Poor customer service costs UK firms billions – so why can’t they get it right?

<span>Photograph: Alamy</span>
Photograph: Alamy

Since the Covid lockdowns, many companies have scaled down customer service, extending deadlines for complaint resolution and reducing staff. Some have removed helplines, leaving customers reliant on ineffectual chatbots.

As a result, traders are taking record amounts of time to resolve issues, and taking record hits to their profits and reputation.

Poor customer service is costing UK businesses £11.4bn a month in lost productivity, according to new research, with employees averaging one day a week dealing with problems.

A “customer satisfaction index”, published last week by the UK Institute of Customer Service (ICS), found satisfaction was falling year-on-year, with nearly 17% of consumers reporting issues with a trader.

As the cost of living crisis bites, more than a third of customers are willing to pay more for a reliable service, according to the research, and companies who top the satisfaction leagues are up to 10 percentage points more profitable.

However, the Observer has recently been inundated with readers’ tales of businesses that have gone above and beyond to keep people happy.

In all cases, their reputation was burnished by how they handled a problem, rather than by an initially flawless transaction.

According to the ICS, consumer trust has become a priceless commodity during economic instability, and it need not require crippling investment to earn it. “Outstanding service comes down to attention to detail, proper training and a friendly, personalised approach,” says ICS chief executive Jo Causon. “This requires responsiveness, empathy and understanding, which isn’t just about process, but genuine engagement.”

It is estimated to cost five times more to attract new customers with marketing initiatives than to retain existing ones, and firms with higher-than-average customer service ratings earn 114% more revenue per employee, ICS figures show.

Cost-cutting, on the other hand, can be a false economy. Employees are spending, on average, nearly a quarter of their shifts dealing with problems – up from just over a third last year. Based on the average UK wage of £583 a week, this equates to £11.4bn in lost output.

Ultimately, a slew of five-star reviews are more lucrative than sales pitches. The mistake many companies make, especially larger brands, is to digitalise and streamline customer support, so staff stick to a script and systems cannot cope with problems that do not fit the mould.

Tales of excellence

Here are some of the companies that have realised that a personalised approach can turn faults into accolades.

  • I ordered a dress from fashion brand Nancy Mac. It was beautifully made but, sadly, not right on me. I emailed the company to ask its advice. It sent me two more dresses in different sizes and lengths to see if they would be more suitable. It also offered to make a dress in a preferred length at no extra cost, and the owner telephoned me to check I was happy with their garments. The returns were free. I have rarely come across such excellent and personal customer service.
    DN, London

  • I ordered 20 personalised photo calendars from VistaPrint. When they arrived, I realised I had positioned one of the photos wrongly. I rang its helpline for advice. It was answered promptly by a helpful lady who arranged a full refund, a reorder of the corrected calendars, and a speedy delivery. Brilliant service. Return orders guaranteed.
    HL, London

  • During one of the lockdowns, my wife and I purchased a Reebok stationary exercise bike. Recently, a few weeks outside the warranty, it conked out. Fearing the worst, I phoned Reebok for technical assistance and was told that the problem would, most probably, be solved by a replacement console or a new mains adaptor. To my amazement, he offered to send both out to us free of charge, and they arrived a few days later. We are now up and running, (well, cycling), once again.
    NM, Oldham, Greater Manchester

  • Twenty years ago I bought a bird feeder from Jacobi Jayne. It was guaranteed for life and I had already had the Perspex tube replaced once. Recently, a workman knocked the feeder off and broke the tube. I contacted Jacobi Jayne to buy a replacement, but the feeder was no longer in production. Despite the damage being accidental, I was offered a new model, which arrived free of charge two days later.
    IK, Newcastle

  • My wife gave me a pair of Lamy pens in 2012. Ten years of daily use resulted in bits falling off the ballpoint, and the top no longer clipping on to the fountain pen. I contacted Lamy to ask where I could get them repaired in the UK. Instead, I was asked to send the pens to Germany, and it replaced both without charge.
    DK, London

  • I broke the lid on my 30-year-old orange Le Creuset casserole, which my late father had bought for me when I left home. Le Creuset said it would send an ex-display lid. Some time later, the company informed me that it could not find a lid in the correct colour, so it would send a new casserole, worth about £300.
    SM, London

  • I contacted furniture maker Bevan Funnell for advice about a broken lock on a wardrobe which I had bought secondhand at auction. To my surprise, it sent me a set of new locks with matching keys at no charge.
    NR, Newcastle

  • I bought Smith Optics ski goggles from a shop in France. A fastening broke recently, and I contacted Smith Optics hoping to buy a replacement strap. I had paid in cash and had no receipt. I couldn’t even remember the shop’s name. Nonetheless, I was told that the goggles were sold out, but that it would send a replacement pair when the new season stocks arrived. True to their word, they duly arrived.
    NM, Billinge, Lancashire

  • Twice in the last year I’ve had to contact Shark UK about broken parts on my vacuum. Both times I’ve been sent a free replacement part with no quibble and free delivery. I think it’s great that some companies are willing to do their best for their customers.
    MC, London

  • The stitching on the shoulder strap of my favourite Lowe Alpine rucksack came away, rendering a perfectly good sack unusable. I emailed Lowe Alpine and was given a job number for Rab’s repair centre. I sent it off, and it’s come back repaired, and was posted free of charge. That rucksack holds memories, as well as kit, and I’m so pleased.
    HP, Orkney

  • I purchased a Paul Smith £85 leather bracelet in 2019. Last month, the clasp loop was becoming frayed. The retailer wasn’t interested, so I contacted Paul Smith to see if it thought the wear was normal. It replied that it looked correct given the amount of time I’d owned it, but that as I’d said I’d only worn it occasionally, it wanted to resolve the issue. It was no longer on sale, but a replacement was found and sent for free. That is what I call going the extra mile.