Marketing Intelligence & PlanningEmerald Article: The ways companies really answer consumer complaintsArnaldo Ryngelblum, Nadia Wacila Hanania Vianna, Celso Rimoli

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This is an EarlyCite pre-publication article: Arnaldo Ryngelblum, Nadia Wacila Hanania Vianna, Celso Rimoli, (2012),"The ways companies really answer consumer complaints", Marketing Intelligence & Planning, Vol. 31 Iss: 1 (Date online 31/9/2012)

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The ways companies really answer consumer complaints Author Details (please list these in the order they should appear in the published article) Author 1 Name: Arnaldo L. Ryngelblum Department: University/Institution: Universidade Paulista Town/City: São Paulo State (US only): Country: Brazil Author 2 Name: Nadia W. H. Vianna Department: University/Institution: Universidade Paulista Town/City: São Paulo State (US only): Country: Brazil Author 3 Name: Celso A. Rimoli Department: University/Institution: Universidade Paulista Town/City: São Paulo State (US only): Country: Brazil NOTE: affiliations should appear as the following: Department (if applicable); Institution; City; State (US only); Country. No further information or detail should be included Corresponding Author: Celso A. Rimoli Corresponding Author’s Email: celso.rimoli@gmail.com

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Structured Abstract: Purpose – This work questions whether companies follow a deliberate strategic internal pattern while responding to consumer complaints or they always offer consumers a fair redress. Design/methodology/approach – A complaint sample from consumers addressed to the main Brazilian companies in four industries were examined. The responses directly provided to consumers were contrasted to those given after the mediation of Procon-SP, the main Brazilian consumer protection agency. As an additional source of evidence a documentary research was conducted with other participants of the complaint process. Findings – Results showed that companies retain or postpone the solution of complaints in order to discourage complainants, but once they appeal to consumer protection agencies their demands are satisfied, even when companies do not fully agree with them. This seems to reveal a strategic intent on their part. Research limitations/implications – Although the sample examined was not probabilistic, the evidence generated by the data collection and also the documents examined confirmed the results, enhancing the findings. Practical implications – Government and consumer protection organizations could use this information to envision new ways to perfect regulation in order to avoid a complaint increase. Originality/value – The results call the attention to the ways companies respond to consumer complaints, suggesting they do have a strategic intent regarding the solutions provided that go beyond offering a fair redress, as is recommended by marketing models highlighting market orientation and consumer satisfaction. Keywords: Complaints, strategy, consumers, consumer protection agency. Article Classification: Research paper

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The ways companies really answer consumer complaints

Introduction

Customer complaints are a fact of life that companies have to deal with in one way or another. For example, they could consider them as a centre of cost or as an opportunity for learning (Vos et al., 2008). The field of customer complaints and how companies deal with them has aroused interest not only in the USA and European countries, but also in Australia and in Asian countries. Many of these studies explore themes such as cross-cultural differences, the actions taken by consumers when they get dissatisfied and others. (Phau and Baird 2008). In this article we address a Brazilian perspective on the subject and add the mediation of a consumer protection agency to shed some light into how companies answer to consumer complaints.

Consumer protection organizations report emphatically about the problems faced by consumers in their relationships with suppliers of products and services. The number of complaints registered at Procon-SP the main Brazilian consumer protection agency, grew strongly until 2007 and has shown since then an increase proportional to the Brazilian GDP (Procon-SP, 2009a; 2008a; 2007; 2006; IPEA, 2009). Important companies from the telephony and financial industries continue to appear among the most complained ones (Procon-SP, 2009b). Also, between 2004 and 2008 the number of complaints handled has grown by more than 100%, and in the segment of the public essential services specifically, there was an increase of 240% (Revista Procon-SP, 2009).

In most cases consumers only appeal to protection agencies after trying to solve their problems by contacting directly the companies involved (Estadão, 2007). In addition, the number of complaints registered at Procon-SP, in 2007 represents less than 1% of telephony lines operating in the greatest São Paulo (Brazil). Therefore, we can suppose that the complaint potential is much larger, since many customers become discouraged at some point of the reclaiming process (Aaker and Day, 1982; Voorhees et al., 2006).

