, to

explain variation in the dependent variables (i.e. O1 to O6) taken one at a time. It is

customary to interpret only those (signiﬁcant) canonical functions that contribute

most in the dependent set.

Table 8 summarises the redundancy analysis for the set of dependent variables,

O1 to O6. It shows that the total redundancy is .265 for all ﬁve canonical functions.

This means that 26.5% of the variance in the organisational outcomes indices O1 to

O6 can be explained by the set of complaints-handling process indices, I1 to I5.

Furthermore, the ﬁrst canonical function accounts for almost all of this (at 90.76%).

In short, both the F -statistics, as well as the redundancy analysis, suggest that the ﬁrst

canonical function is the most meaningful result suitable for further interpretation.

Therefore, we performed further analysis of the ﬁrst canonical function only

(Table 9). Only those loadings above .45 were interpreted. This is because for a

Table 7 Result of canonical analysis.

Canonical functions

Canonical

correlations Canonical R

F-value Probability

1 . 717 . 514 3 . 33 . 000

2 .414 .171 1.28 .194

3 .225 .051 .65 .798

4 .169 .029 .51 .803

5 .065 .004 .19 .825

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Ang and Buttle Complaints-handling processes and organisational beneﬁts 1035

Table 8 Canonical redundancy analysis of dependent variables.

Canonical

functions Canonical R

Variance

extracted Redundancy

Proportion of total

redundancy

1 . 514 . 467 . 240 90 . 758

2 .171 .102 .017 6.609

3 .051 .085 .004 1.627

4 .029 .065 .002 .702

5 .004 .191 .001 .305

.265

Table 9 Summary of the ﬁrst canonical function.

Variates/variables

Canonical

squared

Average

squared

Canonical

Redundancy

index

Dependent variables

O1: Improved

customer-facing

processes

.840 .7056

O2: Improved products

and/ or services

.560 .3136

O3: Produced higher

levels of customer

satisfaction

.842 .7089

O4: Produced higher

levels of customer

advocacy

.877 .7691

O5: Reduced costs .162 .0262

O6: Enhanced reputation .528 .2788

Dependent variates 2.8013 .467 .514 .240

Independent variables

I1: Visibility and

accessibility of

complaints-handling

policy and process

.757 .5730

I2: Easy-to-use process

for all complainants

.854 .7293

I3: Responsiveness of

complaints-handling

process

.510 .2601

I4: Fair communications

with all parties

.768 .5898

I5: Customer-focussed

approach to ﬁnding a

resolution

.359 .1288

Independent variates 2.281 .456 .514 .234

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1036 Journal of Marketing Management, Volume 28

sample size of 144, a loading of above .45 is considered to be signiﬁcant at the

.05 level (see Hair et al., 1998; the criterion used for factor analysis is the same

as for canonical loadings).

Table 9 shows that not all variables in both the dependent (organisational

outcomes) and independent set (complaints-handling processes) are e qually

important or inﬂuential. The rank order, as determined by the absolute value of the

canonical loadings, for the four most inﬂuential complaints-handling processes is:

1. I2 ('easy-to-use process for all complainants', .854);

2. I4 ('fair communications with all parties', .768);

3. I1 ('visibility and accessibility of complaints-handling policy and process', .757);

4. I3 ('responsiveness of complaints-handling process', .510).

In the case of the organisational outcome measures, the rank order for the top ﬁve

most important variables is:

1. O4 ('produced higher levels of customer advocacy', .877);

2. O3 ('produced higher levels of customer satisfaction', .842);

3. O1 ('improved customer-facing processes', .840);

4. O2 ('improved products and/or services', .560);

5. O6 ('enhanced reputation', .528).

In summary, there is a signiﬁcant multivariate relationship between these sets of

complaints-handling processes and organisational outcomes. Speciﬁcally, as a set,

I2, I4, I1, and I3 are signiﬁcantly and positively correlated with O4, O3, O1, O2,

and O6. However, neither I5 ('customer-focussed approach to ﬁnding a resolution',

.359) nor O5 ('reduced costs', .162) contribute signiﬁcantly to this multivariate

relationship.

Discussion

This paper explores a unique data set provided by a collaborating commercial

organisation, LP. The data are self-reports from 144 organisations across four

sectors of industry and commerce. The data were generated in intra-sectoral

benchmarking studies designed principally to assess the degree of conformance

between organisational complaints-handling processes and those embedded in the

international complaints-handling standard, ISO 10002, and its predecessors.

