Consumer Directions September 2010

consumerdirections www.socap.org.au

September 2010

The official publication of the Society of Consumer Affairs Professionals Australia

Mavis Bailey Honoured as 2010 Egg Award winner

p10 The game has changed: Symposium review

p16 Budget travel creates new service paradigm

p18 Bringing back the bounce: building resilience

Call 02 8069 8222

Customer Surveys Real-Time

Point-of-Experience

a Questionnaires designed, distributed & accessible to customers within minutes

a Touchscreen technology kiosks, desktop, handheld a Real time, centralised reporting a Widely used in healthcare, leisure, education, government & transport. Wherever customer service matters.

a Ideal for measuring promotional campaign results a Cheaper than some traditional survey methods a Local, national or global deployment

www.opinionmeter.com.au

CONTENTS

SOCAP Australia Executive President: Jane Pires, Suncorp Vice-President: Andrew Gavrielatos, NSW Fair Trading Vice-President: Andrew Taylor, CaseWork Treasurer: Glen Wells, Travel Compensation Fund

4

President’s message: Jane Pires

Public Officer & Company Secretary: Peter Gillson, SFI International

Executive officer’s message: Amanda Blesing

5

New SOCAP Australia Board members

6

News

Board Members Brendan French, Commonwealth Bank Dr Elizabeth Lanyon, Consumer Affairs Victoria

8

Mavis Bailey receives 2010 Egg Award

Sioned Rees-Thomas, Coles Group

Rising stars shine bright

Ralph Simpfendorfer, TMI Australia

SOCAP Australia 20th Anniversary Symposium

Damian Paull, Code Compliance Monitoring Committee

Leigh Thomas, Listening Post Charlie Trkulja, National Australia Bank

Patron Professor Allan Fels AO

SOCAP Australia Secretariat Executive Officer: Amanda Blesing T: 03 8687 9061 E: ablesing@socap.org.au Projects and Events Coordinator: Eliza Smith T: 03 8687 9062 E: esmith@socap.org.au SOCAP Australia Suite 205, 757 Bourke St Docklands VIC 3008 T: 03 8687 9060 F: 03 8687 9063 socap@socap.org.au www.socap.org.au Consumer Directions is produced by FlapJack Media Pty Ltd on behalf of SOCAP Australia.

Editor: Freya Purnell T: 02 9929 5465 M: 0412 602 579 E: editor@socap.org.au Designer: Justin Knights Disclaimer: Views and opinions reported in Consumer Directions are not necessarily those of SOCAP Australia. Whilst all care is taken for accuracy, no responsibility is taken by SOCAP Australia.

Consumer Directions is printed on recycled paper. ©Copyright 2010 SOCAP Australia

Gold Sponsor

4

Awards

10 T he game has changed – highlights from the 2010 Symposium: Freya Purnell 14 2 0 years of SOCAP and consumers affairs in Australia: Elizabeth Kelleher

10

Travel 16 F lying high: Why are budget airline passengers complaining... And still coming back for more?

Resilience 18 Bringing back the bounce: Freya Purnell 14

SOCAP AUSTRALIA WORKING PARTIES 2009/2010 Communication Working Party Glen Wells, Travel Compensation Fund (convenor), Sally Trevena, FaHCSIA (non-director), Andrew Gavrielatos, NSW Fair Trading, Karen Andrews, Nestle (non-director), Freya Purnell, Editor, Consumer Directions Events & Education Working Party Jane Pires, Suncorp, Leigh Thomas, Listening Post, Peter Gillson, SFI International Thought Leadership Working Party Sally Trevena, FaHCSIA (non-director) (convenor), Ralph Simpfendorfer, TMI, Andrew Taylor, CaseWork, Brendan French, Commonwealth Bank, Leigh Thomas, Listening Post, Rhonda Day, ANZ Note: All working parties also include a SOCAP staff member.

Clarification

Silver Sponsors

In Kind Sponsors

TMI Watch24

In the June 2008 edition of Consumer Directions, on page 5 we reported comments by Alison Maynard that FOS welcomed a statutory compensation scheme as a last resort for “retail clients” of Australian Financial Services Licensees (AFSLs). It has been drawn to our attention that in Australia there is already a Financial Claims Scheme (FCS) in existence for many “retail clients” of ADI and general insurance AFSL holders. This was introduced under Federal legislation from 16 October 2008, and broadly protects bank/deposit-taking institutions’ retail depositors and general insurance home, contents and motor policyholders from deposit loss to a defined threshold or policy failure caused by their institution’s failure. We apologise for any confusion caused by the earlier statement. www.socap.org.au

FROM THE PRESIDENT Jane Pires

I am delighted at the opportunity to serve as your President of SOCAP Australia for the next 12 months.

I also would like to thank Andrew Taylor for his achievements and hard work during his time as President.

Over the past 12 months, there have been many opportunities for our members to attend training and events, and we intend to ensure there is more for our members in the future.

The 2010 Symposium was a great success with plenty of positive feedback from attendees. I would like to congratulate Amanda, Kathleen and Eliza on producing such a successful event, and the Symposium Working Party for its commitment and effort in designing the Symposium. The feedback shared has given us many ideas for future events, training and interactions with our members and potential members. I would encourage

you to continue to visit the SOCAP Australia website and make Consumer Directions and our fortnightly e-newsletter ‘required reading’ for yourself and your team.

One of my key goals for my time as President is to work with the Board, the SOCAP Office team and the members to make membership of SOCAP Australia an essential part of the consumer affairs professional’s toolkit. This can be achieved in a number of ways, and our starting point will be our new membership options and upcoming training opportunities. I will share more on this with you over the coming months, and I look forward to hearing your thoughts on these changes.

In closing, I would also like to welcome our new Board members, Dr Elizabeth Lanyon, Sioned Rees-Thomas, and Damian Paull. We are looking forward to working with you all over the next 12 months.

FROM THE EXECUTIVE OFFICER Amanda Blesing

The SOCAP Australia office has been a hive of activity in recent months. With a full schedule of events in Sydney, Melbourne, Brisbane and Perth, plus our 20th Anniversary Symposium, the phones, email and website have been running hot. We have already programmed the remainder of the year including a workshop and/or breakfast each for Perth, Brisbane, Sydney and Melbourne and we look forward to seeing either you or your staff at something relevant for you.

Thanks to those of you who took the time to provide us with feedback regarding the 2010 Symposium. There have been some great positive comments along with excellent constructive feedback, and we look forward to interpreting that information and turning it into next year’s program. Want to be part of something big? Why not help out on the Symposium Working Party? We love having your involvement and ideas. Please give me a call or drop me an email to express your interest. And put these dates in your diary now – the 2011 Annual Symposium is scheduled to be held in Sydney from 30 August to 1 September 2011.

Congratulations also go to our inaugural Rising Star Award winners, Lisa Lai, Ansell and Simon Tracy, NRMA. The award process provided me with an excellent 4 | September 2010 | Consumer Directions

opportunity to see first-hand some of the interesting projects that SOCAP members are involved in.

Our next major project is to develop a searchable catalogue of feature articles which have appeared in Consumer Directions over the past four years. Once complete, we will also catalogue key Symposium presentations. SOCAP Australia has great content available for members, however sometimes this proves difficult to access. The cataloguing activity will ensure that all members, especially those newer to SOCAP, will easily be able to access relevant information to assist them in their roles.

So what is my vision of SOCAP in the future? A regular schedule of thoughtfully programmed workshops and events for members and their staff. Consumer Directions as a ‘must have’ business resource for all Australian businesses with an interest in enhancing customer relations. A Symposium that regularly attracts 250+ people and 10+ exhibition companies. One more major event on the SOCAP Australia calendar for those who are unable to join us in August. Plus an active online community of SOCAP members who are able to help each other via blogs and online postings, recommendations and research. We are working hard to make this vision a reality.

SOCAP Australia Board

Introducing your new SOCAP Australia Board members For the 2010/2011 year, three new members have joined the SOCAP Australia Board – Dr Elizabeth Lanyon, Sioned Rees-Thomas, and Damian Paull.