We could suppose that some companies would not have clear strategies to respond to complaints and then treat these events with similar priority. In this case, the reason for the complaint increase could lie in a work process that needs to be improved. Otherwise, if companies define selectivity, priority, delay, as strategies to deal with customer complaints, then they would have a deliberate strategic pattern that can be identified as the cause of the problems.

Given this context we could question why and to what extent are companies unable to correct their internal deficiencies, considering the discourse on the importance of pursuing consumer orientation and satisfaction (Day, 2007; Kotler and Keller, 2006) as an organizational value and as an important element in their competitive strategy? Or are there any other reasons or contexts for companies not meeting customer complaints? Following this line we formulate our research question: ‘What kind of strategic patterns do companies use when responding to consumer complaints?’ What we mean by strategic pattern is the repetition of certain responses to similar issues, such as offering redress to consumer complaints only after the intervention of a protection agency. Accordingly, this study aims at assessing if companies follow a deliberate strategic pattern while answering consumer complaints

In addition to this introduction we set out in section 2 a literature review contextualising the complaint field, specifying the types of complaints and also stating two propositions to be examined. In section 3 we brought the methodological aspects, where we exposed the basis of our analysis as well as its logic. In section 4 we presented and discussed the results, and in section 5 we presented our conclusions, the limitations of our research and suggestions for future work in the field.

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Conceptual background

We identified three major streams of research regarding consumer complaints. The first researchers on consumer dissatisfaction focused the characteristics of the complainants, their intentions, behaviour, and sources of dissatisfaction (Dolinsky, 1994; Fornell and Wernerfelt, 1987; TARP, 1986; Bolfing, 1989; Singh, 1990; Pearson, 1976; Richins, 1979).

The second group of studies presented the effects of complaints on consumers and organizations, analysing also the latter’s effectiveness to respond to the former’s (Chauvel and Goulart, 2007; Chauvel, 2000; Maxham and Netemeyer, 2002; 2003). A study on the British Human Services Charities (Bennett and Savani, 2011) has indicated the adoption of formal complaint-handling procedures by these organizations, in recognition of a strategic, rather than ad hoc, approach to complaint management.

And the third set of studies identified the necessary elements for effective relationship marketing strategies, because it was realized that the cost of generating a new customer could be substantially higher than retaining an existing one and other considerations (Rust et al., 2004; Reinartz and Kumar, 2000). However, there have not yet been enough studies indicating how many consumers got satisfied with the answers obtained at the first step in complaining, and how many drop out (Tax et al., 1998; Hoffman et al., 1995; Homburg et al., 2010; Dolinsky, 1994; Homburg and Fürst, 2005; Gilly, 1987; McAlister and Erffmeyer, 2003; Fornell and Westbrook, 1984).

These streams of studies mostly indicate procedures and structures to respond to complaints in order to keep the consumer satisfied, who is an already conquered asset. However, we know that complaints have increased as a result of handling problems by companies. We also found that there is a lack of studies seeking to determine whether or not strategies are developed to handle consumers in a less idealized manner, involving for example delaying, preventing or meeting these dissatisfactions in part.

The complaint field contextualization

This section examines how dissatisfaction processes unfold, how the answers are processed by organizations, and discusses the possibility of companies adopting patterned answers according to specific conditions. It was elaborated taking into account the extant literature on the field and also Brazilian secondary information.

The following step to the initial contact from complainants, which most of the times could be with frontline employees and managers at stores (Harris and Ogbonna, 2010) or to a call center attendant, requires forwarding the problem to the company. From this moment on, the question is whether the company's decision is made by examining the correctness of each application, as suggested by the authors previously mentioned (Homburg and Fürst, 2005; Day, 2007), or it has strategies to adopt according to specific demands (Whittington, 2001).

Among the reasons that could lead a company not to reply favourably to the consumer, running the risk of harming its image (Blodgett et al., 1997, McAlister and Erffmeyer, 2003) two must be highlighted. The first one involves the perception of opportunism from consumers (Fornell and Wernerfelt, 1987) and also from the company’s employees (Simon, 1991, p.32).

Following this line, Harris and Ogbonna (2010) found that employees from different

hierarchical levels conceal customer complaints for reasons such as personal or family

protection, avoidance of additional work, lack of time, alienation, among others. Consumer or

employee opportunism happens when an individual distorts, manipulates or lies in respect to the

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dissatisfaction that he communicates. When the company perceives this is the case, its intention normally would be to reject the consumer’s demand.

