Virtually all firms have some kind of complaint handling procedure, often one that has numerous guidelines and constraints attached to it. The procedures are frequently time-consuming and as a result costly, apart from the difficulty of deciding how much compensation a given complaint should attract, or even regardless of whether the complaint is justified in any way.
Most of us are familiar using the scenario in which we don't offer the complainant sufficient and a dispute ensues - occasionally the result is really a lawsuit, but always the result is a lost consumer. It is, in fact, the customers who determine whether the complaint has been adequately addressed - so why not let the customers decide what the compensation should be?
Granite Rock is really a business that supplies building materials (mainly aggregate, concrete, cement, sand, and also the like) to construction businesses. The products are fairly homogeneous in between firms - cement is cement is cement, in other words. Granite Rock as a result had a problem in establishing a unique selling proposition that would distinguish it from its competitors.
What the business does is unique. It permits customers to handle their own complaints. On all its invoices is a statement towards the effect that the invoice is what Granite Rock thinks it has earned, but customers are welcome to pay what they think the company has actually earned - in other words, if a customer thinks a delivery was late, or perhaps a product was defective, he or she can deduct an amount from the invoice to compensate.
As in most business-to-business markets, buyers rely on having great relationships with their suppliers, so few (if any) abuse the system. In fact, Granite Rock has discovered that the general price of dealing with complaints has dropped significantly: apart from the savings in terms of administration time, clients are actually awarding themselves much less compensation than Granite Rock would have been ready to pay.
The bonus is, needless to say, that customers trust Granite Rock and are much happier to do business with it than they're with (often cheaper) competitors. This works best in business-to-business markets, but ought to also work well in consumer services. Abuse is of course feasible: if a consumer is consistently abusing the system, it's open to you to quit supplying that consumer. After all, they had been most likely abusing your old system anyway.
Monitor what the scheme is costing and compare back to your prior system, but remember to include any increase in business resulting from the increased trust clients have in you.
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