Is your pacification strategy based on facts or guess work?
Author: William Archer
‘Your most unhappy customers are your greatest source of learning’, a quote attributed to Microsoft founder, Bill Gates. Businesses that have invested into their complaint management processes and nurtured their complaint handling teams will appreciate the value in learning from unhappy and altruistic customers. Leading such companies to refine their operation and to avoid making similar mistakes in the future.
Yet, it’s one thing to invest in a process that informs you of your customer experiencing a problem and why, and how, this has occurred. Understanding how best to resolve the problem is something else entirely.
This is where businesses need to employ a pacification strategy that is tailored to best fit the situation and category of complaint. If you're using guesswork here, then you may as well be blindfolded, reaching out with your hands in the dark. Worst still, you could be needlessly paying out redress payments and not gaining any benefit.
This type of pacification strategy, where a business incorrectly assumes that paying the customer off will result in the issue being resolved, is factually incorrect and not guaranteed to result in a higher Net Promoter Score (NPS).
Pacification strategies do not come off-the-shelf in a one-size-fits all approach. There are variables and nuances that need to be considered, which will differ between sector to sector as well as from issue to issue. This is where Resolver can add real value.
The scale of our complaint data is completely unique with over 100 million data points collected from impassioned consumers across multiple sectors. Through our Resolver Analytics benchmarking platform, powered by machine learning and natural language processing, we’ve been able to make fascinating observations and correlations regarding pacification strategies. And how the outcomes and resolution success achieved by organisations vary in stark contrast to each other.
Through analysis into the airline sector, our data revealed that when a well-known flight operator ceased paying out on every complaint case (as they had been doing), and instead gave more explanations and assurances to customers that this particular issue wouldn’t happen again, they achieved greater resolution outcome success. They provided an explanation to the customer about the issue and also explained why they wouldn’t pay out in that instance.
This resulted in a higher NPS compared to other flight operators who paid out in every instance on the same issue type. It also resulted in a higher CSAT rating and perceived ease of having the complaint resolved.
When we applied comparative analysis to credit cards, our data revealed that, despite assumptions to the contrary, complaints at the fully or mostly resolved stage achieved a higher NPS when there was no payment to the customer as part of the resolution outcome.
This further underlines that payment as a means of redress doesn’t guarantee a satisfactory or completely resolved outcome in the consumers’ mind. Our analysis into credit cards also revealed that in certain cases, an explanation and apology aren’t the correct pacification route to pursue either.
Further observations within the credit card sector reveal that a higher NPS was achieved through goodwill and assurances to customers in relation to certain issues compared to receiving just an apology and an explanation by the business. This demonstrates the nuances involved in developing a successful pacification strategy for both a sector and a complaint type. And why it's crucial to have the correct insights to guide your approach in order to reach the best outcome for your customer.
Burning bridges (and money)
Simply put, there is no correlation between payment and NPS in every instance regardless of what sector you operate in (except for PPI). If you’re paying out on every complaint case, then there’s a high probability you’re burning bridges with customers who place greater value upon receiving an explanation of why their issue happened and assurance it won’t happen again. You’re also burning money by issuing redress payments that won’t necessarily return you a higher NPS.
Work smarter, not harder. Why waste money paying out on complaint cases that remain mostly or fully unresolved in the mind of the customer? Instead find the truth of the issue by looking across the entire market to see what success looks like. That’s what Resolver Analytics enables you to do.
You can apply comparative benchmarking across your sector and dig into your competitors’ actions to uncover a solution that best fits the issue. This enables you to implement a pacification strategy that starts working in your favour, as well as your customers’.
As Bill Gates put it best ‘Your most unhappy customers are your greatest source of learning’. So why pay out on a complaint case when what the customer really wants is an explanation or an apology? Through real-time actionable insight, you can issue a response to your customer designed to increase NPS, reduce churn and avoid unnecessary pay-outs burning a hole in your revenue.
Discover more by arranging a consultation and demo with a Resolver expert and start working smarter towards building a pacification strategy built on facts rather than guess work.