Cost of a Complaint reported by Customers

[jeanmarc - 2011]

I was wondering if it's possible to work out the Cost of a Complaint reported by customers?

I am trying to sort out how?

Thanks
JM

 

[Helmut Jilling]

Re: Cost of a Complaint?

I was wondering if it's possible to work out the Cost of a Complaint reported by customers?

I am trying to sort out how?

Thanks
JM

Sure. There are direct costs, the cost of the defective product that has to be replaced, rework costs, transport costs to return the product and ship new product to the customer, additional testing, sorting costs, etc. There are also indirect costs, staff time to review, research, discuss the complaint, travel costs and time to the customer. And lastly, their are intangible costs, hard to calculate directly, that address the risk of losing business. That is more of an overhang potential cost, until it actually occurs, it is only a risk. But, if you do a lot of business with that customer, it is a big risk.

 

[jeanmarc - 2011]

Re: Cost of a Complaint?

Sure. There are direct costs, the cost of the defective product that has to be replaced, rework costs, transport costs to return the product and ship new product to the customer, additional testing, sorting costs, etc....

Actually it's a service linked to management of medical insurance scheme.

Agree with the intangible costs.

JM

 

[Helmut Jilling]

Re: Cost of a Complaint?

Actually it's a service linked to management of medical insurance scheme.

Agree with the intangible costs.

JM

Well, the specifics would be a little different. But, the 3 categories still apply - Direct Costs inccured, indirect costs that I listed would probably be the same, and the intangible risk of losing business could become tangible real quickly. You would need to think about what "direct costs" would be applicable to you.

 

[jeanmarc - 2011]

Re: Cost of a Complaint?

Note taken. We will work around the 3 costs categories and see what comes up.

Thanks

JM

 

[John Broomfield]

I was wondering if it's possible to work out the Cost of a Complaint reported by customers?

I am trying to sort out how?

Thanks
JM

jeanmarc,

Also refer to BS 6143. You may then state that the costs were determined in accordance with that standard.

John

 

[Sartaj Bedi]

I was wondering if it's possible to work out the Cost of a Complaint reported by customers?

I am trying to sort out how?

Thanks
JM

I would suggets a paradign shift..
the cost to resolve a complaint must be compared to the life time value of the customer.
the cost must be compared keeping in mind the relative importance of each attirbute to the overall exeprience.
eg some attributes , if resolved will shift the customer from being dissatisfied to a state of no satisfaction and no dissatisfaction. moreover, some attributes will shift from satisfaction to delight.
each attribute has weightage ...this can be determined by using multivariate analysis.

now that you know your life time value of your customer, the weightage of the attributes being measured , and its impact on shiftingg the customer to a stage of delight. You can look at the cost of solving the problem and do a cost benefit analysis.

there are article available on this on how to calculate cost of poor quality. i think that would help you to.