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Poor service costs UK firms £37bn

News, 17 February 2017
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LONDON: More than a quarter (28%) of UK consumers chose to spend less with a company or took their business elsewhere last year after they received poor customer service, a new study has revealed.

According to Ombudsman Services, an independent body which provides dispute resolution for the largest economic sectors in the UK, that meant UK companies lost more than £37bn in 2016.

Based on a survey of almost 2,500 consumers across the UK, Ombudsman Services also found that complaints against UK firms increased by three million last year to reach 55m complaints.

Of particular note for brands, the survey revealed that almost four-in-five consumers (79%) said they would be unlikely to return to a brand if their complaint was handled badly.

According to the findings, the retail sector fared the worst, accounting for almost a quarter (24%) of complaints last year at a cost to the sector of £10.05bn.

Telecommunications (13%, £2.98bn) and energy (10%, £5.2bn) were the sectors that also received a high proportion of complaints and, following a series of industrial disputes, the transport sector (7%, £5.51bn) also witnessed a 30% rise in complaints.

Lack of trust in businesses to put things right following a complaint emerged as one of the key reasons discouraging consumers from raising their issues, the report found.

And along with long-term disillusionment, the survey revealed that around a third (34%) of consumers believed they could only get redress from a complaint if they kicked up a "big fuss," meaning the effort involved may not be worth it.

"This research shows that much more needs to be done to make the customer 'king' from a customer service point of view," said Lewis Shand Smith, Chief Ombudsman at Ombudsman Services.

"The problem is that 63% of consumers feel disillusioned and feel resigned to poor service, and no long trust businesses to do the right thing," he continued.

"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."

Data sourced from Ombudsman Services; additional content by Warc staff

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