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Organisations fail to keep pace with complaints

12th May 2006
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Commercial and public sector organisations are failing to keep pace with their customers’ complaints, at a time when the volume of complaints and sense of urgency are rising sharply.

These are the findings of the National Complaints Culture Survey (NCCS), released today by organisational development company TMI and the Institute of Customer Service (ICS).

ICS and TMI say that regulators are out of touch with customer expectations on complaint resolution, and that a quarter of organisations are at crisis point in the divergence between their views of complaints handling and customers’ views.

Retail and leisure sectors are seen as the best at complaints handling, with consumers naming the John Lewis Group, Tesco, Marks and Spencer and independent hotels among the top companies.

The weaker sectors are government, communications and utilities, with BT, NTL/Telewest, local councils and British Gas being most frequently mentioned for poor handling of complaints.

Over 60 per cent of customers are now willing to complain most of the time; a ten per cent increase in five years. Fifty-two per cent of customers believe UK organisations are getting worse at handling complaints, compared to 42 per cent five years ago. Only five per cent say their complaint is resolved at the first point of contact.

Customers’ main frustration is responsiveness. Complaining by e-mail has shot up to 40 per cent in 2006 from seven per cent in 2001. Ninety-four per cent of people making complaints by email want their complaints handled within one week, but only 49 per cent see this in reality.

Sixty-one per cent say they expect a telephone complaint to be resolved on the same day, compared to fifty-one per cent in 2001. Between 85 and 90 per cent expect a written complaint to be acknowledged within a week, though the preference to complain by letter has fallen from 30 to 14 per cent.

Clive Hicks, senior consultant and report author at TMI, says: “Five years of data show there is a yawning gap between customers’ expectations and organisations’ actual performance.

“Regulators’ guidelines in particular are out of touch by saying it is acceptable to take 28 days or longer to respond to a complaint. This is not keeping pace with what is important to the customer.”

David Parsons, ICS chief executive, said: “Today’s customers are more demanding than five years ago and simply won’t tolerate their complaints being mismanaged. In fact, 89 per cent who have a bad service experience tell others.

“Organisations are blind to the opportunities a healthy complaints culture presents. People who complain more are also likely to pay more for exceptional service. Sixty-eight per cent of customers will pay up to 20 per cent more.

“Complaints can be positive for businesses that learn from them and adapt. The main issues arising from this survey are a lack of responsiveness to complaints and a failure to equip customer-facing staff with the means to resolve them.”

TMI and ICS say that ‘listen – then act’ is a recurring phrase from customers in the survey. “Trust is built through being easy to do business with and more open and honest communication, particularly when it comes to complaints management,” said Hicks.

“There is clear evidence that employees empowered to fix complaints are more positive on a range of measures including building trust with customers. Trust in an organisation will reflect success in matching customer expectations,” he added.

The results rate 26 per cent of organisations as being in crisis and 30 per cent in danger in terms of a misalignment of customer and employee views of the organisation.

Hicks said: “The widening gulf between customer expectations and organisations’ actual performance suggests directors and leaders of organisations are ignoring customers’ views, despite 93 per cent of them believing their complaints culture affects the reputation of their organisation.

“Directors and their organisations participated in this survey as they recognised the need to improve service delivery, wanted to understand the combination of employee and customer perspectives, benchmark their organisations against others and discover best practice. This gives us hope that lessons are hitting home and being learned,” said Hicks.

The survey findings have helped TMI to develop a model that organisations can use to benchmark the difference between customers’ and employees’ views. The results can then be used to chart where changes need to be made.

Recommendations for improvement are made in five areas: taking responsibility for complaints management, listening to the customer viewpoint, leading an agenda for change, equipping and deploying enough resource and having an implementation plan.

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