Dr Elizabeth Lanyon Dr Lanyon is director, policy and legislation at Consumer Affairs Victoria, where she chairs the Unfair Contract Terms Taskforce. In that capacity she has overseen and worked on a wide range of projects including mobile phone contracts, online auctions, internet service providers, hire car contracts, major events ticketing, domestic building and residential tenancy agreements, and rewards and frequent flyer schemes.

She is also leading Victoria’s involvement in a number of Council of Australian Governments (COAG) projects, including the implementation of the Australian Consumer Law. Lanyon is an author of academic texts on consumer credit regulation, has 30 years’ experience in legal practice focusing on banking and financial services and was an associate dean at Monash Law School. Lanyon has also been an adviser and consultant to government both in Australia and overseas.

Sioned Rees-Thomas Rees-Thomas is the general manager, customer at Coles Group. She has been with the company for over six years, since migrating from the UK in 2004. Rees-Thomas has over 25 years’ experience in professional retail management and has held many senior roles in retail, with considerable commercial experience in both buying and marketing.

Previously Rees-Thomas worked at Tesco and Boots the Chemist, sat on the Trading Board of ASDA – Walmart, and prior to moving to Australia was European buying director for Walmart Europe.

Currently Rees-Thomas is a member of the Coles operations leadership team, focusing on delivering transformation in its customer service strategy in

all 750 Coles, Bi-Lo and Pick’n’Pay Supermarkets.

Damian Paull During his 25-year professional career, Paull has held executive level roles in financial services compliance management, regulatory compliance investigations, and senior investigative roles in federal law enforcement (Australian Federal Police and Australian Securities and Investments Commission).

His diverse responsibilities in complex, often sensitive environments have required solid leadership and decisionmaking skills. Paull says he has had the privilege of working with and leading some high performing teams, and enjoys empowering, coaching and mentoring and assisting others to achieve their goals.

In Paull’s current and recent roles, he has specialised in regulatory compliance, in both management and operational capacities. This has involved setting strategic direction for and implementation of wide-ranging financial compliance programs, and relationship development and management for key stakeholders and regulators.

As CEO for the Code Compliance Monitoring Committee, Paull has taken on new challenges to lead a team through a change program aimed at improving its ability to access and influence self-regulation across a number of different sectors. He says the organisation is still on a journey focusing on being a catalyst for its performance while also looking to their own operations in an effort to make a difference.

SOCAP Australia would like to also thank retiring Board members David Schomburgk (2005-2010), Marilyn Grant (2005-2010) and Sally Trevena (19992010) for their long-standing support of and contribution to the organisation.

Dr Elizabeth Lanyon

Sioned Rees-Thomas

Damian Paull

www.socap.org.au

NEWS

QUT research studies role of gratitude in customer relations A researcher from the Queensland University of Technology (QUT) is developing a model to understand the role of gratitude in customer relations. Syed Fazal e Hasan, a PhD student with QUT’s School of Advertising, Marketing and Public Relations, said his study explores the factors that contribute to customer gratitude and how it can generate positive feelings towards a customer service employee.

“Marketing has not focused on customer gratitude as an element of social exchange in spite of it having been recognised and studied by psychologists, sociologists, anthropologists and philosophers,” said Fazal e Hasan.

“Many researchers in these disciplines have recognised that receiving benefits stimulates an emotional response to reciprocate a benefit to the giver.”

He said that his customer gratitude model describes how a customer’s perception of benefits from a person who is trying to sell them something can enhance the quality of their overall relationship. “If customers perceive that the seller’s benefit is self-serving they are less likely to feel gratitude,” said Fazal e Hasan. “If they perceive higher levels of benevolence from the seller, they are more likely to develop positive emotions such as gratitude toward the seller.”

He said the aim of the study is to give organisations a more practical understanding of how they can stimulate customer gratitude. “The study will also provide marketers with a diagnostic model for improving organisational strategies through the development of more effective relationship marketing campaigns.”

New Ombudsman appointments Ron Brent has been appointed as Australia’s first independent Aircraft Noise Ombudsman in response to recommendations in an Aviation White Paper released

by Transport Minister, the Hon. Anthony Albanese MP late last year. Brent, who was previously the deputy Commonwealth Ombudsman, will review the handling of complaints about airport noise and the efficiency of community consultation processes on airport noise.

He will also provide regular reports to the Airservices Australia board and the Transport Minister and produce a detailed annual report for the general public. Albanese said the new position would “give communities around airports a better opportunity to follow up issues and complaints about aircraft noise”.

In other appointment news, Allan Asher has taken on the role of Commonwealth Ombudsman following the resignation of Professor John McMillan. Asher was previously chief executive of the Australian Communications Consumer Action Network, and prior to that, chief executive of EnergyWatch (UK), nonexecutive board member of the UK Office of Fair Trading, and deputy chairperson and consumer protection commissioner of the Australian Competition and Consumer Commission (ACCC).

Senator Joe Ludwig said Asher brings a wealth of 6 | September 2010 | Consumer Directions

experience, leadership skills and independence to the role.

“Mr Asher has a strong record of achievement in key executive and statutory appointments in Australia and the United Kingdom,” said Ludwig. “This range of knowledge and skills makes Mr Asher well qualified for appointment as the Commonwealth Ombudsman.”

Australian consumers dissatisfied with major banks New research by Brisbane consulting firm Engaged Marketing suggests Australian consumers are disappointed by the customer experiences provided by the major banks. Engaged Marketing’s 2010 Benchmarking survey ranks high-profile organisations using the Net Promoter Score (NPS), which is based on customers’ likelihood to recommend the company’s product or service. The survey gave Bendigo Bank and Bank of Queensland a positive NPS of 30 per cent, while ANZ, Bankwest, the Commonwealth Bank, NAB, St George and Westpac all achieved negative scores.

Engaged Marketing founder and CEO Chris Roberts said the research also demonstrates the impact negative comments can have on an organisation. “What this research shows is that for every one negative comment made about a bank, it takes around four or five positive referrals to negate the damage,” said Roberts.

“Based on around 18 million banking relationships there may be as many as 30 million negative comments being made about banks by their customers every year. This makes achieving a positive customer experience first time more important than ever.”

Roberts said the results strongly suggest that many Australian banks have the potential to grow simply by focusing on improving their customer experiences. “There has never been a more critical time to go back to basics and focus on the customer,” he said. “The continued strong utilisation of social media injects an additional element of urgency because everyone knows word of mouth is the most effective marketing channel available to customers.”

Consumers willing to spend more for better customer service Australian consumers are willing to spend 8 per cent more with companies that provide excellent service, according to research conducted by American Express.

The American Express Global Customer Service Barometer surveyed 1000 Australian consumers and found that 53 per cent believe that customer service has become more important in the current economic climate. However, the study also found that 71 per cent of the Australians surveyed felt that companies have not increased their focus on service.

Jim Bush, executive vice president of world service at American Express, said customers want and expect superior service. “Especially in this tight economic environment, consumers are focused on getting good value for their money,” said Bush. “Many consumers say

NEW MEMBERS New SOCAP Australia members: June-August 2010 companies haven’t done enough to improve their approach to service in this economy, and yet it’s clear they’re willing to spend more with those that deliver excellent service – suggesting substantial growth opportunities for businesses that get customer service right.”

New social responsibility standard to be published by ISO ISO 26000, which gives organisations guidance on implementing social responsibility (SR), has successfully passed the last development phase and been approved for publication as an ISO International Standard. ISO targets publication on 1 November.

Paying tribute to the “exemplary efforts” of the experts who developed the standard, ISO secretary-general Rob Steele commented: “ISO 26000 will help organisations for whom operating in a socially responsible manner is more than ‘just a nice idea’ to implement social responsibility in a pragmatic way that targets performance. It will be a powerful tool to help organisations move from good intentions about SR to good actions.”

