Responding to Consumer Complaints

Responding to Consumer Complaints
December 1998 -- R&D Management

By: Pam Erickson Otto
Contributing Editor

  To the untrained ear, customer complaints might sound like sour notes. But to consumer-relations professionals, they're music to the ears."We very much want to hear from our consumers," says Sally Shlosberg, vice president, consumer relations, Pillsbury Company, Minneapolis. "Such dialogue tells us how our products are doing in general, and can also provide valuable feedback in the case of a specific problem."  To help facilitate this sort of communication, most major food processors offer company addresses, toll-free numbers and, of late, Internet addresses, on product labels. At Pillsbury, calls, letters and e-mail messages are handled by the consumer-relations staff, a department whose ranks can swell to include more than 60 trained associates during fall and winter - the peak baking seasons.  "Last year, we recorded 640,000 consumer contacts, and will probably hit 700,000 this year," Shlosberg estimates, while hastening to add that such a rapid rise in responses doesn't reflect a trend of declining quality. "The increase is largely due to our enhanced accessibility. Although the number of contacts has increased, the types of contacts we receive has remained the same - about two-thirds questions and compliments, and one-third complaints." Making records  Every consumer contact Pillsbury receives is recorded in the company's computer tracking system. Product codes are recorded, as are the consumers' general comments. Careful analysis of tracking-system data helps the company rapidly identify emerging trends. "If we get one call from a consumer whose cake didn't rise, we tend to regard it as an isolated incident not necessarily due to product quality," Shlosberg says. "But if we begin to receive several calls describing the same problem, that trend is reflected in the analysis. When we see that other products produced on the same day produce similar problems, we take steps to initiate the appropriate action."  Shlosberg adds that consumers who report such problems are offered coupons for free replacement product. "Research shows that if someone had a problem with a product, and the situation was resolved successfully, that consumer will be more likely to purchase the product again," she says, referring to consumer loyalty studies conducted by the Society of Consumer Affairs Professionals in Business, an industry group based in Alexandria, VA, and TARP, an international customer service research and consulting firm with U.S. headquarters in Arlington, VA.  For problems of a serious nature - for example, where consumers' health might be threatened - the company enacts emergency procedures.  Such was the case in early September when Pillsbury issued a recall for its Chocolate Chip Cookies refrigerated-dough product. A consumer called Pillsbury's toll-free number to report that the cookie dough contained walnuts. Although the nuts posed no threat to the individual's health, the person was disappointed in the product and believed the company should know about the problem.  Following the call, consumer relations alerted a number of other departments. Quality assurance coordinated a rapid retrieval of the affected product from store shelves; marketing and communications dispatched press releases; and a telephone message was recorded that gave callers the product code numbers and geographic areas affected by the recall. Pillsbury's legal and regulatory affairs departments also were notified.  As a result of the company's quick action, mislabeled product remaining on store shelves was retrieved, and there were no reports of serious allergic reaction. And the consumer who initially found the problem received coupons for free product as a thank-you.  In this particular case, the retrieved product required no further analysis, because the walnuts were clearly visible. However, in cases in which consumers report foreign objects or other problems with a product, Pillsbury's internal laboratories are called upon to examine product samples to determine the defect's source. "We want to be sure we know exactly how the problem occurred, so it can be prevented in the future," Shlosberg says. Outside help  For cases of a very sensitive nature, Pillsbury, as well as many other food processors, sometimes chooses to use the services of the National Food Processors Association's (NFPA) Claims Program. The Washington, D.C.-based group reports that more than 75% of NFPA member companies have used the program's services, which range from claims investigation to litigation management to crisis-management support.  "We look into all sorts of potential claims," says Phil Olivetti, who heads NFPA's claims department. "Percentage-wise, the most frequent type of complaint is a report of a foreign object or material in a food product. The next tier would be illness complaints. The third, and smallest, tier would be claims of property damage - food products that caused damage to a person's property." Examples of property-damage claims include products with containers that exploded or leaked, and products that caught fire during microwaving.  When a member company contacts NFPA about a potential claim, claims-department associates immediately begin investigating the complaint's legitimacy. "Let's say a consumer contacts one of our member companies because he became ill after eating one of its products," he says. "The question we need to answer is, 'Was the company liable?' So we begin by looking at the liability issues - at the product itself, at its container. We have our lab perform tests to see if any part is defective." A sample from the actual product consumed yields the most meaningful results. However, samples of product with the same lot number also can be used.  With a foodborne illness, the lab would conduct pathogen tests. If a consumer claimed a foreign object was found in the food, the lab would investigate whether the item could have been in the product when it left the manufacturer. Tests also are performed on the foreign objects themselves to make sure they are what the consumer alleges. "What may look like rodent hair may be something else entirely," Olivetti says. "Our lab can provide objective test results that will either substantiate or disprove a consumer's complaint."  