Implications for Web Complaint Management

Implications for Web Complaint Management

Literature Review

 Although customer complaint behavior has been the focus of many studies involving traditional marketing approaches, little attention has been paid in terms of online marketing [6, 13]. Of the 200 studies of online customer behavior reviewed by [6], only two addressed customer complaint behavior; in contrast, online customer satisfaction was the focus of 42 of those studies. This lack of research on online customer complaint management is surprising in light of the identification of this topic as a key e-CRM issue by several leading e-businesses, including The Institute of International Research (http://www.iir-ny.com). In traditional markets, customer complaints are considered an important source of information [29]. Since complaint management is recognized as being central to customer satisfaction, any measure of complaint behavior should consider the degree and quality of the underlying customer satisfaction [6]. Read More According to [13, 18], effective complaint management has a dramatic impact on customer retention, deflects potential word-of-mouth damage, and improves profitability.

Researchers [5, 2] are starting to look at complaint management as an important aspect of online strategic marketing tool – one that has such potential benefits as maximizing customer satisfaction and loyalty, creating favorable publicity, and reducing the overall number of complaints. Examples of two leading online businesses that are considered leaders in e-CRM and improved relationships with online customers are burke.com [26] and neimanmarcus.com. Traditional markets have learned that customer complaints are affected by individual customer characteristics, customer’s perceptions of the sources of their dissatisfaction, outcome expectancies, product type, and the costs associated with complaining [7, 25, 32]. However, few online customer complaint behavior model has been proposed to date; studies [5, 6] identified such technology factors as system performance, Web assessment factors, and other media characteristics as primary cause of customer complaint behavior [24]. Web assessment factors, include information, agreement, and settlement components – all of which can be used to evaluate online customer complaints and to measure the effectiveness of electronic commerce sites that transcend traditional marketing paradigms [24]

On the other hand, unmet customer expectations are also considered a primary cause of both online and offline customer complaints. Customer disconfirmation may be the result of a disparity between expectation and actual performance in terms of any of the Web assessment factors mentioned [24]. During the information phase, customers collect information on potential products or services, look for suppliers, and inquire about prices and conditions. In the agreement phase, a firm link is established between the seller and customer, and the details of a contract (e.g., product specifications, payment, and delivery) are negotiated. Product or service delivery occurs during the settlement phase, after which guarantee claims are made or help desk services are required [24].

Theories, such as dissonance theory, exit, voice, and loyalty explained causes and outcomes of customer complaining behavior. According to cognitive dissonance theory [10], disconfirmed expectations create a state of dissonance or psychological discomfort. Hirschman’s theory of exit, voice, and loyalty [16] posits that consumer complaining behavior is contingent upon the “value of voicing the complaint,” the “probability that the complaint will be successful,” and on “the ability and willingness to take up the voice,” and that exit is often a last resort [4]. According to Hirschman [12], management discovers its failure to provide satisfaction via two feedback mechanisms, exit and voice. In a complaint handling framework by [28], authors introduced the concept of justice to explain people’s reactions to conflict situations. Prior studies [4, 28] described a sequence of events starting with a complaint and ending with an interaction through which a decision is made and outcome reached.

This scenario stresses the influence of interpersonal treatment, process elements, and benefits/outcomes as core components of whether or not customer service is viewed in a positive light [21, 28]. The argument has been made that evaluations of how complaints are handled are contingent upon how customer service centers are managed. However, a previous study [6] found that product issues (e.g., product quality and performance) Causes of Online Customer Complaints are more important determines. In the present study, the first proposition was established to determine whether customer service issues result in a larger number of online complaints when compared with product issues. Proposition 1: Causes of online customer complaints will be more likely triggered by problems with customer service than by product failure.

