HUNTSWOOD: A PERCEPTION GAP

Features | 11/03/20

For many firms, the word ‘complaint’ has negative connotations. 

Yes, if a complaint is serious and not dealt with efficiently and quickly, it will be detrimental to the business and leave the customer with a poor perception. However, when managed properly, the complaints process can actually improve relationships and provide firms with an invaluable amount of data which they can use to improve their processes. A great experience through the complaint process, in turn, drives loyalty and customer advocacy. 

Simply put, taking another look at complaints can deliver huge benefits for companies across a range of industries. 

Huntswood’s Complaints Outlook 2019 used data drawn from interviews with 31 leading firms and over 5,500 customer survey responses to identify the real value to be gained by delivering ‘complaints excellence’. 

More than just a regulatory benchmark

Ensuring regulatory compliance is obviously an important part of the complaints process. But, as you’ll no doubt realise, achieving compliance should be seen as a minimum standard, not an end goal. 

In this increasingly competitive world, delivering excellent customer experience is just as crucial as achieving compliance. It really is what sets firms apart. It’s very unlikely a firm failing to achieve compliance is delivering a good experience, anyway. 

As switching providers becomes easier and more commonplace, the value of creating customer advocates increases. It’s very common for friends and colleagues to share their bad experiences in dealing with their service providers, so there’s obviously incentive there to stop people receiving poor experiences in the first place. 

On the flip side, when someone shares a good experience there is a weight behind it that firms shouldn’t underestimate. In fact, according to the Complaints Outlook, around half of people who hear about positive complaints experiences
will go onto become customers of the firm in question.

A disconnect in customer and provider perception 

Yet there is still some way to go for many firms when it comes to encouraging this advocacy. 

One of the key findings in the Complaints Outlook was the scale of the divide between firms’ understanding of how well they’re handling complaints and what customers actually think of their complaints experience. 

60% of financial services firms believe their customers are satisfied with their complaints handling, while only 22% of customers actually report being satisfied. This perception gap between firm and customer needs to be urgently addressed by any business seeking to remain competitive, drive loyalty and attract
new customers. 

It’s perhaps not surprising, then, that we found customers are more likely than ever to switch provider if their expectations are not met. Providers must differentiate themselves from competitors with a customer-centric approach, ensuring that a customer’s complaint journey is as frictionless and as valuable as possible. If they achieve this, customers will be
less likely to start looking elsewhere.

What can firms do to streamline their complaints process?

There are several simple steps firms can take right now to ensure that customer expectations can be met:

Resolve issues at the first point of contact (FPOC)

Only 20% of financial services customers reported that their complaint had been resolved at FPOC, despite around 76% expecting issues to be dealt with instantly. 

The financial services firms we interviewed said that 46% were swiftly resolved at FPOC, a clear demonstration that firms aren’t aligned with or meeting customer expectations when it comes to speedy resolutions. A swift or ‘instant’ resolution is one of the most powerful ways of generating advocacy and continued loyalty. Those firms that lag behind, either due to ineffective inter-team communication or lacking processes, will struggle to retain customers. 

Upskill staff

If firms are to truly become efficient at dealing with complaints at the FPOC, it is imperative that they invest in upskilling and multi-skilling staff, empowering them to make decisions and resolve issues themselves, wherever possible. 

Automation can be a game changer

50% of customers don’t mind talking to an automated system, as long as it resolves their complaint quickly. People don’t hugely mind the way their complaint is dealt with, it’s the speed with which it is processed and resolved that counts. 

If automation can be implemented successfully, it will hugely relieve front line staff and free up resources that can be used elsewhere in the business to strengthen customer outcomes. 

Offer an omnichannel experience 

For those whose complaints weren’t dealt with at the FPOC, 70% engaged with their provider through at least two different channels throughout their complaints journey. This reflects the need for firms to not only offer an omnichannel experience, but to ensure that these are united to streamline customer journeys. 

Two thirds of customers don’t believe that firms are embracing digital technology to better manage and resolve complaints, and actively choose new technology driven communication channels (such as webchat) when they are available. 

Ensuring that your firm offers an omnichannel complaints experience, with information securely shared for the sake of expediency with the various teams manning each channel, will go a long way to demonstrating a commitment to the customer’s expectation. 

Prepare for the unexpected

As firms increase their digital offering, they must also come to terms with the very real possibility of technical glitches, one common cause of surges in complaints. 

Shockingly, 12% of all complaints recorded over the last 12 months were related to system issues or data breaches. That’s more than one in ten. 

Firms should ensure that they are operationally resilient enough to deal with the surges in customer contact that these technical issues will likely cause. Partnering with a trusted outsourcer is one simple solution to ensure that teams of specialists are on hand as soon as they are needed. Organising this also demonstrates to regulatory bodies that your firm is doing all it can to prepare for the unexpected and is prioritising customer outcomes. 

The importance of customer advocates

96% of firms believe that complainants can be turned into advocates and 57% told us that they believed they were creating advocates in over half of cases. 

Indeed, one in every 12 of the customers surveyed said themselves that they shared a positive complaint experience. 

There is a positive snowball effect to be seen here, as customers not only make buying decisions as a result of what they hear from others but share those stories more widely. This all leads to a positive cycle of continuing advocacy, but only if firms get the complaints experience right in the first place.

Undertake proactive Root Cause Analysis (RCA)

Unfortunately, not everyone will give you the chance to set things right. The report found that 35% of the UK population has experienced a serious issue for which they didn’t make a well-warranted complaint. Firms can’t fix things if they don’t know something has gone wrong.

Firms’ current approach to RCA results mainly in tactical fixes rather than the strategic change really needed. By using RCA more widely and the emerging technologies which make this more effective, firms will be able to do right by the non-complainant population and potentially rectify the issues that aren’t raised.

Identify vulnerable customers at the earliest opportunity

Finally, and perhaps most importantly, firms should pay close attention to the fair and equitable treatment of vulnerable customers. Front line staff need to be upskilled in the identification and treatment of people in such circumstances, but this is not always easy. 

Vulnerable customers can present in many different ways; it could be a physical vulnerability, but it could also be the result of mental health, or financial issues (unemployment, indebtedness), a life stage (the period following bereavement or divorce) or indeed cultural barriers (not speaking English, for example). 

Firms, in general, need to look to regulators, experts in the field and into the large library of customer vulnerable information, and use this knowledge to do more for people in such circumstances. 

A cultural shift needs to occur

Above all, there needs to be a cultural shift in the way complaints are perceived by employees and senior managers if they are to begin seeing their complaints department as the potential ‘profit centre’ it is going forward. 

The key challenge facing firms now is not only understanding and ensuring good customer outcomes, but continuing to keep up with rapidly changing customer expectations. In a digital world, customers expect quick responses. At the same time, however, they also want the empathy and understanding the human touch brings. 

Striking a balance, and achieving complaints excellence in general, may be a challenge for many, but those that achieve it will see the investment made paid back in full by happy, loyal customers.

Kate Woollard
Engagement and Brand Manager

Huntswood