Can the customer be king again?
Customer service seems to fall into two categories: the very good and the very bad. It's fantastic when a company goes the extra mile, but all too often our phone calls and letters go unanswered; getting money back seems near impossible; and we have to deal with staff who are either uninterested or downright rude.
Of course, we're much more likely to share our bad experiences than good ones: three times as many consumers tell their friends, family and colleagues about their bad experiences as they do their good ones, according to a Consumer Forum survey. In response to the question "does bad customer service make you go elsewhere?", an unequivocal 98.4% of respondents said yes.
So the incentive is definitely there for providers to look after us. But are they doing a good job of it?
Martha de Monclin doesn't think so. The 39-year-old owner and director of a PR agency lives with her husband and two children in Buckinghamshire. Last year she was on her way to the airport for a business trip to the US when she realised that she had forgotten to buy travel insurance.
"I called my husband and asked him to sort it out for me and send me the web links so I could access them when I arrived in the US and pay for the cover. Unfortunately, while in the US I had to go into hospital for a few weeks.
"I knew it was going to be expensive, but things were made even worse when I was told that I wasn't covered by my insurance."
When Martha got back to the UK, she contacted her travel insurer, Direct Line, and was told that travel insurance bought outside of the country was null and void and that had Martha tried to purchase it over the phone she would have been told this.
However, there was nothing on the website indicating this limitation. "If I had known, I would have gone elsewhere," she says.
Martha took her case to the Financial Ombudsman Service and won it on the grounds that the information on the website wasn't clear enough. "I definitely wouldn't use Direct Line again, and I'll tell everyone I know not to," she adds.
Is Martha's experience characteristic of a falling standard in customer service? "Within the financial industry a lot of services are driven principally by price, rates of interest and new business," says Craig Phillips, principal of Coredata business research.
Banks and other firms vie with each other to attract new customers with introductory bonus offers. Stuart Crawford-Browne, senior research manager at J.D. Power and Associates, a global marketing information services company, says this has had a negative impact on the image of financial services: "People mistrust their bank's motives, particularly when it comes to the pursuit of profit at the expense of their customers' interests."
While some firms are keen to emphasise their customer service credentials - take NatWest's recently advertised 'customer charter' - it seems we aren't always convinced. "Companies spend a great deal on marketing and advertising but customers can be quite cynical about all the promises," says Phillips.
According to Andy Hanselman, a speaker and consultant on customer care, too many businesses are failing to keep up with our expectations: "The staff don't have the right skills or the incentive to do their best; senior directors are often too far away from frontline services; and consumers increasingly expect more."
So do we have unrealistic expectations? Hanselman doesn't think so, but he does believe that the average UK consumer is now less happy to put up and shut up. "If they don't get half-decent service, they'll go elsewhere," he says.
Just as company loyalty to customers appears to be increasingly rare, today's shop-around culture also means we're more likely to leave a company we're not happy with. And as we rely on friends and family to tell us who we can trust, reputation has become more important than ever.
Our Customer Service Awards
One thing that stood out in last year's Moneywise Customer Service Awards was that consumers appreciate a company that is willing to deal with problems directly rather than pass them on.
Online bank First Direct has made customer service its USP, and this is not going unnoticed: it emerged as the overall winner of our 2010 awards.
By contrast, Santander, the biggest loser in the awards, was heavily criticised for its low level of service, with one customer warning: "Avoid it like the plague." Santander has now pledged to improve its service.
It seems 'people power' is making a difference - so if you're unhappy with a provider, register your dissatisfaction by making a complaint or simply take your custom elsewhere.
The financial services industry is beginning to recognise that customer service isn't an optional extra - according to a moneywise.co.uk poll, 66% of us take into account customer service when choosing a financial product.
New high street bank Metro Bank aims to capitalise on this mood, with longer opening hours, plenty of in-branch staff, and even lollipops - perhaps other banks will be forced to follow suit (though maybe not with the lollipops) if they want to keep our custom.
Help us find the companies with top customer service and value for money by completing our survey, and you could win £1,000 in cash.
How to complain
• It's important to know where you stand legally first. If the provider sees that you know your legal rights and can articulate them well, that's sometimes enough in itself to get a response.
• Use expert opinion or evidence where appropriate.
• Keep an event log or diary of all correspondence and the stages you go through.
• Act quickly: things will be fresher in your mind as well as the bank's.
• Send any letters by recorded delivery and make copies – never send original documents.
• Be assertive without being aggressive.
• Persevere: civil law is all about negotiation, so don't accept the first brush-off as the end of the story.
If you’ve have a complaint about a financial service product you have bought but the company you bought it from refuses to resolve your problem after eight weeks, the Ombudsman can help. The Ombudsman will investigate and resolve the matter. The Ombudsman is independent and its service is free to consumers. The Ombudsman may find in the company’s favour but consumers don’t have accept its decision and are always free to go to court instead. But if they do accept an Ombudsman’s decision, it is binding both on them and on the business.