The second reason regards the company not satisfying the consumer because of other priorities such as limited availability of people, financial resources, and other items. The complaint handling procedures are in many cases conducted by departments that have to share their attention with activities unrelated to the consumer. The solutions adopted seek to accommodate different internal demands (Whittington, 2001). In most cases there is a separation between the consumer and the supplier consisting of distribution or communication channels, especially the Customer Service Care (CSC), that generally rely on information from a company’s database, such as accounts’ statuses (Nunes, 2001). Structures for processing, routing and monitoring complaint handling in companies are generally small. In most situations the reported problem will wait in line to be redirected to a specialised department. Complaints tend to be handled on a case by case basis, which may cause delays.

In addition to the complainant and the complained company, other actors such as consumer protection organisations, specialised internet sites, the media, and the government take part in the institutional practices of the field to mediate complaints previously denied by companies. Another important actor in this context is the judiciary, as it has the duty of judging who is right or wrong in the disputes between the parties. The existence of these instances can pressure companies to negotiate directly with complainants. However it might also allow for postponements, once companies would enjoy another instance for issue resolution, without penalties. And, even when cases get to the courts, companies in Brazil count on the slowness of the judiciary (Folha de S. Paulo, October 12, 2011). The government also tries to act in this field through regulating agencies. This is the case, for example, of Inmetro (regulation of measures) and the governmental regulatory agencies, such as Anatel for the telephony industry and the Central Bank (BC).

Finally, when it comes to an oligopolistic situation, as with telephony and financial services in Brazil, there is obviously little market competition. Thus, it is necessary recognise that oligopoly gives companies economic power to define standards in their markets, such as prices, product characteristics, and services conditions (Stigler, 1964).

Types of complaints and propositions

We have outlined until here that organizations might not be interested, every time, to respond favourably to consumers and can deal with complaints considering different circumstances. For example, there are internal conditions, such as financial, physical, or time constraints, as well as external conditions, such as the action of consumer protection organisations and of the judiciary. We also have to consider the fact that the industries studied (telephony and banking) are oligopolistic, and thus proceed to the examination of the responses given to consumers to see whether or not repetitive issues might indicate an intentional orientation involving the implementation of specific strategies.

Based on Procon-SP, (2008a) and Ofcom, (2008) experiences we defined four complaint problem categories: 1 – related to operational issues (defects), performance issues; 2 – marketing (unfulfilled commercial promises), and 3 – administrative (unauthorized charges), or issues at later stages (such as problems with attendants) and 4 – service issues (in the relationship with the company).

Considering the literature review and the research questions of this work we elaborated two propositions indicating strategic patterns, as follows:

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1 - The repetition of the same type of response from companies to similar consumer complaints suggests a strategic pattern.

2 - The delaying of responses to later stages of the customer complaints process configures another strategic pattern.

Methodology

In this section we first describe the complaint process, then present the data collection and finish explaining the logic of analysis we used.

The complaint process described

The suits researched were of two types, respectively ‘Letter of preliminary information’ (LPI) and Reasoned Complaint (RC). LPI records detail the consumer complaints sent to Procon-SP and the official responses to them. Whether consumers get unfavourable responses or just do not get any, they could then pursue administrative suits by addressing a RC to the company. So the main difference between them is that RC may be asked if the response the consumer obtained to LPI is unsatisfactory. But when the situation gets to this point, the company has its name automatically included in a complaint list that is made available for public consultation by Procon-SP, and is also disseminated by the media. However, Procon-SP is only able to mediate administrative reconciliations and cannot judge anything. This way, if an agreement is not reached at this final stage, consumers are instructed on to how to pursue judicially their cases.