Our goal was to see what the data could tell us about complaints-handling

processes and related organisational outcomes. We tested no hypotheses. Being

exploratory, we applied a number of statistical procedures to the data to see what

we could learn that is important for marketing management. The data analysed

comprised 17 complaints-handling process measures and six organisational outcome

measures. The 17 complaints-handling process measures were reduced to ﬁve factors

and subsequently to indices to facilitate further analysis and interpretation.

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Ang and Buttle Complaints-handling processes and organisational beneﬁts 1037

Factor analysis of the 17 process variables yielded ﬁve factors, accounting for

62.6% of the overall variance. The ﬁve factors are: F1, visibility and accessibility

of the complaints-handling policy and process; F2, easy-to-use process for all

complainants; F3, responsiveness of the complaints-handling process; F4, fair

communications with all parties; and F5, customer-focussed approach to ﬁnding a

resolution. These factors reﬂect the Guiding Principles that underpin ISO 10002.

The summated indices (see Table 5) show that the organisational complaints-

handling process that is most conformant to the Standard is 'fair communications

with all parties', whereas the least conformant is 'easy-to-use process for all

complainants'. The index data suggest that these complaints-handling processes

have the strongest impact on customer advocacy but relatively little impact on

organisational costs.

The bivariate correlations (see Table 6) add other valuable insights. Complaints-

handling processes are more strongly associated with improving the three

marketing-related outcomes (i.e. customer advocacy, O4; customer satisfaction, O3;

and customer-facing processes, O1), rather than outcomes that are more internal

to the organisation (i.e. reducing costs, O5, and improving products/ services, O2).

Intuitively, the impact on satisfaction and advocacy makes particular sense, since

handling and resolving complaints well has immediate beneﬁcial effect on the

experience of the customers concerned. The weaker association with reduced costs

and improved products/services supports the conclusion that excellent complaints

handling has a less observable and immediate impact on these organisational

outcomes.

What is also interesting is that the outcome O6 ('enhanced reputation') also has

a weak correlation with the all the complaints-handling processes (r ranges between

.078 and .290), except for I4 ('fair communications with all parties', r = .355). Again,

this result suggests the same conclusion that complaints-handling processes have a

stronger and more observable effect on customer outcomes than on longer-term

outcomes such as enhanced reputation.

The canonical correlation analysis yielded other interesting insights. First, the

canonical loadings are generally higher than the simple bivariate correlations. Thus,

although many bivariate correlations are weak, Table 9 shows that, when interpreted

as a set, prediction increases signiﬁcantly. In fact, as a set, the complaints-handling

process indices (I1 to I5) explain about 24% of the variance in the set of dependent

variables (O1 to O6; see Table 8). We conclude that there is a signiﬁcant multivariate

relationship between this set of complaints-handling processes and organisational

outcomes.

Second, not all the variables are equally inﬂuential or important in this multivariate

relationship. Speciﬁcally, as a set, I2 ('easy-to-use process for all complainants'), I4

('fair communications with all parties'), I1 ('visibility and accessibility of complaints-

handling policy and process'), and I3 ('responsiveness of complaints-handling

process') are signiﬁcantly and positively correlated with O4, O3, O1, O2, and O6.

However, both I5 ('customer-focussed approach to ﬁnding a resolution', .359) and

O5 ('reduced costs', .162) do not signiﬁcantly contribute to this multivariate

relationship. In other words, when organisations implement complaints-handling

processes that conform to the descriptions given in I1 to I4, they generate a

range of valued marketing-related outcomes, most notably higher levels of customer

advocacy (O4) and higher levels of customer satisfaction (O3). This is an important

ﬁnding because it implies that if organisations are interested in these important

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1038 Journal of Marketing Management, Volume 28

marketing-related outcomes (i.e. O4 and O3), then it pays to implement ISO 10002-

conformant complaints-handling processes, particularly those that are embedded in

indices I2, I4, I1, and I3.

Taken together, these results provide good support for the assertion in ISO

10002 that 'handling of complaints through a process as described in this

International Standard can enhance customer satisfaction ... [and] lead to

improvements in ... processes'. In addition, we would add that enhanced levels

of customer advocacy can be expected. However, our evidence fails to support

the standard's assertion that 'information obtained through the complaints-handling

process can lead to improvements in products. ... and, where the complaints

are properly handled, can improve the reputation of the organisation' (ISO,

2004, p. v).

