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#CSWeek: Customers want collaboration, not compensation

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6th Oct 2015
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We’re in the midst of National Customer Service Week this week, and so the spotlight is being shone on what good service means to consumers across the globe, and especially in the UK.

The Institute of Customer Service (ICS) has released details of a new study that challenges the tide of opinion that says the UK has a “compensation culture” and that offering financial resolutions to complaints can help keep customers loyal.

More than 2,000 UK consumers were asked by the ICS about their response when products fail or service levels drop below expected standards. Just 17% stated their default position was to seek compensation. 

Instead, 35% said they voiced their grievances in an effort to let the company know what they had done wrong, while 20% just wanted to receive an apology and 20% wanted to help improve the way the organisations work.

Crucially, although 83% of organisations readily pay compensation, the research says that after experiencing a problem only 38% of consumers “will definitely use the organisation again”.  One in three also claim that it doesn’t stop them from becoming detractors, and discouraging other people from using the brand.

“British business must be careful not to fall into the trap of confusing compensation for customer service,” says Jo Causon, CEO of the Institute of Customer Service.

“Both UK plc and public services need to be aware that providing good customer service does not just mean offering a financial fix for mistakes made.  If organisations continue down this path they face the very real risk of harming their future prosperity by creating an expectation of compensation. The long term solution lies in building strong relationships with consumers and meeting their demands for speed, convenience and choice.”

Complaining may be widely regarded as a national pastime in the UK, but formal complaints to companies has historically been a lesser part of the stereotype.

However, with the advent of new channels such as social media making complaining easier, this has changed over the last few years. Data from Ombudsman Services in August revealed over 66m complaints about products and services last year – equating to a complaint every 1.2 seconds.

Such is the frequency in retail, in particular, that a new Consumer Ombudsman service has been set-up to predominantly deal with complains in the sector, alongside the other Ombudsman services that already exist in other sectors.

However, this does not mean resolving complaints will become any easier, and the ICS research suggests the only way of keeping a customer loyal after a complaint procedure is by playing “the long game”.

More than half the respondents claiming they ‘felt better’ after raising a complaint.  Respondents aged 18-44 are also more inclined to complain ‘to get things of their chest’ than consumers aged 45 or over. 

“We are now operating in a relationship economy, with elements such as social media playing a bigger role and requiring significant investment and attention,” Causon adds.

“As younger generations become consumers, they will take to social media in increasing numbers, putting the customer service capabilities of businesses in all sectors under severe strain. If businesses do not adapt to the changing environment and try to deal with complaints simply by offering compensation at every opportunity, many may struggle to maintain their current customer base.”

Join MyCustomer.com for #customerserviceweek by streaming ‘Build a Great Customer Experience’ live online, now.   

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By PaulineAshenden
12th Oct 2015 09:13

Building strong relationships does mean going beyond the compensation culture and creating a more positive experience. One way is to create customer advocates – recruiting those consumers that love your brand to act as your spokespeople to help convince others about the service you provide. 

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