ISO 26000 will provide harmonised, globally relevant guidance for private and public sector organisations of all types. The standard is the result of international consensus among expert representatives of the main stakeholder groups with an interest in the subject and is designed to encourage the implementation of best practice in social responsibility worldwide. The document distills global agreement on: • Definitions and principles of SR; • The core issues to be addressed in implementing SR; and, • Guidance on how to integrate SR throughout the operations of an organisation.

Development of ISO 26000 has been an extensive process, originally launching in 2005.

The project was carried out by the multistakeholder ISO Working Group on Social Responsibility (ISO/WG SR), which included experts and observers from 99 ISO member countries – of which 69 were developing nations – and 42 public and private sector organisations.

In all, some 400 people took part which made the working group ISO’s largest ever.

On the approval of the standard, ISO/WG SR chair, Jorge E.R. Cajazeira, said: “One future day, organisations will look at ISO 26000 and say ‘How could we have survived in business without social responsibility?’ And all because a team of dreamers tried to imagine just what the future could be, and then worked hard for five years to achieve the vision. I am proud to have participated in the leadership of such a dream.”

Name Company Maria Spizzirri AGL Peter Butler ATO James Heath Australian Unity Michelle Lewis Bank Of Queensland Keith McDonald Carnival Australia Simon Shaw Carnival Australia Pedro Stanic Carnival Australia Antony Rowe Coca-Cola Amatil Niki Lindsay Colgate-Palmolive Adam Stankevicius Commonwealth Ombudsman’s Office Elizabeth Lanyon Consumer Affairs Victoria Kerry Allday Data Response Simon Cobcroft Department of Broadband, Communications and the Digital Economy Pagan Barrett-Woodbridge Department of Human Services Phil Dalling Department of Human Services David Fox Department of Human Services Craig Hibbins Department of Human Services Tracie Martin Department of Human Services Matthew Reeder Department of Human Services Tess Synot Department of Human Services Caroline Lovett Energex Janelle Noble Energex Geoff Roberts Energex Katrina Jenkins Etsa Utilities Alexandra Yacoub Foxtel Stephen Blyth GE Capital Ron Arnold IAG Peter Dennis IAG Clive Broomham ING Australia Tina Dougherty ING Australia Darlene O’Brien ING Australia Russell Daily Legal Services Commissioner Patrick Beckett LG Electronics Australia Tony Chambers LG Electronics Australia Richelle Fitzgerald LG Electronics Australia Lyrene Swan Macquarie Leasing Lyn Baker n/a Joe D’Ermillio NSW Fair Trading Anne McManus NSW Fair Trading Joanne Treacy NSW Fair Trading Helen Ford NSW Ombudsman Chris Wheeler NSW Ombudsman Anita Whittaker NSW Ombudsman Dini Soulio Office of Consumer & Business Affairs Dan Venning Office of Consumer & Business Affairs Kristen Barnes Public Transport Ombudsman Gordon Watson Qantas Natalia Pacheco RAC Deb Babet Shell Australia Richard Pereira Shell Australia Amita Laroiya Suncorp Sharron Walker Target Simon Cohen Telecommunications Industry Ombudsman Duncan Cambray Telecommunications Industry Ombudsman Yogarani Stal The Wrigley Company Dominic White Transport Accident Commission Elecia Youren Transport Accident Commission

www.socap.org.au

Awards

Mavis Bailey receives 2010 Egg Award The 2010 SOCAP Australia Significant Contribution to Consumer Affairs Award, also known as the Egg Award, was presented to Mavis Bailey at the Symposium Gala Dinner for her decades of service in the banking and financial services sector.

Bailey began her career as a banker, and when she returned to work at St George after the birth of her children, was involved in setting up the first formal centralised complaints handling unit to be established by a financial institution.

“I can still remember the celebration when we had our first complaint. It grew over the years, and I thrived on it – I had a fabulous team of people working with me,” Bailey says.

Bailey became head of customer relations, quickly earning the nickname the ‘Perfumed Dragon’.

“When there was an area that would have complaints, they’d see me coming and they’d duck under their desks and say ‘Look, it’s that dragon woman again’,” says Bailey. “And I said, ‘Well, if you’re going to call me a dragon woman, let’s make it elegant, call me the Perfumed Dragon’, and that’s how I got my nickname.”

After many years, Bailey retired from St George and began a new career as a marriage celebrant. But just six weeks after she left St George, she was approached by Citibank.

“I spent the next two years working with Citibank to establish a complaints handling unit,” says Bailey. “It was done mainly offshore at that stage, so that was really a huge challenge.”

While she successfully implemented a complaints handling system, addressed a number of systemic issues and significantly reduced the number of complaints being referred to the Ombudsman, Bailey had soon had enough of the demanding role, and left to once again pursue her career as a marriage celebrant in Launceston, where she now lives.

“I’ll never retire,” says Bailey. “I enjoy what I’m doing now very much – it’s a beautiful profession, marrying people.”

Asked what it takes to be successful in complaints handling, Bailey says the most important thing is to “love what you do”.

“If you don’t like doing it, don’t be in the job because it will just wear you out, you become very cynical. Complaints handling was something I never imagined myself going into, but because I loved doing it, it was just wonderful for me.

I obviously chose the right path and you know, who would have thought the Perfumed Dragon would be getting a golden egg?”

Rising stars shine bright The SOCAP Australia Rising Star Award was instituted this year to recognise junior managers within the SOCAP community who have made a significant contribution to improving the complaint handling process or outcome, going above and beyond their job description.

Joint winners Lisa Lai, Ansell Lisa Lai, joint winner of the inaugural Rising Star Award, is consumer services coordinator at Ansell Healthcare. She was nominated by Alison Arnot-Bradshaw, regulatory affairs director for Asia Pacific, for delivering significant improvements to Ansell’s complaints handling processes since taking on the role in 2008.

In addition to reducing complaints handling response times from up to two weeks to two to three days, Lai has helped keep complaints top of mind at Ansell by establishing complaints handling training for sales teams.

“Lisa has established herself as the go-to person for all things complaints and has an amazing rapport with the sales teams,” says Arnot-Bradshaw. Some of Lai’s key initiatives include introducing a reporting system whereby the sales teams are provided with monthly reports on the status and outcomes of all complaints, and creating a complaint reference card to ensure that complaints are processed efficiently and in line with Therapeutic Goods Administration standards.

8 | September 2010 | Consumer Directions

Lai says she was overjoyed and honoured to receive the Rising Star award. “I think it’s fantastic that SOCAP Australia is acknowledging and encouraging the work and services put forth to promote a greater level of customer care, awareness and satisfaction,” says Lai. “The award is also a great way for organisations to acknowledge and celebrate their consumer services department and the work that they do.”

Simon Tracy, NRMA Motoring and Services Simon Tracy, also joint winner of the inaugural Rising Star Award, is senior manager for member relations at NRMA Motoring and Services. He was nominated by NRMA head of stakeholder management, Reg Chamberlain, for successfully restructuring NRMA’s Member Relations team and delivering a more dynamic reporting system that better addresses the needs of the various business areas.

“Part of the change program enacted by Simon was to ensure that the Member Relations team became the ‘voice of the member’ within the business,” says Chamberlain. “Simon

(L-R) Rising Star joint winner Simon Tracy, finalists Jennifer Jackson Hall and Sally Haydon, SOCAP Australia patron Professor Allan Fels AO, finalist Carlie Deppeler and Rising Star joint winner Lisa Lai.

and his team have worked tirelessly for members who did not experience our normal high level of service to ensure that they not only had their complaint dealt with swiftly with empathy but that the offending business area was fully aware of the complaint, the effect on the member and its potential impact on the business.”

Tracy says he felt very honoured and humbled to win the inaugural SOCAP Rising Star Award.

“Working at a company like NRMA Motoring and Services that values great service and the member experience so highly and having supportive managers certainly makes my job easier. Of course, the award belongs as much to the Member Relations team as it does to me. Any success I have is because they’ve made me look good,” Tracy says.