The second proposition to be tested is how online customer complaints depend on the product categories, specifically if customers failed to find proper information on those products. According to [11], all products are not equal on the Web because products possess different attributes and different levels of the same attributes. Based on [11], although the Web could capture many attributes of the product, critical aspects of some pumps were not conveyed. Similarly, the previous study [8] argued that online transactions differ from traditional exchanges in terms of sensory (touch, smell, or sound) and non-sensory product attributes. In this study, products are classified into two categories – “sensory products” and “non-sensory products.” Sensory products [8] have attributes that can be conveyed through our senses, particularly touch, smell, or sound. Non-sensory products are defined as products with attributes that can be conveyed reasonably well in words (e.g., product information). In order to minimize customer dissatisfaction in e-businesses, this study proposes that sensory products (e.g., clothing, shoes, etc.) will require more intensive information online than non-sensory products. Otherwise, customers will be more dissatisfied with sensory products due to the specific attributes. This classification has been suggested because customer expectations on products via online, are contingent upon different product attributes. Proposition 2: Online customer complaints based on information failure are greater for sensory products than for non-sensory attributes.

Sources of Online Complaints

This section i) describes the sources of online complaints where online customers can get opinions or leave comments, and ii) introduces the framework for classification. The sources of online complaints are feedback systems, such as epinions.com, cnet.com, eComplaints.com, customer service centers, and non-profit organizations. In some cases, those websites are dedicated to the exchange of information on all products and services from any company; in other cases, online customer service centers focus on the product lines or services offered by a single company. This study uses the following framework (Table 1) to classify the features of the sources of online complaints: i) non-public vs. public, or ii) direct vs. indirect.

1 Epinions.com

The Epinions.com website is a source of product ratings, price comparisons, and opinions on the ‘pros’ and ‘cons’ of a broad range of individual products. Products are discussed along a continuum of “highest-rated” to “lowest-rated” based on user comments. Users are given access to recommendations, criticisms, and opinions for individual products, as well as a composite opinion rating based on consumer comments. Only members (i.e., registered users) at epinions.com are allowed to participate in rating the product or reporting opinions.

2 cnet.com

Similar to epinions.com, cnet.com provides product rating, price comparison, and positive/negative opinions. Cnet.com also provides information on diverse products/services. Unlike epinions.com, users at cnet.com are allowed to report product ratings (e.g., 1 = worst; 5 = best) and detailed opinions without being a member. Cnet.com provides product ratings based on value, service and support, quality and reliability and features. Users at cnet.com choose options to view all opinions, positive, or negative opinions.

3 Better Business Bureau (bbbonline.org)

Better Business Bureau OnLine (BBBOnLine), a nonprofit organization, brings consumer protection and business self-regulation to e-commerce (http://www. bbbonline.org/about/press). BBBOnline describes this site as a “source of collecting complaints to resolve market-space problems and to provide valuable models for e-commerce (http://www.bbb.org). The Bureau argues that its system proves that the majority of marketplace problems can be solved fairly through voluntary self-regulation and consumer education. Although any consumer is empowered to register a complaint, those complaints are not made public; instead, the Bureau prefers giving descriptions and ratings for a range of product within specific categories. The BBB’s reputation for reliability makes it a favorite source of information for consumers making purchases from companies they have not dealt with previously; its nonprofit status is considered a big plus in its favor (http://www. bbbonline.org).

4 Complaints.com

Owned and operated by Comments.com, Inc., complaints.com’s stated goal is to maintain an online

computer database to resolve customer problems and to increase the value of business firms (http://www. complaints.com). Users must register before they are given access to electronic bulletin boards to exchange messages on product, service, consumer, and business complaints, as well as any actions taken in response to those complaints (http://www.complaints.com). Unlike some feedback systems that are operated on a specific product/service basis, customers using complaints.com file their dissatisfaction against online businesses. Customer profile information and message content are sent to firms that are the targets of complaints posted by anonymous users (http: //www.complaints.com).

5 Planetfeedback.com

Considered one of the leading public online consumer feedback services, planetfeedback.com’s stated goal is to help consumers send their comments to companies “quickly and effortlessly” (http://planetfeedback.com). Also according to this website, the company has received both TRUSTe and BBBOnLine privacy certification. According to PlanetFeedback.com, registered users are allowed to express their satisfaction/dissatisfaction with a company’s response to a complaint and to share their opinions with others; all letters, which include contact information are saved in a database. PlanetFeedback’s business services division, BrandPulse, helps businesses respond to consumer comments and offers detailed analyses of customer satisfaction with a product, service, or firm, as well as the “virality” (word-of-mouth behavior) of consumers.

