An approach to customer complaints management, created in partnership with Boxwood

1. *
A program of FS transformation around
customer complaints management

2. *Complaint management is an
increasingly important moment of truth
The quality of complaint management is both a threat to, and opportunity for, the organisation.
Risk Culture
Customer Financial
Major swing point for customer loyalty Retain customers vs cost of acquisition
Reduce customer attrition Address issues at first point of contact to
Valuable feedback & improvement reduce cost and effort
opportunities Continuous improvement driving out costs
Drive positive & avoid negative Social Media Reduce redress costs & fines
Excellent
Complaints
Management
Organisation
Operational
Motivated employees deliver better customer
satisfaction reducing the causes of complaints Root-cause analysis drives continuous
or handling them better at first point of improvement
contact End to end Process designed for customer not
Quality L&D for all customer facing staff on regulator avoiding backlogs
complaints enables complaints to be a Customer centric KPIs reduce regulatory risk
positive touch point

3. *More ways to register dissatisfaction,
while customer expectations increase
Expectations around customer service and experience are increasing as customers find new, more public
ways to communicate their needs and issues to organisations

4. *Greater scrutiny by the ombudsman –
no wish to top the league tables
As results and rankings are more widely reported and become a subject of interest to more customers,
firms are competing to not be top of complaints league tables.

5. *BUT issues dealt with successful can
drive greater advocacy
…as the person in question shares detail regarding the resolved issue with their social graph.

6. *
*A mindset change is required
on the part of FS organisations

7. *From cost reduction and speed of
resolution…
..to embracing and generating new value by successfully addressing customer issues
Remedy % Wanted to get % What they got
1. Explanation of why problem occurred 73% 18%
2. Product / service fixed 72% 27%
3. Thank you for my business 71% 25%
4. Assurance problem wouldn’t recur 70% 16%
5. Apology 59% 25%
6. Chance to vent 59% 47%
Top six wants of complaining customers (information sourced by Boxwood)

8. *
*How we create this new way
of working

9. *A program of transformation around
customer complaints management
Executive
Sponsorship
•Core to customer &
business strategy
•Exec balanced
scorecard
Operating Model •Continuous Customer Culture
reinforcement
•Designed for early •Customer outcome
resolution (high not risk focused
FPOC) •Proactive CX
•Easy to use systems •Always listening,
& MI improving &
•Drives teamwork communicating
Excellent
Root Cause Complaints
Analysis Management Employee Culture
•Accurate customer & •Empowered &
complaint info trusted
capture •Engaged &
•Robust analysis supported
•Findings welcomed & •Trained & confident
actioned
Measurement &
Management
Targets
Information
•Outcome driven at
•Lead & lag indicators all levels
•Single customer •Drives end to end
reporting integrating trust & teamwork
all feedback,
research and MI •Delivers compliance
as a by-product

10. *Root cause analysis that incorporates
new real-time data sources
Root cause analysis will incorporate new real-time data sources capturing customer issues at source, as
they happen