Finalists Jennifer Jackson Hall, Office of the Disability Services Commissioner Jennifer Jackson Hall is a senior assessment and conciliation officer at the Office of the Disability Services Commissioner. She was nominated by deputy commissioner Lynne Coulson Barr for her recent efforts to make the Office of the Disability Services Commissioner more accessible to hearing-impaired individuals.

Jackson Hall initiated a partnership with Vicdeaf to produce a video explaining how to lodge a complaint in Auslan, the sign language of the Australian deaf community.

“The production of the Auslan information has clear benefits for deaf and hearing-impaired people by providing information about the role of the office and how they can make a complaint in an accessible and engaging way,” says Barr. “It also demonstrates that the office respects their right for information in their preferred language and format, and promotes their right to complain about services when they are dissatisfied.”

Jackson Hall has also developed visual materials to promote the direct participation of people with an intellectual disability or cognitive impairment in meetings held to try to resolve complaints made to the Office of the Disability Services Commissioner on their behalf.

Sally Haydon, Telstra Sally Haydon is group manager of customer sales and service at Telstra. She was nominated by Stephen Fox, director of contact centres, for her ongoing commitment to improving customer satisfaction. Over the past nine months, Haydon has overseen a reduction in the complaints received via the Telecommunications Industry Ombudsman (TIO), by refocusing the organisation’s attention on complaint drivers and implementing significant stretch targets in relation to complaint management.

“Sally has demonstrated excellent thought leadership about our business and gained the right assistance to continually focus efforts on identifying systemic root causes and improving processes,” says Fox. “Sally’s positive impact is not only on customers, but also on her staff and team. She works tirelessly to inspire each individual to engage with the customer, take responsibility and resolve the customer issue – great or small.

There is an increasing number of compliments being received from customers in relation to staff members in Sally’s team for the way in which they have managed and resolved their issues.”

Carlie Deppeler, Nestle Australia Carlie Deppeler is a senior food advisor at Nestle Australia, nominated by Christine Underwood, business relationship manager of consumer services, for her efforts to help customers better understand Nestle’s allergen labelling by establishing an Allergen Centre on the company’s website. The Allergen Centre is a central place for customers to learn about food allergies and the specific products which are suitable for them, which also allows customers to register their details to receive quarterly emails from Nestle updating them on the latest allergen information, changes to specific products and other related developments. Over 1000 customers have now registered for the Allergen Centre email updates.

“From a business perspective, it has decreased the number of contacts received by the Consumer Services department, allowing us time to handle other consumer queries. The Allergen Centre has also gained recognition within the industry, both

by Anaphylaxis Australia and the Retailers and Manufacturers Liaison Committee, both of whom have supported the centre with their members,” says Underwood. www.socap.org.au

Symposium

The game has changed Over three days the SOCAP Australia 20th Anniversary Symposium, held in Melbourne in August, provided an opportunity to reflect on how consumer affairs has transformed over the past 20 years and the issues that consumer affairs professionals continue to grapple with. Freya Purnell presents some of the highlights.

The social media revolution Perhaps not surprisingly, given its potential as one of the great ‘game-changers’, social media and how to manage it in a customer relations environment was the talk of the town.

Some of the key questions consumer affairs professionals are wrestling with around social media include: when to get involved, how to engage (and how much time/resources it takes to do so), and how to balance responsibility for social media with other parts of the organisation.

Consumer affairs professionals can use social media to communicate with their customers and other stakeholders in a purely reactive way – that is, by monitoring social media channels and simply responding to those people who are complaining about their organisation, or alternatively, in a more positive, proactive way, by providing useful information through these channels to strengthen customer relationships and develop brand advocates.

International guest speaker Jeff Hagen, director, consumer services, General Mills (USA), encouraged delegates to dive in and start monitoring the conversations about their company using free tools such as Google Alerts.

“Just start doing something – don’t just watch and fret, step in. As you start using the tools, you’ll find that it is not particularly frightening. It is just another way of communicating and we are very good at that,” Hagen said.

However Mike Wilke, founder and president, Wilke/Thornton, said if companies are going to get involved with social media, responsiveness is key. Particularly when using channels such as Facebook and Twitter, responses must be delivered within one to two hours, or the conversation will have moved on.

One of the most difficult issues is who in the organisation should own social media activity – whether this should be marketing, IT or consumer affairs.

Yvonne Adele, chief idealist from Ideas Culture (and also known as Ms Megabyte), said, “The mistakes I see happen are when you look to marketing or IT to tell you what to do.

Providing a professional face to the conversation is your goal.”

Wilke agreed, commenting that while there is clearly an important role for marketing, consumer affairs is the best place to handle the responses “because it is something you have been doing forever”. And it can, in fact, help to finally crack the marketing/customer relations divide.

“In our case, marketing has realised that they have to be in lockstep with consumer affairs, because they haven’t really had those conversations before, and they don’t really feel comfortable getting involved in the more negative aspects,” Hagen said.

The general message was that social media is not going to go away, and organisations must give up ambitions to try to ‘control’ the conversation – ultimately they can only hope to influence it.

Social media was also a focus of discussion at the FMCG 10 | September 2010 | Consumer Directions

Dr Claire Noone, Consumer Affairs Victoria

workshop. FMCG companies have been taken by surprise at the speed at which social media has taken hold, and the difficulty now is trying to work out how to manage it in a practical sense. Many companies are seeing their marketing departments jumping into Facebook and Twitter without really thinking through the policies and procedures around areas such as communication standards, responsiveness and how these channels should be managed. Delivering consistency in communication also presents a challenge due to the informal style of social media, particularly given most complaint handlers are currently recruited for their phone skills, rather than written communications. In addition to the new demands of social media, the rise in the number of email complaints may require a change in recruitment processes.

The way in which a complaint can spread through social media like wildfire is also being felt in the area of product recalls, as was demonstrated during the Product Recall Simulation.

In a first for the SOCAP Australia Symposium, Steve Hather from RQA Asia Pacific took participants through a hypothetical scenario, with participants planning a response as information about a product safety problem gradually came to light.

In an unfolding product recall situation, although social media can provide a useful way to connect with other customers who have a problem, it can also serve as an avenue for consumers to disseminate information about their complaints much faster, with greater potential for brand damage.

To give delegates a more rounded picture of what is driving consumer behaviour, social commentator Neer Korn, director of the Korn Group, shared some of his insights. In some ways, the picture is bleak – consumers lack trust in public institutions, are crying out for transparency and, if something goes wrong, contrition, and generally have low expectations of the customer experience.

“They have a negative perception about whether they are going to have to call a call centre, that the person on the phone won’t understand them, they are already annoyed about

something – you are starting with them already in this negative mindset… But when you surpass their expectations, they are very excited,” Korn said, adding that this leads to consumers enthusiastically spreading the word about products and services they are happy with.

Another key trend is the rise of the ‘smart living’ mentality – consumers are looking to “beat the system” by shopping around for bargains, and sharing information through community forums online, where they feel the information is more reliable than from the company or organisation itself.

Because of this trend, Korn believes it is essential for companies to join the online conversation in a professional way.

Neer Korn, The Korn Group

Influencing the organisation Jeff Hagen, director of consumer services, General Mills (USA), gave a fascinating insight into how detailed analysis of customer feedback data provides an unprecedented opportunity for consumer affairs to influence the organisation at large.

As a global food company with $16 billion in annual sales and major brands including Betty Crocker, Nature Valley, Latina and Yoplait, General Mills receives around 1.1 million contacts per year, with around 80 per cent coming via phone, 17 per cent via the web, and the remaining amount via regular mail.

Using a CRM system with a four-level coding hierarchy for customer contacts, Hagen said the consumer services function regularly produces a series of reports, which has created an excellent connection with the marketing and product development areas.

“We can tell them what consumers are thinking, and can contribute during the process of product development. We are generally part of the conversation upfront, to provide information about how we can prevent consumer frustration,” Hagen said.

