The study looked at 126
companies currently in the Better Business Bureau database for companies
in which at least seven complaints had been filed within the past 10
years and which had resolved 10% or less of those complaints. The study
found that 70.4% of those businesses were no longer in business. The
study also found that the median life span of those businesses which had
gone out of service was less than two years.
Interestingly enough, the study also found that all 50 of the companies
that had seven or more complaints and had resolved all of them in the
same 10-year period were still in business. Even among businesses with
low resolution rates there seemed to be a correlation between resolution
rates and whether a company went out of business. In this low
resolution group, companies that were still in business resolved 5.9% of
their complaints, while companies that were not in business resolved
only 3.6% of their customer complaints. Michelle L. Corey, president of
the Better Business Bureau stated that “the study shows that those
companies that incur an excessive amount of customer dissatisfaction by
not resolving complaints do so at the risk of going out of business”.
She also concluded that “the study also notes that the factors governing
whether a complaint is closed as resolved by the Better Business Bureau
are not overly stringent, and that if a company makes a good-faith
effort to resolve a complaint, it is closed as administratively judged
resolved. Even so, many companies failed to make this good-faith effort
to resolve valid complaints by their customers,” Corey stated. “While
companies may go out of business for various reasons, the fact remains
that the companies in the study that went out of business provided
minimal customer satisfaction.”
In
addition to customer dissatisfaction, other negative consequences were
noted by the study in that for a few the businesses that were no longer
in business, attorneys general from either Missouri or Illinois filed
suit against 13 of them. The Better Business Bureau also issued news
releases relating to 32 of the companies with low resolution rates which
cautioned the public when dealing with these companies.
The obvious conclusion is that customer satisfaction is the key to
health and long life in business according to the study. Some of the
recommendations provided by the Better Business Bureau on how companies
can adequately address customer complaints include:
-
Have a written customer relations policy that covers all aspects of
the business that directly relate to the customer.
-
Communicate the policy to the entire organization and monitor
compliance.
-
Designate a person to supervise complaint handling activity.
-
Commit the organization to referring unsettled complaints to a
third-party dispute resolution mechanism.
-
Track underlying patterns of customer dissatisfaction and take
corrective actions to prevent recurrences.
