What Happens When Consumers Complain

About a year ago, Douglas Walker stepped up to a soft-drink vending machine at the junior college in Japan where he was teaching English. For an American who has been abroad for a long time, the familiar taste of Coke can prompt sentiment for Norman Rockwell-like wholesomeness and the homeland. Walker inserted the coins. A paper cup dropped down and filled with fizzing caramel-colored liquid. He took a gulp. It wasn’t “the real thing” he tasted.

“I had the nasty experience,” Walker complained, “of finding a cockroach in my mouth while drinking a Coca-Cola.”

Walker said what galls him is not the fact that there was a roach in his drink so much as the response he got from Coca-Cola USA. When he wrote of the incident to the corporate headquarters in Atlanta, he apparently got a snub. The reply was “skirting on the sarcastic,” Walker said. “I complain . . . and am told they have nothing to do with the Japan operation. The bucks go to Atlanta, but the buck stops in Tokyo.”

He was also displeased, he said, with the response he got from the Kinki Coca-Cola Co. in Japan. “So where does that leave me?”

Fair enough question. In this corporate era of global economics, how does the individual consumer with a run-of-the-mill complaint rate? Or, for that matter, with conglomerates being overtaken by takeover fever and companies being consumed with managing big crises (what with oil spills, poisoned grapes and tainted pills), is anyone listening to the customer with a quibble?

The consensus from an informal survey of some folks who should know is that although the traditional corporate credo of “the customer is always right” has gone the way of the Good Old Days, companies in general are better than ever in performing the motions and mechanics of fielding consumer brickbats. Some doubts are raised, however, over their motives.

“It’s not that the customer is always right. The philosophy is to let the customer feel they’re always right--without necessarily admitting it,” says Mark Pasten, a management professor and director of the Lincoln Center for Business Ethics at Arizona State University. Pasten believes that the string of crises in this decade have forced corporations “to toughen up” when it comes to handling consumer complaints. That should not mean being hard-hearted or unfair so much as structuring and verifying each step of the resolution process: “To document what is happening, not to accept anybody who says anything as having prima facie validity, to sift out the valid claims from the flakes,” he said.

The task these days is to handle the problem without getting dirty hands. “Companies have to try to capture anything about the transaction that can be demonstrated to protect themselves,” Pasten said. “For most consumers who complain, the complaint is valid to them and the companies know that. Some kind of reasonable exchange of value is a fair solution. But companies don’t want to be set up.”

Rule No. 1, therefore, is “No Immediate Response,” Pasten said. “The company needs to do a reasonably sound study of a complaint, and that takes a while. The customer gets madder and madder thinking the company doesn’t give a damn. It would probably be more efficacious to pay the person off on the spot or decide that the person is a flake and brush him off. But they can’t handle it that way.”

A spokeswoman for Coca-Cola USA boasts about her company’s long track record of good customer relations. Worldwide distribution does complicate things, she said. The company sells the syrup to independent bottlers and distributors. Walker’s complaint would be “routed to the company there, because that is a Japan problem . . . but Coke does have global responsibility,” she said.

An incident 3 years ago involving a pregnant woman who got sick a few hours after eating Chicken McNuggets at a McDonald’s restaurant in Washington further demonstrates the “immensely complex situation” a complaint can pose. The woman’s doctor diagnosed her condition as food poisoning. The next day, she filed a report with the District of Columbia public health and epidemiology offices, which inspected the restaurant and noted conditions that could have led to food poisoning.

The woman contacted the manager of the restaurant, who directed her to a regional headquarters. She wrote there asking for remuneration for the two days’ work she missed. A McDonald’s attorney responded that there was “no conclusive evidence” that her sickness was the result of having eaten the McNuggets. She wrote back with copies of the health department report and her doctor’s diagnosis. The attorney’s next response still questioned the premise of her claim, asking whether she had not eaten other food elsewhere. Her third letter threatened legal action. Eventually--in its fifth response--McDonald’s sent a check to cover the lost earnings but did not admit responsibility.

“Because of the number of tamperings, food putrefactions, and other diseases, it is recommended good policy to assume that you are not the one responsible,” Pasten said. “Even if they find that there is a potential source of the illness” in the restaurant, “it doesn’t mean that that made that person ill.

“Unfortunately, consumers think of this as stonewalling. It is actually a cost the companies have to accept to comply with public health regulations.

“Companies need to find out exactly what the problem is. If it is their fault, they will make good. If it isn’t, they don’t.”

Meanwhile, however, the customer will get good and angry.

Robert Neuschel worries that at a time when sour grapes are a sick mind away from poisoned grapes, corporations are constantly positioning themselves for the best defense. Doing so hinders the relationship between company and consumer and cripples initiative, says Neuschel, a professor of corporate governance at the Northwestern University Kellogg School of Management. And that, he said, accounts “for Exxon’s miserable handling” of the Alaska oil spill.

“As we become more crowded and move around more, we’re going to have more accidents and more people are going to get hurt,” said Neuschel, who is a former senior partner of the McKinsey and Co. management consulting firm. “The public expects some problems. What they are anxious for is that people stand up, take the blame and do something about it.”

Quaker Oats is one company that is regularly singled out as one that plays fair with consumers and does something about its problems. One industry analyst compares Quaker Oats’ complaint division to “a SWAT team.” “Within hours of a problem occurring, no matter how small,” the analyst said, “they’ve got a team of specialists there investigating it.”