6 eComplaints.com eComplaints.com describes its service as a means of letting consumers “fight back” by voicing their concerns to companies who sell faulty products or services, while at the same time giving other consumers information on which to base their purchase decisions (http://www. ecomplaints.com). All complaints published by eComplaints.com are also sent to the companies in question, which encourage e-businesses to reply and to use the information to improve their products or services. By helping companies overcome their reluctance to address issues that come up repeatedly, eComplaints.com believes that it can help companies create and maintain a competitive advantage, and therefore remain profitable.

7 Web Customer Service Centers

Increasingly, online businesses are claiming that they use the Web as a customer service tool (http://www.rightnow.com). According to The Institute for International Research, some companies are using what they call “Web-based customer contact centers” to deal with customer comments and complaints, utilizing sophisticated technology (e.g., chat functions) in their collaborative approach to problem-solving. For a large majority of online customer service centers, the exchange of information is restricted to the parties involved in a dispute. Instead of sharing customer complaints on their web pages, these companies restrict electronic interactions to email message. By controlling access to complaints, these businesses believe that they will avoid negative publicity, especially the spread of damaging rumors by word-of-mouth [28]. On the other hand, this approach may influence the belief that these companies neglect customer complaints and devalue their customers. Some e-businesses, such as http://www.samsungmall.co.krand http://www. skdtod.co.kr, open all customer complaints to the public. Any valid customers are allowed to file a complaint in what is referred to as “customer service center” files that are organized by topics – e.g., delivery, product quality, or after-sales services. The sellers’ responses to these complaints are also publicized, giving customers insight as to how the firms react to problems.

The following categories are used to distinguish the different types sources of online complaints: Public Most of the feedback systems, such as http://www.epinion.com, http://www.eComplaints.com, and http://www.cnet.com are examples of public sites. Customers using public sites are able to view the other comments, such as product review (‘pro’ and ‘con’ views), price comparison, and news for diverse kinds of products. Online customers also view comments/opinions regarding products/service at customer service centers, which are managed by some online businesses, such as http://www.samsungmall.com, http://www.skdtod.co.kr. These centers are public, so customers can view all the messages posted by other customers. However, they require registration in order to leave a message. Non-Public Most online business manages their complaint messages individually. Customer complaints are not opened to the public and stored in a disclosed form. By hiding complaints, online businesses will not disseminate the troubles, which spread damaging word of mouth [23]. However, online businesses may have a tendency to neglect customer problems or ignore the value of the customer. Direct Online ComplaintsSome online businesses have managed to transform consumer complaints into valuable business opportunities (http://washingtonpost. com) and protect customers. Online companies such as http://www.samsungmall.co.kr build customer service centers and bulletin boards to offer feedback about customer complaints. On the other hand, the majority of online companies manage complaints via e-mail individually. Online companies, which do not disclose customer feedback systems, might take advantage if they manage effectively, while avoiding negative publicity. Customer dissatisfaction might result from viewing complaints of other customers. Indirect Online ComplaintsFeedback systems provide customer complaints online. Customers using these system do not send complaints directly to the companies that sold a product or service, but to a third party that not only sends them to the targeted companies, but also disseminates the information to a wider audience.

These third-party websites post complaints as open-ended messages (i.e., general opinions), structured feedback (i.e., rating) or a combination of the two [30]. While most feedback systems are open to the public, some accept only registered users (e.g., http://www.complaints.com). Customers leave positive/ negative product/service evaluations and comments/ opinions relating to a brand and/or product in the feedback system after they make a purchase. By posting negative opinions, the purpose of the feedback systems is to i) help others avoid the same pitfalls; ii) help others avoid similar problems; and iii) exert leverage to solve customer’s complaints (http://complaints.com). Non-profit organizations such as http://www.bbb.org also provide a place where customers report complaints. Although customers cannot share other users’ opinions/comments on the product/service, these organizations protect customers and resolve their problems. The BBB system has proven that the majority of marketplace problems can be solved fairly through the use of voluntary self-regulation and consumer education

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