One sure path to superb service is to track and assess every customer complaint and unearth its root cause

It was in 1990 that Jim Thompson threw down the challenge: to get a grip on customer complaints. His company, Electronic Controls Co. (ECCO), based in Boise, Idaho, designs, manufactures, and markets amber strobe lights for utility vehicles and backup alarms for trucks that beep when the driver shifts into reverse. And like most businesses, ECCO was hearing its share of customer complaints.

ECCO's customer-service reps, who fielded the complaints, were authorized to issue credit memos, ship replacement products or parts overnight, or do whatever else was necessary to placate customers. That was fine as far as it went, but it didn't go far enough for Thompson, then president. There was no record of the complaints or the reps' response to them. Thompson's concern was that the underlying problems that provoked the complaints in the first place still lurked, almost certain to prompt future gripes.

"We sensed we were getting the same complaints over and over, but we weren't sure," says Ed Zimmer, then in charge of sales and marketing, which includes customer service. "Our challenge was to track them and make them go away. We needed the statistics because, you know, if something gets measured, it gets done."

So the customer-service team devised a form to capture the core data -- the customer's name and account number, the complaint itself, and ECCO's corrective action. As patterns emerged, the customer-service personnel improved the form. For instance, check-off boxes were added for the most common complaints.

Zimmer, who considers the form an "active document," encourages such innovation. "It's better to have the form designed by the people who use it," he says. "We revise it at least once a year. And we decided to put a lot more effort into how we handled the complaints. Instead of a 'corrective action' that responded to complaints individually and specifically, we adopted a 'first response corrective action,' to correct the root causes of problems."

Now in its fifth generation, the form provides a way to tabulate complaints and deal systematically with them. ECCO tracks the information in two ways. A sales-team secretary enters each complaint into the computer's database, and Lori Hicks, the customer-service team leader, files the original hard copy of each open-and-shut case in a binder with the "closed" cases. The complaints that merit further consideration go into the "open" binder. Hicks uses the database to generate a monthly customer-satisfaction report that lists complaints by category and by frequency of occurrence.

"Once we know what the most common complaints are, we can identify what's causing them," says Zimmer, now president and chief operating officer. "We take our top three problems and assign corrective-action teams to solve them. Then our biggest problem goes away and number four becomes number three. In a recent 12-month period, we'd had 33 complaints about shipments that were either over or under the right quantity, but in the past 6 months, since we redesigned our packing slips and added a second check of each box before it gets sealed, we've had only 6 of those complaints. That's typically how it goes when we attack the root causes, be they in shipping, training, engineering, production, whatever. So we're now making fewer mistakes, or at least different ones."

ECCO has for some time traced a range of customer-service indicators -- warranty returns, late shipments, and credit memos -- to gauge customer satisfaction. But complaints earn special attention. The most recent batch of complaints tops the agenda of every Monday's meeting of the company's leadership team, a nine-member executive committee comprising all department heads. Lori Hicks reads aloud all the newly filed complaint forms, and the group elects courses of action.

"The CEO and the president are giving complaints their full attention, so it's clear this process is important," Zimmer says. "We're small, about 100 employees, and everyone takes pride in seeing the complaints go down."

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ECCO president Ed Zimmer explains the form:

At first we routed the filled-out forms to everybody in sales and all department heads, but that took too long. Then we realized that everyone who really needed to see the complaints was on one of these three teams -- leadership, production, or sales.

About 95% of the complaints are phoned in. Most of them, like this example, come into the customer-service area, but we provide pads of these forms to anyone who might talk to a customer. Even our engineering people have them, because someone might call with a technical question about installation and they may make a complaint. I have a pad at my desk, too, because sometimes customers demand to speak to the president.

Complaints that don't fit into one of the common categories are marked "other." But if an unusual complaint increases in frequency, it can end up with its own box. "Competitive comparison" is a relatively new category that used to be covered by the "other" choice.

We ask for a root-cause analysis when we see a complaint that's pretty frequent or one that we feel is becoming a severe problem. That's how we discovered that our badly designed packing slip promoted mistakes and that we'd ended up shipping the wrong amounts repeatedly. Those complaints go into the "open" binder, which the director of sales and marketing, Dan McCann, and I review at least monthly. Anything still open after a month gets pretty high attention. We expect these teams to react quickly.

The team is usually two or three people from the area where the root cause appears to be who are in a position to implement corrective action. If it looks like a materials problem, for example, then we assign people from the materials team or the purchasing department, and so on. Those people report back to a member of the leadership team, who can either approve their corrective action or have them keep working on it.

We leave this blank until the root cause has been identified and corrective action is in place. It completes the loop. Only a member of the leadership team can authorize closing a complaint.

We try to take corrective action on the first phone call. It's important to apologize and to make sure you understand the problem. Sometimes, unhappy customers are merely looking for a place to vent frustration. They feel better when they get the chance to do it. You can't assume you know how they feel or that you know the severity of this complaint to them. So we want to satisfy each customer right away. This complaint was filed by one of our customers who is entitled to freight-free shipments on orders over a certain dollar amount. Our sales and marketing people are authorized and trained to deal with complaints, and there's no dollar limit on what they can do. They can't make a mistake so big that it's worse than having an unhappy customer out there, telling other people about us.

Before each Monday leadership-group meeting, the sales and marketing department and probably the production department have already reviewed the newly filed complaints. Sometimes those departments recommend solutions. But the leadership team assigns a corrective-action team to each serious or frequent problem. For each complaint, we have three possible courses of action.

"Track for trend" is for complaints that don't come up very often and aren't really serious, like a dented box. If we suddenly see several customers with this same complaint, however, then we might assign a corrective-action team to hunt for the root cause. Generally, these are internal problems, mistakes we made. They just go into the "closed complaint" binder.

If, for example, we sent three boxes and the shipper delivered only two, we'd consider it an external error that required no more investigation.

We keep each hard copy in the binder for six months after the complaint is closed. We figure that's long enough. But the information is never purged from the computer. We have all the complaints in our database, going back to when we started this.

The little [smiley] faces are just a personal touch.