This relationship has been built through the supply of detailed and high-quality data to bring the voice of the consumer to the rest of the business. The reports Hagen’s team utilises includes: • Daily early warning report: used to highlight potential problems with products due to a consumer report (for example, if a consumer has become ill after consuming a product).

• Triage report: indicates daily events and statistically relevant activity, particularly any spikes in complaints or days between contacts.

• Monthly contact tracking analysis to executives: this includes both verbatim comments from consumers and observations on one or two product categories. As this report is distributed to the CEO, many others in the company have requested to receive it so they are prepared for any questions he may have.

• Social media listening tool: tracking conversations about General Mills’ products.

• Plant reporting tracking against objectives: the company’s manufacturing plants have KPIs around reducing customer complaints, and these reports track their performance.

• Product reporting tracking: shows how products have performed since being adjusted in response to customer feedback.

• Surveys: if there is a problem with a product, consumer services can use surveys to probe more deeply with customers.

Networking at the Cocktail Party • Issues tracking: reporting on the tenor of conversations with

consumers around certain topical issues such as palm oil.

• Product locator analytical tool: a real-time dashboard pulling

information from retailers to enable consumers to find a product they are looking for.

• Ad hoc reporting: the division pulls between 30,000 and 40,000 ad hoc reports each year.

With such a huge amount of data at his fingertips, Hagen has been able to use this information to help the marketing and product development teams to predict what the ‘next big thing’ in food will be, based on their consumer interactions. They determined that there would be high demand for gluten-free products, and on the basis of this information, the company changed several products, and sales of these rose 30 per cent.

This led to the launch of several more products – and some very happy executives.

More broadly, having contact centre data available to the business in this way has had a significant impact: because of consumer feedback, products are launched or reformulated; packaging changes are made; quality improvement and plant changes are driven; and the shape of conversations are changed based on consumer feedback rather than what executives believe.

However, Hagen admitted getting to this point has required a considerable amount of work and some sophisticated tools. His advice for others?

“Establish the credibility of data over time. Don’t just focus on complaints – you get a lot of value from enquiries, and then you can highlight the praise from consumers to the business. Don’t just provide data, because the numbers alone aren’t sufficient – you can include recordings of comments in reports. Pick your battles and don’t demand credit for insights – it is the consumer Continued on page 12 www.socap.org.au

Symposium

Continued from page 11

Sharing between sessions

International guest Jeff Hagen, General Mills (USA)

telling the business, not you. Show others in the business what they can do to be successful by making the voice of the consumer prominent,” Hagen said.

Hagen has obviously built considerable influence within his organisation, and Australian Pharmaceutical Industries head of human resources, Steve Arthurson, gave delegates his advice on how to develop leadership and influence. He said there has been a shift in the way influence is now applied – from being the ability to persuade others, to now working collaboratively to achieve an outcome.

“I believe leadership is about having the confidence, courage and passion to engage, inspire and enable others to create positive change,” Arthurson said. “The changing nature of influence requires much greater flexibility, the ability to deal with ambiguity, alliances and the ability to connect with others.”

He set out a practical plan on how to address four important factors in building influence: networking, engagement, collaboration and agreement.

The role of influence in a mission to dramatically improve customer experience was also highlighted by Jules Scarlett, director, customer service and satisfaction, Telstra. Charged with the tough task of turning around poor customer service performance, Scarlett explained how critical strong leadership support has been, particularly as she does not have direct line authority over the people she is trying to influence. While the company has made progress on reducing complaints 12 | September 2010 | Consumer Directions

to the TIO and other big goals, it has taken some significant commercial decisions and changes in priorities and business cases – all driven by influencing the right people. Perhaps not surprisingly, introducing metrics for customer satisfaction tied to at-risk components of salaries for executives has already seen a shift in focus, but Scarlett also recommends leveraging support from whichever champions can be found, and using data to feed the voice of the customer back into the organisation in any way possible.

“If you immerse your executives in these customer experiences, it can have quite a profound effect on the way they perceive things,” Scarlett said. “Sometimes you have to be very bold in your role – speaking up to say, ‘This is not the right outcome for the customer’, even when events are in train. It’s not always possible to change the outcome, but it will lead to more informed decision-making.”

A crisis of a different kind was the subject of Justin Hyams’ presentation. The Qantas head of customer care shared how the airline responded to the mass havoc wreaked on the travel industry and passengers by the Icelandic volcanic ash crisis in April 2010.

“Every decision you make in the crisis response impacts your customers and their families, and customer care will still be dealing with this incident possibly months and years later,” Hyams said.

He gave a snapshot of how the crisis unfolded, from the initial announcements that the airspace over Europe would close for six hours – which meant Qantas had to try to contact 1000 customers within a matter of hours to let them know their flights had been brought forward – to the challenge of keeping people stranded all around the world accommodated for six days, and the lateral solutions this required. All up, 15,000 passengers were impacted over six days, and 15,000 room nights were provided for 3000 people.

“Customers demand, after years of loyalty, that you deliver on what you brand says it stands for,” Hyams said – and rarely would there be a better opportunity to deliver than in a crisis situation such as this.

The policy perspective With some sweeping changes to consumer regulation in Australia coming into play over the last year, the Symposium provided an opportunity to share various perspectives on changes.

Dr Elizabeth Lanyon, director, policy and legislation, Consumer Affairs Victoria delved into a detailed analysis of the new Australian Consumer Law to highlight key impacts on businesses, particularly provisions that are proving controversial or significantly different to what has been in place in the past.

In light of the new law, Australian Competition and Consumer Commission (ACCC) deputy chair Peter Kell discussed the ACCC’s priorities. The key elements of this law, from the ACCC’s perspective, are the new enforcement options and refining of existing powers, the ability to expand its consumer protection toolkit and improve market outcomes.

“It’s not just about changes to black letter law. The reforms also involve a greater level of cooperation and interaction between consumer protection agencies,” Kell says. Cooperative work is not always headline-grabbing, but still essential.”

Kell also highlighted areas of the economy where the ACCC has stronger concerns and are therefore more active around education and enforcement – green claims and telecommunications, where the ACCC sees “market-wide problems with consumer detriment”, particularly relating to unfair contracts and misleading conduct. Kell pointed to several recent enforcement actions as indicative of the problems in these areas.

Telecommunications also came under fire from Allan Asher, CEO of the Australian Communications Consumer Action Network (ACCAN), in his analysis of why Australia has fallen behind the rest of the world in customer care.

While he acknowledged that there has been incredible progress and innovation in Australia, there are still a number of areas where Australia has it wrong, according to Asher – such as addressing systemic ‘unfairness’ and in making information easily comprehensible by consumers.

“Almost every telecommunications product has a forest of fine print which no sentient being could understand.

Consumers who don’t really understand the product in the first place are going into a system where there is not full understanding of what they are buying.”

Drawing on his experience in the UK, Asher said ACCAN was hoping to promote the introduction of a supercomplaint procedure in Australia, where a consumer agency could petition

a regulator to investigate systemic issues. In the UK, this has led to sweeping changes in industries such as financial services.

“We need to raise the bar – Australia can and should catch up, but overall we shouldn’t be too proud of where we have got to,” Asher said.

The game-changing idea?

For the perfect end to a thought-provoking Symposium, Yvonne Adele got the juices flowing, facilitating a session on innovation and creative thinking. Leveraging her techniques for building an ideas culture and finding an industrious, friendly and productive way for teams to brainstorm, Adele outlined her five-step process to find a new way to approach problems – including defining the challenge, creative thinking, idea generation, idea evaluation and action planning. In a highly interactive session, delegates tested these techniques on three of the most pressing challenges facing consumer affairs professionals today – how to effectively manage consumer expectations on complaint response times, how to improve the perception of complaint handling inside the business, and how to find skilled complaints handling staff when recruiting – with some very creative solutions generated.

