BSBCMM301B ebook 23032015

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BSBCMM301B 

Process Customer 

Complaints

eBook 

Table of Contents 

BSBCMM301B Process Customer Complaints 

Introduction .............................................................................................. 2 

1. Respond to Complaints .......................................................................... 3 

1.1 Process Customer complaint Using Effective Communication ................ 3 

1.2 Obtain, Document and Review Complaint Reports ............................... 6 

1.3 Make Decisions Regarding Complaints ............................................... 8 

1.4 Negotiate Resolutions ...................................................................... 9 

1.5 Maintain Complaint/Dispute Register ............................................... 11 

1.6 Inform Customer of Outcome ......................................................... 12 

2. Refer Complaints ................................................................................ 13 

2.1 Identify Complaints that Require Referral ......................................... 13 

2.2 Make Referrals to Appropriate Personnel .......................................... 13 

2.3 Forward Documents and Reports .................................................... 14 

2.4 Follow-up to Gain Decisions ............................................................ 14 

3. Use Judgement to Resolve Issues ......................................................... 16 

3.1 Identify Implications of Issues ........................................................ 16 

3.2 Analyse, Explain and Negotiate Options ........................................... 18 

3.3 Propose Viable Options .................................................................. 19 

3.4 Lack of Negotiation ....................................................................... 20 

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Introduction 


This unit describes the performance outcomes, skills and knowledge required to 

handle formal and informal negative feedback and complaints from customers. 

Operators may exercise discretion and judgement using appropriate knowledge 

of products, customer service systems and organisational policies to provide 

technical advice and support to a team. 

No licensing, legislative, regulatory or certification requirements apply to this 

unit at the time of endorsement. 

This unit applies to individuals who are skilled operators and apply a broad range 

of competencies in various customer service contexts. 

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1. Respond to complaints 

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Customer complaints are usually a result of expectations not being met. 

Complaints can then help an organisation better understand customer needs, 

improve products/services, increase customer loyalty, etc. Properly responding 

to complaints provides an organisation with the opportunity to meet or exceed 

expectations thus leading to a happy, loyal customer. 

1.1 Process customer complaint using effective 

communication 

It is not unusual for people to feel anxious or have negative feelings when they 

are on receiving end of customer complaints with such experienced as 

confrontation, conflict, aggression and frustration. 

Complaints can provide the organisation with an excellent opportunity to exceed 

the customer’s expectations. An effective complaints management system can 

benefit an organisation in several ways, including: 

 

 

 

 

 

 

Better understanding of customer needs 

Enhanced reputation of the organisation 

Improved product quality and service delivery 

Increased customer loyalty 

Less time and money spent attracting new customers 

Word-of-mouth advertising by satisfied customers 

TIP: When customers complain, it means that their expectations about a 

product or some aspect of the organisation’s service have not been met. You 

have now a new opportunity to exceed their expectations about how their 

complaint is handled. 

By being able to identify the problems that are causing persistent complaints, 

the organisation has an opportunity to reduce the time and effort spent fixing 

them, as well as gaining a clearer picture of other ways to improve the 

organisation’s policies and procedures. 

Research has found that even in those cases where a complaint is not 

completely resolved to the customer’s satisfaction they will remain loyal to the 

organisation as long as a genuine attempt was made to resolve it. It’s worth 

remembering that it costs about five times more to attract a new customer 

than to keep an existing one. 

An organisation will likely have a variety of customers, both internally and 

externally, that will have different types of complaints. Customers are people or 

other organisations that wish to obtain goods or services from the organisation 

that employs you. These types of customers are termed external customers. 

However, you may be employed in a position where you only need to have 

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contact with other teams or individuals within your organisation. These other 

parties will also require you to provide them with goods or services to satisfy 

their needs. Customers that are from within your organisation are termed 

internal customers. 

But customers can also include: 

 

 

 

 

 

customers with routine or specific request 

people from a range of social, cultural or ethnic backgrounds 

people who may be unwell, drug affected or emotionally distressed 

people with varying physical and mental abilities 

regular and new customers 

While every complaint can be different the steps for dealing with them should be 

the same. Using effective communication and a detailed complaint policy with 

mandatory procedures can aid in responding to complaints. A complaint policy 

ensures that complaints are dealt with professionally and take into account both 

organisational and legislative requirements. Procedures included in this policy 

could include: 

 

 

 

 

 

 

 

Give the customer undivided attention and actively listen to the complaint, 

looking for the main issue. Refrain from interrupting or making 

judgements and accept ownership of the problem. Thank the customer for 

bringing the problem to your attention and provide next steps. 

