Carendi: Exactly. Whenever customers purchase one of our products or services, they also purchase the right to complain about perceived poor service.
Yet most companies, including Allianz, aren’t really aware of the hidden power of complaints and will sometimes ignore people who make them. Customers are also good at picking up clues that tell them not to bother complaining. For instance, the complaints area may only operate during certain hours, there is no follow-through from the company, or customers are told that a complaint will delay their settlement.
It’s time to look at complaints in a new light, as a great opportunity to fix something we didn’t get right the first time. I call it "service recovery."
Service recovery – getting it right the second time
Allianz has a goldmine in its midst and doesn’t need a prospector’s map to find it. According to Holding board member Jan R. Carendi, every customer complaint is an opportunity to build customer loyalty and to help create lasting competitive advantage for Allianz.
Jan R. Carendi: "Our customers also purchase the right to complain about perceived poor service"
? Most companies are afraid of complaints, yet you believe Allianz can use them to its advantage?
? What does Allianz need to change in your view?
Carendi: Our goal should be to develop a culture that is more receptive to complaints and customer feedback, and that views complainers as doing us a favor: they’re giving Allianz a second chance. If we recover magnificently, then we can build an even stronger emotional bond with customers that can be a source of lasting value.
The unfortunate fact is that most customers don’t complain, even when they are unhappy. That’s a shame, because they have invaluable information for us. So, rather than seeking to reduce complaints, we should be encouraging our people to seek out complaints and listen to this feedback. This will help us better understand, in a timely fashion, what customers really want.
They can become our allies by identifying internal practices that create problems for users. Customers can also show how we need to improve to cater to "misfits" in the market – "blanks" where no services or products are readily available – and help us in ways we would never have thought of.
The unfortunate fact is that most customers don’t complain, even when they are unhappy. That’s a shame, because they have invaluable information for us. So, rather than seeking to reduce complaints, we should be encouraging our people to seek out complaints and listen to this feedback. This will help us better understand, in a timely fashion, what customers really want.
They can become our allies by identifying internal practices that create problems for users. Customers can also show how we need to improve to cater to "misfits" in the market – "blanks" where no services or products are readily available – and help us in ways we would never have thought of.
? Can you quantify the "value" of complaints?
Carendi: Customers who don’t get their problems resolved properly are three times more likely to take their business elsewhere.
Yet superior "recovery" can have the opposite effect: evidence suggests that 25 percent of customers identified as "promoters" of a company started out as people who had experienced a failure in service.
Most customers don’t really believe that complaining does much good. That’s why we need to be alert to any sign – a phone call, body language, a chance remark to an agent – that a customer is unhappy.
Unhappy customers want to tell someone about their problems. If we don’t listen, then they’ll complain to others. On average they will tell 8 to 10 people, and one in five will tell up to 20.
Yet superior "recovery" can have the opposite effect: evidence suggests that 25 percent of customers identified as "promoters" of a company started out as people who had experienced a failure in service.
Most customers don’t really believe that complaining does much good. That’s why we need to be alert to any sign – a phone call, body language, a chance remark to an agent – that a customer is unhappy.
Unhappy customers want to tell someone about their problems. If we don’t listen, then they’ll complain to others. On average they will tell 8 to 10 people, and one in five will tell up to 20.
Carendi: "Effective service recovery can be a powerful source of positive word-of-mouth"
? And you believe Allianz can capitalize on this service recovery concept?
Carendi: I certainly do. Word-of-mouth advertising can either make or break our products and businesses because potential clients would rather believe a friend’s recommendation than a global campaign.
Effective service recovery can be a powerful source of positive word-of-mouth. In reality, the majority of our customers worldwide are satisfied but these people are hard to influence – they might never buy more than one policy.
The main opportunity to make an impact on them is when they contact Allianz to complain. That’s our chance - through superior service recovery - to forge a bond of loyalty, sell them some more products and have them, out of delight, refer Allianz to their friends and family.
Effective service recovery can be a powerful source of positive word-of-mouth. In reality, the majority of our customers worldwide are satisfied but these people are hard to influence – they might never buy more than one policy.
The main opportunity to make an impact on them is when they contact Allianz to complain. That’s our chance - through superior service recovery - to forge a bond of loyalty, sell them some more products and have them, out of delight, refer Allianz to their friends and family.
? A lot of this sounds like something Allianz should be doing already?
Carendi: It’s not rocket science, but two thirds of those customers we eventually lose had sent signals that they were willing to be convinced to stay.
We should remember that people like to return favors. Most customers only want what they think they were denied, so if we can give them something beyond that – whether it’s a financial benefit, an added convenience in their lives, or just time spent listening – they are likely to reciprocate by continuing to do business with Allianz, and possibly by promoting us.
We should remember that people like to return favors. Most customers only want what they think they were denied, so if we can give them something beyond that – whether it’s a financial benefit, an added convenience in their lives, or just time spent listening – they are likely to reciprocate by continuing to do business with Allianz, and possibly by promoting us.
? So how does Allianz begin to introduce this new direction?
Carendi: Part of the solution is to improve our processes and build our capabilities to serve our customers across functions and business lines.
Firstly, we need to make it easy for customers to complain or leave feedback. Let's look at toll-free numbers, postage-free envelopes, etc. I like the British Airways idea at Heathrow where you can step into a video booth and record a complaint or make a suggestion. We introduced a similar facility on this year's Annual General Meeting.
Firstly, we need to make it easy for customers to complain or leave feedback. Let's look at toll-free numbers, postage-free envelopes, etc. I like the British Airways idea at Heathrow where you can step into a video booth and record a complaint or make a suggestion. We introduced a similar facility on this year's Annual General Meeting.
? Employee education and motivation must also have a big part to play in this cultural shift?
Carendi: Most definitely. Good service recovery is based on good internal value systems: the way we treat customers is closely aligned to the regard we have for each other in the company. Charity begins at home.
So, there must be a commitment from Allianz to educate, reward and recognize people against customer focused KPIs (Key Perfomance Indicators). For instance, people require specific training on how to separate the customer’s anger from the customer’s complaint. Our employees need to understand that customers have reason to be angry.
So, there must be a commitment from Allianz to educate, reward and recognize people against customer focused KPIs (Key Perfomance Indicators). For instance, people require specific training on how to separate the customer’s anger from the customer’s complaint. Our employees need to understand that customers have reason to be angry.
? So where does Allianz go from here?
Carendi: To sum up, customers want a reliable, hassle-free and consistent response to their complaints. They want resolution at the first contact, extra effort demonstrated and someone to deal with who has authority to resolve and follow up.
Our market research tells us that customers want to feel significant, connected and confident. This means emotional attachment. This emotional element is the key to loyalty and we can build on that with magnificent service recovery.
And it must never stop. Companies that are good at service recovery always look for ways to do it better. They never stop working at it!
The full interview first appeared in the employee magazine "Allianz Journal".
As with all content published on this site, these statements are subject to our Forward Looking Statement disclaimer, provided on the right.
Our market research tells us that customers want to feel significant, connected and confident. This means emotional attachment. This emotional element is the key to loyalty and we can build on that with magnificent service recovery.
And it must never stop. Companies that are good at service recovery always look for ways to do it better. They never stop working at it!
The full interview first appeared in the employee magazine "Allianz Journal".
As with all content published on this site, these statements are subject to our Forward Looking Statement disclaimer, provided on the right.
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