The complaining customer - a potentially happy one

THE "champion grumblers" among Singapore's customers made themselves heard last year, pushing the national complaints rate up. But customer satisfaction also soared to its highest level yet, said the Institute of Service Excellence (ISES) at the Singapore Management University, which tracks both.

The overall Customer Satisfaction Index of Singapore (CSISG) - which ISES compiles from surveys with customers of companies from a range of business sectors - seemed to defy a rise in the proportion of complaining customers to rise for a fourth year running to hit 71.1 points. That's the highest it has been since the CSISG first began tracking consumer contentment in 2007.

How should this seeming incongruency be understood? First, it can be noted that of the nine industry sectors measured by ISES over the course of the year, only two - finance and insurance and healthcare - saw significantly happier customers in 2014, compared to 2013.

Satisfaction with two other sectors - info-communications and public education - held steady, but the remaining five recorded significant year-on-year declines. But because the national index is weighted by the various sectors' contribution to Singapore's GDP, the finance and insurance and healthcare sectors - with their relatively larger weights and happier customers - managed to counter the drag from the other sectors and pulled the national score up.

Question of response

A more interesting explanation, though, surfaces in ISES' analysis of complaints data - with implications for how businesses ought to respond to grumbling customers.

Along with questions designed to measure how satisfied customers are with a particular company, ISES' survey also asks questions about complaints - whether there was cause to file one and, if so, how that was handled by the company.

Overall, 4.8 per cent of customers polled in 2014 said that they had complained to the company they were being asked about, up from 3 per cent in 2013. Apart from the public education sector, in fact, all sectors saw higher complaint rates in 2014 compared to 2013 - with some alarming jumps.

For the private education sector, 21.3 per cent of respondents lodged complaints, a surge from 2.6 per cent in 2013. The other sector with a complaint rate significantly above the national rate was the info-communications sector. Last year, 16.9 per cent of its customers complained, up from 12.1 per cent in 2013.

But complaint rates can be misleading, ISES pointed out. A very low complaint rate may not mean that customers are truly grievance-free. It could be that they have just given up on the company and might well be griping to others. Conversely, an increase in complaints could be the result of a company making it easier for customers to provide negative feedback.

Which is why it also tracks what it calls a "true non-complaint rate", of the proportion of customers who did not complain because they genuinely had no reason too. And on this count - which strips out all respondents who did not complain because they found it "too difficult" or felt that there was "no point" to doing so - all sectors except private and public education showed improvement in 2014.

This includes the info-comms sector, which achieved a higher 80.7 per cent true rate of no complaints in 2014, improving from 71.9 per cent in 2013.

To ISES, this underscores the importance of companies' efforts to engage the disgruntled but distant customer and uncover hidden grievances that may not be captured by their traditional feedback channels.

ISES director Caroline Lim thinks social media is an example of a non-traditional channel of feedback or "complaints handling".

"Social media is one area where companies can really tap into, to examine public sentiment of their service and offerings. Not many people will file a complaint with the train operator when the service breaks down, but tweeting and posting on Facebook about the experience is almost second nature to a large segment of consumers," she noted.

There is, of course, the matter of ensuring that customers who bother to complain get a good response.

Said Ms Lim: "This study's data consistently backs up what we all intuitively know: well-handled complaints result in significantly more satisfied customers that will come back and patronise the business. In 2014, on average, customers with a well-handled complaint had a satisfaction score of 69. Not bad, and pretty close to the national CSISG score. And a poorly-handled complaint? The customer satisfaction was a dismal 37."

"Well-handled complaints and a robust feedback framework will result in participative and committed customers. This has a direct and positive impact on satisfaction," the ISES report pointed out.

In fact, the finance and insurance sector - which did the heavy lifting when it came to national satisfaction levels last year - reaped the benefit of better-handled complaints. While the rate of complaints rose, banks and insurers have been handling their complaints better, with ratings climbing upwards since 2012, ISES noted.

Changing for the better

Over the eight years that ISES has been compiling the CSISG, it has witnessed improvements in customer satisfaction levels in Singapore.

"More than that, as observers to the service landscape, I think it is most heartening to see the concerted efforts of our businesses to improve the service experience for their customers. It is an ongoing process and it is reflected in the strong CSISG score we have today," Ms Lim said.

She believes it is an indicator of Singapore's service competitiveness globally too. "Similar studies of customer satisfaction in other countries show that we are not far behind economies with traditionally strong service cultures, such as the United States and South Korea. We can ride on this momentum and push for a breakthrough across our service sectors to give us the competitive edge," she said.

Singapore's 2014 national CSISG score of 71.1 points compares to a score of 72.5 points for the US and 73 points for South Korea. Both markets use indices based on a similar methodology to the CSISG, to track customer satisfaction.

Over the years too, tweaks have been made to the way the CSISG survey is carried out. "There is a regular review on the relevance of each sector, sub-sector, and even the companies that make up the index. The index aims to measure Singapore's service competitiveness, so we are always reviewing what makes an impact to our service landscape, whether economically or otherwise," said ISES academic director Marcus Lee.

And even as the core methodology and model behind the CSISG will remain the same, the institute is exploring other ways of conducting its surveys. For instance, it is now exploring online surveys instead of face-to-face interviews. These are already being used for the ITE and private education institutions, but may not be suitable for all sectors, he added.