UK financial services and utilities businesses are underperforming when it comes to complaint handling, despite their growing belief that customers are satisfied with their performance.
That is according to Huntswood’s Complaints Outlook 2019 report, which combines research from financial services and utilities firms with survey responses from over 5,500 consumers. The nationally representative survey was carried out by Huntswood’s research partners, YouGov, and has revealed a perception gap between businesses and customers – 69 percent of firms believe that their customers are satisfied with their complaints are handled, while the reality is that only 26 percent of customers actually report being satisfied.
When asked, 87 percent of firms interviewed also said that their complaint handling staff are well equipped to do the job, however 61 percent of customers are currently dissatisfied with the empathy of the staff member they interacted with and 59 percent are dissatisfied with the knowledge of the staff member they interacted with.
Resolution times also remain an issue – 49 percent of firms believe they are resolving complaints at the first point of contact, yet only 18 percent of customers claim that their complaint was resolved immediately.
Complaints Outlook 2019 also reveals a disconnect between the perceived importance of complaints handling by businesses and a lack of focus on building required professional skills. This is evident in the fact that, despite 96 percent of businesses agreeing that the impact of the complaint handler on customer satisfaction is high or extremely high, 52 percent admitted that their employees do not complete professional complaint handling training programmes or qualifications.
With increased regulatory scrutiny around the treatment of vulnerable customers, 75 percent of the firms interviewed believe that their staff are equipped and empowered to deal with customers in vulnerable circumstances, with the remaining quarter feeling they are only part of the way to achieving this.
Furthermore, 57 percent of firms believe they are creating advocates in at least half of all cases, however only eight percent of customers surveyed had a positive complaints experience and shared it with friends and family.
This perception gap should be treated as a warning to firms, with 60 percent of customers adding that they would change provider as a result of a poor complaints experience.
Paul Scott, Chief Commercial Officer at Huntswood, said: “Firms are increasingly recognising the value that can be derived from the complaints journey. However, despite this, our research shows that there are discrepancies between how financial services companies believe they are dealing with complaints and the reality for customers. Complaints are an unavoidable part of business, so it’s critical that they are handled well and that customers feel valued throughout.
“Firms should therefore be looking to create an effective complaints handling operation, underpinned by a robust strategy which focuses on providing the best possible outcomes for customers. Doing so can deliver enormous benefits, such as deeper relationships with existing customers and an increase in new relationships from customer advocacy.”
As CX professionals, it’s our job to understand and predict the needs of customers and to present experiences that fulfil those needs.
Unfortunately, the reality of our role is rarely so simple.
According to a study fromBain & Company, 80 percent of businesses believe they are delivering a “superior” Customer Experience, and yet, only eight percent of customers feel they’re receiving such an experience. Clearly the realities of CX don’t match the stories that we as CX professionals tell ourselves.
Given this disconnect, it’s hard not to wonder what other common misconceptions we as CX professionals hold. Even more importantly, what are the steps that we can take to overcome these myths in future?
With that in mind, here are four common myths to rethink in your own CX approach.
Myth 1: Loyalty is the number one priority for CX
CX professionals often emphasise the importance of customer loyalty and the role that a positive CX can play in encouraging such loyalty to the brand. These are great concepts – and when loyalty is earned it is of huge value to a business. But what do we really mean when we talk about loyalty?
Research by Forrester shows that most consumers “perceive loyalty programs as an opportunity to save money”. But ‘saving money’ isn’t loyalty.Discounting programmes aren’t loyalty programmes. In reality loyalty could refer to repeat purchase behaviours, or it could refer to intent to recommend. It all comes down to the goals of your business and what you choose to measure.
These are the types of considerations we need to account for before prioritising customer loyalty as the central goal of our CX approach. Concepts such as loyalty are only valuable if brands take the time to define these terms, hone their approach, and focus on the areas that are most important to their overarching business goals.
Myth 2: Customers need to be delighted at every interaction
‘Delighting’ customers is a notion that gets thrown around a lot in the CX world. While we obviously all want to provide our customers with positive, memorable experiences, it’s important not to get too caught up in short-term wins, rather than focusing on long-term success
Pleasing one off experiences are beneficial, but they shouldn’t take priority over consistent positive interactions with a brand. Creating this consistency and ensuring that each of your brand touchpoints is optimised will lead to far greater long-term value and customer loyalty than a one-off promotion or event.
Myth 3: CX is all about minimising customer complaints
Complaints are painful, but minimising customer complaints should not bethe core focus of a brand’s Customer Experience approach. For each complaint, there is an opportunity to demonstrate that the individual is valued by the brand.Which is why service recovery can have such a powerful, positive impact on your Customer Experience.