Said company spokesman Ron Bottrell in Chicago: “Quaker has always been a very consumer-responsive company. We do have a team of consumer specialists who are professionals trained in particular product categories,” says Bottrell of the experts prepared to talk about nutrition, packaging and ingredient specifics of any of the company’s products. When something goes wrong, Bottrell said, the appropriate specialist contacts the consumer and obtains information, including production codes, dates and other data to try to determine the source of the problem.

In a case 5 years ago, a woman in Bloomington, Ill., was hospitalized after ingesting ground glass. She claimed that it had been in a Quaker Oats granola bar. Quaker’s quality assurance team responded immediately, tracing production codes to the plant where the bar was made but found “nothing unusual” in records or samples of that production run. There were no signs of tampering along the distribution route either. Still, supermarkets started pulling the product from their shelves, and media coverage began to spread beyond Illinois.

“We were on the verge of a recall, even though we couldn’t find anything . . . indicating we were at fault,” Bottrell said. Then police investigators found glass fragments in a wastebasket at the woman’s home that matched the glass removed from her digestive system. “If we had gone ahead with the recall,” Bottrell said, “that would have gotten national attention. That’s what would’ve stuck in people’s minds. It takes a long time to regain consumer confidence.”

When Al Tortorella’s new General Electric refrigerator developed a tricky thermostat after he had had it only a couple of weeks, he began thinking about the company’s policy to guarantee that the refrigerator could be returned for a refund or replacement within 90 days, whatever the reason. The expensive appliance soon showed other signs of being a clunker. Tortorella knew what he was going to do.

In the last week of the 90-day period, Tortorella called the phone number on his warranty and complained: “It isn’t working right. I don’t want it. Replace it.” In 7 days, he had a new refrigerator.

“I chose to handle it as just another consumer,” says Tortorella, otherwise known as the Los Angeles-based executive vice president of Burston Marsteller, a national public relations firm that does consulting for corporations facing image disaster. He is known as the Red Adair of corporate crises, a man colleagues call “the master of disaster,” the man brought in to douse the raging flames of negative publicity. He could have called GE brass, but he didn’t.

“That’s one company that worries about what the consumer is thinking,” says Tortorella, who was a consultant for Johnson & Johnson during the landmark Tylenol poisoning case. It was that strategy--yanking the product from the marketplace rather than risking public health--that largely shaped the conventional consensus on how to respond to consumer issues, Tortorella said.

“Tylenol became the quintessential example of how a company should comport itself under pressure. Since then I have seen a not-so-subtle change in the American business psyche. Executives who run these corporations . . . see more clearly than ever that what the public thinks of them, as to how they handle a problem, is almost more important than the problem itself.”

And therein lies the problem, if you ask Joan Claybrook. “Are they doing a good job of it? Maybe because they have computer programs and form letters and mechanisms set up to respond to every complaint, it seems that way,” said Claybrook, who is president of Public Citizen, the Washington-based consumer advocacy organization.

“But business tends to look at consumer complaints as a public relations necessity,” she says. “They don’t look at them as a real evaluation of their business . . . to assess the efficiency of their operation or the quality of their products. They look at them as a pain in the neck.”

Public Citizen is the fly in corporate America’s self-congratulatory soup. The group agrees that corporations have come far indeed since the mid-’60s--when a major auto maker was caught dumping hundreds of rolls of microfilm of complaints it had received about a certain model car--but Claybrook contends that all is not right in corporate-consumer relations.

‘Secret Settlements’

She points to the increasing number of “secret settlements” (the court records are sealed from public disclosure) being included in corporate liability settlements as proof. “They don’t want what they know to spread,” Claybrook charged, speculating that the defects described in those sealed records could alert the public to safety hazards. “They’re trying to quash it and control it item by item. They often fix future products, but they won’t correct the old ones. Recalls are expensive.”

She also attacked as double talk the product warranties corporations tout. “All these manufacturers have developed warranties that actually limit the common law warranty you already have to start with,” Claybrook said. “Manufacturers are adept at the language they use . . . . The companies have learned to grapple with complaints. Only now they can handle them without anybody giving them a hard time, because they have the mechanisms in place for getting an answer out.”

How should an unsatisfied consumer give a company a hard time, then? “First thing to do is write to the president of the company and nobody else,” Claybrook said. “Second, mail copies to the relevant senators and congresspeople who have some power over the issue. And third, send it to the relevant government regulatory agency. And picket. Business hates picketing more than anything else in the whole world.”

Ten years ago, Rosemary Dunlap of San Diego took her VW Dasher, which had been involved in an accident, to a dealer for repairs. “Two or 3 weeks,” the service representatives told her. Three months later, the car still had not been repaired. “They gave it what I call the ‘Sunshine Treatment,’ ” Dunlap said. “They left it out on a back lot and didn’t even look at it.”

First, Dunlap got angry. She complained to the owner of the dealership and got no satisfaction. She wrote letters to Volkswagen and to the appropriate federal agencies. No reply from the corporation, and only sympathy from the government. “They said there wasn’t anything they could do,” she said.

Dealership Picketed

So she decided to get even. After she checked with police about the legalities, Dunlap started picketing the dealership. Her signs sported slogans such as “Rabbit Sales--Tortoise Service.” She persisted for 5 months. She became an institution in San Diego. People honked in support as they drove by. Some joined her picket line. Five months later, the dealership went out of business--but not before settling with Dunlap, by buying the car it had never repaired.

“I really believe in empowering consumers to affect the marketplace,” said Dunlap, who moved to Washington in 1985 to found Motor Voters, a nonprofit consumer advocacy group that concentrates on the automobile industry.

Since then, she has taken on Peugeot over its refusal to offer air bags to its buyers. Dealerships hate picketing, she said, but it gets a response.

“In this country, an individual consumer can make a big difference.”