Britain is a nation of complainers but is anybody listening?
We should be!
We Brits are famed for many things. According to our cousins across the pond, we are all; snaggle-toothed; tea drinking; crumpet eating serial complainers. Yip, they’ve definitely got us on the last one!
In a nation so uptight that we have an ombudsman or regulator for just about every industry, we still feel compelled to write letters of dismay about how poor our experience has been or post about our disappointment on social media. Whatever the company, big or small, we don’t discriminate. We’ll complain no matter what the business.
Complaints handling is big business; consumer complaints have to be answered properly, resolved then appropriately actioned so that it doesn’t happen again. Now, this may sound simple enough, but when you’re a sprawling organisation it can be challenging getting the correct message to the customer in an efficient effective manner. Do you remember playing Chinese whispers at school? Now multiply that by 100 for a large scale organisation. To communicate from head office down to customer service assistant level systems need to be in place to avoid a simple complaint recurring! I do feel sorry for the big organisations; I know first-hand the challenge of changing culture in a smaller business. It can still be… challenging to say the least.
Complaints vs profit
I’m rambling on but as I mentioned complaints are everywhere, especially in larger businesses. Naturally one would assume that consumer complaints would have a detrimental effect on profit and turnover; add to the mix the well-known stat that individuals are 10x more likely to share a negative story than a positive one, and we are convinced this is the case. However, it isn’t always as clear-cut. For example, the UK’s most complained about train operator, Go Ahead, has been rated the worst for value and the most difficult to get a seat on. Despite this negative feedback, their half year profits went up by 17% to £52.1 million with share prices jumping up by 10%. I recognise that this may not the best example as there isn’t often much challenge regionally between train operators.
The airline industry is another sector bucking the trend; despite receiving a high volume of complaints, they still manage to return staggering profits. In America, USA today, reported that the airline industry had a bumper year yielding $25.6 Billion in profits. They have managed to do this while official complaints have risen from 15,539 in 2014 to 20,174 in 2015. If you go on Twitter and check out any of the American airlines, you’ll notice a lot of informal complaints during any given day. (Reading through them can also provide you with many hours of entertainment – I highly recommend it.) Those involved in creating the legislation for the American airline industry have made comment that although there has been a 30% increase in complaints within a year, when you compare this to the number of people who travel, this number is relatively low. 2 million Americans jump into a flying tin can every day, as a percentage I work this out to be 0.00277, but then again I wasn’t great at maths in school.
Getting the balance right
I always like to provide a bit of a balance in anything I write, and the British utilities industry is relatively easy picking for complaints stories, facts and figures. Our own Scottish Power has suffered a fair bit of bad press over the past 12 months. Our local (yet Spanish owned) power and gas provider has seen a 25% fall in profits in the renewables division. There has also been a 3% fall in overall profits which are down to £174m for the last financial year, still not to be sniffed at. This fall is not a shock, considering the £18m fine (£15m of which was given to customers) they received from utilities regulator OFGEM due to poor customer service and a rise in customer complaints. The challenges facing Scottish Power where linked to an IT changeover. In the rumour mill, I heard it was linked to switching to a world leading CRM…no matter what the reason, you can definitely see a direct link between complaints and decreasing financials. In my humble opinion, this is because you can buy your power and gas from anybody. With an abundance of new and agile providers springing up across the UK, like Spark energy and PFP energy, more consumers are moving away from the big 6.
Another one of the big 6 has fallen foul over the past year. N Power which owned by German-based RWE saw profits plummet by 60% in 2015. This is because N Power’s complaints have increased in droves, while their customer base has dwindled losing close to 300,000 customers in 2015 alone. This is because customers were receiving inconsistent bills, duplicate bills, or sometimes no bills at all. (They actually sent my grandpa a bill for 5 years of electricity use, yet he has never actually been a customer!) OFGEM has now stepped in and hit N Power with a decree that has undoubtedly rocked their business; anyone who has an outstanding issue that’s not resolved within 28 days is entitled to receive free gas and power until their issue is resolved; it’s expected that some complaints will not be fully resolved until the end of 2016. Another fine example of complaints bringing down profits.
Now, not every utility provider is the devil incarnate. Not all providers want to overcharge you or surprise you with a bill when they fancy it. Severn water has had a fantastic year in 2015. They saw their pre-tax profit rise to £281m which is a year on year increase of 2,6%, while turnover remained static. In the same year, Trent Severn also saw complaints reduce by 35%. In the same year, the company made a major investment in infrastructure and efficiency projects. This is a fine example of a big company taking on board customer feedback, resolving issues and avoiding complaints.
Complaints handling in Britain – ok so we complain a lot, so what?
Right, you may be asking why am I so concerned with talking about complaints? Well, I believe that taking customer complaints on board and finding a real resolution to them can actually help you retain your customers by building on customer loyalty. We all love being treated as an individual; we like to feel like our complaints really matter. It’s not the first time I’ve phoned up to complain and cancel my mobile contract and come off the phone tied into another 24 months with a new upgrade. Why is this? Simple, because I am a sucker for someone who actually listens and wants to help resolve my issue. Listening to customers is so important, sometimes it can be the lifeblood of a business. It can help set your business up to perform better in the future by avoiding making repeatable mistakes.
We’ve got some great examples of clients who do the above fantastically, like Dunnes stores. They use our software as part of their complaint handling process. They take complaints so seriously that the partners in this multi-million profit making department store are part of this process and it is one of the reasons this business is currently undergoing phenomenal growth.
If you feel like you can make improvements to your complaints handling process, why not check out our top tips?