Data collection

We used two methods to collect data. Firstly, we performed a survey on how companies responded to customer complaints, based on a non-probabilistic quota sample of 140 administrative suits (90 of LPI type and 50 of RC type) entered at Procon-SP. The suits correspond to complaints addressed to the main companies of the most complained industries in Brazil, as follows: Vivo, Claro, and Tim (mobile telephony industry); Telefonica and Embratel (land telephony industry); Itaú, Santander, and Bradesco (banking); Itaucard, Bankpar and Santander (loan companies). Secondly, we took a documentary research examining inspections, lawsuits, discussions, and agreements between companies and other actors in the field, including government and consumer protection agencies. Thus, several documents were reviewed including administrative proceedings against telephone companies by Anatel (2000) and lawsuits by consumer protection agencies (Idec, 2010; Revista Procon-SP, 2009); contents of the discussion forum involving companies, Anatel, and protection agencies (Anatel, 2010; 2009; Medeiros, 2010); report from Inmetro (2006) about customer services by phone companies; agreement between companies and the Ministry of Justice (2010; Froufe, 2010), and denunciation by the media (Wiziak and Soares, May 23, 2010) that brings examples of negotiation, disagreements, and conflicting situations between the actors in the field.

Table 1 shows the distribution of the data collection on consumer complaints at Procon-SP. The lines depict the type of suit (LPI or RC) and type of complaints, whereas the columns show these data classified by industry.

------------------------------------------------------------------ Insert Table 1 here ________________________________________

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The numbers of suits in the sample reflected a higher volume of LPIs in relation to RCs and the proportion of each company in relation to the total number of complaints. The suits’ records include the statements of complaints made by consumers and also some kind of evidence related to it, such as bills, records of contacts with the call centres, down payments, etc. They also register the official responses from the companies, plus an evaluation by Procon-SP for each case.

Complaint coding was based on classifications adopted by the American Better Business Bureausi (Braff and Laogue 2004; Garrett 2006), Ofcom (2008), the English Department of Communications, and Procon-SP (Procon-SP 2008a) and was organised in four types, as described in Table 1. Organizational responses to complaints were coded into six kinds of answers to include options ranging from total recognition of a demand with complete redressing to no recognition without any explanation and are detailed at Tables 2 to 6.

Logic of the analysis

In order to validate whether or not companies actually practice specific strategies regarding complaints, we considered their responses as the visible part of the strategy. We first analysed the LPI records available at Procon-SP. If the consumers that contacted the companies directly obtained different answers from those who did it through a protection agency, then then we have an indication that companies practice diverse strategies in different stages of the same issue, and prefers that the process be defined later. The same is true for RC responses originated by LPI records. To be able to affirm the existence of such a strategy, we used a procedure named counting of themes (Miles and Huberman 1984). Although it is not possible to generalize to all complaints, due to the characteristics of the sample, even a few repeated cases can indicate that a practice exists (Creswell, 2007). This type of analysis exposed the timing of the organisational response, which occurred during the first contact(s) or was delayed through responses that either denied or responded partially the demands. Procrastination also occurred so that each claim was either mediated by the consumer protection agency or was examined later at the courts.

In addition we compared complaints similarly classified to the responses they received. In the event that a particular complaint-response association was repeated significantly, it was possible to suggest the existence of a strategic practice for that type of complaint (Creswell, 2007).

We also examined documents and texts to identify different forms of relationship in the complaint field, involving the notification of companies by actors, such as consumers, governmental regulatory bodies, media, and organisations of consumer protection to indicate dissatisfaction with the complaint handling by companies. We used the discourse analysis method (Fairclough, 2001) to perform the examination, in which textual analysis and the discursive practice of production, distribution, and consumption examination of documents helped identify if there was a hegemonic and ideological practice on the part of all actors. The propositions were examined considering the various sources of evidence provided in the article, so as to validate if there is congruence between them (Yin, 2009).

Results and discussion

Tables 2 to 6 show the responses given by companies to customers, highlighting them before and after the mediation by the protection agency (Procon-SP), the type of suit involved (LPI or RC) and also more detailed information on these suits. Specifically, Tables 2 and 3 details the results of LPI suits and Tables 4 and 5 explores the consequences of RC suits. The classifications of complaints and company responses by type are indicated at each table.

