Consumer Action Monitor 2017

by Communications Team | Feb 15, 2017

The £37 billion cost of poor service

  • More than a quarter (28%) of consumers spent less or left a brand altogether as a result of bad service
  • Number of complaints increased to 55 million in 2016 - up by three million from 2015
  • Continued poor service by brands leaves customers disillusioned

Last year more than a quarter (28%) of consumers spent less with a company or took their custom elsewhere after receiving poor service – at a cost of over £37 billion to companies1.

According to new research from Ombudsman Services, consumers made 55 million complaints in 2016, up by three million from 2015. But the way a company manages its complaints could prove costly, as four in five (79%) people said they would be unlikely to return to a brand if their issue was handled badly.

The fourth annual Consumer Action Monitor - the most-comprehensive multi-sector survey of its kind in the UK - finds that the Retail sector is responsible for the most complaints (24%), followed by Telecoms (13%) and Energy (10%). However, it is Retail, Banking and Transport sectors that are most likely to lose out, as frustrated consumers vote with their feet (see Table 1).


Table 1: Complaints made and the cost of poor service for the 10 most complained about sectors

Sector

Total complaints received (%)

Cost of poor service (£)

Retail

24%

£10.05 billion

Telecommunications

13%

£2.98 billion

Energy

10%

£5.20 billion

Transport (bus, rail and airlines)

7%

£5.51 billion

Banking and Financial Services

7%

£5.81 billion

Leisure and Tourism

5%

£1.40 billion

Tradesmen

3%

£1.61 billion

Post

2%

£0.38 billion

Parking

2%

£0.03 billion

Property Services

2%

£0.44 billion

The number of complaints received may not be a true indicator of customer satisfaction, as the research indicates there were a further 75 million issues that were ignored or swept under the rug due to apathy and long-term disillusionment with businesses. 

Of those who experienced an issue but did not complain about it, more than a quarter (28%) simply could not be bothered. Significant numbers said they do not believe companies listen to consumers (19%), which is indicative of broader dissatisfaction with the business sector as a whole, although in some sectors ongoing issues have left customers feeling as though they have to accept poor service.

Long-term, and highly publicised, problems in the rail sector have left one in five (20%) resigned to poor service. Complaints have increased by 30 per cent, from 1.56 million in 2015, to 2.04 million last year, and in this sector many consumers do not have the option of switching provider. 

Lack of trust in businesses to put things right following their complaint is one of the key factors discouraging people from raising their issues. Along with long-term disillusionment, one in three (34%) believe you can only get a result from a complaint if you kick up a big fuss, meaning the effort involved will often not be worth the reward.


Lewis Shand Smith, Chief Ombudsman at Ombudsman Services, said:
"It is great that the Government is pursuing a responsible capitalism agenda, but this research shows that much more needs to be done to make the customer 'king' from a customer service point of view. The problem is that 63 per cent of consumers feel disillusioned and feel resigned to poor service, and no longer trust businesses to do the right thing.

"At the moment, consumers feel that complaining is often a waste of their time, because they see no change in the behaviour of big business. By putting consumers at the heart of what they do, businesses can prevent customers from taking their custom elsewhere, which is good for consumers and good for business."

 

ENDS

 

1 Consumers were asked if they left or decided to spend less with a company as a result of poor service (filtered by sector). The number of people who changed their behaviour across the UK was then calculated, and multiplied by the average amount consumers would previously have spent in each sector, to give an overall total. Detailed methodology available on request.

 

Research methodology:

Ombudsman Services commissioned ICM Research to carry out a nationally representative survey of adults aged 18+. A total of 2,477 people were questioned throughout Great Britain (excl. Northern Ireland), with representative quotas for gender age, region, social grade, work status and tenure. The research was conducted between 4 and 6 January 2017.