These ﬁndings are important for marketing managers, particularly those who are

responsible for lifting levels of customer satisfaction and customer advocacy. These

results show that by designing and implementing complaints-handling processes

that conform with ISO 10002 guidelines, principally those that relate to visibility,

accessibility, responsiveness, and fairness (objectivity and conﬁdentiality), marketing

managers can expect to experience pay-offs in heightened customer satisfaction

and advocacy levels. An additional beneﬁt indicated by our analysis is that the

information obtained from customer complaints can lead to improvements in the

efﬁciency and effectiveness of customer-facing processes. When our ﬁndings are

associated with other research that shows that complaints-handling performance

is an important contributor to customer retention and loyalty (Ang & Buttle,

2006; Homburg & Fürst, 2005), we can infer that having ISO 10002-conformant

processes is important for relationship marketing efforts that stress customer

retention outcomes. Marketing managers may ﬁnd it to their advantage to design

complaints-handling processes using workﬂow functionality embedded into customer

management software applications.

In addition to these conclusions about the inﬂuence of ISO 10002-conformant

processes on marketing-related organisational outcomes, these results also make a

number of other contributions. First, they conﬁrm the important positive inﬂuence

that mechanistic complaints-handling processes can have on customer satisfaction

(Homburg & Fürst, 2005). Second, they shed some light on the composition of justice

perceptions. A mentioned in the literature review, many scholars have employed

justice theory as a framework for understanding customer complaint behaviour.

Many of the items that were included in the exploratory factor analysis are, prima

facie, examples of the three types of justice that have been identiﬁed. For example,

distributive justice is reﬂected in the item 'complainants who reject initial solutions

to their complaints are offered alternative forms of resolution, either external or

internal to our organisation'; procedural justice is enshrined in items such as 'we

have clearly deﬁned time limits for resolving customer complaints'; and interactional

justice is embodied in items such as 'all our customer contact people are fully trained

in our complaints-handling process'. The majority of the items appear to illustrate

procedural justice. Scholars who are using justice theory in their research might ﬁnd

our inventory of questionnaire items useful.

In sum, we are conﬁdent that organisations that implement ISO 10002-

conformant complaints-handling processes do enjoy beneﬁcial marketing-related

outcomes, particularly in terms of enhanced levels of customer advocacy, higher levels

of customer satisfaction, and improvement to customer-facing processes.

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Ang and Buttle Complaints-handling processes and organisational beneﬁts 1039

Limitations

As with all research, this work is subject to a number of limitations. The four sectoral

benchmarking studies that provided the data set for this research were all somewhat

different. We have therefore limited our analysis to those items that were common

to all benchmarking studies. Due to relatively small sample sizes from three of the

four benchmarked sectors, we were unable to conduct industry-speciﬁc analyses.

Our analysis is based on self-report data. The study is cross-sectional rather than

longitudinal. Therefore, inference of causality is based on correlations, rather than

time-order changes. Because the ﬁeld is so young, there is no theoretical model

to guide our research. We are thus limited to exploring the relationships between

multiple independent and dependent variables in a general way, dependent on the

data made available by our collaborating commercial organisation. Finally, although

the 17 common items that form the basis of our factor and subsequent analyses do

reﬂect the Guiding Principles embedded in ISO 10002, they do not exhaustively

sample the entire content of the international standard. Notwithstanding these

reservations, this is still the most comprehensive contemporary investigation of the

association between complaints-handling processes, as deﬁned in ISO 10002, and

organisational outcomes.

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Ang and Buttle Complaints-handling processes and organisational beneﬁts 1041

Appendix

Complaints-handling process measures

1. Information about how and where to complain is well publicised to customers.

2. Our complaints-handling policy is accessible to all our people.

3. The organisation ensures that records from top management reviews of the

complaints-handling process are maintained and acted upon.

4. Complainants are always kept informed of the progress of their complaint

through our complaints-handling process.

5. Top management has established an explicit customer-focused complaints

handling policy for our organisation.

6. Information about how to make complaints is widely available to customers.

7. All our customer contact people are fully trained in our complaints-handling

process.

8. We do not regard complaint ﬁles as closed until all options are exhausted or we

know that complainants are fully satisﬁed with the resolution.

9. Complainants who reject initial solutions to their complaints are offered

alternative forms of resolution, either internal or external to our organisation.

10. We have clearly deﬁned time limits for resolving customer complaints.

11. We have well-developed processes for recording customer complaints.

12. Complainants can access our complaints-handling process at any point or time

through any medium, including telephone, letter, fax, e-mail or face-to-face.

13. Information and assistance about complaints-handling is available in a number

of specialist formats, including Braille, large print, and audiotape.

14. Assistance to customers who want to complain is available in all the languages

used by our customers.

15. None of our complainants incurs any cost when engaging our complaints-

handling process.