Be understanding, the person is complaining about the organisation, not 

personally attacking. Be calm and check for understanding by asking 

reflective questions. 

Discuss options for fixing the problem. At the very least, a sincere apology 

costs nothing. But think about what this complaint could cost you in lost 

business or a complaint to the Equal Opportunity Commission. Maybe you 

can provide a free product or discount a future service. 

Do not provide solutions that cannot be actioned. If unsure about a 

solution indicate to the customer that other personnel must be involved 

and that this will occur with follow-up. 

Time is of the essence with complaints. Make sure they are a priority and 

are dealt with quickly and correctly. If complaints take several days to 

resolve or are forgotten, they can escalate. 

Record the customer's contact details and follow up to see if they were 

happy with how their complaint was handled. Let them know constructive 

actions that have been put in place to avoid the problem in the future. 

Communicate internally so that all staff are aware of the issue. 

Congratulate employees and share success stories of efficient and 

effective solutions with customers. 

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Always record and file the complaint and the solution completely and by 

using organisational requirements. A document management system 

should exist that is easily accessible and secure. This can be used for 

future planning and for reference if a reoccurring complaint occurs. 

Effective communication is a skill that is extremely important when 

dealing with customers on a daily basis as it can often mean the difference 

between an ok customer experience and a great experience. A customer is more 

likely to communicate an exceptional experience with others than just a good 

one. That being said, a bad experience will always be communicated and can 

have detrimental effects on an organisation. 

Interpersonal skills for customer service 

Processing customer complaints is a component of customer service. In order to 

provide excellent customer service, you need to be an effective communicator. 

Treating a customer courteously involves a lot of little things that demonstrate 

to customers that we recognise and respect them as individuals and that we 

appreciate the contribution they make to the success of the organisation. You 

should consider: 

 

 

 

 

 

 

 

 

 

 

 

greeting the customer by name 

smiling and maintaining eye contact 

offering to assist them 

asking permission before asking them questions 

using their name 

not interrupting them or speaking over them 

respecting their privacy 

being alert to any special needs that they may have 

offering additional services where appropriate 

thanking them for their custom 

farewelling them and encouraging them to return 

Companies that want to maintain a competitive edge, both now and in the 

future, are realising that reactive customer interaction services must be replaced 

by a more proactive approach that recognises the growing user-centricity of 

consumer communications networks. Consumers are increasingly interested in 

communicating with companies via new and multiple channels. A company’s 

ability to respond to customer requests wherever they are and via whatever 

device they are using at the time, will have an increasingly significant impact on 

how effectively an organization connects with their customers. 

A great deal of effort has been invested in reducing costs by removing people 

from critical business processes through automation and system integration. The 

fact remains that nothing is more frustrating for a customer than to have a 

problem and not be able to talk in real time with someone who can solve it. If 

customers are to stay loyal, customer contact operatives must be trained and 

ready to seize the opportunity to satisfy the customer at the earliest 

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opportunity, using their preferred communications method. This means making 

subject matter experts available when and where needed, which in turn 

demands sophisticated voice and data integration systems 

Issues that customers complain about 

When a customer complains, it means that their expectations about a product or 

some aspect of the organisation’s service have not been met. Customers could 

complain about such issues as: 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

administrative errors such as incorrect invoices 

customer satisfaction with service quality 

damaged goods or goods not delivered 

delivery errors 

housekeeping issues – Is the music too loud? Is the reception area too 

dark? Is the café unclean? 

problems accessing the organisation (physical access for customers with 

special needs or online access for remote customers) 

prices 

product delivered 

product not delivered on time 

products being out of stock 

range of products 

service errors 

slow or inefficient service and unhelpful or rude staff 

staff having poor product knowledge or giving incorrect advice 

Their complaints may include: 

 

 

 

 

different types of severity, formality and sources 

scenarios where external bodies such as police are required 

straightforward customer dissatisfaction 

level of documentation required 

1.2 Obtain, document and review complaint reports 

Documenting a complaint can be as simple as taking notes on a conversation, 

and as complicated as engaging in filling out customer complaint forms or 

reports with extensive detail that will require research for a solution. This 

documentation may include audio-visual tapes or computer-based systems. 