Encouraged to take these new skills back to their organisations, inspired delegates may be presenting their breakthrough results at next year’s Symposium.

www.socap.org.au

history

20 years of SOCAP and consumer affairs in Australia The two decades since SOCAP Australia was first established has seen many milestones in the world of consumer affairs. Elizabeth Kelleher combed the archives and spoke to key figures in SOCAP Australia’s history to define some of the most significant events.

1991 SOCAP Australia was established by a steering committee of consumer affairs professionals to lift the profile of consumer affairs in business and public administration. Bill Dee, a former SOCAP Australia president and now principal of consulting firm Compliance and Complaints Advisory Services, says SOCAP Australia emerged out of the strong consumer movement in the 1970s and 1980s and an acknowledgment of the excellent work SOCAP International was doing in the United States. “It was at a time when the ACCC had just released a report on self-regulation, so selfregulation was certainly the mantra,” says Dee. Founding member, former SOCAP Australia president and now full-time historian Simon Smith says the launch of SOCAP Australia was significant because it brought “together for the first time consumer professionals from the top 500 businesses and government in forums specifically focused on an exchange of better business practices”. Another founding member, Anne Barker, who is now managing director of City West Water, concurs, saying that the establishment of SOCAP Australia “marked a great step forward in the maturity of thinking about consumer protection and working together for the benefit of consumers”.

SOCAP Australia also held its first annual Symposium in 1991, enabling consumer affairs professionals to share ideas about complaints handling and the future of the industry. Mavis Bailey, who held senior customer relations and advocacy roles with St George and Citibank, says the annual conferences were a great innovation because they allowed consumer professionals to interact with colleagues in other industries. “The conferences gave us inspiration to continue on making a difference in our own organisations, as well as the opportunity to learn from others in consumer affairs and make valuable contacts who made us think outside our own square,” says Bailey.

1995 SOCAP Australia commissioned Technical Assistance Research Programs (TARP) to conduct an extensive study of consumer complaint handling in Australia. The Amex-SOCAP Study of Consumer Complaint Behaviour in Australia consisted of a national household mail survey, a 14 | September 2010 | Consumer Directions

series of companyspecific mail surveys, a mail survey of Australian corporate complaint handling practices and a series of mini-case studies of innovative complaint handling practices.

According to Smith, the release of this “groundbreaking” research “led to a paradigm shift in how Australian business responded to consumer complaints”.

SOCAP also helped Standards Australia launch the industry standard for complaints handling, AS 4269. Dee says the release of the Amex-SOCAP Study of Consumer Complaint Behaviour in Australia and the new complaints handling standard were both very important developments in consumer affairs. “You could say that the study set out why you should get into complaints handling and AS 4269 provided the how,” says Dee. “SOCAP had a lot of involvement and ownership of both those things.”

1999 The SOCAP Australia Significant Contribution to Consumer Affairs Award was first presented, with Ted Benjamin, director of consumer affairs, Telstra receiving the inaugural award.

2000 SOCAP published In the Consumer Interest: a selected history of Consumer Affairs in Australia 1945-2000.

Featuring contributions from Robin Brown, Peter Condliffe, Jeff Giddings, Colin Neave and John Wood, the book charted the development of consumers affairs in Australia over the past 50 years and pinpointed the challenges facing consumers in the current’s global and self-regulating marketplace. Smith, who edited the collection, says it is “now the leading text charting the shifting, sometimes pioneering, responses of government, business and industry to consumer issues in the second half of the 20th century”.

2002 The FMCG-focused Consumer Affairs Common Interest Group, which had been established by Marilyn Grant in 1996, is brought under the umbrella of SOCAP Australia.

Grant, consumer service manager at Johnson & Johnson, says the group has been very beneficial to those working in the FMCG sector. “Over the years, many and varied topics had been discussed, from aligning our replacement product practices to quickly responding to consumer contact received via social media,” says Grant.

2004 Former ACCC chairman Alan Fels became patron of SOCAP. Speaking to Consumer Directions earlier this year, Fels said he and the ACCC had been strong supporters of SOCAP from the start: “Our hope then was that SOCAP wouldn’t just be about enforcement and compliance but that it would be something far broader, and it would attract businesses big and small who were interested in giving the highest priority to consumer matters, who would see the development of very proactive approaches to consumers as an important weapon in their own commercial interests. I’m very pleased that in fact SOCAP has gone down that broad path quite successfully.”

2006 SOCAP helped Standards Australia launch ISO AS10002: Customer satisfaction – guidelines for complaints handling in organisation, which replaced AS 4269 (1995) as the industry standard. The new standard provided guidance with respect to the planning, design, operation, improvement and implementation of complaint handling processes for business, and covers systems, responses and best practice guidelines.

2007 Bill Dee was honoured with the first SOCAP Australia lifetime membership at the 2007 Symposium. “I was greatly honoured to receive a SOCAP life membership award, particularly as it represented acknowledgement by my peers in SOCAP of my commitment and contribution to SOCAP from the beginning,” he says. “SOCAP is an organisation I have always had a great deal of time and passion for. I have found it to be an organisation where members share the passion and enthusiasm for providing superior products and services for consumers by being at the cutting edge of developments in such areas as complaints handling, consumer protection regulation and consumer emotion.”

Under the presidency of Peter Gillson, SOCAP Australia also ushered in a new era of engagement with its international partners in 2007. “The decision to engage with our international SOCAP partners was another very significant change,” says Gillson. “During my time as President, I contacted all SOCAP executives around the world and we began dialogue to identify common practice

John Wood presents Bill Dee with SOCAP Australia lifetime membership

and benefits for all members no matter the location. This includes access for all members to a bigger SOCAP brand with shared synergies and access to research, best practice guidelines, international events, online global forums and blogs, webinars and podcasts with like-minded professionals.”

2009 In March, Amanda Blesing was appointed executive officer of SOCAP Australia. “My feeling is that SOCAP is on the verge of something bigger and better,” says Blesing. “Our membership numbers were around 312 when I started and we are excited to announce we just achieved 368 members during recent weeks. There is a great foundation of committed members who have been extremely supportive of SOCAP over many years who are keen to see that SOCAP membership becomes essential for anyone who works in consumer affairs or complaint handling.”

2009 also saw the first round of legislation passed to institute the Australian Consumer Law, a national consumer law which would be administered by the Commonwealth rather than the states and territories. The new law, which replaces provisions in 18 Acts across Australia, is based broadly on the consumer protection provisions of the Trade Practices Act 1974 and is designed to reduce compliance costs, provide a consistent platform for consumers and allow industry mobility between states. Speaking at the SOCAP 2009 Symposium, Lyn Baker, former NSW Commissioner for Fair Trading, said: “I think the new law and the changes in consumer attitudes are heralding a new era of consumer engagement. For business, consumers are going to expect to know more about the products and services that they are buying, and they are going to continue to value customer service.”

2010 At the 2010 Symposium, SOCAP Australia introduced the Rising Star Awards to recognise excellence in individuals new to the consumer affairs sector. Open to SOCAP Australia members and those who work immediately under SOCAP members, the award will now be handed down annually at the SOCAP Australia Symposium. “It has been hugely encouraging to see the obvious hard work and innovative approaches that many of our younger members undertake,” says Blesing. “It has been even more rewarding to be able to acknowledge these achievements in a meaningful way.” www.socap.org.au

Travel industry

Flying high Why are budget airline passengers complaining... and still coming back for more?

With low-cost air travel creating a new paradigm for customer service in the travel and tourism industry, what impact is this shift having on customer satisfaction and brand capital for airlines? This article, from Knowledge@Australian School of Business, considers the ramifications of budget travel.

The image of Australian Paralympian Kurt Fearnley crawling through Brisbane airport in November 2009, after he had been forced to surrender his wheelchair at the check-in counter in exchange for one that he could neither steer nor propel himself, was a nadir for the low-cost airline industry.

In Fearnley’s case, the carrier happened to be Jetstar, but there was a feeling that it could have been any of the budget airlines. Besides outraging disabled and non-disabled passengers everywhere, it seemed to symbolise increasing complaints about inflexibility and lack of care being levelled at budget airlines.

