Bad customer service costs UK companies over £37 billion a year

More than a quarter of customers chose to take their business elsewhere or spent less with a company last year due to bad customer service at a cost of over £37 billion, according to research.

A report seen by Sky News from Ombudsmen Services, an independent body which provides dispute resolution for the UK’s largest sectors, found that 28% of people report losing “brand loyalty” after receiving bad customer service.

Almost four in five — 79% — said they would be unlikely to shop with a brand again if a complaint they submitted was treated badly.

The survey found that complaints against British firms have increased from 52 million in 2015 to 55 million in 2016.

The retail sector was the most complained about, accounting for 24% of complaints last year, followed by the telecoms industry accounting for 13% and the energy sector accounting for 10%.

However, the retail, banking, and transport sectors are the most likely to lose money as a result of bad service, as it is easier to shop with rival firms compared to the difficulty of switching a broadband or gas supplier.

Lewis Shand Smith, chief ombudsman at Ombudsman Services, told Sky News: “This research shows that much more needs to be done to make the customer ‘king’ from a customer service point of view.

“The problem is that 63% of consumers feel disillusioned and feel resigned to poor service, and no longer trust businesses to do the right thing.”

After a year characterised by numerous disruptive train strikes, the rail sector saw a dramatic 30% increase in complaints, to 2 million. However, many users do not have the option of changing suppliers so the financial impact on train services was more limited than other sectors.

“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,” said Shand Smith.

“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.”


NOW WATCH: Drone footage will make you want to book a trip to the Scottish Highlands

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.