First published on SourcingFocus.com in October 2018
Across a multitude of sectors, service providers are facing increased competition and regulatory pressures, with the aim of driving higher levels of customer satisfaction. In finance, the new open banking initiative, introduced by the UK Government, has resulted in a shift towards increased transparency, encouraging competition into a market that was previously closed to all but the largest of entrants.
Meanwhile, Energy UK announced that more than 5.5 million energy customers switched electricity supplier during 2017. Alongside this, the regulator, Ofgem, is capping the price of standard variable (SVT) and default tariffs and encouraging customers to shop around for better deals. Therefore, the key question for service providers across sectors is how to attract new customers and retain current ones in an increasingly competitive and regulated marketplace?
The place to start is around customer interaction and communication, which is key to meeting the expectations of discerning customers. However, regular service rankings and complaints data issued by regulators, including the FCA, Ofgem and Ofwat, all serve to demonstrate the scale of the challenge when it comes to customer engagement.
Providers must ensure a high standard of quality assurance when handling customer interactions in the first instance, reducing the number and complexity of complaints that often result in unnecessary costs or damage to reputation. Effective customer contact is a crucial opportunity to improve satisfaction and retention levels, while simultaneously attracting new customers who are seeking a better level of service. Often, working with an external partner to deliver these outcomes ensures an objective assessment of areas for improvement and focus.
In addition, putting effective contingency plans in place for sudden and unforeseen spikes in customer queries and complaints should be an important part of a service provider’s preparation. For instance, the surges in complaints Ofwat received as a result of the ‘Beast from the East’ and the summer heatwave, should act as a wake-up call for water firms to prepare for more extreme instances of weather and the customer interactions that will ultimately follow.
Turning to the world of retail banking, app-based challenger banks have demonstrated that customer service teams can be available immediately at customers’ fingertips, and traditional banks need to keep up with this digitised, customer-first approach. It is imperative service providers embrace technological solutions and operational improvements to better handle customer complaints, resulting in an enhanced, streamlined experience. Complaints are raw, direct interactions with customers and should be treated as valuable sources of information about business services and processes, highlighting potential trends to learn from and address.
All firms should routinely review complaint paths to analyse the causes, not just the symptoms, and identify any particular business processes that may be causing problems. It is essential to have sufficiently granular management information (MI) on the complaint caseload to be able to address systemic issues. Where there are particularly high levels of complexity in complaints – for example, challenges around vulnerable customers – it’s important to consider putting in place new processes and experienced teams to focus on effectively finding an appropriate resolution, while upskilling and training existing teams to ensure they are prepared for future issues.
In addition, the correct outsourcing partner can deliver collaborative expertise when a company needs it most. A high-quality provider should offer effective root cause analysis (RCA), which allows companies to identify problem products and services that may be driving complaints. By fixing problems internally and creating an environment in which issues are identified and rectified before they escalate, firms should be able to look beyond symptoms and see genuine improvements in business performance and for customers.
Switching providers is easy and encouraged, but service providers must cut through the noise and differentiate themselves from the competition by providing a positive customer experience, which is something increasingly sought by consumers. It is time to take stock and reassess how customers and their complaints are dealt with, treating each one as an opportunity to build brand loyalty and improve consumer retention.
Huntswood can relieve the pressure of handling large volumes of complaints and other forms of inbound customer contact and provide its clients with a wide range of services that deliver good customer outcomes and business efficiencies.