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In Table 2 we brought a cross tabulation of companies’ responses given to complaints addressed by their clients before and after the constitution of the LPI suit by Procon-SP. We can see that prior to consumers recurring to Procon-SP, the non-recognition of the complaint occurred in 78% of the cases, but only 16% of these remained unchanged after the LPI suits. It should also be noted that after Procon-SP’s LPI intervention, 47% of all the claims have been fully met, and that for another 35% of the cases the new response meets at least in part the demands by consumers (the sum of the last line of columns B, E and F). These results seem to indicate that there is a dominant strategy used by companies when dealing with consumer complaints, which is to agree to consumer demands whenever they reach Procon-SP, even when the company does not consider the allegations fully correct.

-------------------------------------------- Insert Table 2 here -------------------------------------------- In Table 3 we analyse how the 69 responses that were type A before the LPI changed after the

mediation of Procon-SP. We notice that mobile telephone companies and banks are the most resistant to change their initial positions (47% and 45%, respectively), which is much higher than the 20% score for all industries. Still, about half the demands to these two industries receive some kind of favourable response. On the other hand, the loan companies are those that responded more favourably to consumers (89% of type C). Also, the landline telephone companies never leave the consumer without some kind of redressing. These numbers suggest the existence of differentiated strategies among the industries when responding to a LPI-Procon-SP, indicating, for example, that concentrated industries might be less willing to respond favourably to customers.

The changes in relation to the other before-LPI responses (types B to F) were not analysed, since their amounts of cases were small.

----------------------------------------------- Insert Table 3 here ----------------------------------------------- As indicated previously, a similar analysis was accomplished for the RC suits. Table 4 depicts

the distribution of the 50 cases surveyed with the cross tabulation of responses to the LPIs before and after the RCs. From Table 4, we draw that the biggest percentage change occurred in favour of completely meeting the demands (46% of type C), and for over 32% of the cases (the sum of the last line of columns B, D, E and F) the new responses met at least partially their demands.

-------------------------------------------------- Insert Table 4 here --------------------------------------------------- Analogous to Table 3, in Table 5 we analyse how the 50 responses that were type A before the

RC changed after the mediation of Procon-SP. We notice that each industry reacted differently indicating the practice of diverse strategies, regarding the responses to the RCs: Land and mobile telephony are the most resistant to change their first decisions, in 33% and 29% of the cases,

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respectively, which are higher than the percentage for the whole group of companies (24%). On the other hand, loan companies are those that respond more fully in favour of claimants (86% of type C, well above the other companies) and banks are those that respond the least in favourable to complainants (13% of type C). These results suggest that each industry apply different strategies regarding the RCs from Procon-. The changes in relation to the other initial responses (B to F) were not analysed because of the small amount involved.

----------------------------------------------------- Insert Table 5 here ------------------------------------------------------ Combining the results from both suit types, LPIs and RCs, we can conclude that mobile

telephony is the least receptive to customer complaints, while the loan companies are the most. However, it is possible to say that an important proportion of the responses have been changed after Procon-SP’s intermediation.

We also examined if there were a response pattern relating to each type of complaint, as they were characterized in this work. For both suit types, we compared the responses to the complaints as mediated by Procon-SP (Table 6). What is most salient for all types of response (A to F) and for any type of complaint (1 to 3) in Table 6 is that complaint 1 has shown a higher concentration of responses B and C which imply either total concession or partial concession to demands. For problem type 3, more than 50% of responses involved agreeing with consumers’ demands (C). These results reinforce the resolution of problems after the mediation of Procon-SP

-------------------------------------------------- Insert Table 6 here --------------------------------------------------- Considering the documentary research conducted, we found criticisms from actors such as

government entities, consumer protection organizations, and the media to practices in some industries. For example, telephone companies are blamed by them for the many problems they caused to consumers that seem to grow beyond what happens in other industries. In banking, the rise in complaints is also criticized and specific problems assume greater importance at certain periods.

The actors in the complaint field other than consumers and companies also make clear their disagreement with the performance of companies regarding the handling of such questions. In this way, they continue to corroborate the field’s practices, as it is observed by the measures taken, lawsuits, media reporting, regulatory changes, and administrative suits, as follows.