11. *Operating model changes issues the
underlying organisational
resolve
Before Complaint During Complaint After Complaint (escalation) Related On-going Activity
Information about any Customer and colleague
Customers know how to All information is
history / activity related Confident and effective are updated on progress Feedback is given to (Potentially) increased
access the bank and can recorded accurately into Complaint is turned in to
to the complaint is interchange between through calls, emails text customer and colleagues complaints volumes are
do so via channel of their a single system accessible a business opportunity
recorded and accessible bank / customer etc in line with regarding their issues recorded
choice by all staff
by colleagues preferences
Core customer Colleagues understand We have a clear
Root causes of Customers understand Colleagues receive a We deliver a consistent
Outcomes
information is accessible the complaints handling Service and experience is understanding of root
complaints are gradually next steps, timeframes warm hand-off when experience to
by colleagues to simplify process and escalate consistent post hand-off causes underlying
eliminated / mitigated and available options complaint is escalated commercial customers
verification process where required complaints
Ideal customer solution is The customer is happy Customers feel positive
understood and with the redress given Customer feedback is
Higher complaints about the overall
appropriate redress given and the process was The complaint is resolved welcomed, shared and
volumes are recorded experience and the
where relevant quick and easy acted on
relationship is enhanced
The customer’s
complaint is fully
understood and a mutual
understanding is reached
Analysis is done on survey Ownership of the Back office colleagues
Colleagues record all Flexible options are Customer understanding
data to predict potential Colleagues record all complaint is taken as work to deliver the right Opportunities to improve
customer information on available and are offered is updated, shared and
complaints and address customer information on complaint moves through result for the customer – are flagged and feedback
a single easy to use to the client to resolve used to develop and offer
these before they a central system the system / is handed “what I do is for the end given
Activity & Behaviour
system the complaint solutions
become an issue off customer”
Everyone supports
Colleagues take Colleagues are Diagnostic drop down Tools and information are
Colleagues record all updating customer
ownership for customer empowered to provide tool to help colleagues available and consistently
complaints and systems information to ensure an
issues and complaints appropriate redress at deal effectively with used to deliver quality
are simplified up date single customer
right across the bank first touch complaints
view
Colleagues express
empathy towards Action is taken to Each best practice outcome relies on a number activities and behaviours being
customer and ask what immediate impact
the best outcome would relating to the complaint consistently delivered which in turn relies on a larger number of beliefs and behaviour
be for them
drivers being in place and reinforced by management.
This can all be best summarised by the level of customer and employee centric culture
Time is invested to gather
all relevant information that exists in a firm
We trust colleagues to The bank is aligned to
Customer service and We all trust the Front line are We have an aligned set of
make the correct deliver the promises We are all part of a
Time spent on recording experience is a driver in complaints handling continuously developed KPIs that foster team
judgment at first touch made to customers in line learning environment
complaints is valued the complaints handling process and we use it and always improving working and trust in line
Drivers & Beliefs
and offer the right with the minimum
process correctly with customer needs
resolution standard
Proper initial diagnosis of
Customer feedback is a the complaint is The bank is aligned to
valuable predictor of We have a feedback Drivers of internal conflict
Customer relationships important to deal deliver any promise made Team working is valued
future causes of culture in Commercial are continuously
are rewarded effectively with the by the bank to resolve and rewarded
complaints and can be and bank wide removed
complaint and for future the complaint
proactively managed RCA
A customer-centric We resist the urge to
Capacity is created to
Customer complaints are approach to complaints We all know who to call We all trust each other police colleagues and
enable colleagues to
an important indicator of handling will delight our for help and know they and treat each other with empower them to deliver
build lasting customer
customer satisfaction customers and meet FSA will help me respect appropriate customer
relationships
requirements solutions

12. *Creation of a customer-centric culture –
when, where and how the customer wants
Processes around listening, responding and engaging with customers will be on their terms, where they
are and in the ways that they find most appropriate

13. *Management of customer data -
knowledge and insight in a single view
Customer data will be managed in such a way as to provide customer knowledge and insight in a single
view, creating a much more informed and personal relationship

14. *Measurement frameworks and targets that
reward key value drivers for the organisation
Measurement frameworks and targets will reward key value drivers for the organisation – stronger
customer relationships, resolution of underlying service issues and better products
Firm name Number of Number of Complaints Closed
complaints complaints closed within complaints
opened closed 8 weeks (%) upheld by
firm (%)
Barclays Bank Plc 146,316 155,257 96 52
Santander UK Plc 138,225 118,658 96 49
National Westminster Bank Plc 93,893 88,049 96 66
HSBC Bank Plc 65,441 73,333 94 35
Bank of Scotland plc 55,316 61,389 94 52
Lloyds TSB Bank Plc 51,586 64,508 95 59
MBNA Europe Bank Limited 37,292 39,530 95 42
The Royal Bank of Scotland Plc 35,361 33,327 96 56
Capital One (Europe) plc 21,117 18,969 99 4
Santander Cards UK Limited 18,161 18,314 98 27
Nationwide Building Society 17,892 18,269 99 47
Bank of Ireland (UK) Plc 11,250 11,044 91 43
Vanquis Bank Limited 10,918 11,250 99 35
Tesco Personal Finance PLC 10,226 10,240 95 63
The Co-operative Bank Plc 9,827 9,557 98 48
Marks & Spencer Financial Services Plc 8,369 8,188 99 29
Shop Direct Finance Company Limited 6,161 7,082 92 17
Clydesdale Bank Plc 5,311 5,118 86 36
Clydesdale Financial Services Limited 4,707 3,941 95 29
Ulster Bank Ltd 3,851 3,488 97 37
R. Raphael & Sons Plc 3,784 3,320 99 6

