We live in a world where consumers are more empowered and knowledgeable than ever. They know their rights – and this is a good thing. They know that if they’re not getting good service, they can complain up the ranks within any business and if they don’t get any satisfaction from that they can approach regulators like the Financial Ombudsman Service or the courts.
While this may not sound like a big deal, they know they can also make their voices heard by complaining on social media sites like Facebook and Twitter. By simply adding a hashtag they can categorise that complaint and hit enter and within the blink of an eye that critique can be seen by hundreds, if not millions of people.
When it comes to poor service, businesses are often at fault. If you look at the insurance sector you need only look at the payment protection insurance (PPI) scandal and the volume of complaints received on the matter by the Financial Ombudsman.
Miss-selling of PPI has raged on for years and yet the grievances keep rolling in. By the end of 2016/2017 the Financial Ombudsman said it had received over 1.6 million complaints about mis-sold PPI.
Sometimes there are things that happen that cannot be controlled by any business owner, big or small and claims can come flooding in. Take for instance, the rise in travel insurance complaints. According to the Financial Ombudsman’s annual review (2016/2017) there has been a 41% rise in travel insurance complaints. However, some of these have been as a result of the Zika virus spreading to over 60 countries, causing concern among thousands of travelers – many of whom cancelled their travel plans and then claimed from their broker or insurer.
The blame game
Regardless of whether you or an employee at your company is at fault – when it comes to customer complaints it pays to pay attention and to address the issue. Ignoring the problem, rejecting a claim or not providing a service because you are sticking ‘to your rules’, can prove disastrous, particularly in instances where there are grey areas.
Consider, for instance, a case referred to the Financial Ombudsman, which was featured in the latest annual review:
Mrs S had become pregnant after booking a holiday in a country affected by the Zika virus. Having read official advice that pregnant women should consider avoiding this country, she and her husband contacted their GP who agreed and advised that they not go to this destination. However, when they tried to claim on their travel insurance for the cost of cancelling the trip the insurer rejected it, saying that they weren’t covered for ‘travel disruption’. Mrs S and her husband had indeed not opted for this extra cover.
However, the Financial Ombudsman pointed out that it could see by the cover the couple had that they wouldn’t be covered if they travelled against medical advice. So Mrs S wouldn’t be covered for medical issues if she did travel, but also wouldn’t be covered for cancelation of her trip if she didn’t. It was a classic ‘between a rock and a hard place situation’. The Ombud said that under these circumstances it told the insurer that it would be fair and reasonable to pay the couple’s claim.
So what can brokers and insurers learn from this experience? Even though Mrs S and her husband weren’t covered for what they were claiming, they still got paid out. Is it a case of the Ombudsman just siding with the customer? I don’t believe so. I think it all boils down to fairness. The Zika virus is not something anyone could have foreseen.
Good customer service and keeping clients is all about evaluating situations like this and doing the right thing, even if it goes against policies. In this instance, paying out the claim or fighting for it to be paid out would have prevented a lot of heartache and, ultimately, scrutiny from the regulator.
How to retain customers and improve your service
When it comes to claims and service, there’s lots of things that can go wrong. It’s also easy for customers to cancel policies and move onto the next broker or insurer willing to give them better service or a better price.
One of the greatest risks to any brokerage is losing loyal customers. This, according to some experts, is often worse that obtaining a new customer. Losing loyal customers can have an impact on your revenue, staff morale and your brand’s reputation so it should be avoided at all costs.
If you don’t have a strategy to retain your customers it will be easy for your competitor to woo them away. But in this fiercely competitive environment, how can you make sure that you retain your customers? Here are some tips to follow:
- Have a retention strategy in place and keep data up to date
You can’t afford to lose customers, and there’s good reason for this. According to one report, retention costs five times less than acquisition. So keeping your customer happy will ultimately save you money. Your client database or customer relationship management system can help manage your interactions with your current and potential clients. This is why it’s so vital to ensure that your company’s database is comprehensive and regularly maintained. Neglecting this could impact your profitability.
- Keeping up with face to face contact
In a digital world where everything is automated it’s easy to keep a client at arms length by making them fill out forms, leaving messages or sending emails. But having that face to face meeting can be a key part of your retention strategy. Customers are more likely to stay loyal to you if they know you. Many companies are either engaged with or dipping their toes with artificial intelligence and robo advice but it doesn’t always mean you have to follow the herd. That doesn’t mean you mustn’t embrace technology either. It means you should be open to communicating with your clients through multiple channels. How you talk and interact with a millennial may not be how you should deal with a Baby boomer.
- Get personal
You will never know what your customer needs if you only scratch the surface and stick to what they ask about. Get to know your customer a little better. Do they have pets? Do they have a family? Are they about to buy a home? Or do they own a car? These are some of the vital questions to ask and can help you build a better portfolio for them and ultimately cater to all their needs. This will mean that they are less likely to leave you as you would be dealing with all their needs. Remember to ask these questions on a regular basis as circumstances can and do change.
- Make use of your wider network
Has your client asked you about a product or service that you don’t offer? Why not tap into your wider business network and refer them to someone or a company that does offer this service or product. It’s important that you trust your referral.
While this may look like you are giving business away, it will actually demonstrate to your client how well connected you are. If you end up regularly sending work to your business buddy, you may be able to make money this way too by charging a referral fee. If the business buddy can’t afford a referral fee, then negotiate for him or her to send business your way when the moment presents itself.
- Deal with complaints head on
Complaints can be a business owner’s worst nightmare. However, it’s never a good idea to stick your head in the sand if a complaint arises, particularly if they are on social media or if they are confrontational.
Even if you are not in the wrong it’s important to deal with complainant. When it comes to dealing with complaints, speed is of the essence. You don’t want to give the impression that you don’t care about your customer’s needs or feelings if they believe they have been wronged.
Don’t only focus on the complaint and the negative results that come with it. See grievances as an opportunity to fix the situation and improve your services. Nobody is perfect and neither is your business. Who knows, it may even provide you with the opportunity to build a better relationship with your customer and retain them. According to one report, customers who complain and are then satisfied with a company’s response are 10% more likely to make a repeat purchase than a customer who did not complain in the first place. Surprisingly, the most loyal customers are also the most likely to complain.
Deal with the complaint as directly as possible – either face to face or over the phone if there’s some distance between you and the customer. Be prepared for confrontation and some awkwardness but see it as an opportunity to make things right. Record the conversation (obviously with the person’s permission) and make sure you keep these notes and act on them.
Ultimately, learning from your mistakes can help to prevent similar complaints. They won’t help in preventing all mistakes though. Remember what I said earlier: Nobody’s perfect!