The real consequences of poor complaints handling

Posted: 27th June 2019

There’s plenty of information out there (a good portion of it published on our very own Insights blog) about the value of proper complaints handling – how over-delivering on customers’ expectations after an issue will lead to benefits as wide ranging as customer advocacy to longer relationships – but little has been said on what poor complaints handling can really mean.

With our Complaints Outlook 2019 just around the corner, bringing with it a wealth of best practice tips and guidance for the effective handling of complaints, we thought it worthwhile to reiterate just what complaints mean for people and their daily lives, and how getting it wrong can cost your firm dearly.

Complaining is good for you

We all know the truism that says “you just shouldn’t bottle things up”. Well, the fact that so many people in the UK are suffering in silence without making a complaint to their financial services or utilities provider goes to show that we’re not exactly a nation that likes to ‘open up’.

The FCA, a few months ago, revealed that some 15 million Britons are regularly missing out on refunds or remedies by not complaining. Our own research suggests that 43% percent of the population routinely bottle up their issues. That’s an awful lot of pent-up frustration ready to be taken out on firms and the marketplace in general.

When we also consider that mental health conditions are on the rise across the country, firms need to ensure they are being empathetic and understanding of customers’ situations, and opening up appropriate channels (managed by trained staff) to allow for easier complaining. It is important to open up and to feel in charge of one’s situation. Firms can, and should, be assisting with this customer empowerment. 

Firms need to make sure that they don’t close themselves off to customer complaints. Those that do – either out of fear of facing up to large-scale issues or the resource strain that sudden surges may bring – risk losing out on the incredible value of complaints, forcing customers to simply ‘put up’ with problems that could be solved for the benefit of every party involved.

A negative experience doesn’t just affect the individual involved

Social media has given us all the tools to immediately call out the bad behaviour of companies and to share our message further than ever before. If your firm fails to satisfy enough customers’ expectations, you can expect the repercussions to ripple far and wide. You don’t want to see your firm’s name tied to a negative story in the “Trending Tweets” bar….

Your firm will be losing your most valuable customers

Across both financial services and utilities, close to 90% of customers would consider leaving a company following a poor complaints experience. In an era in which switching providers has become easier than ever, many customers are finding that they would rather pop online, check out one of the many popular comparison sites, and leave your firm within the space of an hour rather than sit through weeks of calls, chases and paperwork confusion.

It can be frustrating when customers don’t even give you the chance to right a wrong before changing loyalties. To combat this, firms need to be undertaking root cause analysis on the complaints they do receive and use the learnings to proactively improve the situation of non-complainants.

In today’s connected world, switching is easy. Don’t let your complaints experience hold open the door to another firm.

Vulnerable customers need to know who they can trust

A one-size-fits-all approach to dealing with customers is never going to work. Customers in vulnerable circumstances are always going to be those hit hardest by poor or ineffective treatment. Some may not have the capacity to switch providers as easily as others, and some may not even have the language needed to explain their problem.

If people get wind that your firm isn’t doing its part for vulnerable customers, expect the popular backlash to be sharp and severe. Large firms need to ensure they are treating all of their customers equitably, or become seen as a business not to be trusted.

75% of the firms we interviewed for the Complaints Outlook said they were equipped to provide good service to vulnerable customers, but we are still finding that only certain front-line teams are receiving much-needed training. Some may be able to identify vulnerable customers, but lack the power to make the decisions that would assist them.

Firms cannot simply lump a large population of people into the category of “vulnerable customers” either, instead, they must take an “individual customers” approach if they are to truly deliver good outcomes to all.

Don’t falter in your duties

Financial services firms and utilities providers supply customers with the essential products and services that help them live in and navigate the world. If we can throw in another truism here, “with great power comes great responsibility.” Large corporate entities need to ensure that their customers come first in investment decisions, operational organisation and governance. Otherwise, they will be seeing customers leaving without even so much as a “good bye”.

So, if you want to ensure that your firm is doing its bit for your customers, and that you will avoid the consequences of poor complaints handling, be sure to sign up for the Complaints Outlook 2019. It will be your toolkit for unlocking the true value of complaints.