16. If a complaint is about one of our people, we always make sure that that person

is given the opportunity to comment on the complaint.

17. To ensure objectivity, we treat all complainants with impartiality, conﬁdentiality

and sensitivity.

18. Top management has identiﬁed and allocated the management resources to

enable the complaints-handling process to function effectively.

19. We are committed to the continual improvement of our products and services as

a result of our learning from complaints.

20. Our top management is not committed to effective complaints handling

(reversed).

21. All our people escalate to management complaints that are important to our

organisation.

22. We immediately acknowledge receipt of every complaint.

Downloaded by [Macquarie University] at 17:57 27 August 2012

1042 Journal of Marketing Management, Volume 28

23. Managers throughout our organisation ensure that monitoring of the

complaints-handling process is properly undertaken and reported.

24. Top management has ensured that there is well-deﬁned, regular, periodic

review of the effectiveness of the complaints-handling process.

Organisational outcome measures

1. Complaints data help us identify opportunities for improving the efﬁciency and

effectiveness of our customer-facing processes.

2. Complaints data help us identify opportunities for improving products and/ or

services.

3. Changes we make as a result of complaints analysis produce higher levels of

customer satisfaction.

4. The way we handle customer complaints produces high levels of customer

advocacy, such as positive word-of-mouth.

5. Our use of complaints data enables us to reduce costs.

6. Our reputation is enhanced because of the way we handle complaints.

About the authors

Lawrence Ang is Associate Professor of Marketing, at the Department of Marketing

and Management, Macquarie University, Sydney, Australia. He has varied research

interests, enjoys teaching, consulting and the process of becoming an oenologist. His

research interests are customer relationship management, complaints management,

creativity in advertising, neuro-marketing, celebrity endorsement and social media.

In addition to his doctorate, he has a ﬁrst class honours degree, and has published

over thirty scholarly articles.

Corresponding author: Associate Prof. Lawrence Ang, Level 6, Building E4A, Marketing

and Management, Faculty of Business and Economics, Macquarie University, North Ryde,

Sydney, NSW 2109, Australia.

E Lawrence.ang@mq.edu.au

Francis Buttle

is Visiting Professor of Marketing and Customer Relationship

Management at Macquarie Graduate School of Management, Sydney, Australia. He is

author of 7 books and 100 scholarly papers. He is also principal of Francis Buttle &

Associates, an advisory and research organisation founded in 1979.

E Francis.buttle@mgsm.edu.au

Downloaded by [Macquarie University] at 17:57 27 August 2012

... A study conducted by Estelami (2000) revealed that almost forty percent of customers, who were disappointed of service quality, were consequently complained of the premises' strategies of handling their complaints, and assured that premises must enhance their complaint management system intensely. Other similar studies conducted by Andreassen (2001), Grainer (2003) and Ang and Buttle (2012) pointed out that that many complaint owners refuted the complaint handling system. The authors also argued that ineffective handling of complaints affect customers' satisfaction. ...

... The online survey included twenty four questions within two sections; the first section comprised of four questions and related to demographic data of the complainants (Age, gender, education level and travel type). The second section contained twenty questions and focused on assessing the customers satisfaction of the hotels handling complain process, this involved six aspects modified from Winch, 2011;Ang and Buttle, 2012;Dekay, 2012;Einwiller and Steilen, 2015) and included; ease of making the complaint, quickness of acknowledgement, speed of response to the complaint, capability of the human resource, satisfaction with the results of complaining, follow up procedures. Fivepoint Likert type scale was used (Strongly agree=1, Agree=2, Neutral=3, Disagree=4 and Strongly disgree=5). ...

... Unfortunately, neglecting customer complaints lead to product development failure and low level of satisfying customers, destroy the image of the hotel, customer escapes to competitors, weak corporate earnings, lack of loyalty and unwillingness to purchase again. A similar results have been reported by Estelami (2000), Andreassen (2001), Grainer (2003), Ang and Buttle (2012) and Satmetrix (2015) that there is a high level of customers' dissatisfaction with the handling complaints policy and procedures. According to table 2, more than half of the complainants (65.2%) found it was easy to register my complaint with the hotel website/ social media. ...