When documenting a complaint, always include as much relevant information as 

possible so that if future verification or comprehension can be completed. 

Documentation is not only necessary for internal purposes but is also necessary 

if the complaint is taken to a regulatory agency or even court. 

Documenting the complaint helps to verify: 

 

That the action, condition or policy being complained about actually 

happened or exists 

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That the action or condition or policy in question was intentional, or at 

least that those responsible for it knew, or should have known, its 

consequences, or known that it was illegal or unethical 

That a particular individual or entity was or is responsible for the action or 

condition or policy in question 

That experiences or conversations were had 

That someone was actually harmed or otherwise negatively affected by 

the action or condition or policy in question 

The particular physical, social, economic, health, psychological, 

environmental, or other results of the action or condition or policy in 

question 

There are other compelling reasons to provide careful documentation for any 

complaint such as: 

 

 

 

 

 

It establishes credible witnesses 

It establishes that the employee was concerned enough to pay attention 

to and record the details of the situation 

It may determine whether or not the complaint is taken seriously 

Having the proper documentation may make a difference as to whether or 

not the complaint can be acted on by a regulator or court 

Proper documentation can protect against liability or slander charges 

The first step in documenting a complaint is being able to understand what kind 

of information and format is required. This will vary across organisations but 

should remain the same within an organisation. Information or facts about the 

situation will be imperative to a proper solution being developed and can 

include: 

 

 

 

 

 

 

Time and date 

Place 

The individual(s) or group(s) involved 

Relevant addresses, phone numbers, e-mail addresses, web sites, etc. 

The number of incidents, and/or the duration of the problem, if it's 

ongoing 

The issue itself 

If the complaint concerns the violation of a law or regulation, for instance, be 

sure to explain which law or regulation is at issue and exactly what elements of 

it were violated. Remember, relevant information only! That being said, if unsure 

if data is relevant or not, always right it down. 

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Review of information or reports regarding complaints should always be done 

promptly. It will be much easier to understand and find a solution when the 

complaint is fresh in someone’s mind. Postponing or forgetting altogether will 

negatively affect both customer and the organisation trying to rectify it. The 

sooner a solution can be devised, the happier the customer and the elimination 

of negative communication about the incident. 

1.3 Make decisions regarding complaints 

Once a complaint has been made and documented the next step is deciding on a 

solution. Assemble the necessary documentation and refer to the appropriate 

organisational and legislative requirements before deciding on actions. Some 

organisational requirements that relate to complaints include: 

 

 

 

 

 

Access and Equity – obligation to ensure customer service complies with 

range of legislation and regulations relating to anti-discrimination and 

provides equal access to all customers 

Confidentiality and Privacy – handling of customer information and 

complaint is kept confidential and solutions must demonstrate respect for 

the right of individuals and their right to privacy in any interaction 

Pricing and Discount Policies – assisting customers to achieve the greatest 

‘value for money’ with products and services 

Replacement and Refund Policies – should be detailed and clear for both 

employees and customers to understand 

Workplace Health and Safety – duty of care to employees and customers 

Developing and implementing a customer service policy can be effective when 

making decisions about complaints. It should be available to both employees 

and customers so that decisions are not a surprise and have objective reasoning. 

It is important that the customer understands what he or she can expect in 

terms of service, and a customer service policy can help to communicate this. 

The policy may spell out the roles of the customer service staff and the level of 

service that can be expected from them. It goes without saying that good 

customer service training should be in place in the order to fulfil the customer's 

needs and expectations. It is very important that the employees interacting with 

customer have access to company policies available and training. 

Business and the Australian Consumer Law 

The Australian Consumer Law (ACL) is uniform legislation for consumer 

protection, applying as a law of the Commonwealth of Australia and of each of 

Australia's states and territories. The law commenced on 1 January 2011, 

replacing 20 different consumer laws across the Commonwealth and the states 

and territories. The text of the law is incorporated into the law of each state and 

territory by reference in separate fair trading acts. 