As long as a customer is engaged enough to complain, there is hope. It’s the customers who quietly disappear, unhappy, unengaged and unsatisfied that should terrify us.Do we want to minimise the causes of complaints? Absolutely.But the complaint itself is not the problem. As hard as it is to remember: feedback is a gift, even when it’s painful. Feedback represents hope and provides brand with the opportunity to make things right for the individual and, ultimately, right for the business in future.
Myth 4: Customers want full personalisation
While many CX practitioners see full personalisation as the Holy Grail of experience, it’s important that brands don’t burden their customers with unnecessary data collection as they strive for the perfect personalised experience.
As just one example, airline brands know a tremendous amount about each passenger. If that knowledge is spread across multiple internal systems, however, then the availability of data can make the Customer Experience worse not better.
If an airline already knows what flight a customer is taking and whether they have checked in a bag, then there is no reason to ask customers those questions again at the airport. It’s crucial to solve such integration gaps before making the passenger do the heavily lifting. Save the customer’s valuable feedback time to focus on the unknown:what the experience was and how to improve it.
Much of what we talk about in Customer Experience is based on inaccurate, but shared, misconceptions. Thankfully, CX is not static – and we can always improve how we deliver it and how we talk about it.By understanding the nuance of some of our core CX language, we can challenge basic assumptions in ways that free us up tomaximise our full potential and deliver memorable experiences that benefit both the brand and the customer in equal measure.
This might sound like a strange question in the context of financial services, but have you ever heard of Kintsugi?
No matter if not because I’m about to explain exactly what it is – and why it matters to your complaints handling team. For those who haven’t come across it before, Kintsugi is the art of repairing broken pottery. Fixing broken pots and dishes might not sound that impressive (or seem to have much bearing on complaints and Customer Experience) but the philosophy behind it is both fascinating and highly useful.
In Kintsugi (which translates as ‘golden joinery’), the broken pottery is repaired in a specific way. The pieces are held together with a special mix of lacquer and gold powder – creating a golden seam that serves not to hide the break but highlight it. The piece of pottery is not as good as new; it wears its golden scars with pride.
They are now part of its history and something to be cherished. Whatever caused the item to break has, instead of rendering it useless, helped it become more beautiful. For people used to seeing broken things as being at the end of their journey, it’s an interesting concept to get used to.
However, it’s a philosophy that I think can have a profound effect on how you approach complaint handling – and the entire Customer Experience.
The problem with product-driven CX
Delivering great CX is a challenging task for any company – especially in the complex world of financial services. There are so many different elements that need to come together to keep each customer happy. Some of them you won’t even have control over. After all, how can you account for the things going on in a person’s day that will influence how they interact with you?
Thankfully, overall, customers are incredibly happy with the products and services they receive from companies. The UK banking sector is above the all-sector average for customer satisfaction, so it must be getting something right.
The problem arrives when customers aren’t happy with the products and services they receive. Too many businesses build their CX around the core product. So, when this doesn’t suit the customer’s needs or doesn’t work out as planned, the company isn’t sure how to handle the situation. Sure, it has a complaints handling team, but when the sole focus of CX is on delivering a great product, there’s little any agent can do to add value or retain the customer.
The importance of repairing relationships and building customer trust
When businesses lose a customer, there’s a tendency to label each case as a ‘lost cause’. This is especially the case when a product or service hasn’t lived up to expectations because companies don’t want to be faced with their failures. I don’t mean this as a harsh criticism; it makes sense when an organisation’s outward-facing reputation is built on the success of its offering.
Customers want to purchase from a company they can trust to deliver the goods. However, businesses have less and less control over how their brand is perceived. When a customer has a poor experience, they’re easily able to post reviews online detailing exactly went wrong. There’s no way for companies to prevent this – other than to deliver the best possible CX.
In situations where customers are already unhappy, aftercare and complaint handling become vital. Too many customer relationships break down because there’s no effective way to resolve issues and mend the trust between consumer and company. This is where the following philosophy of Kintsugi could make all the difference – both to the retention and acquisition of your customers.
How to apply Kintsugi to complaints handling
As I’ve mentioned already, there are so many elements that go into creating great CX. You can’t deliver the perfect experience 100 percent of the time – it’s simply impossible. However, when things don’t go completely according to plan, you can pick up the pieces and mould them into something new; something stronger.
If you apply the idea of Kintsugi to your CX, you can change the way you look at the customer journey. Instead of hiding the issues customers have had with your products and services (again, you can’t), focus on mending these relationships through complaint resolution to make sure people come away with a positive experience of your overall business.
By accepting that the customer journey doesn’t always go smoothly, you can transform the perception of your CX and your brand. When people look at a Kintsugi bowl, they don’t focus on how it broke – they see a new, more beautiful object that has taken the place of the original. The same will be true of your CX if you have an effective complaints-handling operation in place to rebuild trust with customers who have had a less than positive experience up until the point they complain.
