HOW EFFECTIVE COMPLAINT MANAGEMENT AFFECTS CUSTOMER RETENTION: THE CASE OF GROUP-BUYING SITE GROUPER.MK

Abstract

In a highly competitive modern business world, keeping a dissatisfied customer is essen-tial to any company, considering the high cost of acquiring new customers. It is easier than ever for dissatisfied customers to spread their experi-ences and bad word of mouth through the various media that new technology and the Internet offer. Therefore, handling customers’ complaints effec-tively can be a critical factor in a customer’s decision-whether to continue using the company’s services or products or switch to a competitor. In this context, “effective” means minimizing costs for the company while achieving the intended or expected result. A content analysis of customer complaints emailed to the group-buying website Grouper.mk was conducted. A total of 220 complaints and related decisions were reviewed, analyzed, and categorized into six reasons for customer dissatisfaction and three ways to com-pensate for the dissatisfaction. In addition, the internal customer database analysis revealed that timely resolution of customer issues with the right approach resulted in 80% of all dissatisfied customers staying with the company. The analysis also showed that more frequent customers are more likely to remain after a complaint has been resolved than less frequent customers.