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The Australian Consumer Law also generally reflects most of the consumer 

protection provisions of the fair trading legislation in each state and territory. 

Consumer protection is a group of laws and organisations designed to ensure the 

rights of consumers as well as fair trade competition and the free flow of truthful 

information in the marketplace. The laws are designed to prevent businesses 

that engage in fraud or specified unfair practices from gaining an advantage over 

competitors; they may also provide additional protection for the weak and those 

unable to take care of themselves. Consumer protection laws are a form of 

government regulation, which aim to protect the rights of consumers 

1.4 Negotiate resolutions 

Negotiating can be an important part of the complaint resolution process. 

Negotiation in business is a learned skill that improves with practice. When 

dealing with customers, a win-win negotiation should try to be achieved to 

maintain the relationship. The process of negotiation should always try to bring 

the two parties to an agreement, somewhere in the middle. 

There are a number of factors that go into successful negotiation, most 

importantly though is preparation. Before a negotiation, familiarity and 

knowledge around the topic that is being negotiated, people involved in the 

negotiation and the benefits that both parties are trying to obtain, should be 

developed. Other pieces include: 

 

 

 

 

 

 

 

Goals – What do you want and need to get out of the negotiation? What 

does the other side want and need? (relate to both content and 

relationship) 

Trades – What do you have that the other person wants? What are you 

comfortable giving away to get what you want? 

Alternatives – If you can’t reach an agreement, what alternatives do you 

have? How good or bad are those alternatives? How important is it that 

you reach an agreement? 

Relationships – What is your relationship with that person? What is the 

history of your relationship? Can failure to reach an agreement damage 

your relationship with that person? Will there be any hidden issues which 

can affect the negotiation? 

Expected Outcomes – What are you expecting to be the outcome from 

this negotiation? What outcomes have you had with this person in the 

past? How will that affect this negotiation? 

Consequences – What are the consequences of winning? What are the 

consequences of losing? What are the consequences for the other person? 

Does that matter to you? 

Power – Who holds the power in the relationship? Who controls resources? 

Who will lose the most if an agreement isn’t reached? 

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Possible Solutions – Based upon all of the above considerations, what 

possible compromises can you come up with/ 

Items that can be negotiated regarding a customer’s complaint include: 

 

 

 

 

 

 

Discounts and payment terms 

Quality and performance standards 

Delivery options and delivery schedules 

Implementation schedule and training support 

Warranties and insurance 

Customisation 

Negotiation Approach 

The following is a negotiation approach that can be used when dealing with 

customers: 

Acknowledge: using empathy to understand both the information and the 

emotions and feelings attached to the complaint. Reflective questions or 

paraphrasing will show comprehension and the want to help 

Question: use a range of open and closed questions to obtain information 

regarding the complaint. Gather as much information as possible. 

Understand: match the customer’s problem with personal experience and 

knowledge. Also, recognise consequences the customer has incurred. 

Answer: will depend on the organisation and complaint but can include an 

apology, compensation, financial assistance, indication changes will occur, 

refund, replacement, etc. 

Some other things to keep in mind when negotiating a resolution with the 

customer include: 

 

 

 

 

Understand the underlying expectation or need - a customer may present 

an outrageous or unconventional solution, the trick is to listen and try to 

understand what they are really asking for 

Offer an alternative with concession – if the original offer or solution has 

been rejected offer an alternative that shows a concession on the 

organisation’s part. It does not need not be a major one but should fall 

somewhere between best-case and worst-case outcomes 

Address each issue - address each issue your customer has raised, one at 

a time. Save the toughest issue for last. Make sure to confirm and record 

each disagreement and agreement, no matter how small. 

Confirm in writing – once an issue has been resolved, make sure it is 

properly documented and that this documentation is filed internally and 

provided to the customer. 

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Always focus on win-win solutions - long-term, prosperous customer 

relationships require time and attention. Negotiating win-win solutions 

with customers will not only provide benefits to the customer but the 

organisation as well. 