A few months earlier, figures had been released by the Office of Consumer and Business Affairs [SA] that showed the number of passenger complaints about air services had doubled in the financial year 2008/09, compared with the previous year. These complaints outweighed all other categories of consumer dissatisfaction recorded by state government complaint handling agencies in Australia.

Cancellations and flight time changes accounted for most of the complaints. Additional charges for schedule changes, excess baggage and use of credit cards were a bone of contention too, as were booking errors and lost baggage.

A Domestic Airline Satisfaction Survey conducted for the consumer magazine Choice, published at around the same time, may gauge the degree of consumer unhappiness. In the survey, Asian low-cost airline Tiger Airways came last on the table with barely half of the respondents satisfied with their service. Jetstar followed closely behind with 60 per cent of customers satisfied, and Virgin Blue scored highest with 68 per cent. As one dissatisfied Tiger customer summed it up in The Straits Times in Singapore: “Budget airlines are great if all that is involved is booking the ticket, getting on the flight and 16 | September 2010 | Consumer Directions

flying off. But when something goes wrong, everything is in a mess and it can be very frustrating.”

High altitude growth Despite this, low-budget carriers have experienced rapid growth in recent times. Value-based air travel in Australia represents a very high proportion of air travel passengers compared with the rest of the world. More than 50 per cent of all customers are flying a low-cost service, according to Jetstar’s head of corporate relations, Simon Westaway. He says that the company has experienced double-digit growth with 30 per cent to 40 per cent more people travelling with the carrier this year compared to last. Tiger Airways also announced strong growth for the last financial quarter of 2009, posting a net profit of $14.1 million after tax – all of which might suggest that shareholders, at least, have little to worry about.

But the high number of complaints levelled at budget carriers has attracted the attention of the Federal Government. At the end of 2009, a government white paper was published which signalled the intention to keep a much closer eye on airline behaviour and protect customers against the vagaries of the industry. It urged airlines to adopt corporate charters that adhere to benchmark standards of service, particularly when handling complaints.

Ironically, it seems that rapid growth in the budget airline industry may underlie poor customer service. According to Murali Chandrashekaran, professor of marketing at the Australian School of Business, while a budget airline is catering to a narrow customer base – those people who will always seek the cheapest option – the airline can usually satisfy their needs. It’s when a variety of customers start

using their services that problems begin. “More customers means new types of customers,” says Chandrashekaran, “and to make them all happy, with all their diverse needs, leads to rising costs. It’s like running a satisfaction treadmill; you have to run faster to stay in the same place.”

Trying to please many different kinds of customers and keep costs down is where a chasm has opened up in lowcost airlines’ service and complaints have escalated. But it is in the handling of complaints where the airlines appear to be most at fault. “Any time you go down the path of low cost, it comes with sacrifices,” says Chandrashekaran. He cites US data from 2000 which showed that it cost a big legacy airline such as United or American about 17-18 cents per mile per passenger when travelling around 600-800 miles.

For a budget airline travelling the same distance, the cost is about seven to nine cents per mile. About 65 per cent of the cost benefit is coming from “business process complexity”, that is, tickets available from many different sources, special meals and the systems needed to manage those, customer lounges, frequent flyer services, baggage handling services, ground staff and, of course, complaint handling services. “So what do low-cost carriers do?” asks Chandrashekaran. “They take out all the things they don’t need – meals, complaint procedures, ground staff. Who’s handling your problem if your luggage doesn’t arrive?” The question hangs in the air, rather like the luggage.

In his seminal research paper, Customer Evaluations of Service Complaint Experiences: Implications for Relationship Marketing (1998), Chandrashekaran examined what happened in the space between customers complaining about a service and its resolution. What he discovered has some important lessons for the budget airline industry. Looking at the issue from a social justice perspective, he found that how customers are dealt with is crucial to their satisfaction with the company. In what Chandrashekaran calls “the architecture of satisfaction”, it matters not only that customers get satisfaction from the complaint handling process, but also how they get it: first, whether they are treated with care, receive an apology and are listened to; second, whether they are told how their complaint is to be handled and when they might expect a resolution; and third, whether they get acceptable compensation at the end of the process.

“Service providers often do well in the last category, throwing money at the problem, but although customers might express satisfaction with the airline,” notes Chandrashekaran, “in their mind they often don’t believe that the company has the processes to prevent the problem happening again. You get a big bang for your bucks by just being nice. Most people just want to hear you say sorry, smile, be nice and it costs nothing.” All of this hinges on mechanisms being in place for resolving complaints quickly and efficiently, and on the training and empowering of staff to deal with problems.

Soft landings However, budget airlines have already started to take note.

According to Jetstar’s Westaway, “We acknowledge that we were not up to speed in terms of customer relations management. There was a drift in response time [to

complaints] from 14 days to around 90 – that is totally inappropriate.” In March 2010, the company introduced a 10-point guarantee for customers providing travel vouchers if certain commitments fail to be met, a 24-hour call centre and a response to complaints within 15 days. “We have established a permanent resolution team brought in about 18 months ago to take escalated calls and deal with them on the spot. We’ve also sunk more money into bodies on the ground, and given staff a lot more power to handle issues on the spot face-to-face.”

Increased investment seems inevitable if low-cost airlines are to redeem themselves in the eyes of the public. But if the numbers using their services are growing, why should airlines bother?

Budget carriers ignore customer satisfaction at their peril, Chandrashekaran believes, as it will prove more expensive for them in the long run. “Any time you pay attention to the service experience – not just the flight but the complaint handling – it’s going to increase customer satisfaction.

It costs much more to win over new customers [using advertising campaigns and other marketing initiatives] than it does to keep existing ones.” Satisfaction with the way complaints are handled has a direct impact on a customer’s trust and commitment towards an airline, he adds. “People will come back if they trust you to deliver on your promises.

It’s trust based on people and processes.”

Tiger Airways’ chief executive Tony Davis believes that airline-customer relationships have turned a corner and that previously customers were going through a period of adjustment to budget carriers. He says now there is less confusion about what people are getting for their money.

“If you look at the kind of issues we were facing a year ago, things like the 45-minute check-in deadline, people have now gotten used to that,” he told Travelconsumerdaily.com. “They know Tiger is going to charge them extra for their baggage if they have too much, and if they turn up late they’re not going to fly… That is the model and that is why the fares are so cheap. You can’t pay the $28 fare and then expect a business class product.”

He may be right, but perhaps there are lessons in the steep learning curve of the Asian hotel industry in the late 1990s.

After being hit by financial downturn and the SARS scare, Asian hotels discovered it’s all about high levels of service and service recovery. “Take Raffles in Singapore that has a very different customer philosophy,” says Chandrashekaran.

“All staff are empowered to satisfy customers and only need to talk to a manager if they have to say ‘No’ to you.” Marriott Hotels, which has spent a lot on customer satisfaction, is another example. “You may not save costs today, but you have invested in future profits and the customer has become an apostle for you.”

Apostles or no apostles, for the low-cost airlines, redemption appears to rest in their own hands.

This article was first published in May 2010 by Knowledge@Australian School of Business, a free web-based journal produced by the Australian School of Business at the University of New South Wales, in partnership with the Wharton School. http://knowledge. asb.unsw.edu.au www.socap.org.au

resilience

Bringing back the bounce Being able to take difficult situations in your stride is a critical attribute for a consumer affairs professional. However there are many other good reasons why building resilience should be a priority for both individuals and organisations. Freya Purnell reports.

Once defined as the ability to bounce back from adversity, resilience now has a more holistic definition. Rather than focusing on the response to stress or trauma, resilience is currently seen as the capacity to handle ongoing stresses in a positive way.

Psychologist Carolyn Manning says she sees resilience as a cluster of coping mechanisms. She gives the example of a football team which is beaten soundly one weekend and yet turns around to win the next match – the players put the disappointment of the first game behind them and move onto the next challenge.

“Resilience seems to have a developmental aspect, in that previous experiences of resilience develop a stronger base for coping with the next setback or hardship,” Manning says.