This research aimed to assess the strategies implemented by small-sized hotels to handle e-complaints via website and TripAdvisor as a social media platform and to identify the most common reasons for online customers' complaints. To achieve research objectives, data were collected using a mix of quantitative and qualitative approaches. First, an online survey targeted 150 customers who had made e-complaints in the last year. Second, content analysis of 198 collected complaints from the hotels' websites and accounts on TripAdvisor site during the last 12 months. The findings have highlighted that the low quality of food and beverage service was the most common reason for online complaints. The results also revealed that the majority of hotels neither responded to nor monitored complaints via social media, so it was not surprising to find out that the respondents were not satisfied with the aspects of handling e-complain process that adapted by the investigated hotels. The results pointed out that the surveyed hotels did not provide an explanation of what mistakes have been made and did not describe the action taken to ensure it won't occur again. One of the main finding that the small sized hotels did not make the required effort for investigating and collecting all relevant information surrounding the complaints to make the picture clear and determine the suitable taken action. These results will benefit small hotels management to develop better handle customer e-complaints system with precise procedures as well as, they will distinguish the major aspects that they should change and improve. Future research may consider each hotel category investigations deeply to find more about their complaint management strategies.

... The evidence of a close relationship between complaint management and service quality is shown in many studies of the marketing literature. Ang and Buttle (2012) found that having visible and accessible complaints-handling processes and policies can yield many benefits, such as customer satisfaction. Similarly, Singh, Jain, and Choraria (2016) argued that effective complaint-handling systems within the service protocol help ensure customer retention. ...

... Fourth, complaint management only influenced satisfaction level (H7) but not for the perceived value (H8). The fact that complaint management positively influences customer's satisfaction is aligned with the finding of Ang and Buttle (2012): Visible and accessible complaints handling processes and policies can yield customer satisfaction. Considering that complaint is customer-initiated expressions of dissatisfaction to the company (Landon, 1980), it is granted that a good complaint management system will have a positive effect on spectators' level of satisfaction. ...

This study investigates four influencing factors (i.e., facility quality, performance quality, interaction quality, and complaint management) on fans' satisfaction and perceived value, which further leads the intention to return. A total of 238 respondents of a Class A Short Season Minor League Baseball (MiLB) team participated in an online survey. Data were analyzed primarily with structural equation modeling (SEM) to investigate the relationship between study variables. The results indicated that spectators' satisfaction was influenced by interaction quality, performance quality, and complaint management while perceived value was predicted by facility quality and interaction quality. In predicting spectators' revisit intention, fans' perceived value was more critical in comparison to their perceived level of satisfaction.

... However, organisational justice and response research is argued to be undeveloped and under-theorised, particularly in the field of FM [7,17] and empirical research into facility manager-user relationship in the evaluation of facilities performance remains scant and largely anecdotal [2,7,19]. Furthermore, while the theme of organisational justice and response to customer complaints has been on the retail and service organisational research agenda for many years [18,20,21], research into how this operates in the evaluation of facilities performance is rare [6,7]. To overcome this research gap, the purpose of this research is to explore the value of organisational justice and response theory in answering the following research questions. ...

There has been growing interest in how to foster collaborative relationships between facility managers and end-users to obtain user-centred post-occupancy data for improving design and user satisfaction. Despite this attempt, there is little understanding on how facility managers respond to user feedback and its impact on user post-feedback behaviours. Drawing from theoretical insights from organisational justice, organisational response, and service quality studies and using a case study of higher education facilities in Australia, how facility managers manage user feedback to drive collaboration between facility managers and users during occupancy is explored. Various methods were used in this case study research, including document analysis, interviews, and observations. The research findings indicate that facilitation, timeliness, redress, apology and explanation, and attentiveness and efforts are applicable to facilities management (FM) services and could influence user post-feedback behaviour. Current responses to user feedback are not satisfactory, resulting in a poor relationship between facility managers and users that negates service acceptance and the engagement in a positive word-of-mouth. To foster more facility manager–user collaborative relationships in post-occupancy evaluation, and position FM as a service organisation, there is a need for improvements in current FM responses to user feedback and the effective management of user post-feedback behaviours.

... On the other hand, customer complaints are a reality of the organizational life. Customers are dissatisfied when they receive lower performances from the enterprises and enterprise employees compared to what they expected, or when they believe they are being treated unfairly (Ang andButtle, 2012: 1021). In this context, customer satisfaction is vital for hospitality enterprises. ...

... MüĢteri Ģikayetleri organizasyonel yaĢantının bir gerçeğidir. MüĢteriler iĢletmelerden ve iĢletme çalıĢanlarından beklediklerinden düĢük performans görüyorlar veya haksız muamele gördüklerine inanıyorlarsa memnuniyetsiz olurlar (Ang & Buttle, 2012: 1021. ...

