TRADE LEADER’S GUIDE: Are Customer Complaints a Good Thing and How Much Does an Underrated Complaint Cost - Part 2

In Part 1 of this publication, we told you about the most common problems in dealing with complaints – the human factor.

We will now look at issues related to technical systems, process management and the delegation of rights and responsibilities.

We will now look at the problems related to technical systems, process management and the delegation of rights and responsibilities, or in short, problems related to the internal organization.

Problems related to the internal organization. 

  • Lack of escalation protocols or their poor configuration leads to wrong and hasty decisions by staff.

Often the goal of the people dealing with complaints, is to end-up with them in favor of the company and send out the client, without actually solving his problem. Escalation is in many cases undesirable by management because it takes extra time, which it prefers to spend on increasing sales and attracting new customers. The problem with this attitude is that losing one customer leads to more serious costs than keeping him/her. In addition, a complaint filed with serious grounds, which turns out to be in a body such as the CPC, can lead to severe fines in Bulgaria of EGN 500 and more, while a procedure for resolving a dispute with a mediator at NAIS ADR Center is EUR 55. Traders that do not even have a customer complaints department can prevent such a disastrous development if they use an external complaints service provider. The NAIS ADR Center accepts complaints electronically, which are forwarded to the merchant to decide if he wants to engage in online negotiations in the form of a chat with his client. The cost of one credit for reviewing a complaint and conducting online direct negotiations in the virtual chat room on the NAIS platform,, is EUR 5. Thus, each of the parties participates in the conversation from a place and moment that are most convenient for them and the costs are significantly minimized.

Good traders know the golden rule that a new customer costs 5 times more than a retained old one. Some argue that the ratio is even higher and forecasts reach 25 times the cost of attracting new customers.

The best traders know that behind every complaint filed, there are 26 other dissatisfied customers who do not file one at all. 91% of them just leave and change the trader. In addition, 9-15 people tell about their disappointment, and 13% of them tell 20 people.

Often the reason for the reluctance to file a complaint is the lack of confidence that their problem will be addressed and resolved. Another reason is to use an online independent complaint submission center such as NAIS. The fact that the center is an independent body stimulates the desire to submit a complaint and gives a chance to traders to address it, as well as to pay attention to common problems so as to correct mistakes and readjust their processes.

With good development, from 4 to 6 clients share their positive impressions. In more than 90% of the successfully completed consumer dispute resolution procedures in our center, the customer expresses a desire to continue buying from the merchant.

  • Another major problem is the incorrect registration of the complaint. Technical problems can lead to inaccurate recording or inaccurate reporting.

In the electronic system of the ADR center of NAIS the form for filing a complaint is in electronic format and is made so as not to miss important details in it such as type of product, service, date of purchase and value. The complainant also noted whether they had already contacted other authorities and institutions on the matter and whether he had already lodged a complaint with the trader. It is possible to upload documents so that the trader and the mediator can find their way faster in the initially submitted information.

Each complaint receives an individual number, the date of submission is registered, automatic reminder messages are sent for deadlines.

A common mistake in describing a complaint in free text is to confuse the description of the complaint with the request.

"In the electronic form of the complaint at the NAIS ADR Center, the description of the complaint and the request are in separate text boxes. In this way, the two topics are not mixed, and the client is encouraged to make the first proposal to resolve the dispute."

  • Sometimes the trader's employee fails to identify the need for the intervention of a third party, a mediator, who can help resolve the dispute.

At the NAIS ADR Center, while the parties are conducting direct virtual negotiations via chat messages, at any time, each of them can request the start of mediation by pressing a button on the chat screen. This is a signal to the other side that the possibilities for an agreement have been exhausted and it is necessary for a professional to intervene to help them resolve their conflict.

The trader decides whether to start mediation or end the negotiations in a way that would certainly satisfy the client.

If direct negotiations take place in the trader's channel, whether by letter, chat or telephone, the employee must be aware of when his arsenal of mechanisms to resolve the case has been exhausted and it is more appropriate to transfer the procedure to a dispute resolution center where his colleague, a company representative, will be authorized to negotiate with a mediator.

"In this regard, the associate members of NAIS should very carefully select their representatives in the ADR center who participate in the mediation procedures. It is best that they are authorized officials at a higher level who have the right to make decisions and have delegated compensation budgets. "

  • Many retailers fail to invest in their own channels to communicate with customers seeking problem resolution.

Unfortunately, in such situations, time is critical because the stress the client experiences from a failed transaction is high and he/she is looking for the easiest and fastest way to reduce it. In case of untimely or unresponsive reaction by the trader, the consumer often resorts to negative statements on social networks, shares with relatives and friends, filing a complaint to the CPC or other bodies. The very act of verbalizing the problem or filing a complaint reduces some of the tension. If the recipient shows understanding, respects the complainant's frustration and commits to resolving the issue, the first hot moment is played out.

At the NAIS ADR center, after filing a complaint, the user immediately receives an e-mail that it has been accepted. It is considered admissible under the General Terms and Conditions and then referred to the trader for reply. Also, the associate members of NAIS receive statistics from the electronic system regarding their cases, as well as general analysis of trends.


  • The lack of specialized and well-trained in internal procedures and protocols staff for handling complaints, as well as non-delegation of decision-making rights and compensation of complainants, can lead to incomplete dispute and deterioration of the client's attitude towards the trader. The lack of any procedures and mechanisms for responding to complaints is a huge omission.

The loss of valuable time due to the negligence of the complaint or the slow and cumbersome procedure for addressing it also pushed the applicant to extreme action. A problem posed by customers may persist and the company may not take care to eliminate it. This leads to fines from institutions, bad image, and if the client reaches the peak of his dissatisfaction, to sue. This, in turn, is a gateway to setting a legal precedent that could lead to a wave of lawsuits. If the client is duly aware that he can turn to an independent body, such as the NAIS ADR Center, to expedite the work on his complaint, this can prevent such adverse developments and significantly reduce the damage to the trader.

There is nothing scary or bad about customer complaints. They are the bitter but effective medicine that cures bad processes and internal company practices. A neglected complaint leads at least to the loss of a customer, and replacing it with a new one can cost 5 to 25 times more. At worst, it could lead to state authorities sanctions and heavy fines. If we deepen our analysis on this topic, we can ask ourselves an even more complex question:

Is it worth losing a customer who makes purchases of good value, especially if he/she is a regular buyer and has the potential for good future income from him/her, with another on whom we do not have enough information whether he/she will give such a return on investment to acquire it?

Follow the next publications from this series, dedicated to the best practices in dealing with complaints, from the section "Trade Leaders' Guide" on the NEWS page of, as well as in the profiles of NAIS on LinkedIn and Facebook. In the next publication we will look at the problems related to technical systems, process management and the delegation of rights and responsibilities, or in short, problems related to the internal organization.

Resources used:

KPMG 2019- Why customer resolution really matters A guide to successful customer complaints management

Published on 06.04.2021 Back to news