Creating an opportunity with complaints
If you can make golden repairs on your customer relationships, you can turn negative experiences into positive ones. As well as making those consumers more loyal to you, the approach means people are far more likely to become brand ambassadors – helping you attract new business. This is why complaints are an opportunity for financial services companies, rather than a source of shame.
To make the most of this opportunity, however, companies need to know that their complaints handling teams are operating as effectively and efficiently as possible. For an unhappy customer trying to resolve a complaint, the frustration of having to do something as simple as repeating their details and queries to several different agents is magnified hugely. It’s just one example of how poor complaints handling can exacerbate a negative CX and highlights the need for companies to get the basics right.
When a customer gets in touch to talk about their complaint (whether over the phone or online), they have to be given the confidence that their issue will be resolved as best as possible – regardless of who they talk to. This means making sure that every agent has access to up-to-date information on each case, allowing them to make progress, support the customer and take important steps towards improving the overall CX received.
The way you approach complaints in your company will make a huge difference to how successful you are. If you apply the ideals of Kintsugi to complaint handling, you’ll shift the whole focus of your CX – and your business will be better for it. However, having the right mindset is just one piece of the puzzle.
The UK Complaint Handling Awards has established itself as Britain’s premier showcase for customer service talent, and this year saw one of the event’s most sought-after Gold gongs go to one of the world’s most recognisable names in outsourcing and professional services – Capita.
Capita was one of the day’s big winners at the UKCHAs 2019. Can you tell us a bit about the initiatives you put forward?
Tracey: This was our first time entering the UKCHAs, and we entered with three separate initiatives in different categories.
The first was entered in the Customer Relations & Remediation category. It detailed our end-to-end approach to remediation, which encompasses the way in which we assess the size of the problem, design the treatment strategy, and build and deliver the solution, which can include tracing, customer communication, investigations, and payments. The reason we chose this initiative was because our approach has generated significant benefits for our clients and, most importantly, their end customers.
Our second initiative was entered in the Innovation in Complaint Management category and it centred around the introduction of groundbreaking technology that had not previously been used for the type of project our client wanted us to engage with. Our innovative solution mitigated the potential for a high-risk manual solution and enabled the client to save over £1m, meet their regulatory commitments, and ensure customers were remediated quickly.
Lastly, our third entry in the Best Complaint Handling Training category focussed on our fit-for-purpose PPI Training Academy, which was set up to respond to the demand for large volumes of resource from one of our key financial services clients. Our Academy is a best-in-class method of training delivery for staff which has now expanded to include the client’s own permanent staff, as well as other supplier resources and it has generated a saving of over £8m for our client.
We were delighted to win an award in all three categories entered – Gold for Customer Relations & Remediation, Silver for Innovation in Complaint Management, and Bronze for Best Complaint Handling Training – acknowledging Capita’s drive to constantly deliver better outcomes for our clients and their customers through delivery of effective, innovative complaint solutions. We hope to emulate the same success this year with some of the new initiatives that are taking place across our business.
Analytics were a key part of Capita’s initiative. How crucial is such technology in delivering first-class complaint handling and Customer Experience for firms today?
Becky: Technology is fundamental to ensuring we deliver a first class complaint handling service and Customer Experience for our clients’ customers.
To give you just one example, we have used our 20 years’ experience in delivering successful complaint handling projects to tailor one of the UK’s leading case management systems in order to support the end-to-end complaints customer journey and provide a complaint-focused analytics capability to drive continuous improvement.
The system has integrated CRM, workflow, and task management functionality as well as robust data controls and flexibility which allows us to work with each client to re-configure the system quickly and create a bespoke purpose-built solution to meet their specific needs.
All customer interactions are stored to provide a holistic view of the customer journey. This provides us with a rich source of data which we can analyse to understand customer behaviours and identify the root cause of complaints to ensure we continually improve our operations, with the ultimate goal of helping our clients to reduce their future complaint levels.
How has the awards success inspired the Capita team?
Becky: Our success was only possible due to the hard work, ingenuity, and dedication of the teams who designed, built, and delivered all three of our initiatives. Not only did these teams inspire our entries and give us initiatives which were worthy of a place at the awards, but they had a direct impact on our success.
Those behind each of the initiatives were directly involved in the production of our award entries to ensure that we included as much detail as possible and were able to tell the story from the perspective of all stakeholders – the client, our operational management team and front-line colleagues, as well as the end customers. It was key members from our delivery teams who presented our initiatives in front of the judging panel during the UKCHA finals.
