How much does a customer complaint cost you?
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  1. #1
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    Default How much does a customer complaint cost you?

    Do any of you keep track of how much a customer complaint costs you? It could be either the delivery being returned, the customer having to sort out the good from the bad and sending you the bill, customer drops you etc.

    I think it might surprise most at how many get involved and use their time sorting the mess out.

    The cost might make some think twice as to how much to invest in avoiding mistakes.

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    Nothing


    Because I learn something from it and treat them so well they walk away swearing they will never do business with a competitor

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    A customer complaint should never "cost" you, it's a chance to forge a better relationship with them.

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    Nothing, the only real complaint I've sorta had is when they have to find someone else to do the work when I'm too busy to take it, or real long delivery times.
    I tell every customer and their inspection guys if there's ever an issue, something to improve, or a part out of spec I want/need to know. thankfully even that has been beyond rare, only a few times in 13yrs and half of it was nothing I could do anything about on my end.

    Too many customers spend a lot of time fixing(or trying to fix) garbage parts that should get sent right back to the shop who made it.
    In the end, if you supply garbage, it should cost you as much as it needs to, until you learn to stop making/selling garbage, or go out of business, whichever comes first.

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    Quote Originally Posted by plastikdreams View Post
    A customer complaint should never "cost" you, it's a chance to forge a better relationship with them.
    ^^^^
    What he said. Almost always it turns out better than imagined.

    However, on very rare occasions you get somebody who ordered the wrong item and has decided it's our fault for not reading his mind. Of course we offer to take the wrong part back and send him the right part, but in a case where it wasn't our fault we don't pay the freight.

    BUT, if he starts the old "You better take care of me or I'll tell everybody about your lousy customer service" routine, then you have to assume he already has done exactly that, and no amount of catering will undo it. It will only reward him for being a prick.

    If he is actually rude to one of the ladies, then they have standing orders to hang up. Telling him to commit an anatomically difficult act upon himself is optional, but they wouldn't be fired for it. Oh, and his email gets blocked.

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    Next order price goes up...of course if it was my fault i will fix it. The cost of aggravation is priceless so it is hard to put a good number on it.

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    Quote Originally Posted by gustafson View Post
    Nothing

    Because I learn something from it and treat them so well they walk away swearing they will never do business with a competitor
    Normally I agree with what you write. This time I have my doubts. All complaints cost. It's only a question of how much.

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    Every single one - world wide. It is a key metric for our corporation.

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    Quote Originally Posted by Tonytn36 View Post
    Every single one - world wide. It is a key metric for our corporation.
    Exactly. The reason I asked (started the thread) is that recently someone wanted to buy my product as they were having problems that could be avoided. The problem became whether management was willing to offer what it cost. Personally I'm certain it'd cost less than it is costing them at present and that they are still not solving the problem.

    On paper it's easy to save $1 but often it costs $5 to do so. To some ignorance is bliss.

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    In our case, you are looking at quite a bit of money per incident:

    Initial sort at customer by 3rd party - could be $10-20k.

    If bad product is suspected of being already in customer assembled product, another $50k up to a few million dollars is at stake - depending on how many suspect products were assembled - for tear-down and inspection of the assemblies for suspect product.

    Then you can be assessed a fine for shutting down customer production due to defective product. This can be a *very* substantial fine depending on the circumstances.

    There is then the cost of shutting down production at the manufacturing facility and sorting all product currently in process for the defect.

    Additionally the cost for the time of the QA person to respond to the complaint, and process the 8D.

    Additionally the cost of the Engineering and management resources to investigate the issue, determine a root cause and design and implement a corrective action to prevent the recurrence of the issue.

    Additionally, the corrective action cost which can be up to a few hundred thousand dollars depending on what type of corrective action is required. For instance, I am currently looking at one such issue in which the cost estimates are expected to land in the $60-80k range.

    Then you have the cost for replacement product to satisfy customer requirements.

    Now, we aren't a small company and we deal with large corps as customers and millions of products a year, but many of those costs types mentioned are still applicable for smaller manufacturers.

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  15. #11
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    Quote Originally Posted by Gordon B. Clarke View Post
    Do any of you keep track of how much a customer complaint costs you? It could be either the delivery being returned, the customer having to sort out the good from the bad and sending you the bill, customer drops you etc.

    I think it might surprise most at how many get involved and use their time sorting the mess out.

    The cost might make some think twice as to how much to invest in avoiding mistakes.
    I feel like they cost me this if they are "simple/minimal" one tolerance or cosmetic feature to fix on a complaint rework. Obviously these things can cost you a customer which is Catastrophic.
    Complaint (NCR W-Rework) - 1000.00 Minimum
    Return (NCR) - 500.00 Minimum No extra processes involved
    Complaint (NCR - Only) - 50-100 if nothing else is involved

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