Customer complaints hit all time high, costing UK more than £9bn in lost productivity

UK Power Networks engineer talking to a customer
  • The number of customers experiencing service issues with organisations has risen to its highest level since 2008
  • Global shortages and a UK staffing crisis have led to a 16 per cent rise in customer problems, typically over quality and reliability of goods and services
  • Complaints handling is now costing UK businesses £9.24bn every month in lost staff time

A record number of consumer problems and complaints is costing British business £9.24bn a month in staff hours, according to the Institute of Customer Service. Its Customer Satisfaction Index (UKCSI) which was released today, show 17.3% of UK customers are experiencing a product or service problem, the highest overall level since records began in 2008. 

The external environment is tough for organisations and customers alike, with global supply chain issues and local skills shortages impacting on their ability deliver a consistent customer experience.  

UK Power Networks, a power infrastructure provider, sit at the top of the customer satisfaction table. Strong communication and swift resolution of compensation payments to customers left in the dark following Storms Eunice and Franklin earlier this Spring likely contributed to its success. Customers rated it highly for trust, being open and transparent, having helpful and competent people and an easy-to-use website.  

The bi-annual survey polls 10,000 consumers across 13 industry sectors to track the effects of customer service on business performance. Despite swifter complaint handling and resolution, problems and complaints are a significant drain on productivity and will in the longer term lead to lower levels of customer satisfaction.

In the face of record labour shortages, with 1.3 million unfilled jobs , the cost of handling such complaints has risen to £9.24bn a month in staff time spent rectifying issues, according to the Institute’s calculations.

Commenting on the latest findings Jo Causon, CEO at The Institute of Customer Service said: 

”Many businesses are already struggling to deliver consistent levels of service hampered by staff shortages, supply issues and geopolitical upheaval. Organisations cannot avoid these issues. They will need to develop service strategies that are responsive to evolving customer needs but also protect short and long-term business performance.

UK business is suffering from a loss of productivity owing to the time spent resolving customer complaints and service failures. For me it's clear that a carefully calibrated focus on service is crucial to boosting performance and addressing the broader challenges of societal polarisation, inclusivity and wellbeing.”

Against an ongoing backdrop of stock and staff shortages, there has been an increase in the number of problems relating to the quality/reliability of goods and services (42.8%) and suitability of goods/services (26.4%). Despite a rise in those experiencing problems, the trend for improved complaint handling continues to improve, but there needs a shift away from ‘service recovery’ to identifying and addressing the root cause of issues.  

With the cost of living crisis high on the business agenda, the report also found evidence of a widening polarisation in expectations about affordability of excellent customer service. Over one third (35%) of customers indicated that they would be prepared to pay more to guarantee excellent service. Yet, reflecting the increased financial pressures consumers are facing, three in five (58%) customers reported that low prices will become more important in influencing their choice of organisation, product or service across all sectors in the next 2 years. 

Causon concludes: 

“There is an increased need to understand the trade-offs different customers are willing to consider in terms of price, quality, availability, sustainability and support. Organisations will need to ensure they maintain essential services and are transparent about the level of service they provide depending on the product, services and price points customers choose.”

The top 10 rated organisations in July 2022 are:

 July 2022 rank Organisation Sector July 2021 Change in score July 21 to July 22
1 UK Power Networks Utilities 101 7.9
2 Timpson Services 131 8.9
3 John Lewis Retail (Non-Food) 2 1.9
4 Tesco Mobile Telecommunications & Media 5 2.2
5= Suzuki Automotive 3 1.9
5= M&S Retail (Food) 24 3.8
7 Ocado Retail (Food) 70 6.1
8 Waitrose Retail (Food) 26 3.7
9 Apple Retail (Non-Food) 62 5.2
10 first direct Banks & Building Societies 1 -1.3

Published twice a year, the UKCSI rates customer satisfaction at a national, sector and organisational level across 13 sectors.

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