Not only did this ensure the panel was hearing about the initiative first-hand from those on the front line, but it also allowed our key team members to reap the rewards of their hard work.
Inspired by this success, our teams are already considering what initiatives they want to submit for the 2020 awards!
Would you encourage other companies involved in first-class customer service and complaint handling to enter awards?
Tracey: Yes we would highly recommend that any company truly invested in delivering first-class customer service and complaint handling should enter these awards. We won’t deny it requires hard work and a lot of extra effort from people who are already focussed on delivering service to our clients, but taking part and being rewarded for our efforts greatly outweighed this.
Not only is it a chance to showcase your company’s successes and gain external recognition, we have also found that it has been a great motivator for our teams, due to the internal recognition they received as a result. From their management teams who felt their work was worthy of entering in the awards, through to the internal communications which have been spread across the wider Capita group, we are seeing more and more of our staff keen to get involved in the awards process. As a result we are hoping to have even more entries to submit in 2020.
Where, in your opinion, does the future of quality complaint handling lie? Is it solely in technology, or is it important to maintain a ‘human’ element throughout?
Becky: As mentioned previously, technology plays a major part in the future of complaint handling. Not only can it help improve the quality of operations to ensure that our clients’ customers are benefiting from fair and consistent outcomes, but recent advancements in technology such as speech analytics are also helping us to support our clients to reduce – and ultimately prevent – their complaints.
That being said, due to the emotive nature of complaints and the importance we place on the effective management of customers with vulnerability – particularly in financial services – we believe it is of the upmost importance to maintain the ‘human’ element within complaint handling operations.
At Capita we pride ourselves on having a team of experienced, skilled, and dedicated colleagues who understand the importance of using technology as an enabler to improve the experience they provide for our customers day-in, day-out.
For the full list of categories to enter in the 2020 UK Complaint Handling Awards, click here.
Nobody wants to receive a complaint about their product or service, but the reality is that we can’t please all of our customers all of the time.
The time when customer complaints were hidden is now thankfully long gone. Appearing as a judge at the UK Complaint Handling Awards, which celebrates the innovative ways organisations manage complaints, I saw this first-hand.
Receiving complaints, responding to them effectively, and most importantly, learning from them can be challenging.However, achieving this is critical to the success of any business that is focused on providing the best Customer Experience.
For every customer who complains, there are 26 other unhappy customers who remain silent (source: Lee Resource Inc.).Customers who care enough to tell you about their negative experiences are scarce, but they afford you the opportunity to turn that customer into an advocate and ultimately, retain their business.
Often, complaints are dealt with on a case-by-case basis, but it is critical to take a step back and undertake a root cause analysis, otherwise the opportunity to improve is lost.One of the most effective ways to undertake this process is to plot the journey of the complaint, thereby mapping all the touchpoints, both direct and indirect.
While a customer journey map (CJM) is a tool often used by marketeers to plot the customer engagement story, from brand awareness through to (hopefully) a long-term relationship, it is also a great resource for complaint management.
Rather than dealing with the fallout of the complaint on a case-by-case basis, the CJM process enables an organisation to review and map the complaint from beginning to end and identify the root causes. Instead of resolving the complaint from an internal point of reference and making assumptions, the CJM empowers the customer by putting them front and centre.
One of the major strengths of adopting this method is the ability to view the complete journey when putting into place processes to prevent it happening again. The visual artefact highlights potential gaps, inconsistencies, and the volume of touchpoints – all of which have the potential to contribute to the complaint in the first place.
More often than not, the solution does not sit at the complaint ‘fallout’ stage but much earlier in the journey.It may be that expectations were set incorrectly at the outset of the journey, or specific information was not provided in marketing collateral etc.By focusing on the complaint as a stand-alone issue, any process changes may have little or no impact.Only by viewing the complaint as a part of the whole journey can you be confident that changes made will have the greatest impact.
Another advantage of a CJM is the people involved in the mapping activity.Too often complaint management is focused on the team that receives that complaint – but any mapping workshop should include representatives from all parts of the business.This level of collaboration reaffirms the importance that every role plays in an organisation’s Customer Experience, whether directly or indirectly, and it also provides the perfect forum for some ‘outside the box’ brainstorming.I’ve run journey mapping workshops where the ‘lightbulb’ moments have come from unexpected sources, such as software developers, finance teams, and HR.
We know that customer loyalty is one of the key determinants of an organisation’s success.By viewing complaints as learning opportunities and actioning solutions via a customer journey map, you increase the likelihood of turning that customer (and all those that kept quiet) into an advocate.As data from the Jim Moran Institute and Lee Resources showed, 95 percent of customers will give you a second chance if you handle their complaint successfully and in a timely fashion, and that translates to an improved Customer Experience for your current and future customers.
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.”