Why financial services organisations must embrace a positive complaints culture

We are all more than familiar with much-quoted statistics that one unhappy customer will tell 10 or more people. Given the prevalence of social media as a platform for complaining, it seems that the actual figure could run into the millions in 2020.

Complaints are traditionally viewed as a costly burden on customer services teams in spite of the potential to use them as an opportunity to win hearts and minds. They’ve been seen as something which must be managed as efficiently as possible in order to free up valuable contact centre time for more lucrative cross-selling and up-selling activities. 

Modern organisations are beginning to change the way they think about complaints. They recognise that cost savings and cross-selling aren’t, necessarily, mutually exclusive. Research suggests that by the end of 2020, customer experience (CX) will overtake price and product as the primary brand differentiator for the first time. 

Despite the very best of intentions, sometimes mistakes do happen. Crucially though it’s not the mistake that influences whether a customer remains loyal or defects to a competitor, but the way in which their case is resolved. That’s the potential of complaints management as a vital lever for loyalty.

Consumers are savvy and understand their rights from a regulatory perspective as well as the customer service standards their provider promotes. When things go wrong, while some consumers may simply wish to air their frustration, many understand that the complaints process can represent a form of negotiation to get the outcome they want. 

They know they may have a right to compensation if they’ve been let down in some way. Effective resolution of the problem represents a win-win for both provider and consumer. 

Good complaint management is good for business

Financial services companies recognise that good complaints management can open up opportunities to instil loyalty, cross-sell and up-sell. Retaining existing customers is easier, cheaper and more valuable than attracting brand new ones. Increasing retention rates by just 5% can result in profit gains of up to 95%. A good complaint outcome can generate an advocate for your brand that can attract new customers.

At the same time, valuable feedback on products and services can be used to shape future offerings to optimise CX and minimise instances where customer expectations are not met. 

Strategy and culture are crucial in embracing a positive complaints culture, but adopting the necessary tools is of equal importance. Capturing every interaction, regardless of channel, not only ensures a comprehensive picture of the consumer’s history, profitability and potential value, but details all aspects of dialogue to maximise effective complaint resolution. 

Feedback can be gathered to identify trends and anomalies and used by the relevant teams to review areas which are subject to common, or frequent errors being reported. 

Complaints are inevitable. Your decision to embrace them as a rare opportunity to engage directly with your market and convert a negative experience into loyalty, positive word-of-mouth and improved strategy, or discard them as a necessary evil, is likely to influence your future position as a leader or a laggard in a world where CX is undoubtedly king. 

Martin Canwell is Account Executive at Aptean.

The views and opinions expressed in this Viewpoint article are solely those of the author(s) and do not reflect the views and opinions of Fintech Bulletin.