How Effective is Your Complaints Procedure?

March 7, 20196min

So, you have an effective complaints procedure in place; you are engaging with customers, finding problems and working through solutions, but just one important question remains: “How well are we doing?”

There is, of course, one clear sign of an effective complaints procedure, and that is a happy customer. Yet it can be a bit more complex than that. The typical reward for good complaint handling is increased sales and improved customer retention.

However, it is not always apparent whether these factors are down to your complaint handling alone. So how can we reliably measure success?

One possible measure is reputation. For the last three years, the UK Complaint Handling Awards has sought to recognise organisations that have made a success of their complaints procedure. The event is hosted by Awards International, and for many companies that have received such an award, industry acknowledgement is a reliable mark of success. The results can also be surprising.

“It’s interesting, if not ironic, that when it comes to winning awards, the most competitive industry sectors are also often the most complained about sectors,” explains Donna O’Toole, CEO of awards consultancy August.

“The rail networks, banks, loan providers, insurance companies, telecoms, and utility providers that the public so often love to hate are also the businesses leading the way in transforming their complaints handling processes – and in turn, improving the overall Customer Experience.”

Donna explains that in recent years there has been a rise in businesses realising the long-term value of how they handle customer complaints in the short-term. When shortlisting companies for the awards, successful companies are typically those that demonstrate transparency, better communication strategies, and have implemented innovative tools to help employees respond faster and more effectively.

Industry peer recognition is a valuable indicator of success but there is also a data-driven method of measuring complaints performance.

The Resolver platform is constantly monitoring user feedback throughout the complaints process. It does this by asking users to rate their experience at each stage of the complaint, thus enabling the data team to generate a score on how effective each company, and each sector, is in complaints handling. As with the awards, the results are not always what one would expect.

“It is really interesting because sometimes a lot of the things are counter-intuitive,” says Michael Hill, Resolver’s lead complaints management consultant.

“Sometimes people will give a company a high satisfaction score, despite the fact they have not achieved full resolution of their complaint.”

This highlights the value that customers place in being able to actually express what is really upsetting them. People are more likely to feel better if they have had, at the very least, a fair hearing or, at best, feel they have been treated fairly after going through the process.

On the other end of the scale, Michael notes, there are customers who have been very upset with their experience despite getting their complaint resolved. This is either because they still feel their complaints have not been listened to, or that the company did not follow up.

“We get quite a few companies that have failed to pay out compensation, having agreed to pay, or just take too long to deliver on their promises,” Michael explains.

“Businesses get right up to the end of the line, and technically everyone should be walking away happy, but people are still dissatisfied. It can get complex.”

When it comes to which sectors perform well by user satisfaction, it is usually those industries with a strong regulator or a free escalation service, such as an ombudsman. This is often because it inspires more confidence in the consumer that their issue will be resolved. Again, these can often be the industries that get the most complaints, such as financial services. On the other hand, you have sectors like retail where there is no established ombudsman or regulator, meaning many customers are left feeling very frustrated.

Having a high volume of complaints doesn’t necessarily mean a business is getting things wrong. It is the satisfaction score that matters. Michaels notes that the best-performing companies are those which have strong lines of communication with the public and are quick to respond and engage with customers when a complaint is received, regardless of complaint volume or, in some cases, eventual outcome.

Michael adds: “We would say any business that encourages complaints is going to see more coming through the door, but this is simply better visibility of the problems caused for customers. If they resolve them quickly and effectively, then they will keep their customers. If they don’t, customers will vote with their feet.”

Will Archer

Will Archer

Will Archer is Marketing Manager at Resolver Group, sponsors of the UK Complaint Handling Awards.

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