1.5 Maintain complaint/dispute register 

A complaint/dispute register is an effective tool that all organisations should 

implement. It not only keeps record of past issues but can be used to track the 

progress of a complaint and ensure future complaints are minimised. It creates 

consistency for responses and records solutions that were successful and those 

that were not. 

The register can be either paper-based or electronic and can contain information 

such as: 

 

 

 

 

 

 

Date complaint was made 

Customer information 

Description of the complaint 

Comments or notes 

Solutions 

Outcomes and follow-up 

Having a register of complaints is useful for monitoring and identifying any 

patterns and finding areas of improvement in the business. It is also useful as a 

record if a customer returns to make further complaints. 

Complaints can also be categorised in the register to aid in solution efficiency. 

This can also lead to uncovering underlying causes of complaints. Regular review 

of the way the organisation manages complaints may: 

 

 

 

 

 

 

Ensure suitability, adequacy, effectiveness and efficiency 

Identify product deficiencies 

Identify work practice deficiencies 

Identify opportunities for improvement and need for change in complaints 

handling process 

Evaluate changes to complaints handling policy and objectives 

Identify changes in external factors 

It is imperative that resolutions are always included in the register. Knowing 

what worked and what created further issues will aid in correct changes. Also 

make sure that complaints that were resolved and to the customer’s satisfaction 

are indicated so the complaint can be ‘closed’. A regular check of the records will 

then show you which complaints still need to be resolved. This way, no 

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complaints will be left unresolved for very long and customers won’t be kept 

waiting. 

1.6 Inform customer of outcome 

It is important that organisations always respond to any customer complaint, 

suggestion or praise. If the customer has a complaint, it should be responded to 

as quickly as possible. Start with letting the customer know if the problem can 

be resolved on the same day or whether the company needs more time to 

investigate and resolve the complaint. Sometimes the customer service assistant 

may have to speak to a supervisor. Whatever the case may be, providing 

sufficient details is good practice. 

If the matter is complex, it may take several days to provide the customer with 

an answer. If this is the case though it is necessary that the customer is updated 

on the progress of the complaint. Being proactive in contacting the customer to 

provide feedback and updates rather than them contacting the organisation is a 

good practice to implement. 

Once an outcome or solution has been decided upon it will be necessary to notify 

the customer. This can be done either in writing, email, telephone, etc. 

Regardless of the channel of communication used, make sure to include the 

following information: 

 

 

 

 

 

 

 

 

Restate the complaint 

Describe what the investigation revealed 

Describe final outcome of complaint 

Explain actions being taken 

Check customer is satisfied with course of action 

Thank customer for the opportunity to assist them 

Take actions within timelines agreed to 

Complete any necessary paperwork 

Most importantly, once complaint is resolved confirm that the customer is in fact 

content with the outcome. While it will not be possible to please every 

customer’s needs and expectations, every possible effort should be made to do 

so. Remember, bad word-of-mouth from an inadequately resolved complaint can 

be detrimental to an organisation. 

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2. Refer complaints 

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2.1 Identify complaints that require referral 

Once a complaint has been received it will need to be assessed to determine 

validity, impact and whom the best person to deal with the complaint is. While 

some complaints may be straightforward and a simple solution is evident, others 

may need to be referred to other personnel or even external contacts. Other 

reasons for referral include organisational or legislative requirements, additional 

or different solutions are necessary or the person that received the complaint 

does not have the knowledge and expertise to properly address it. When 

assessing a complaint and identifying a solution, always act within limits of 

authority. 

Customers may also demand or expect complaints to be referred if they are 

dissatisfied with the proposed solution or because the circumstances around the 

complaint are complex. 

The complaint policy should clearly outline which complaints require referral and 

who should receive them. Organisations implement these procedures not 

because they do not trust employees to respond to a complaint but depending 

on the core issue of the complaint, different personnel have the necessary 

training and knowledge to effectively resolve it. 

2.2 Make referrals to appropriate personnel 

Customer service employees should understand referral options and which 

complaints are categorised under each. Critical service or support issues are 

likely to be referred to a different person than a minor issue and the type of 

customer involved may also result in a different referral process or person. 

If the customer feels that the complaint has not been sufficiently dealt with by 

the company, the customer has the right to take the complaint to a legal entity 

or external party. 