15. *
*Benefits

16. *Positive shift in customer lifetime
value and brand reputation
Financial Services have an opportunity to improve in terms of customer satisfaction & trust
Source: UK Customer Satisfaction Index results January 2012
Source: UK Customer Satisfaction Index results January 2012

17. *Customers advocating the organisation
due to these positive experiences
Excellence in complaints handling drives advocacy and direct bottom line impact - even “Good”
complaints handling has a negative impact on advocacy and results in lost revenue
Cause to complain? Contacted Bank? How was it handled?
Excellent complaint handling
NPS 23%
Had problem or complaint last 12 Total Customers ~1%
Contacted Bank about
months complaint
NPS -28% NPS -29%
Very Good complaint handling
Total Customers 8% Total Customers 4%
All customers NPS 0%
Total Customers ~1%
NPS 10%
No problem or complaint in last Didn’t contact Bank about
Total Customers 100% 12 months complaint
Good complaint handling
NPS 14% NPS -27%
Total Customers Total Customers
92% 3% NPS -27%
Total Customers ~1%
Fair or poor complaint
handling
NPS -49%
Source: Bain Analysis (Financial Services)
Total Customers
~2%

18. *Greater operational and NPD savings
from addressing root causes
The cost of complaint handling in FS is higher than many other industries, in part due to the proportion
of complex complaints but also as a result of the slow resolution times
£140
Telecommunications
£120
Public services Finance - banks and
(national) building societies
£100
Utilities
Per 100 customers
Cost of complaints
£80
Public services
(local)
£60 Finance - Retail – non-food
insurance
Retail – food
£40 Transport Automotive
Leisure Tourism
£20
£0
70 72 74 76 78 80 82 84
CSI
Source: UK Customer Satisfaction Index – Cost of Complaints

19. *Fewer recurring complaints as organisation
swiftly addresses root cause
This example showing an issue that still has to be dealt with, after three years
2009
2012

20. *An opportunity to improve employee
performance and job satisfaction
…by using customer-facing staff in the solution design and delivery
“Across industries and job types, we found that
“In a sweeping meta-analysis of 225 academic
people who fit our description of ‘thriving’
studies, Sonja Lyubomirsky, Laura King, and Ed
demonstrated 16% better overall performance (as
Diener found that happy employees have, on
reported by their managers) and 125% less burnout
average, 31% higher productivity; their sales are
(self--reported) than their peers.
37% higher; their creativity is three times higher.
They were 32% more committed to the organization
My research shows that employees who score the
and 46% more satisfied with their jobs. They also
highest on providing social support are 40% more
missed much less work and reported significantly
likely to receive a promotion in the following year,
fewer doctor visits, which meant health care savings
report significantly higher job satisfaction, and
and less lost time for the company.”
feel 10 times more engaged by their jobs than
people who score in the lowest quartile.”
Source: Positive Intelligence by Shawn Achor
Source: Creating Sustainable Performance by
Gretchen Spreitzer and Christine Porath

21. *
*Next steps

22. *Key questions to ask
 What drives our complaints management – cost, risk, operational KPIs, customer
feedback and experience, customer attrition?
 Are our complaints handling in line with our customer vision? What is our vision for
complaints?
 How much do we invest in complaints handling training with the front-line and back
office?
 How motivated are our complaints handling teams? Do we have some of our best
people support our complaints?
 How often does the Exec team listen to complaint calls or contact upset customers?
 Do we believe being in the middle of the pack for FSA reporting on complaints is good
for business?
 Are we confident that we get to the root cause of our complaints and our always
address the reasons?
 What is our current attrition rate and is there a link with any of our complainants?
 When did we last have a robust complaint file review. What did it tell us?
 Are we consistently delivering TCF Outcomes 1, 5 & 6?

23. *