Complaint management - a short overview

Seminar paper from the year 2006 in the subject Business economics - Business Management, Corporate Governance, grade: A-, University of applied sciences, Munich (FOM), course: International Marketing, language: English, abstract: 1 Introduction 1.1 Executive Summary In the past years the stress of competition towards companies is growing. In addition, companies can hardly grow or make profit in the long run due to stagnant or shrinking markets and increasing internationalisation. Continuous improvement or enhancements of production technology and the products themselves lead to the fact that products are even more substituted. Thus, it is not sufficient to sell only good products but the service is coming more to the fore from customer's point of view. This change in general conditions leads to a focusing on customer orientation. While the acquisition of new customers was formerly relevant, today's instruments regarding the customer retention gain more importance. Companies recognized that satisfied customers considerably contribute to corporate success. Empirical studies showed that it is five times more expensive to acquire a new customer and considerably cost extensive to recover a lost customer than binding existing customers.1 Dissatisfied customers change to competition or harm the company via negative word-ofmouth propaganda. Permanent customer relations in comparison do have a profit- as well as cost-advantage. Customer retention leads to more profit due to the buying frequency, crossselling- effects and cost savings in consequence of saved acquisition costs and efficiency advantages. Further chances result from the decreasing price sensitivity of the customer. Beside of the direct profit impacts of customer retention, indirect impacts on further customer relations occur, e.g. recommendations of satisfied customers. The corporate objective should be the focusing on customer retention and thus to improve the corporate competitive position.