State Ombudsman 

The various states in Australia have state Ombudsman offices, with similar 

jurisdiction as Commonwealth Ombudsman, except over state government 

authorities. The Ombudsman gives priority to more serious matters, especially if 

they are likely to affect others. The Ombudsman generally does not investigate a 

complaint if you have: 

 

 

 

Another right of review you have not used 

Not attempted to resolve the problem with the agency concerned 

Ombudsman does not make offer advice on decisions of Ministers and 

Cabinet, courts and judges 

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The Ombudsman’s services are free of charge and can act on anonymous 

complaints but would likely require sufficient information to carry out an 

investigation and need to be convinced that the complaint is of a serious nature. 

In some cases, the law requires a complainant’s information be released. 

Australian Competition and Consumer Commission (ACCC) 

An independent Commonwealth statutory authority that promotes competition 

and fair trade in the market place to benefit consumers, businesses and the 

community. It ensure that individuals and businesses comply with the 

Commonwealth competition, fair trading and consumer protection laws. 

2.3 Forward documents and reports 

The documents and information collected regarding a complaint may need to be 

forwarded to different personnel. While detail is of course necessary, as 

previously mentioned, evidence and data must be relevant so they can make an 

informed decision. The level of detail in documents and reports required will vary 

according to the circumstances of each complaint. Some of the situations you 

might find yourself in: 

 

 

 

 

Informing supervisors, directors, or other officials of the offending entity 

Formally or informally presenting evidence before an individual regulator 

or a regulatory body 

Presenting documentation at a public meeting or demonstration, or in a 

media interview or program 

Testifying at a state or federal legislative hearing looking into the 

activities of a particular entity or of a regulatory agency 

The person(s) now managing the complaint will reference the documents and 

reports to establish: 

 

 

 

 

 

 

Facts around complaint 

Consequences to customer 

Risk to organisation 

Customer’s preferred outcome 

Reasons for the escalation or referral 

Solutions offered so far 

A witness statement may be required for some complaints. This captures in 

written form and in logical and sequential order, the relevant information given 

by a witness to a complaint investigation. 

2.4 Follow-up to gain decisions 

If the complaint has been referred to someone else in the organisation or to an 

external party, follow-up can still be completed to make sure a decision is 

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promptly made. Any information or progress that can be provided to the 

customer will be appreciated. 

It is not uncommon for complaints to be pushed aside or forgotten. Make sure 

those that are supposed to be providing an answer keep it a priority and are in 

fact working towards a solution. Offering any assistance or ideas for a solution 

may be a welcome action to speed up the decision process. 

Follow-up should not come across as pushy or as an annoyance but rather as a 

friendly reminder that the customer is awaiting a solution. Inputting a timeline in 

the complaint policy is a good idea. It will ensure complaints are correctly 

prioritised and are dealt with in a professional and prompt manner. 

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3. Use judgement to resolve issues 

3.1 Identify implications of issues 

You need to have a good understanding of the organisation you work for. If you 

are very familiar with the way things are done and understand your level of 

responsibility, you will find it easier to make decisions about how to process 

customer complaints. 

You must process complaints in the way that your organisation would want you 

to. Even when you are dealing with an unusual complaint that is not mentioned 

in the organisation’s policies and procedures, you should still have a general idea 

about how the organisation might like to handle it. 

Along with disappointment and frustration that results from a customer 

complaint there are other implications that could arise from the circumstances 

surrounding a complaint. Implications that can affect both the customer and the 

organisation. Understanding these implications ensure solutions address all 

issues of a complaint. The following are some examples of issues and their 

implications that can occur to the customer: 

Faulty Equipment 

Lost production time 

Health or safety hazard 

Inconvenience 

Cost of organising replacement 

Missing Parts 

Wasted assembly time 

Time spent establishing missing part 

Inconvenience 

Lost production time 

Missed Appointment 

Time wasted by waiting 

Time and money spent rescheduling 

Item or service not usable 

Hire cost of temporary solution 

Incorrect Information 

Received 

Repair not Complete 

Time and cost spent obtaining correct information 

Inconvenience 

Customer time wasted 

Health or safety hazard 

Time and cost to reschedule 

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Incorrect Invoice or 

Account 

Time and money spent resolving 

Insufficient funds 

Bank fees 

The biggest and most impactful implication though usually is the customer’s 

emotions and feelings, usually anger, frustration and disappointment that cannot 

always be resolved. 