Procon-SP filed a lawsuit against Telefonica and stated that “Telefonica shows a peculiarity: high resolution index at Procon-SP. That is, consumers always try to resolve their problems directly (which is recommended), but are unable.” (Revista Procon-SP, 2009, p.23). Anatel (2010; 2009) and the DPDC-Department of Consumer Protection and Defense, under the authority of the Justice Ministry (Ministério da Justiça 2010) showed, in different interventions that their way of dealing with this kind of problems got at most to the point of suing companies administratively, but the imposition and payment of a fine is recognized to be highly unlikely. In this sense, Inmetro (2006) sought to establish a needed assessment of companies’ actions but gave in to the pressure of different interests: “ … because of the lack of technical regulations or standards that define the criteria to evaluate the Customer Service Care, Inmetro has defined, in

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partnership with the representative entities of the industries involved … a specific methodology for this analysis”.

When it comes to service providers to propose corrective actions, as was the case of the plans voluntarily submitted to the DPDC (Ministério da Justiça 2010; Froufe 2010) by the telephone companies Tim and Vivo, they did not even mention any kind of adjustment in the functioning of their operational and administrative departments. Their proposal was for a greater proximity to Procon-SP.

And finally, when it comes to the media, it casts doubt on Anatel’s exemption, when it raises an alert about the hiring of “four of its seven presidents that went to work for the companies they once oversaw” (Wiziak and Soares, 2010).

All these secondary evidence seem to corroborate the previous findings of the suit survey, as well as show some difficulties in meeting customer complaints.

Conclusions, limitations and further research

It was shown earlier that despite the growing number of complaints reported to Procon-SP, only a small fraction of dissatisfied consumers start a complaint suit. Thus, we know that complaint figures would be much higher if all the grievances were registered. Of those consumers that do formally complain, most of them address the companies directly before seeking the assistance of a protection agency. It was also shown that the number of complaints have been increasing probably because companies have not altered their procedures in responding complaints so far.

In such a context the purpose of this study was to assess whether companies follow a deliberate strategic pattern while responding to customer complaints or they always try to offer a fair redress. We conducted two kinds of data collection: a survey of complaint suits reported to Procon-SP, in relation to companies in four industries, land and mobile telephony, banks and loan companies. We also a documentary research as a second source of evidence. The survey with suits was obtained through quota sampling, a non-random criterion, so that the results with the sample examined cannot be generalized to the company population object of the complaints examined here. However, as is pointed by Creswell (2007) a repetition of some cases can indicate that a practice exists, especially when there is congruence of evidences from different sources (Yin, 2009).

The results obtained showed that companies do develop a strategy to deal with consumer complaints, which consists in either not responding to them at all or doing it in a limited way, so that consumers might give up their demands over time. Conversely, for consumers who reach the intermediation of Procon-SP, companies offer a more positive response even if they don’t fully agree with them. This practice is repeated at the four industries examined, although we could notice different incidences among them. These findings address in part the objective settled and validate the first proposition stated, regarding the repetition of the same response to similar complaints in suggesting a strategic intent.

Other results about checking if any of the three types of complaints were prevalent showed dispersion in the response array, although for administrative complaints (type 3) there is a bigger concentration around response type C, in which the company supports the correctness of the demand and responds in favour of the consumer, corroborating the previous tendency. This suggests that companies are willing to show good will to this agency, either because they want to preserve their image, avoiding negative publicity, or the percentage of complaints at this stage is low. These findings also address part of the objective and are consistent with proposition 2, about

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the delaying of responses to later stages of the customer complaints process as configuring a strategy.

The sharp increase in the number of complaints at the same companies, year after year, may indicate that consumers, consumer protection agencies, and government departments have not been capable to sensitize companies to improve their handling of complaints and keep consumers satisfied. Nevertheless, this might happen because companies might not consider adequate doing so until complainants go to the mediation agency. Once they make a LPI or a RC, the proportion of positive responses increases significantly even if companies do not really agree to what is being complained, as was observed before. This pattern of action seems to reveal a strategic intent by companies and might also be a way to preserve their public image. The telephony and the banking-finance industries in Brazil are powerful, due to the fact that there are few companies providing the respective services on the market, and due to the legislation and regulation that protects them. Thus, we can say that in the context of the analysis performed, the findings also suggest that the more oligopolistic the industry, the less consumer-oriented its companies’ strategies need to be.

