News and Views

The complaints landscape in 2019 and beyond

Written by: Matthew Drage, Head of External Engagement, Huntswood
Published: 3 September 2019

The large perception gap that exists between businesses and their customers when it comes to the handling of complaints is not always realised or acknowledged.

But a new report, the Complaints Outlook 2019, published by specialist resourcing and advisory firm Huntswood, provides a comprehensive view of the complaints handling landscape in the financial services and utilities industries.

Crucially, for firms in these sectors and beyond, the report highlights that it is now harder than ever to hold onto loyal customers, but the value that can be unlocked by doing so is incredibly high.

Keeping your customers loyal

In 2016, 61 per cent of people would share their complaints experience with friends or family, compared to only 43 per cent in 2019. Customers are more likely to simply walk away following a dissatisfying complaints experience, with 32 per cent avoiding using the firm in question for any further services and 40 per cent willing to stop using or close down their accounts.

The technology-powered disruption that is taking place in many industries is making it easier for people to ‘vote with their feet’, with customers able to switch providers from their phones and compare prices in the space of a few mouse-clicks.
Huntswood’s research suggests that firms can increase long-term retention rates from 49 per cent to 75 per cent by delivering a satisfying complaints experience. But what really goes into making this often-frustrating process “satisfying”?

Keys to a satisfying complaints experience

The role of the frontline complaint handler in the process is, of course, vital for ensuring that the complainant is satisfied with their complaints experience.

The vast majority of firms interviewed for the report (89 per cent) claim that their staff are well-equipped to deliver good outcomes. However, 59 per cent of customers reported they were dissatisfied with the knowledge of the staff member they interacted with, and 61 per cent with the level of empathy demonstrated throughout the process.

There is clearly a case here for extending training and development in this area. Only 47 per cent of firms report that their staff complete professional complaints-related qualifications.

Speed of resolution is, perhaps, the most important factor in complainant satisfaction. Firms take on average 33 days to resolve a complaint which has not been resolved at the first point of contact, this being entirely at odds with customer expectations. 76 per cent of financial services customers expect their complaint to be resolved immediately

If firms want to retain their existing customers, they need to start resolving complaints more quickly. The longer a complaint goes unresolved, the lower the long-term retention rate. A ‘retention cliff-edge’ effect occurs wherever a complaint remains open for over a week, with complaints open for more than one month usually resulting in retention rates falling below 50 per cent five years post-complaint.

Complaints in the 2020s

Despite the positive steps already taken by firms, the report provides an argument for continued investment in the complaints function. This will be needed to meet the changing expectations of consumers and overcome the challenges of an environment in which switching providers often proves easier than raising a complaint – a trend which will only continue in the coming decade. Find out more by downloading Huntswood’s Complaints Outlook 2019 report here.