Posted: 3rd December 2019

A short time ago, we shared the first of our complaints questions and answers, hoping to cover some of the burning questions from the September launch event of the Complaints Outlook 2019.

Discussing the definition of ‘complaints excellence’, appropriate measures for gauging customer satisfaction and staff performance, and even the big questions of ‘compliance vs satisfaction’, our experts hope to cover some of the areas not directly explored within the Complaints Outlook itself.

And so, without further ado, let’s continue clearing up some of the mysteries around complaints.

“Is it more cost-effective to just “agree” with customers and provide refunds, even if there is no business error, to ensure a first point of contact (FPOC) closure?”

FPOC resolution is certainly one of the most effective ways to ensure customers have a good complaints experience, but it is not the only way. 

A lot of the time, customers may understand that their complaint is complicated enough to warrant longer investigation times. We’ve found that, sometimes, people even feel less valued if their issue is simply taken at face value and resolved immediately. Making customers feel that they are ‘just a number’ in a long queue of other complainants is not a good look for any business.

However, there is definitely an argument for automating responses depending on the risk appetite set out at the project outset. Your business may find it costs more to hire complaint handlers over a long period than simply pay out to all impacted customers. By undertaking detailed scoping exercises early on, aiming to understand the estimated number of customers impacted by an issue and the average cost of a refund, your firm will be able to properly plan spend.

In mass remediation projects, such as PPI complaints for example, your business may find it cheaper to take customers’ for their word than perform lengthy and expensive investigations. The travel sector, with its delay refund programmes, is another sector in which automatic refunding is effective.

In the end, planning and detailed scoping is needed whenever a large-scale issue emerges. Sure, FPOC resolution is important, but so is the commercial viability of your operation.

“What does a customer consider to be FPOC resolution? Is it the first person they speak to or is this linked to time-frame for complaint resolution?”

FPOC resolution is a definition that changes from business to business – ranging from the first call to the first 24 hours (and even further in some cases). However, customers have a pretty clear definition of FPOC in their heads. To them, FPOC means immediately. Literally, at the ‘first point of contact.’

This is one of the main drivers of the ‘perception gap’ that we describe in the Complaints Outlook 2019. Only 18% of customers would say that their complaint was resolved immediately. However, 49% of the firms we talked to as part of our research said they were achieving it. There’s a big disconnect there.

One could easily agree with customers and say that the only time you really achieve FPOC resolution is when an issue is actually resolved at the first point of contact – that is, the first person spoken to, or the first form filled out. However, we know that things are often more complicated than that.

Though it is not exactly a dictionary definition, we would say that resolution within the same day as the complaint was made would represent an ‘immediate’ resolution. Naturally, this isn’t always possible, though firms should always be seeking to make resolution times as short as possible. Certainly, they should be keeping resolution times in line with regulatory expectations.

We think that, even if FPOC is not achieved, businesses should ensure that complainants are kept up to date with the process, as we discuss later.

“Are we at risk of not fully understanding a customer complaint if we focus solely on improving our resolution times?”

There is always a danger in chasing arbitrary numbers over delivering good experiences. Complaint handlers aren’t robots, after all, and people expect the staff they talk to be empathetic to their situation and do their best to understand the root cause of an issue.

Our very own Kate Woollard recently published an article to Huntswood Insight on this very idea. Sometimes we can become so caught up in trying to meet key performance indicators (whether they are things like resolution time, call time, customers serviced per day, etc.) that we sacrifice the ‘humanity’ of our interactions.

So, yes, in short, there is definitely a risk of failing to understand customers if you are chasing quick resolution times. This is another reason why the definition of FPOC is so important to consider. Good customer outcomes cannot be sacrificed simply for efficiency’s sake.

“If complaints can’t be addressed at FPOC, what is your view on the frequency of proactive updates we should give our customers?”

As we touched upon earlier, it’s actually not all that common to be able to resolve issues at FPOC. While many customers do understand that complicated complaints may take a while to resolve, the pressure is still on – 75% of customers expect their complaint to be resolved immediately.

Customers also expect that they will be kept up to date with developments in their case, and regularly at that! Generally, people don’t want to have to chase companies, going to the trouble of waiting in call queues and remembering the details they’ve previously been given.

According to the Complaints Outlook, 62% of financial services customers had to chase their company to receive updates on their complaint, and only 24% were satisfied with how often they were being kept up to date.

To give you an idea of how often these firms are providing updates, 9% of customers reported receiving updates daily, 15% weekly and 15% monthly. 52% of these updates were by letter and 35% by phone.

We would say that, depending on the complexity of the case, that customers should be kept up to date either daily or every few days via immediate channels such as SMS or email. If the case is particularly complex, it might be worth giving the complainant a call once a week to explain to them why the issue is taking a while to resolve, and reassure them personally that your business is doing all it can to fix things.

Interestingly enough, we are still seeing firms reluctant to use app-based or digital methods to update customers. Only 25% of updates in financial services were made via email, and only 3% by a mobile app. While not every firm will have access to a widely-used mobile app, the benefits of being able to keep customers up-to-date through the same channel they conduct their business provides plenty of user experience and time-saving efficiencies.

“How do you differentiate between customer dissatisfaction and an official complaint?”

Most differences between “dissatisfaction” and “official complaint” relate to how firms define materiality.

Provided firms have sufficient controls in place to mitigate risk of customer detriment then it is not necessary to log every expression of dissatisfaction as a complaint. We would note that an overly broad complaints definition carries the risk that a greater number of expressions of dissatisfaction or customer concerns will be recorded as complaints. This creates operational pressure and could potentially lead to an over-reporting of complaints to the FCA. Worst of all, customers might be put through a complaints process that was largely unnecessary given the issues they were raising.

This has always been a tricky issue to work around and we are aware that different firms take different approaches, especially in relation to ‘materiality’ – depending in part on the firm’s risk appetite, business model and product set. Unfortunately, there really is no ‘one size fits all approach’.

Expert guidance is just a call away …

We hope that we’ve covered some of your questions in these last few blog posts, but we completely understand that we can’t cover absolutely every topic in the space of a few thousand words!

Luckily enough, our complaints experts are always happy to share their thoughts on their field of specialisation. You’re more than welcome to reach out to one of them with your questions, and they’ll do their best to give you a clear answer and guidance.

don’t forget to download the Complaints Outlook 2019 for a detailed exploration of the current state of the complaints landscape. The report covers all of the topics discussed in this article in much greater detail and with the weight of in-depth customer and firm research. It should be the ‘go-to’ handbook with you on every step towards ‘complaints excellence’.

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