Günümüzde internet kullanımı oldukça yaygın hale gelmiştir. Özellikle turizm açısından bakıldığında, seyahat siteleri potansiyel müşterilere planladıkları tatiller açısından ön bilgi alma kolaylığı sağlamaktadır. Ayrıca geçmişteki deneyimlerini ve bu deneyimlerin sonucunda elde edilen memnuniyet ve şikâyetlerini paylaşabildikleri bu siteler oldukça ilgi gören platformlardır. Bu seyahat sitelerinden biri olan TripAdvisor'da kullanıcılar yorum ve görüşlerini açıkça belirtmektedir. Bu çalışmanın amacı TripAdvisor sitesi üzerinden Bişkek'te faaliyet gösteren konaklama işletmelerini yönelik yapılan yorumlardaki şikâyetlerin hangi kategorilere ayrıldığı ve işletmelerin bu şikâyetleri ne oranda yanıtladığını tespit etmektir. Bu kapsamda 31.01.2017 tarihine kadar TripAdvisor üzerinden yapılan yorumlar incelenmiş kullanıcılar tarafından derecelendirilmiş 274 yorum ve bu yorumlarda yer alan şikâyet unsurları altı başlık altında derlenmiştir. Bu altı başlık, üründen, fiyatlandırmadan, dağıtımdan, tutundurmadan, yasal boşluklardan, müşteriden kaynaklanan sorunlar olarak değerlendirilmiştir. Bu başlıklar arasından en fazla tekrar eden (%35.4) unsurun üründen kaynaklı sorunlar olduğu görülmüştür. Sonuç olarak, otel işletmelerinin bu şikâyetlere büyük oranda (%69.71) cevap verdikleri tespit edilmiştir.

... Müşteri şikayetleri organizasyonel yaşantının bir gerçeğidir. Müşteriler işletmelerden ve işletme çalışanlarından beklediklerinden düşük performans görüyorlar veya haksız muamele gördüklerine inanıyorlarsa memnuniyetsiz olurlar (Ang ve Buttle, 2012: 1021. ...

Günümüzde internet kullanımı oldukça yaygın hale gelmiştir. Özellikle turizm açısından bakıldığında, seyahat siteleri potansiyel müşterilere planladıkları tatiller açısından ön bilgi alma kolaylığı sağlamaktadır. Ayrıca geçmişteki deneyimlerini ve bu deneyimlerin sonucunda elde edilen memnuniyet ve şikâyetlerini paylaşabildikleri bu siteler oldukça ilgi gören platformlardır. Bu seyahat sitelerinden biri olan TripAdvisor'da kullanıcılar yorum ve görüşlerini açıkça belirtmektedir. Bu çalışmanın amacı TripAdvisor sitesi üzerinden Bişkek'te faaliyet gösteren konaklama işletmelerine yönelik yapılan yorumlardaki şikâyetlerin hangi kategorilere ayrıldığı ve işletmelerin bu şikâyetleri ne oranda yanıtladığını tespit etmektir. Bu kapsamda 31.01.2017 tarihine kadar TripAdvisor üzerinden yapılan yorumlar incelenmiş kullanıcılar tarafından derecelendirilmiş 274 yorum ve bu yorumlarda yer alan şikâyet unsurları altı başlık altında derlenmiştir. Bu altı başlık, üründen, fiyatlandırmadan, dağıtımdan, tutundurmadan, yasal boşluklardan, müşteriden kaynaklanan sorunlar olarak değerlendirilmiştir. Bu başlıklar arasından en fazla tekrar eden (%35.4) unsurun üründen kaynaklı sorunlar olduğu görülmüştür. Sonuç olarak, otel işletmelerinin bu şikâyetlere büyük oranda (%69.71) cevap verdikleri tespit edilmiştir.

... There is a close relationship between complaint management and service quality. In a study conducted across four industry sectors, Ang and Buttle (2012) found that the complaint handling process affected policy and marketing-related benefits, including customer satisfaction. Similarly, Conlon and Murray (1996) and Singh, Jain, and Choraria (2016) found that when an organization effectively manages complaints, customers are likely to stay with the company. ...

We explored the influence of facility quality, performance quality, interaction quality, and complaint management on fan satisfaction and team identification. Participants were 283 fans of a Class A minor league baseball team, who completed an online survey on the team's official social media website. We tested the efficacy of the proposed model using the structural equation modeling bootstrap procedure with maximum likelihood estimation. The results confirmed that complaint management positively influenced interaction quality, and that facility quality, performance quality, and interaction quality positively affected fan satisfaction and team identification. Our findings highlight the importance of complaint management, indicating that organizations need a good complaints management system and employees who are well trained in handling these complaints.

