Both commercial and public sector organisations are failing to keep pace with customer complaints at a time when the volume of complaints and their urgency are rising sharply, according to the UK 'National Complaints Culture Survey' by 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.
The retail and leisure sectors were seen as being the best at complaint handling, with consumers specifically naming the John Lewis Group, Tesco, Marks and Spencer and independent hotels among the top performers.
The weakest sectors were found to be government, communications and utilities, with major telecoms providers, local councils, and a major gas utility being the most frequently mentioned for their poor handling of complaints.
Fifty-two percent of customers believe that UK organisations are getting worse at handling complaints, compared to 42% five years before. Only 5% said their complaint was resolved at the first point of contact.
Customers' main frustration is responsiveness. Complaining by e-mail rose to 40% in 2006 from 7% in 2001. Almost all people making complaints by email want their complaints handled within one week (94%) but only 49% reported this actually happening.
More than half (61%) said they expect a telephone complaint to be resolved on the same day, compared to 51% in 2001. Between 85% and 90% expect a written complaint to be acknowledged within one week, although the preference to complain by letter has fallen from 30% to 14% since 2001.
According to Clive Hicks, senior consultant and report author at TMI, "Five years of data show there is a significant 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, added: "Today's customers are more demanding than five years ago, and simply won't tolerate their complaints being mismanaged. In fact, 89% who have a bad service experience tell others."
Blind to opportunities
The survey also found that organisations are blind to the opportunities a healthy "complaints culture" presents. People who complain more are also likely to pay more for exceptional service, with 68% of customers reporting that they would pay up to 20% more.
Complaints can be positive for organisations that can learn from them and adapt accordingly. The main issues arising from the survey are a lack of responsiveness to complaints and a failure to equip customer-facing staff with the means to resolve them.
Listen then act
TMI and ICS say that "listen then act" was a recurring phrase heard 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," noted Hicks.
There is much evidence that employees empowered to fix complaints are more positive on a whole range of measures, including building trust with customers.
The survey rated 26% of organisations as being "in crisis" and 30% "in danger" in terms of a misalignment of customer and employee views of the organisation.
According to Hicks, "The widening gulf between customer expectations and organisations actual performance suggests directors and leaders of organisations are ignoring customers views, despite 93% of them believing their complaints culture affects the reputation of their organisation."
The survey findings have subsequently 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.