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Are your customers happy?

21st February 2019

Are your customers happy?

We talk a lot about how best to treat our customers fairly and ensure we meet their reasonable needs and expectations. However, it is very tempting to design products and services that meet our own expectations of what we think our customers need. 

There has been plenty of research into the cost of acquiring new customers, versus the cost of renewing an existing customer.  The figures are always clear, showing it is substantially (at least 5x) more expensive to get a new customer than it is to keep one. 

It therefore makes commercial sense to keep your existing customers happy. So why limit your thinking to their reasonable needs and expectations? I believe it is worth understanding what would delight them and consider whether it is practical and cost effective to do this. 

Whether you work for an insurer, coverholder, broker or are providing a service for one of these parties (eg claims handling) you have your part to play in helping your company provide a service that delights your customers.  

I am going to look at the 3 different areas when you have the opportunity to listen to your customers.

1: Design

Perhaps you are going to sell or service a new product.

Perhaps you are going to sell an existing product to a new group of customers.

Perhaps you are going to change a service provider.

Whichever circumstance applies, your starting point is the design. 

For example - you already sell a travel policy and decide to target gap year travelers, the following could be considered:

Communication: This groups likes direct messaging and on-line notifications/updates. They expect speedy responses. Are you set up to provide this?

Understanding: This group may not have bought insurance before so the policy documents need to explain phrases that may be obvious to older people, such as explaining the excess. In addition, you need to think about how this group absorbs information - is this taken into account in the way you design your information documents (I suggest some testing with this age group would be very helpful).

Cost: This group has less disposable income and so may buy based on cost and without a proper consideration of their needs.  Thus, they could buy cover with exclusions or high excesses without proper consideration of how this would affect a claim. So your information needs to be really clear about what is and is not covered. I would suggest some exclusions should not be there - such as a drinking exclusion on a travel policy targeted on this age group (yes I have seen insurers try that!).

Disclosure: The Ombudsman sees a number of complaints about motor fronting, where applicants are not entirely open about the main driver of their car, to get cheaper insurance. The need for full material disclosure needs to be very clearly explained (it does for all categories of customer but for young people extra care is needed).

There are three ways you could find out what this group expects and what would really delight them:

1: A good starting point is to put yourself in the shoes of your customer. 

What do you want as a customer and what is different between you and the target group? 

How do you think their needs could differ from your existing customers?

2: Research may seem old fashioned but there is so much information available on the internet. 

What are people complaining about in social media?

Competitors complaint data.

Ombudsman data.

3: Why not ask a group of target customers? Asking the right questions and really getting to grips with what matters to this group of customers can be a huge help in creating a product that delights them.

Undertake a survey or run a focus group.

Test elements (such as documents) by asking a group what they understand

2: Monitoring

It is crucial to monitor whether customers are satisfied with service. Any company that focuses solely on attracting new customers and does not look after its existing customers, will have expensive overheads and could find it difficult to retain good staff. 

The following are key activities in monitoring customer satisfaction:

  • Customer satisfaction surveys
  • Examining:
    • Renewal rates
    • Rejected claims (including those subsequently settled)
    • Complaints data

When I agree a consumer product I create a complaints pyramid - this sets out the expected number of policy, claims, complaints, complaint outcomes, escalation and support rates. I work out what the entire structure of this pyramid will look like and what could affect the numbers. In creating this I will look at the performance of competitors. This forms a benchmark and, after time, shows trends - helping you measure complaints and outcomes and to easily see if something outside what has expected, has happened. 

I have seen many clients want to agree a consumer product with a zero tolerance for complaints - please don't do this without a proper assessment. Zero complains can mean it is difficult for customers to complain, or staff are incentivised not to report complaints - either would concern me as it means customers are struggling to get to your complaints process and share their concerns. 

3: Root cause analysis

For me the most important (and interesting) way to understand whether your customers re happy and what you need to do to improve their experience, is by root cause analysis of your complaints.

Your customers are telling you what they want - why not listen to them?

Many companies undertake root cause analysis by assessing the figures and looking at where something outside the trend has happened - this is a good starting point, as it provides you with an idea of where to dig down a bit more, but has two drawbacks:

Firstly, high level figures don't tell you the story of what the customer actually wants or what has gone wrong.

Secondly, it relies on a high number of complaints about an issue. What if there have only been a few complaints about an issue? Many people do not bother to complain - they either grumble or vote with their feet. It is important to hear what every customer is telling you.  

Collecting & recording 

The starting point is the way in which staff who speak to the customer collect information about the complaint. They need to have a way to record both the trigger point and the resolution.

The activity being complained about may not be the key trigger. Someone may complain about delay when what has really annoyed them is the fact your contractor did not clear up after completing the repair. Both aspects of the complaint need to be considered but you must bear in mind that when something triggers a complaint, it is common for the complainant to use the opportunity to list every aspect of the experience that was not perfect. This affects your judgement as you may then feel they are being unreasonable. It can be difficult to see what the real issue is. Maybe, you should also listen to all those little niggles too?