... Por outro lado, as interações do consumidor junto ao varejista ou ao fabricante, numa situação de canal cruzado, geralmente ocorrem devido aos problemas de compras, seja via Serviço de Atendimento ao Consumidor ou devido à divulgação da má reputação da empresa (Ang & Buttle, 2012). Ademais, se o comportamento de canal cruzado ocorrer após a efetuação da compra em um dos canais (ex: físico) e usa o outro canal (ex: online) apenas para acompanhar o pedido, a compra no outro canal se torna desnecessária porque já ocorreu. ...

As novas tecnologias móveis com acesso à internet têm propiciado o surgimento de um novo processo de compra dos consumidores. Esse processo influencia tanto as compras online quanto as offline (em lojas físicas), a depender do produto a ser adquirido. Teorias de aprendizagem comportamental, como as relações entre precorrentes e correntes, podem explicar esse novo repertório comportamental. O presente estudo testou a mediação do Comportamento em Canais Cruzados (CCC) na relação entre a adoção de dispositivos móveis com acesso à internet e a frequência de compra nos canais online e offline, moderada pelo tipo de bem (durável versus não durável). Com delineamento quase experimental, os dados foram analisados por Modelagem de Equação Estrutural. Os resultados demonstram que a adoção de tecnologias móveis com internet incentivou as dimensões do CCC (busca de informação simultânea, comparação de produtos e preços, e interação com o varejista/fabricante), com maior força para bens não duráveis, e que cada dimensão do CCC altera a frequência de compras online e offline, porém, o efeito específico depende do tipo do bem. A pesquisa analisa o processo de adoção de novas tecnologias geradoras destes novos comportamentos, e que os mesmos incentivam a frequência de compra.

Nader H. Shooshtari
Simona Stan
Shawn F. Clouse

Given the critical need for retail firms to provide high quality customer service and satisfaction, this article investigates the importance of formalizing customer complaint handling policies and procedures with regard to its relationship to the ways in which retail companies receive, record, and respond to customer complaints. A survey of 184 firms from the retail environment of a midsized community reveals that the existence of such formalized procedures is significantly associated with firm size, better channels of communication with customers, mechanisms of recording customer feedback, and better-trained employees, which have been shown to relate to higher firm performance.

Word of mouth marketing — the intentional influencing of consumer-to-consumer communications — is an increasingly important technique. The authors overview and synthesize extant word of mouth theory and present a study of a marketing campaign in which mobile phones were seeded with prominent bloggers. Eighty-three blogs were followed for six months. Findings reveal the complex cultural conditions through which marketing "hype" is transformed by consumers into the "honey" of relevant, shared communications. Four word of mouth communication strategies are identified — evaluation, embracing, endorsement and explanation. Each is influenced by communicator narrative, communications forum, communal norms and the nature of the marketing promotion. An intrinsic tension between commercial and communal interests plays a prominent, normative role in message formation and reception. This "hype-to-honey" theory shows that communal word of mouth does not simply increase or amplify marketing messages. Rather, marketing messages and meanings are systematically altered in the process of embedding them. The theory has implications for how marketers should plan, target and benefit from word of mouth and how scholars should understand word of mouth in a networked world.

Many companies consider investments in complaint handling as means of increasing customer commitment and building customer loyalty. Firms are not well informed, however, on how to deal successfully with service failures or the impact of complaint handling strategies. In this study, the authors find that a majority of complaining customers were dissatisfied with recent complaint handling experiences. Using justice theory, the authors also demonstrate that customers evaluate complaint incidents in terms of the outcomes they receive, the procedures used to arrive at the outcomes, and the nature of the interpersonal treatment during the process. In turn, the authors develop and test competing hypotheses regarding the interplay between satisfaction with complaint handling and prior experi- ence in shaping customer trust and commitment. The results support a quasi "brand equity" perspective—whereas satisfaction with complaint handling has a direct impact on trust and commitment, prior positive experiences miti- gate, to a limited extent, the effects of poor complaint handling. Implications for managers and scholars are discussed.

Francis Arthur Buttle

Marketing practitioners and theorists routinely cite the power of the personal referral on customer behaviour. However, relatively few companies have tried to harness the power of word of mouth (WOM). Scholars have been pondering WOM over 2400 years, although modern marketing research into WOM started only relatively recently, in the post-war 1940s. WOM can be characterized by valence, focus, timing, solicitation and degree of management intervention. Most recent WOM research has been conducted from a customer-to-customer perspective, even though WOM is found in other contexts such as influence, employee and recruitment markets. Marketing research into WOM has attempted to answer two questions. What are the antecedents of WOM? What are the consequences of WOM? This paper integrates that research into a contingency model and attempts to identify researchable gaps in our knowledge.

