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UK compensation culture is ‘a myth,’ new research finds

UK compensation culture is ‘a myth,’ new research finds

Institute of Customer Service

2 min read Partner content

The belief that Britain has developed a compensation culture is ‘a myth,’ according to new research by the Institute of Customer Service.

According to the data, published at the start of National Customer Service Week ( #NCSW15) just 17% of people said their default position would be to seek compensation after receiving poor treatment by a company.

Many said, however, that they would voice their grievances in an effort to let the company know what they had done wrong (35%).

Around a fifth of those just wanted to receive an apology, with the same proportion hoping it would help improve the way organisations work.

Although 83% of organisations readily pay compensation, the data suggests that after experiencing a problem only 38% of consumers said they would definitely use the organisation again after a bad experience.

One in three people also suggested that receiving compensation wouldn’t stop them from discouraging other people from using the company.

Jo Causon, CEO of the Institute of Customer Service, said: “British Business must be careful not to fall into the trap of confusing compensation for customer service. Both UK plc and public services need to be aware that providing good customer service does not just mean offering a financial fix for mistakes made.

“If organisations continue down this path they face the very real risk of harming their future prosperity by creating an expectation of compensation. The long term solution lies in building strong relationships with consumers and meeting their demands for speed, convenience and choice.”

The importance of focusing on long-term solutions, rather than a quick fix, was emphasised by more than half the respondents claiming they ‘felt better’ after raising a complaint.

The research also found that age was a contributing factor, with respondents aged 18-44 more inclined to complain ‘to get things of their chest’ than consumers aged 45 or over.

Ms Causon concluded: “We are now operating in a relationship economy, with elements such as social media playing a bigger role and requiring significant investment and attention. As younger generations become consumers, they will take to social media in increasing numbers, putting the customer service capabilities of businesses in all sectors under severe strain.

“If businesses do not adapt to the changing environment and try to deal with complaints simply by offering compensation at every opportunity, many may struggle to maintain their current customer base.”

Causon sets out why organisations should get involved in National Customer Service Week: