Not Again! Why do Customer Complaints Continue to Rise?

Customer Complaints continue to rise in the UK energy sector, British Gas alone saw a 30% rise in 2011. Common themes include incorrect billing, poor call center response and poor treatment by staff. Fundamentally mistakes in bills and meter reading are a failure a failure of business processes. On many occasions what is perceived as poor treatment by staff is in reality a staff member tied to an inflexible business process and poorly integrated business applications.

Energy companies, banks and other utilities have had a reputation for poor customer service for years. Regulators have it within their power to fine the poor performers, for example npower was recently fined £2M by Ofgem for failing to handle customer complaints and in 2011 in the British Gas were fined £2M and the Royal Bank of Scotland made subject to an enquiry both also for poor complaint handling.

Despite the power of regulators to fine the offenders the situation appears to be getting no better. Most of us are aware of the business benefits of great customer service e.g. improved customer satisfaction, lifetime value, customer retention and upsell so why is it that for utilities and banks the situation is getting worse? These are companies we trust with some of our most important personal information yet they can’t seem to get a handle on complaints. I can understand that during an economic down turn many struggling organizations choose, mistakenly, to focus on reducing customer service costs rather than investing in customer service yet many of these banks and utilities are wealthy organizations insulated from the downturn.

I’ve a theory that because utilities and banks are quasi-monopolies, sheltered from much of the economic woe effecting other industries, their size and profitability is such that they are less concerned with the negative impact of poor customer service. Things like customer churn, crucial to the survival of much smaller businesses, has little impact on utilities. If customers start to leave a short term price promotion will have them flooding back. In the case of banks, with the majority of their revenues coming from the investment side of the business, customer churn caused by poor retail customer service is unlikely to have a great impact on their bottom line.

This won’t however always be the case. For example the imminent separation of banking retail and investment arms in the UK and the resulting creation of much smaller banking entities, the impact of poor customer service and customer churn may be more keenly felt. Already organizations like First Direct in the UK are differentiating themselves based on customer service.

Even in a recession all organizations can make immediate changes to improve customer service and complaint handling without increasing costs. It costs nothing to empower your customer service staff to resolve customer complaints on the spot it just needs the will of the organization to devolving decision making from the center of the organization. Compare the cost of offering a customer an immediate refund, compensation for poor service, free broadband for a month with the cost of managing a long running complaint. Organizations like Disney, Ritz Carlton and Hampton do this already.

Business applications like case management can take employee empowerment further, extracting customer data held in multiple stores within an organization e.g. in CRM and ECM applications and presenting the customer service representative with a 360 degree view of their customer.

In summary, solutions, both tactical and technological, are available to organizations wanting to address their complaint handling problems. For utilities and banks however, at present, complaint handling doesn’t appear to be a priority.

2 thoughts on “Not Again! Why do Customer Complaints Continue to Rise?

  1. I can reply from a banking customer service perspective. There is such pressure to achieve a scorecard that includes calls per hour, that customer service reps do not have the time or dont want to take the time to analyse the situation. Personally, my calls per hour were just below average, but I thoroughly enjoyed educating the customer so that they had a better understanding of what the concern was and a strong effort was made to fix it too. This is how you can turn it around, and build a better relationship with that customer. The following is a quote that heard early in my career and I always lived by it. “If the products are the same as the other bank, it willbe customer service that will make the difference”.
    Personally, I loved getting escalated calls and unhappy customers. Why you ask, because my goal was a smile on their face before the call came to a close. If many more of us practice this, we can turn the perception from negative to positive. Our customers will be happy with their banks as a result.

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