In my experience, front line staff who speak to the customers, are key to getting this right. They need to listen to the customer and get a good understanding of what they are upset about. There is a danger staff can be judgmental at this stage - if a customer is being rude to you this can affect your view of how reasonable they are being. At this stage, it is important to listen and not think about whether the customer is being (in your view) reasonable or not.

For example, where a customer complains about a delay to respond to a letter, the staff member could perceive the response time expected by the customer is unreasonable, especially if the query has been responded to within service standards. Maybe you should re-examine whether the service standard is appropriate?

Most good complaints software will allow for there to be a record made of the issue (eg delay in responding to letter) and also the action needed (eg re-assess service standard). I always like to see a free format field allowing for additional (non judgement) comment about what the customer has said needs change. There should also be a way to learn from the outcome of any escalation (eg to the Ombudsman).

When the complaint is closed, there should be a second pair of eyes review across the customer feedback/comments. 


There are several ways to analyse the data:

  • Examine where something unusual has happened, such as an increase in complaint numbers for a specific product, area or category.
  • Examine whether there is need for specific action, such as review service standard, training or review of policy wording.

I know this may require some time to look for this, but as someone who has done it I believe it is the most important reason for having a complaints team and hugely satisfying for the team to know they are able to make a difference for all customers. 

You need to ensure you also review the outcome of any escalation (eg to the Ombudsman) - if you were not supported think about why this was and whether it means your team needs to change its stance, possibly even look back at closed complaints.

Don't be driven too much by whether the complaint has been upheld. Even if the complaint investigator rejected the complaint there is still plenty to be learnt from that precious feedback.

As a complaints manager I considered this work to be vital to the value of my team and also to the team members feeling they were doing a job that mattered and could improve the customer experience and thus the companies profitability. You will find your complaints team wants to do the right thing for the customer and can provide valuable advice when your company is designing a new product or service (or reviewing an existing one). 


When this information has been assessed it must be discussed at a senior level. Your senior staff should have a good understanding of what has been learnt and be willing and interested to participate in discussions challenging the status quo and making difficult decisions that benefit the customer experience.

Should you still be writing this business? 

Do you need to undertake more training?

Do you need more resources?

Do you need to change the product or service?

You should also look at whether the issues identified have affected a wider group of customers that those who have complained. It should not just be those who should loudest who are compensated when things go wrong.

5 questions

One useful and simple technique for both assessing and discussing the root cause or a complaint is the 5 whys. Essentially you keep asking why until you get to the root cause. It is commonly used in manufacturing but really helpful when looking at complaints as often the issue being complained about is a symptom, rather than a cause.

You must firstly define the problem. It could be from the customers' perspective, such as "why do customers expect a speedier response to emails than they do letters?" or from the perspective of the process itself, such as "why are we taking too long to respond to emails?"

Then gather the people who will be discussing the issue - it's best if this is people involved with the process and so with practical knowledge of how it works.

Ask your initial clear question - then ask why 4 more times. Don't analyse the responses too much until you have finished.

For example: 

WHY did the claims team fail to contact the claimant to confirm settlement of the claim until more than 2 weeks after the loss adjuster's visit? Because, the loss adjuster's report had not been seen by the claims handler?

WHY? Because the report had not yet been added to the claims file.

WHY? Because the email with the report attachment was in the claims team inbox and had not yet been reviewed or actioned?

WHY? Because the claims teams emails were reviewed in date order by the team administrator who had not yet got to this email.

WHY? Because the administrator had been off sick and no-one had dealt with emails while s/he was off.

So it is clear that when an administrator is not in, someone else must review and allocate emails. I would also be tempted to review the entire process as it sounds too key person dependent. Technology is constantly changing and maybe there is a better way for team emails to be allocated.  

The 5 whys is not perfect and I would not use this for very complex issues (as it can lead you to pursue a single track) but it's a great way to move you from the symptom or a judgemental assessment. 

For example

A company receives a batch of complaints about the response times to emails. Customers were sending emails and hearing nothing for days - their email had just gone into a black hole and they didn't even know if it had been received. The complaints were initially being rejected on the grounds the claims team was responding within the timelines in the service standard (so the complaint handlers were initially recording the root cause as being unreasonable customer expectation). 

However, the service standard had been written many years earlier and was based on expectations for letters received in the post, it did not take account of emails where people expect at least an acknowledgement or safe receipt almost instantly. It is therefore necessary to update the service standard to reflect the reasonable customer expectations and change the process so there is an instant automatic email acknowledgement issued and emails are read the same day with a fuller response/acknowledgement being issued within 24 hours - it might not be a full response but the customer needs to hear from a human being to confirm the position and when they can expect a full response. This change will also significantly reduce telephone calls (chasing for responses to emails!) and complaints.

Hopefully, you can now see why I am so passionate about root cause analysis. It changes the role of the complaints team from listening to angry people all day to helping unhappy people and improving the experience for all your customers. 

Author: Sally Pearce (Conduct Matters Ltd)

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