Resilience is also regarded as the ability to embrace change, find ambiguity and uncertainty energising rather than draining, and to stay calm, focused and optimistic during turbulent times, according to Steve Arthurson, head of human resources, Australian Pharmaceutical Industries.

However, executive coach, facilitator and director of Solutions: Taylor-Made, Nancy Taylor, believes that while resilience is important, for those wanting to achieve peak performance and a holistic sense of wellbeing, positive psychological capital is what is required. She has been involved in the creation of the Vida Beyond Resilience Program, which aims to build psychological capital and holistic sustainability – elements of which are resilience, hope, optimism and confidence.

“We like to work holistically because the more psychological capital you have, the more robust and sustainable your performance is, but also your health, your happiness and joy in life are enhanced. Every single indicator says people are better off with high levels of psychological capital and it delivers to the bottom line for organisations because they perform better,” Taylor says.

Under pressure Both circumstances and skill deficits can undermine individuals’ ability to be resilient.

“Ongoing stressors, even minor ones, erode our capacity to be resilient. Simple things like not sleeping well can mean you’re not able to handle things as well as you otherwise might,” says Ingrid Poulson from Steadfast Training.

According to Arthurson, there are five elements of resilience: self-confidence, a sense of emotional wellbeing, continuous learning, physical health, and connectedness. If a person is deficient in any one of these areas, it can impact negatively on their resilience.

18 | September 2010 | Consumer Directions

Staying strong For consumer affairs professionals, and particularly those working in dispute resolution and complaints handling, resilience is crucial. It makes individuals more “bulletproof” and ensures they can perform under stress and ride out setbacks.

“Dealing with complaints can be quite stressful, so resilience helps staff to continue to perform, while maintaining their psychological wellbeing. Besides the obvious stress of the occasional aggressive complainant, the constant stream of complaints may take a psychological toll. For example, hearing complaints about the company for eight hours a day may undermine a worker’s confidence in their company and their identity as a worker there. Staff with higher levels of resilience may cope better in these situations,” Manning says.

“Resilient people typically have confidence that they will be able to overcome new stresses, based on the fact that they have coped with the challenges to date,” she adds.

The rewards of resilience are not just good workplace performance.

“For the individual it creates a sense of holistic wellbeing, calm and happiness. Resilient people radiate a sense of confidence and optimism, and engage and inspire other people, so they are good leaders. From an organisational perspective, you can create this very engaged, inspiring, optimistic and positive feel amongst the team,” says Arthurson.

Practical strategies to build resilience While both individuals and organisations can take actions to build resilience, self-assessment is a good start.

From the frontline

“As a first step, people need to get clear about what are the things in their life that restore them and what depletes them.

Where do you really feel energised and robust? The more we can identify and engage in those things in our life, then the more robust we become. There needs to be a balance between stress and recovery,” Taylor says.

Arthurson works with a ‘menu’ of actions for individuals to either self-assess or work in teams to discuss how they are travelling, which include: 1. Confidence: articulating personal values and vision; developing an action plan for areas of life that require attention; reflecting on what works or is positive; focusing on process goals, rather than outcome goals; and using visualisation and affirmation.

2. Emotional wellbeing: achieving a sense of calm by reducing stress, being proactive, focusing only on what you can change, and using meditation, music, exercise and humour; fostering concentration through process goals, action plans and learning mindfulness; and gaining a sense of control through action planning, and learning how to problemsolve and make good decisions.

3. Learning: having a capability development plan, or even just making a list of new things you’d like to do.

4. Physical health: having a good diet, exercise, water and sufficient rest.

5. Connectness: Establishing a relationships plan to support others and be supported by others.

Similarly, Taylor believes the key elements which help us perform at our peak or build positive psychological capital are having a sense of purpose or meaning in life; setting clear, well-defined goals; having confidence – including having the right training and support to fulfil your role; and looking at the quality of your thinking.

“By that, I mean the decisions we make every day about the meaning we give to events in our lives. Do we tend to explain things to ourselves in a way that empowers us to keep going or do we explain things in a way that leaves us as a victim or disempowered in the situation we’re in?,” Taylor says.

Poulson’s tips on how to build resilience include: • Create more positive experiences. US psychologist Barbara Fredrickson has posited that experiencing three positive events for every negative event can lead to dramatically increased performance and happiness (visit www.positivityratio.com to take an online test to find your ratio). “It’s important to put some strategies in place to ensure there are positive experiences in the workplace, including acknowledgement and celebration. Some very simple tips are, for example, leaving a whiteboard near the door where people can write one positive thing that happened during the day. It means your lasting memory of that day is positive, and it’s there again when you come in the next day,” Poulson says.

• Don’t save up to relax. Build in breaks during the day, even if it is just taking a few deep breaths to release tension.

• Institute a routine to separate work from home. This could be doing some physical activity between work and home, using visualisation strategies such as imagining walking through a waterfall between your workplace and home and washing the day off, or even just changing your clothes.

Resilience is the “X-factor” for complaints handling staff, providing the energy to continually face challenges and conflict, according to a SOCAP Australia member who provided their view on resilience.

“Without resilience it is very easy to fall into the work problems that these potentially volatile situations can cause – lack of rational thought, aggression, anxiety, social dysfunction, depression, and anger.”

Some of the consequences of lower resilience observed in the complaints handling environment include impaired wellbeing, not feeling valued, inadequacies being magnified out of proportion, clouded judgement, issues/emotions carrying over to the next customer interaction, a lessened ability to detach the issue from the customer, inflexibility, a lack of direction and assistance from management and peers, and disillusionment with the effectiveness of their role.

Some of their tips on how to increase resilience include: • Debrief by talking with other case managers/ managers/complaint handlers.

• Take care of your body – eat well and exercise regularly.

• Schedule activities that you enjoy – get involved in leisure activities such as reading, community groups, and hobbies, and take regular holidays.

• Remember to tend to your family and friendships.

Also form strong team relationships so you have people in a similar role to bounce things off, vent with, and so on (a sense of humour helps too!).

• Focus on trying to change the things you can change and not trying to change the things you can’t. Stay flexible.

• Laugh often and hard – laughter is healthy for the body and frees the spirit.

• Focus on the positive – track the differences you make in the business. It gives you a sense of accomplishment to keep doing what you do.

• Recognise that you won’t always handle things perfectly. Every customer complaint is an opportunity to learn about yourself.

What managers can do Taylor believes that because managers play such an important role in setting the emotional mood and tone of the workplace, they need to ensure their own psychological capital and emotional wellbeing is up to par.

“Especially when managing people who deal with complaints, bear in mind that it is an anxiety-producing environment, so managers shouldn’t add to that anxiety,” Taylor says, recommending a focus on praising staff, noticing what they do well, checking to see how they are feeling at the beginning of the day, and debriefing after a difficult experience.

Because of the complexity of the task of developing resilience, involving as it does complex psychological processes such as self-esteem and control, Manning recommends considering professional advice to help train your teams in building resilience.

Carolyn Manning will facilitate a workshop on ‘Managing Difficult Customer Behaviour’ in December.

Visit www.socap.org.au to find out more. www.socap.org.au

SOCAP Australia presents

Complaints Handling Workshops For managers, supervisors, team leaders and staff in a service recovery environment Full and half day workshops

Limited workshops scheduled for 2010 For workshops on these topics in-house or in other locations please contact us directly.

Coaching for Complaint Handling Full day workshop

Back by popular demand

Melbourne: 21 October 2010 Sydney: 4 November 2010

Multiple booking and distance discounts are available.

For details and bookings go to www.socap.org.au, email socap@socap.org.au or contact us on 03 8687 9060.

Early booking recommended.

Managing Difficult Customer Behaviour Half day workshop Perth: 16 November 2010 Sydney: 2 December 2010 Melbourne: 9 December 2010

Root Cause Analysis Full day workshop Sydney and Melbourne February 2011

inspiring members to be the best in consumer affairs