Alternatively, implications that may arise for an organisation could be: 

 

 

 

 

 

 

 

 

 

 

Damaged reputation 

Low morale amongst staff 

Time and cost spent investigating complaints 

Cost of refunds, exchanges and replacements 

Cost of temporary products 

Legislative fees or penalties 

Poor ‘word of mouth’ 

Loss of customers 

Additional training costs for staff 

Cost of rework 

A customer complaint is one of the best opportunities to foster customer loyalty. 

Even the most dissatisfied customer can become an ambassador for the 

organisations, bringing in new customers through word-of-mouth. This then 

means dealing with a customer complaint efficiently and exceptionally. 

Employees dealing directly with customers must possess skills, knowledge and 

authority to be able to resolve the issue for the customer when a complaint is 

made. All customer service personnel need to be made aware of a customerfocused 

approach where ‘the customer is always right’ even if they might not be. 

The complaint may be a one-off situation due to a faulty product or service but it 

could also be an ongoing problem which can be traced to a flaw in operations or 

a problem with a supplier. 

Using your judgement 

Aside from following your organisation’s policies and procedures, there are times 

when you must use your best judgement when handling a complaint. Try to 

gauge the situation – think about how the customer is feeling. Think about what 

they need to hear. Think about what they need to hear. Think about what to tell 

the customer. 

Use your common sense and be sensitive and perceptive. Think about what 

would be best for the customer and the organisation. 

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When a customer is dissatisfied with the products or services they receive from 

an organisation, there are many implications for the organisation – both positive 

and negative. 

Negative implications 

When a customer experiences poor service or buys a faulty product, the 

negative implications for the organisation are likely to be: 

a reputation for poor products and services 

lost customers 

lost money 

Positive implications 

Complaints can provide an organisation with the opportunity to identify where 

they are going wrong and how they can better foster customer relationships. 

They give organisations a chance to put things right and turn the complaint into 

a positive experience. Complaints should be seen as a continuous improvement 

tool that the organisation uses to regularly improve and increase customer 

satisfaction. Responding positively to complaints can actually enhance an 

organisation’s reputation. 

Organisations can use complaints to: 

turn a dissatisfied customer into a happy customer 

improve service and product range 

better understand individual client needs 

increase client and brand loyalty 

3.2 Analyse, explain and negotiate options 

When developing options for resolution always remember to provide options that 

are in fact actionable through authority. These could include: 

 

 

 

 

Exchange of goods 

Additional products or services free of charge 

Refund 

Deal with issue up to a nominated monetary amount 

Always use a sound decision making process that aligns with organisational 

policies. Decision making can include the following steps: 

 

 

 

 

 

Identify problem or opportunity 

Gather relevant information 

Generate as many alternatives as possible 

Evaluate alternatives to decide which is best 

Decide and implement best solution 

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Before beginning this process though, always ask the customer what they would 

like as a solution. Most customers are very reasonable with requests and may 

actually provide solutions that are very easy and accessible to implement. As 

previously mentioned, the complaint is a result of their expectations not being 

met, let them provide the answer with how they can be met. 

Negotiation is an invaluable skill when dealing with customers. It is not so that 

the organisation always ‘wins’ but that both parties ‘win’ with the solution. Clear 

explanations of possible solutions will ensure that negotiations are both fair and 

beneficial. Effective negotiation demonstrates customer-focus and 

professionalism. 

3.3 Propose viable options 

When proposing viable options, keep in mind that legislative and organisations 

requirements need to be considered. Implementing proactive measures can 

greatly aid in efficiently developing options that suit both organisation and 

customer. 

Contracts and legal advice can often prevent complaints and can also provide 

solutions if they do arise. Contracts allow for clarity of the responsibilities and 

expectations of the organisation and the customer and as a result can reduce 

implications from a complaint. That being said, all parties involved need to be 

fully aware of the contract and its details. Communicating is extremely 

important! 

Legal advice may also save the organisation from carrying out a promotion or 

particular business practice that could easily result in a customer dispute. Any 

expense incurred as a result of obtaining the advice is worth the avoidance of 

disputes and bad publicity. 

