By Daniel Hunter
Britain’s consumers are putting service ahead of savings and remaining loyal to their current utilities, telecoms and home entertainment providers.
However, data released by KPMG, also shows that loyalty comes at a price, with many consumers prepared to report their service providers to ‘the regulator’ if service standards drop below expectations.
According to a poll of 1,000 adults across the UK, just 27 percent of bill payers would switch supplier if they were offered cash or another financial incentive.
One fifth of those questioned (18 percent) indicated that they would rather have the flexibility to change contract terms than switch supplier, and a similar proportion (16 percent) were adamant that they ‘are not swayed by incentives.’
The survey reveals that, despite an almost constant stream of information about comparison websites or promotions that offer signing-on incentives, 41 percent of consumers have no intention of changing their suppliers during the next 12 months.
They are also less likely to change household leisure suppliers (TV or broadband) than they are living essentials (gas or electricity) and the data also indicates that customers in the North East are amongst the hardest to win over with gimmicks or incentives.
Asked why they won’t change supplier, 1 in 4 consumers claim they are happy with the service they receive. However, satisfaction levels do vary by supplier, with mobile phone providers scoring highest (29 percent have no quibble at all) and electricity suppliers lowest on the list of suppliers identified in the survey (23 percent).
“With less disposable income in their pockets it would be easy to assume that consumers can be swayed by short-term offers, cash incentives or promises of ‘savings if you stay’," David Eastwood, partner in KPMG Risk Consulting, said.
"The reality is far different, with most customers prepared to pay for a quality service, provided it remains at a high level. However, it is too big a leap to assume that consumers don’t want the hassle of changing supplier or are wary of making a complaint. The simple truth is this — trust is key to ongoing supplier-consumer relationships and if it breaks down, short-term incentives will not be enough to repair the damage.”
It seems that the water companies, electricity and gas providers, and phone and broadband suppliers are listening to consumer demands and taking steps to retain and build trust. The results show that these organisations are responding to calls to make consumer choices simpler, with just 7 percent of respondents complaining that confusing information has created a problem and only 4 percent suggesting they are bombarded with too much detail.
The survey also goes on to suggest that suppliers are taking customer complaints seriously. Just 5 percent of respondents thought that switching suppliers wouldn’t help because ‘no one takes my complaint seriously enough’.
Whilst this is good news for suppliers as a whole, there are discrepancies by sector. For example, 36 percent of respondents agree that their mobile phone provider deals with complaints ‘quickly and fairly’, but this but this figure drops to 21 percent when consumers think about their water suppliers.
In stark contrast to perceptions of the British consumer, the survey indicates that many consumers are increasingly likely to complain if problems do arise. The majority are no longer prepared to accept what they see as standard customer service and will elevate complaints to senior management (57 percent). Over one-fifth (22 percent) would approach the relevant regulator — even though many don’t immediately know who it is. Reflecting the growth of social media, 1 in 10 consumers are also prepared to share their grievance in public, using Twitter or Facebook as the starting point to raise a complaint.
“Stories of regulators fining organisations for mis-selling are regrettably becoming commonplace," Eastwood concluded.
"With household leisure suppliers clearly listening to their consumers’ demands, things may be improving and the signs are there to suggest that moves are being made in the right direction. There is still, of course, some way to go. My hope is that progress is being made out of a desire to improve customers’ experience and to work with the regulator to meet customer needs, rather than because businesses feel compelled to act through fear.”
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