In summary, we conclude that complainants, protection organizations, and government have not been able to change the logic embedded in how companies deal with complaints. This logic reveals strategic patterns or strategies such as not recognising the merit of complaints as well as postponing some of them until they reach Procon-SP. Obviously, this does not correspond to the recommendations of pursuing market orientation and consumer satisfaction (Day, 2007; Kotler and Keller, 2006) when dealing with complaints. It follows that this subject seems not to be not of the exclusive domain of marketing, but may also include other strategic formulations.

Finally the paper points towards other empirical research that can improve the understanding of company behaviour in this area. This study could be replicated in other industries, and also, if possible, be based on a representative sample, allowing the generalization of findings. Also, it would be interesting to analyse the level and reasons for the relinquishment of consumers instead of seeking the mediation of protection agencies, since there are indications that the figures are high. Such a study would permit to examine if companies perform specific strategies during the first contacts. Another important issue related to the theme, is to evaluate and understand the companies’ perception regarding the contributions and constraints brought about by protection agencies.

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The ways companies really answer consumer complaints

Table 1. Sample of complaints suited at Procon by type of complaint and industry

TYPE OF INDUSTRY

SUIT TYPE OF

COMPLAINT

Mobile

telephony

Land

telephony

Banks Loan

companies. TOTAL

L

P

I

1 –Malfunction 2 16 2 - 20

2 – Marketing 2 3 - - 5

3 – Administrative 13 15 11 26 65

LPI total 17 34 13 26 90

R

C

1 –Malfunction - 11 4 - 15

2 – Marketing 3 3 2 - 8

3 – Administrative 10 - 4 13 27

RC total 13 14 10 13 50

TOTAL 30 48 23 39 140

OBS: Complaints were coded as: 1- malfunction occurrence in a product/service; 2 - marketing problems (unfulfilled

advertising promises); 3 - administrative problems (billing, mis-annotation of expenses, and other items), and 4 -

service issues (in the relationship with the company); complaints type 4 were not mentioned by consumers.

Table 2. Percentage of responses obtained before and after LPI’s suits

B E F O R E

L P I

A F T E R L P I

A No

Recognition-

Explain

B

No

Recognition-

Partial

Redress

C Recognizes-

Total

Redress

D Recognizes-

Partial

Redress

E Partial

Recognition-

Total

Redress

F Partial

Recognition-

Partial

Redress

A 78% 16% 18% 36% - 8% -

B 5% 1% 1% 3%

C - - - - - - -

D 5% 1% 1% 1% - 1% 1%

E - - - - - - -

F 12% - 3% 7% - 1% 1%

TOTAL 100%

(90

cases)

18% 23% 47% - 10% 2%

OBS: Organizational responses to complaints include the following alternatives - A) does not recognize the claim

and offers an explanation [or not]; B) does not recognize the claim, but meets partially consumer’s expectations; C)

fully recognizes the request and fully responds to the expectations; D) fully recognizes the request but responds

differently to expectations [poorly, insufficiently], E) recognizes partially and responds to the request according to

consumer expectations; F) recognizes partially the request but responds differently to the expectations.

Table 3. Type A responses before LPI suits (69 cases) detailed by industry after LPI suits

INDUSTRY

A No

Recognition-

Explain

B

No

Recognition

-Partial

Redress

C Recognizes-

Total

Redress

D Recognizes-

Partial

Redress

E Partial

Recognitio

n - Total

Redress

F Partial

Recognitio

n- Partial

Redress

TOTAL

Mobile

Telephony

47% 33% 13% - 7% - 100%

(15

cases)

Land

Telephony

- 46% 37% - 17% - 100%

(24

cases)

Banks 45% 37% - - 18% - 100%

(11

cases)

Loan

companies

11% - 89% - - - 100%

(19

cases)

All

industries

20% 23% 47% - 10% - 100%

(69

cases)

OBS: Organizational responses to complaints include the following alternatives - A) does not recognize the claim

and offers an explanation [or not]; B) does not recognize the claim, but meets partially consumer’s expectations; C)

fully recognizes the request and fully responds to the expectations; D) fully recognizes the request but responds

differently to expectations [poorly, insufficiently], E) recognizes partially and responds to the request according to

consumer expectations; F) recognizes partially the request but responds differently to the expectations.

