CONSUMER COMPLAINT HANDLING IN AMERICA : FINAL REPORT
United States Office of Consumer Affairs September 1979
Selected Findings :
• 32.4 % of the national sample experienced one or more consumer problems during the year preceding the study .
• Three of the four most prevalent consumer problems reported concerned basic deficiencies in the quality of products and services purchased . However , a majority of the problems reported dealt with marketing / business practices .
• 61.9 % of the problem households felt that financial loss , averaging an estimated $ 142 , was possible if their most serious consumer problems were not corrected .
• Extrapolating the study findings to the nation as a whole , American households could have lost up to $ 2 billion during the year preceding the survey if their most serious consumer problems had not been resolved .
• 69 % of the problem households submitted one or more complaints in an effort to resolve their most serious consumer problems .
• More than 40 % of problem households that initiated complaint action to resolve their most serious consumer problem reported totally unsatisfactory results .
• Nearly 70 % of the most serious consumer problems reported by the national sample were not satisfactorily remedied .
with direct responsibility for the customers , but it can still be difficult to break through the other silos .” For instance , when operations cannot deliver on what marketing has promised .
An example of that is when a flight is delayed because of problems with the ground operations . Airlines come in for a vast amount of criticism , not unjustified , but business analysts laud the industry for its ability to recognize and reward its best customers with special treatment , upgrades and other benefits .
In the case of a substantially delayed flight , however , if that causes a top-level elite flier to miss a connection or a meeting when a flight is delayed , then operational problems have undercut the work marketing has done to reward that loyal customer .
But only to a certain extent , explained Ben A . Bentzin , associate professor of instruction in the department of marketing at the McCombs School of Business at the University of Texas at Austin . He differentiates dissatisfaction from betrayal .
As an example , he recalls that over the past few years , Southwest Airlines — which competes as much on cheerful service as it does on low fares — has had several major systemic problems that canceled thousands of flights and left some people stranded for days .
“ No doubt some people felt betrayed ,” said Bentzin , “ but in the long run Southwest does not seem to have suffered any lasting damage , probably because most people saw the problem for what it was , a technical failure , not a fundamental betrayal of Herb ’ s vision .” ( Herb Kelleher was the iconoclastic founder of Southwest Airlines .)
Digging deeper , Bentzin noted that the December 2022 meltdown of the reservation system was the result of decisions over several years “ to forego capital investment in IT . That worked until it didn ’ t .”
Southwest ’ s losses for the fourth quarter of 2022 were estimated at about $ 800 million . The airline announced plans to spend more than a billion dollars on technology and maintenance improvements . In December 2023 , Southwest was fined $ 140 million by the Department of Transportation , the largest consumer protection penalty to date .
If the breakdown itself came to be seen as a disappointment , was the top-level lack of investment in IT a betrayal ? The airline had two “ mass cancellations ” in 2021 , and months before the meltdown its pilots went on strike , saying the crew-scheduling system was faulty .
“ You can quantify customer satisfaction into a dollar value ,” said Broetzmann at CCMC . “ The tools do exist to have visibility into the financial consequences of customer experiences . The key for any company is the ability to take action to translate findings into a business case to allocate corporate resources to the best effect .”
The problem is often structural , Broetzmann explained . “ Even when they have the analytics , some companies lack the curiosity to go beyond the face value of the numbers . Management can have a cognitive bias , even denying empirical data . So even when companies have good data , they don ’ t have the process for correcting bad decision making .”
Denial is a high-level problem , said Broetzmann . “ Some companies have
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