Cultural aspects of business relationships are playing an increasingly important role in the modern economy. Service and complaints processes are no exception. How do I organize an international complaints management system that is accepted by customers from different regions of the world?
Complaint behavior varies greatly between people from different cultural backgrounds. We therefore need to think about how service organizations are set up to do justice to the different experiences of customers.
The misunderstandings we encounter in the global business world are as diverse as the cultures themselves. This is not a particular problem for service management, but it must be included in strategic considerations here too.
What are the differences?
Cultural research provides a variety of models for characterizing different societies, which we cannot go into in full here. The relevant literature will be happy to help. However, we must be aware that a customer's background has a major influence on the perception of complaint processes. This applies above all to the propensity to complain and complaint satisfaction.
Western people generally complain far more often than people who have been socialized in East Asian countries. This is because the collectivist orientation of Far Eastern cultures means that complaints are often perceived as a disruption to harmony. For this reason, Japanese customers are more likely to secretly switch providers if they are dissatisfied without articulating their problem to the company.
However, there may also be differences in the evaluation of complaint outcome, process and complaint interaction. In more collectivist countries, for example, more value is placed on the interpersonal interaction with the person responsible, whereas in more individualistic countries, satisfaction is primarily influenced by the smooth resolution of the problem and financial compensation.
How should our organization be set up for international complaints management?
The aim must therefore be to meet the diverse requirements on the global stage in service as well. We need to talk about decentralization and how to implement it. Above a certain size, decentralization is an important Success factor for the expansion of the service business.
Of course, you can organize the service for your international business customers centrally from your company headquarters in Visselhövede. In some cases, this may be the best solution, but it can lead to problems not only due to language barriers. A decentralized organization may achieve a better result, but it comes with a higher management challenge. So how do we find the best organization for international complaint management?
How do I find the right strategy?
The choice of the right positioning is influenced by external and internal factors. Internal company factors can, for example, relate to the focus of marketing or the company's own corporate structure. Does my company mainly export goods or have I already set up branches in the relevant countries?
External factors include the question of how different the culture of the target country is compared to one's own. The greater the difference, the more sensible a decentralized, local or regional set-up would of course be.
Mixed forms of centralized and decentralized
A purely centralized complaints management system generally only makes sense if your company relies primarily on direct exports, cultural differences appear negligible and/or a decentralized organization makes no sense due to the scope of the business relationships.
Purely decentralized complaint management, on the other hand, is only applicable to companies that generally have a consistent multinational orientation. This means that the individual branches in the different nations also operate largely independently of each other.
However, most companies pursue a hybrid strategy. Direct complaint management is usually structured decentrally in the branches and integrated into the existing field and remote service structures there.
Indirect complaint management, on the other hand, remains centralized. This refers to all measures relating to process and product improvement as well as the analysis and evaluation of complaints. Key performance indicators (KPIs).
Management challenges in the global service world
Such mixed forms of global and local management structures create an area of tension that cannot be avoided in internationally active service organizations:
A global service strategy must be defined that takes into account the conditions in the local units. However, it is very difficult to find a one-size-fits-all solution for all subordinate departments, which is why a certain degree of subsidiarity is necessary. Nevertheless, it must be ensured that local service organizations only move within the defined degrees of freedom in order to ensure a uniform approach.
Evaluation of complaint processes
It is therefore necessary for local complaints management processes to be regularly audited by a central body with regard to strategy conformity, efficiency and effectiveness. Based on the information obtained, it is then possible to either refine the global strategy and/or further develop local processes and promote best practice sharing.
Key performance indicators
It is difficult to evaluate the performance of complaint management globally using just one or two KPIs, as local specifics play a major role. For example, the goodwill rate in relation to repair costs may have to be assessed differently in some markets. In Korea, it will never be possible to achieve the same low rate as in Germany, as customers demand a significantly lower goodwill threshold. This is mainly due to the fact that in many cases they are not used to paying for services at all.
Such peculiarities of the target markets should always be taken into account. This requires different KPIs and also historical comparisons at local level in order to check whether the situation has improved. Comparisons with the competition in the target markets are also important in order to better assess your own local performance.
Who handles complaints?
The categorization of complaints is an equally important issue. Up to a certain level, complaints should be handled by the local organizations. Above a certain scope - such as the potential return of an entire machine - global complaints management should take over the coordination. Such extensive problem cases can easily go beyond the financial scope of the local service units. In addition, many coordination, escalation and approval processes are far better and more efficiently coordinated at headquarters. Another advantage is that the head office is not surprised by huge holes in the annual financial statements of the local companies at the end of the year because it is informed of such incidents in advance.
Passing on feedback
However, problems that could be solved independently on site should also be integrated into the feedback loop for product management and development. Otherwise, important input factors for the further development of the product portfolio and the sustainable reduction of future quality costs will be lost.
Therefore, in addition to the complaint management process, the feedback process for the product business must also be constantly evaluated by the central unit. This is the only way to incorporate local peculiarities into the product development process in order to design products that are suitable for all submarkets. Last but not least, weaknesses in other support processes such as logistics, spare parts supply, remote or field service are also recorded much more transparently and can be actively addressed.
Good complaint management is a key element in retaining customers internationally. The larger and more global the company is, the more diverse and numerous the associated management difficulties are. Suitable strategies need to be developed to counteract this.