The zone of tolerance has emerged from both the service quality and satisfaction literature to represent both a range of expectations and an area of acceptable outcomes in service interactions. In this study, hypotheses are derived from existing literature concerning the possible impact of the "disposition of the customer" i.e. whether cumulative experience has left the customer favourably or negatively disposed towards the service, on the zone of tolerance. In addition, the impact of the importance attached by consumers to the dimensions of service quality upon the zone of tolerance are also investigated. Findings from a quantitative, cross sectional analysis suggest that customers who are more favourably disposed towards the service have a higher level of adequate expectations and a smaller zone of tolerance. In addition, the importance attached to the dimensions of service quality appears to influence the level of desired expectations. Finally, and perhaps surprisingly, those dimensions of service quality generally considered the most important appear to be linked to a larger zone of tolerance.

Alain Samson

This article discusses negative and positive consumer word of mouth (NWOM and PWOM) in a mostly quantitative context. Based on the correlations between WOM and business growth found in Marsden, Samson and Upton's (2005) 'Advocacy Drives Growth' study, possible explanations for the superior predictive power of NWOM are presented. It is suggested that, similar to the Net Promoter (R) Score (NPS), NWOM is a good measure to capture both loyalty and advocacy among existing customers, while negative information may also have a strong effect on purchase decisions by potential customers. The number of brand choices and brand commitment are addressed across industries. It is proposed that brands (particularly services) in high-commitment/low-choice sectors have to be more sensitive to NWOM, while PWOM may be a better predictor for business growth in low-commitment/high-choice industries. Finally, using data from 'Advocacy Drives Growth', a new WOM measure in the form of a 'Net Advocacy Score' is presented.

Warren B. Powell

A Dynamic Programming Example: A Shortest Path Problem The Three Curses of Dimensionality Some Real Applications Problem Classes The Many Dialects of Dynamic Programming What is New in this Book? Bibliographic Notes

Christian Homburg
Andreas Fürst

This article addresses how an organization's complaint management affects customer justice evaluations and, in turn, customer satisfaction and loyalty. In delineating an organization's complaint management, the authors draw a distinction between two fundamental approaches, the mechanistic approach (based on establishing guidelines) and the organic approach (based on creating a favorable internal environment). The empirical analysis is based on a dyadic data set that contains managerial assessments of companies' complaint management and complaining customers' assessments with respect to perceived justice, satisfaction, and loyalty. Findings indicate that though both the mechanistic and the organic approach significantly influence complaining customers' assessments, the mechanistic approach has a stronger total impact. Moreover, the study provides evidence of a primarily complementary relationship between the two approaches. Another key facet of the study is related to the moderating influences of the type of business (business-to-business versus business-to-consumer) and type of industry (service versus manufacturing). The results show that the beneficial effects of the mechanistic approach are stronger in business-to-consumer settings than in business-to-business ones and for service firms than for manufacturing firms.

Hooman Estelami

This article examines the impact of competition and complaint handling procedures on the creation of outstanding complaint resolutions. Using a survey of consumer selfreports of delightful and disappointing complaint experiences, competition is found to have a direct but nonlinear relationship with delight in consumer complaint resolutions. Moreover, the relative impact of consumer loyalty as well as various aspects of complaint handling procedures on the creation of delightful or disappointing resolutions to consumer complaints is examined. Consumer delight and disappointment with complaint outcomes are found to be primarily influenced by compensatory aspects of complaint resolutions.

Betsy Bugg Holloway
Sharon Beatty

Organized service recovery policies and programs are important tools to firms in their efforts to maintain satisfied, loyal customers. Although service failure and recovery issues have received considerable attention in the literature, these topics have received only limited attention in the context of online retailing. Specifically, we lack an understanding of the types of online service failures occurring, the success with which firms are recovering from these failures, and consumer reactions to the service failure/recovery encounters they are experiencing. Therefore, this research involves two studies employing both qualitative and quantitative methods with samples of online shoppers to provide an initial examination of the service recovery management of online retailers. The results provide a typology of online service failures and demonstrate a number of areas in which online retailers are failing to effectively manage their service recoveries. The discussion includes implications for online retailers as well as directions for future research.

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Source: https://www.researchgate.net/publication/254316166_Complaints-handling_processes_and_organisational_benefits_An_ISO_10002-based_investigation

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