Table 4. Percentage of responses obtained by clients before and after RC suits at Procon

B E F O R E

R C

A F T E R R C

A No

Recognition-

Explain

B

No

Recognition-

Partial

Redress

C Recognizes-

Total

Redress

D Recognizes-

Partial

Redress

E Partial

Recognition-

Total

Redress

F Partial

Recognition-

Partial

Redress

A 50% 12% 12% 24% - - 2%

B 14% 2% 8% 4% - - -

C - - - - - - -

D 28% 6% - 16% 4% 2% -

E 2% - - 2% - - -

F 6% 2% 2% - - 2% -

TOTAL 100%

(50

cases)

22% 22% 46% 4% 4% 2%

OBS: Organizational responses to complaints include the following alternatives - A) does not recognize the claim

and offers an explanation [or not]; B) does not recognize the claim, but meets partially consumer’s expectations; C)

fully recognizes the request and fully responds to the expectations; D) fully recognizes the request but responds

differently to expectations [poorly, insufficiently], E) recognizes partially and responds to the request according to

consumer expectations; F) recognizes partially the request but responds differently to the expectations.

Table 5. Type A before RC (25 cases) suits detailed by industry after RC suits

INDUS-

TRY

A No

Recognition

Explain

B

No

Recognition

Partial

Redress

C Recognizes

Total

Redress

D Recognizes

Partial

Redress

E Partial

Recognition

Total

Redress

F Partial

Recognition

Partial

Redress

TOTAL

Mobile

Telephony

29% 14% 43% - - 14% 100%

(7

cases)

Land

Telephony

33% - 67% - - - 100%

(3

cases)

Banks 25% 62% 13% - - - 100%

(8

cases)

Loan

companies

14% - 86% - - - 100%

(7

cases)

All

industries

24% 24% 48% - - 4% 100%

(25

cases)

OBS: Company responses to complaints include the following alternatives - A) does not recognize the claim and

offers an explanation [or not]; B) does not recognize the claim, but meets partially consumer’s expectations; C) fully

recognizes the request and fully responds to the expectations; D) fully recognizes the request but responds differently

to expectations [poorly, insufficiently], E) recognizes partially and responds to the request according to consumer

expectations; F) recognizes partially the request but responds differently to the expectations.

Table 6. Sum of all responses to LPI and RC suits considering all four industries

Complaint

-Response

1-A

Malfunction -

No

Recognition+

Explain

1-B

Malfunction -

No

Recognition+

Partial Redress

1-C

Malfunction -

Recognizes+

Total Redress

1-D

Malfunction -

Recognizes+

Partial Redress

1-E

Malfunction -

Partial

Recognition+

Total Redress

1-F

Malfunction -

Partial

Recognition+

Partial Redress

TOTAL 6 12 12 1 3 1

Complaint

-Response

2-A

Marketing -

No

Recognition+

Explain

2-B

Marketing - No

Recognition+

Partial Redress

2-C

Marketing -

Recognizes+

Total Redress

2-D

Marketing -

Recognizes+

Partial Redress

2-E

Marketing -

Partial

Recognition+

Total Redress

2-F

Marketing -

Partial

Recognition+

Partial Redress

TOTAL 1 3 4 1 3 1

Complaint

-Response

3-A

Administrativ

e - No

Recognition+

Explain

3-B

Administrative

- No

Recognition+

Partial Redress

3-C

Administrative

– Recognizes +

Total Redress

3-D

Administrative

- Recognizes+

Partial Redress

3-E

Administrative -

Partial

Recognition+

Total Redress

3-F

Administrative

- Partial

Recognition+

Partial Redress

TOTAL 19 18 49 - 5 1

OBS 1: Complaints were classified: 1- malfunction occurrence in a product/service; 2 - marketing problems

(unfulfilled advertising promises); 3 - administrative problems (billing, mis-annotation of expenses, and other items),

and 4 - service issues (in the relationship with the company); complaints type 4 were not mentioned by consumers.

OBS 2: Organizational responses to complaints include the following alternatives - A) does not recognize the claim

and offers an explanation [or not]; B) does not recognize the claim, but meets partially consumer’s expectations; C)

fully recognizes the request and fully responds to the expectations; D) fully recognizes the request but responds

differently to expectations [poorly, insufficiently], E) recognizes partially and responds to the request according to

consumer expectations; F) recognizes partially the request but responds differently to the expectations.