Customer Charters and information disclosure
The focus of Australian governments and policy makers since February 1995 on competition policy reform highlights the importance of competition in all markets.
Consumer Protection believes that competition policy reform is not just about lower prices - it is about a blend of prices, service and quality.
Businesses of all types can benefit from putting in place measures aimed at improving relations with their customers. Giving greater consideration and attention to the needs of their customers is one means by which a business can become more competitive.
A customer charter is one measure which businesses can use to enhance their competitiveness, by becoming more customer focused.
What are customer charters?
A customer charter is a statement of standards and/or procedures that a business agrees will govern the relationship between itself and its customers. A charter can establish standards of service delivery, provision of information to customers, consultation processes and complaint or dispute resolution mechanisms.
Why have one?
The advantage of a customer charter is that it will advise customers, in advance, of what they can expect from dealing with a particular business.
It demonstrates to customers a business's commitment to maintaining best practices in service delivery and also provides a benchmark against which the business can measure its performance.
Customer charters pull together a lot of what being customer oriented is all about. This is because an effective charter includes:
- agreed standards of service;
- complaint handling and redress; and
- provision of adequate and clear information to users of the service.
Customer charters can be stand-alone documents, with or without contractual force or they can be incorporated into individual supplier - customer contracts.
They are flexible documents. They can be adopted on a whole of industry basis or specifically tailored to a particular business.
Developing effective customer charters
Customer charters are for customers. In implementing one you need to:
- know who your customers are;
- focus on your customer's needs from their point of view; and
- appraise your product or service delivery from your customers' point of view.
You will be better placed if you invite input from your customers. Customer input will help you develop an effective customer charter and manage its ongoing review.
Developing and maintaining effective customer charters requires commitment from management. This may mean a change in attitude away from an "us and them" approach, to consideration of the interests of both your business and the customers who maintain it.
It will also be important for your employees to be involved in the customer charter process, so that they understand it and are committed to it. Employees may need training about the requirements of the charter and how these can best be met.
What should an effective customer charter contain?
The essential content of a customer charter will be standards relating to quality of service delivery. These should set achievable performance-based benchmarks for the business, aimed at best practices in its service delivery.
For your customer charter to operate effectively, it should include the following features:
- the standards must address the main areas of concern to customers. This will depend on the characteristics of the goods or services provided, but might include information about the product/service delivered, when and how it will be delivered, as well as pricing, safety and billing procedures;
- the standards need to be well defined and capable of being achieved and measured. For example a standard of "we'll deliver the goods faster" may be too broad and need further definition; and
- customer charters need to be readily available to and understood by customers.
You might also consider providing information on how well the standards have been met and the reasons for any failure to meet the standards.
Remedies for breach of the charter
You should consider what form of redress will be available to your customers if the stated standards of service are not met. The availability of remedies will not only be attractive to customers, but will also provide a real incentive for your business to meet the standards.
Matters on which you may wish to adopt policies include:
- refunds, replacement, repair and substitutes;
- information and referral;
- compensation; and
- apology or goodwill gift.
Any remedies available to your customers for breach of the charter should be in addition to, and not substitution for, any of their other rights.
Checklist
An effective customer charter involves:
- a set of well defined, measurable standards of service delivery;
- visibility to customers or potential customers;
- commitment from management and employees of the business;
- input from customers about their service requirements;
- information about complaints handling processes of the business;
- entitlement to redress where the standards are not met; and
- regular monitoring of whether the standards are being met.
Information disclosure
Information disclosure is an important element of the business-customer relationship. The advantages of ensuring that customers have access to relevant information will include:
- the capacity of consumers to make informed and responsible purchasing decisions;
- establishing a positive relationship with customers; and
- the minimisation of customer disputes.
Information provided to customers should be:
- easily accessible;
- provided at no cost to the customer;
- timely; and
- in plain language.
Consideration should also be given to making it available to specialist groups with whom the business deals, such as those who speak a different language, live in remote areas or are disabled.
The main issues on which customers require information are:
- how and where goods and services are provided;
- the charges for goods and services provided;
- any alternative bill paying mechanisms provided by the business;
- the recovery procedures if bills are not paid;
- what action customers can take if they have a complaint;
- what action customers can take if their complaint is not resolved by the business; and
- where to get further information if required.