COMPLAINT HANDLING MANAGEMENT

1. Toyota Otis Inc. June 2010 COMPLAINT HANDLING MANAGEMENT

2. Receiving Complaints • 4 Ways of Receiving Customer Complaints • The Customer arrives at the dealership and complains in person • The Customer phones the dealership • The Customer writes a letter or e-mail • Customer complains to another person

3. Receiving Complaints Whatever the method of complaint is, the customer should still be encouraged to come to the dealership so that the complaint can be investigated and resolved promptly In severe cases, Service Manager or CRO may go to the customer’s residence or location of the vehicle to conduct “Genchi-Genbutsu” activities

4. 3 Stages of Complaint Development • DISSATISFACTION – caused by the service not meeting customer’s expectations • FRUSTRATION – caused by slow progress or unprofessional handling of the customer complaint • ANGER – caused by customer’s rejection of the dealership’s decision to failure to quickly resolve the problem STEP 1 STEP 2 STEP 3

5. 3 Stages of Complaint Development Toyota Complaint Resolution Target Level Satisfied Level Lower Cost DISSATISFACTION FRUSTRATION Higher Cost ANGER

6. 8 Fundamentals of Complaint Handling • Have a Written Policy and Procedures • Appoint a CR Manager • Use goodwill funds • Record Complaints and standardized form • Follow-up to verify Customer Satisfaction • Prevent recurrence of complaint • Participate in complaint handling training courses initiated by TMP • Familiarize all staff members with complaint handling procedures

7. 7 STEPS IN CUSTOMER COMPLAINT HANDLING

8. 1. Receive Customer Complaint • If complaint is received by phone, encourage the customer to come to the dealership • Review the customer’s history file and communicate the details to concerned staff and management • When customer arrives, greet them in a friendly manner • If necessary, take the customer to a private room to discuss his/her complaint

9. 2. Listen with your Ears and Eyes • When the customer speaks, look at them, listen carefully, and learn the reason for his/her dissatisfaction • Let customer express their concern without interruption • Empathize • Take note of key points during discussion • Don’t go directly to the vehicle, show concern for the customer’s feelings first.

10. 3. Establish Facts and find out Causes • Ask the customer, “May I ask some questions?” • Go to the vehicle and see its condition • Before making some comments, confirm that a problem really exists. • Take accurate notes and ask questions using the 5W -2H rule. • Review Invoice or Repair Order for previous work done • If technical diagnosis is needed, get the service department’s support.

11. 4. Reappraise Seriousness and Make Decision • Even when the customer is wrong, turn the complaint into a positive experience • Decide on what action to take (who will do it, what to do, when to do it, etc.) • If the countermeasure is beyond CRO’s authority, ask for the concerned departments assistance and support • Consider how to resolve the complaint, who will do it, and when it will be done • If problem cannot be solved, get TMP support

12. 5. Explain your decision to the customer • Explain the customer what you propose to do and when you will do it to resolve the complaint • Explain the problem occurred and how reccurrence can be avoided. • Ask for customer’s approval and agreement before proceeding with the countermeasure • If you cannot get agreement, go back to Step#3

13. 6. Follow Up • Follow-up should be done within 5 days for general complaints, within 24 hours for safety complaints • Make a report and discuss with concerned departments for Kaizen discussion

14. 7. Review and Reflect on Results to prevent recurrence • Make a contact report and send to management for Kaizen Discussion • Determine how to prevent recurrence of complaint • Dealer must follow-up if countermeasures were handled by a vendor

15. Complaints due to Poor Handling of Customer Requests • It is extremely important that the CRO properly handles customer’s request – whether reasonable or unreasonable • Response to these requests may have a positive or negative impression on customers and may turn into complaints further on.

16. Situation / Customer Requests Possible Responses x “Bring it to where you bought it.” Repair of hi/her Toyota car purchased in another Toyota Dealership Handle the problem according to Warranty procedure. If necessary, Work with the selling dealer Refuse the customer right away x b. No charge for repair of vehicle which is out of warranty Check first the vehicle, then consult Either SA or Service Manager Refer the customer immediately to The MP or to TMP x c. Dealer should take responsibility for inferior products and un- desirable sales process Listen to what the customer has to Say , then coordinate with TMP x “You’re asking for something impossible, just talk to TMP.” d. Demand for unit replacement Reject the demand firmly, but politely

17. Do’s and Don’ts in Complaint Handling • Check for new Customer Complaints everyday • Acknowledge the customer contact within 24 hours • Listen to the customers carefully. Do not ignore them • Apologize and empathize to the customer • Conduct a fair and impartial investigation • Know all reference materials relevant to the investigation • Advise the customer of the results of your investigation • If the customer is angry, don’t reciprocate, be patient. • Do not comment on the customer’s vehicle or attitude • Go the extra mile to help the customer • Educate the customer using facts and figures • Communicate effectively with the customer • Even if the customer is wrong, listen to him patiently. Don’t argue with them • Some of the Customers may just have concerns. Do not ignore them since these may turn into complaints

18. Complaint Handling Skills • The only way to handle customer complaints effectively is to first understand the customer’s feelings and then go to the actual vehicle or location to see the physical problem first-hand

19. No. Preferred level in case of complaint handling Category Skills Objective 1 Clarify, paraphrase and summarize what the customer says Use Positive language Listening Grasp the Customer’s Feelings EMOTIONAL 2 Reflect with empathy, use anger diffusion Reflecting 3 Non- verbal Communication Smile occasionally, use eye contact Lean towards the customer 4 Clarify Information Questioning Clarify Information Focus the customer on the relevant issues 5 Take notes when listening, reflecting and questioning LOGICAL Writing 6 Empower the customer with alternatives Focus on a solution, provide alternatives or options Explaining

20. Conducting a Fair Investigation • Always look at the situation from the customer’s point of view. • Consider all complaints as major concerns – no matter how minor it may seem • Gather all facts, consult with Sales, Parts and Service if necessary • Involve your Dealer Principal, or General Manager, if the need arises. • If technical need arises, you may contact TMP-CRD

21. Reference Materials needed During Investigation • Sales / Product Brochures • Warranty and Service Manual • Owner’s Manual • Technical Service Bulletin / Parts Bulletin • Sales Bulletin

22. Investigation Tips • Fix it right, the First time • Accept responsibility for your dealership’s errors • If another dealer has completed a repair which is the cause of an additional repair, try to work with the former to get the problem resolved.

23. Repairs resulting from Customer’s Driving Techniques • Try using the following phrases • “due to driving habits” • “Customer driving” • “incorrect vehicle operation”

24. Repairs resulting from Customer’s Driving Techniques • Be cautious about denying assistance during the warranty period due to customer’s driving technique. It is TMP’s responsibility to prove that the problem was not due to a defect in the vehicle. Your investigation and verification of the facts are extremely important

25. Goodwill Fund • Goodwill funds can be utilized based on the following cases: • Product Quality (PQ) Issues • Warranty Consideration • VIP Customers • Service Vehicles • Incidental Expenses • Legal Implications

26. Goodwill Fund • All complaints will be handled and treated based on the warranty policy covering the vehicle. • Approval of goodwill utilization will depend on the recommendation of TMP-CSO and justification and proposal of the dealer to TMP. • Monitoring of goodwill allocation must be done by TMP-CRD Customer Service Group regularly

27. Explanation to the Customer • If you are unable to assist the cutomer and your answer is going to be “no”, you should give an explanation to the customer. • Complaint Resolution • CRO must ensure that complaints are closed within the target resolution days from the day of customer contact