As part of the investigation, NFPA associates also check the consumer's complaint history. "Most food companies maintain files of chronic complainers, and we do, too," Olivetti says. "Those records serve, more or less, as a predictor of credibility."  The claims department next looks at the damages that allegedly were created. "Did someone have to see a doctor? Was there a loss of wages? Those are the types of questions we ask," Olivetti says. "Any financial loss experienced by the consumer would be considered a damage. We then try to document any damages through third-party substantiation, such as a hospital bill."  Olivetti says the next determination to be made is whether the product caused the damages. "We look at when the person became sick," he says. "If it was 15 minutes after eating a meal, these foods weren't the cause. Foodborne illnesses have incubation periods that range from several hours to one or two days."  Lab test results and medical diagnoses also are considered during this review.  If the claim is found to be legitimate, department associates then assign a value to the damages. "We add up what the problem cost the consumer," Olivetti says. "For an illness claim, the figure would typically include doctor bills and the cost of medication, plus any lost wages."  Although NFPA's Claims Department averages 3,500 claims investigations a year, only a small percentage are found to be fraudulent. More prevalent, however, is liability-law abuse. "A consumer may say he broke his tooth on a hard object in a food product, and we may find that to be true," Olivetti says. "But we also may find that he hasn't been to a dentist in 10 years, so his teeth were in bad shape to start with. Yet that doesn't matter. The way the law works, if it was the object in the food that caused the dental visit, then it's likely that the food company will have to pay."  Claims incidence also seems to mirror the nation's economy and unemployment rates, Olivetti says. "If someone's out of work and without insurance, they may be more likely to file a claim, because it provides a way to get medical or dental care paid for."  While NFPA's claims department is a valuable complaint-resolution resource, its services are available to member companies only. Food processors not belonging to the association instead either must conduct their own investigations, or work through a third-party administrator. These firms, often hired by insurance companies, provide many of the same services as NFPA, but charge separate fees for each.  Regardless of who handles a consumer's complaint, the most important aspect is how the matter is resolved. "The myopic view of consumer complaints is that they're negative," Olivetti says. "But the broader perspective is that complaints are indicators of problems to be resolved. And when they are resolved to the point of customer satisfaction, complaints end up having a positive effect on the company and its reputation." SIDEBAR:Heightened Response  Managing Consumer Complaints: Responsive Business Approaches to Consumer Needs, a 16-page guide published by the U.S. Department of Commerce's Office of Consumer Affairs, offers several recommendations for setting up and maintaining effective consumer-response systems. Among the guide's suggestions:• Designate procedures to receive complaints. Select means (such as a toll-free number) to receive complaints that are visible and accessible to consumers. Then, publicize the complaint system to encourage consumers to voice their dissatisfactions and to make apparent the company's good intentions.• Develop a record-keeping system. Create computerized or paper forms for recording, categorizing and filing complaint records. Design the system and/or use software that: communicates complaint data and analyses to top management; permits swift identification and response when complaints should be reported to other departments or companies in the distribution network, or to law-enforcement or regulatory agencies; provides market research through complaint trends; and enables management to monitor the complaint-management system's efficiency and effectiveness.• Process and record complaints. Log in the complaint and relevant data, then categorize it for resolution and record-keeping. Categories must be clearly defined and exclusive of one another. Assign the complaint to one person for handling, and forward to another level of authority only when necessary.• Acknowledge the complaint. Consumers do not register complaints with only a casual interest in their disposition. Complaining involves some inconvenience and, possibly, expense. Loyal customers with strong feelings are often involved. For these reasons, it's important to talk directly to the customer whenever possible. Use mailgrams or letters when necessary, but avoid impersonal form letters. Also, take extra time, if needed, to help consumers with special needs, such as language barriers or disabilities.• Investigate and analyze. Be sure to get both sides of the story. Keep records of all meetings, conversations or findings in the complaint database or file.• Resolve the problem in a manner consistent with established customer-satisfaction goals. Empower front-line employees to authorize satisfactory solutions to problems. Act swiftly, keeping the consumer informed through progress reports, and notify the consumer promptly of a proposed settlement.• Follow up. Make sure the consumer is satisfied with the resolution. If necessary, refer the complaint to a third-party dispute-resolution mechanism, and cooperate with further resolution procedures.• Periodically analyze and summarize complaints. Circulate complaint statistics and action proposals to appropriate departments. And, even though the effects of complaints can be positive, develop an action plan for complaint prevention.Further information can be obtained by contacting the Office of Consumers Affairs, U.S. Department of Commerce, Room H5718, Washington, D.C. 20230; phone: (202) 482-5001; fax: (202) 482-6007; e-mail: [email protected].   Pam Erickson Otto is a business and technology writer who has covered the food industry for nearly 15 years. Her interests include the product-development process and issues relating to R&D management.Back to top