What the source establishes
In a December 1980 University of Michigan working paper, Claes Fornell asked how a consumer affairs department might gain influence over corporate decisions. He considered the costs of handling complaints alongside the possible contribution of complaint management to repeat purchasing and sales. This analysis follows the 1980 working paper. A detailed comparison with the 1981 journal version remains to be done.
Do fewer complaints mean fewer problems?
In Fornell’s model, dissatisfied customers may contact the firm, leave quietly, tell others, or seek help outside it. A decline in complaints received cannot show on its own whether the cause was fixed or customers chose a different route. Fornell proposed that a firm could make direct complaints more likely by making it easier to raise a problem and offering remedies people found worthwhile.
Three objectives for complaint management
- Give customers a workable way to complain to the firm. The model considers direct complaints relative to other responses to dissatisfaction.
- Resolve the individual customer’s problem. Fornell compares the cost of offering redress with the cost of losing a customer.
- Look across complaints for common problems. Grouping complaints can expose recurring causes and opportunities to prevent problems for future customers.
An individual remedy and a change that affects many customers operate at different scales. For a remedy, one can examine the cost and effect of resolving a case. For a recurring cause, one also has to establish who is affected, which team can change the underlying condition, and whether the problem recurs afterward.
What the model explains and what remains open
Fornell argued that showing a contribution to sales and profits could give the department more influence over management decisions. The paper supplies a model and the assumptions behind it. It also calls for empirical work on what determines customers’ responses and how to identify common problems in complaints.
The Texize interview describes consultation with teams involved in products. Reading the sources together raises a question: once the department made the costs and benefits visible, who could decide to act? Company records that connect a proposal to a product change and a customer outcome would help answer it.