Dispute resolution clauses should be written into all contracts to encourage joint 

problem solving with your customer before a problem turns into a dispute. Key 

elements to the clause should include: 

 

 

 

 

Informal discussion of the issue or problem 

How the complaint will be handled (who will manage the complaint and 

how they will do it) 

Internal negotiation methods (focusing on joint decision making and 

practical solutions) 

Alternative actions if it cannot be solved (mediation or assisted 

negotiation) 

Visit the Australian Competition and Consumer Commission (ACCC) website for 

information on how to comply with competition, fair trading and consumer 

protection laws. 

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Organisations cannot be successful unless they meets the needs and 

expectations of its customers. One of the essential activities of any organisation 

is to gather customer feedback and then implement and use that information. 

There are a number of ways businesses can gather relevant information from 

customers; the methods used will depend on the type of organisation and 

industry. Some useful means of collecting customer feedback are: 

 

 

 

 

 

 

 

Employees: find out what customers are complaining about or what kind 

of service or product they are asking for 

Short surveys: ask simple questions that customers can answer quickly. 

Include open-ended questions about what kinds of services or goods they 

want as well as asking what they think of current goods and services 

Conversations: chat to customers informally to learn about their needs 

and wants 

Market competitor observation: observe the actions of competitors 

Market research: professional outfits can be employed to ask target 

audiences about goods and services 

Documenting sales: keep records of what is selling well and what is selling 

poorly 

Online discussion groups: online discussion groups can provide 

information about target market's perceptions 

Once information is gathered, it should be analysed and then used to make 

changes. Changes should always positively affect organisational objectives and 

operations. 

3.4 Lack of negotiation 

There will be times when a customer’s complaint cannot be negotiated on. The 

employee may have used all their skills and knowledge to deal with the issue but 

an agreement can’t be found. This does not mean then that the complaint gets 

‘thrown out’ or forgotten about. This is not the correct action to take. 

As previously mentioned, referring the complaint to other personnel may provide 

a solution. Using proper judgement as well as organisational procedures, 

another employee’s experience and knowledge can be helpful in finding an 

answer. A technique such as collaborative problem-solving can be used to help 

alleviate the situation. 

The main difference between negotiation and collaborative problem-solving is 

perspective. In negotiation, each party is predominantly looking out for their 

own interests. In essence, it is a “me against you” situation. In collaborative 

problem-solving, both parties are joining together as a team, to solve the 

problem. That makes it become a “me and you against the problem” situation. 

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When approaching an issue from a collaborative problem-solving point of view, 

there are a number of steps which are typically employed: 

 

 

 

 

 

 

Share Perspectives – use communication skills to understand the other 

person’s perspective of the situation, along with their needs and desires 

Define the Issues – clarify the problem you are facing and the topics for 

discussion 

Identify the Interests – go beyond the stated positions or solutions to 

figure out what both parties really need to receive out of the situation. 

What would bring you to agreement? Try and find common ground 

between both parties. 

Generate Options – brainstorm the situation, seeking as many possible 

ideas for resolution, looking at the problem from every possible angle 

Develop Objective Criterion for Deciding – what standard would be fair to 

both parties? How can you both gain from the solution? Reduce your 

options, eliminating those that offer the least benefit to both parties. 

Evaluate Options to Reach Agreement – of the various options you have, 

which provides the greatest benefit to both parties? Which has the least 

negative impact on both parties? 

By working with “interests” instead of “positions” those involved can come 

together to increase possible solutions. When starting with just one position it is 

as if there will be only one solution; however there might be several different 

solutions that will meet the needs and interests. Rather, by sharing interests, a 

common ground is more likely to be found. Underlying interests can be 

uncovered by asking the following types of questions: 

 

 

 

 

 

Why is that important to you? 

What changes would that solution make? 

What would that mean to you? 

How will you benefit from that? 

What’s your basic concern in wanting that? 

Shared interests are the biggest aid in collaborative problem solving. They 

create a starting point, a way of coming into agreement and a definite goal that 

is desired by both parties. Although not all interests will be shared, capitalise on 

those that are, allowing them to be the centre of discussion and the centre of 

the solution. 

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