Figures show a wide gulf between the number of customers reporting being satisfied with their utility provider and the number reported by the firms, according to regulation and complaints handling experts Huntswood.
The Complaints Outlook 2019 report comes off the back of a YouGov survey of 5,500 people from both the utilities and financial services sectors.
A total of 10 utilities firms and 1,766 utility customers were surveyed.
It found 88 per cent of utility providers believe their customers are satisfied with their complaints handling processes, compared to just 12 per cent of customers who actually reported being satisfied.
Similarly, more than half (54 per cent) of firms believe they are resolving complaints at the first point of contact, while only 12 per cent of customers claim that their complaint was resolved immediately.
When asked, 81 per cent of customers said they are currently dissatisfied with the empathy of the staff member they interacted with and a similar number (79 per cent) are dissatisfied with the knowledge of the staff member they interacted with.
This, Huntswood argues, demonstrates a “real need” for firms to engage with customers on an emotional level, beyond regulatory minimums.
Huntswood has calculated that firms could increase their long-term customer retention rates from 49 per cent to 75 per cent by delivering a faster and more effective complaints experience.
Paul Scott, chief commercial officer at Huntswood, said: “Firms are increasingly recognising the value that can be derived from the complaints journey. However, despite this, our research shows that there are discrepancies between how utilities providers believe they are dealing with complaints and the reality for customers.
“Complaints are an unavoidable part of business, so it’s critical that they are handled well and that customers feel valued. Providers should therefore be looking to create an effective complaints handling operation, underpinned by a robust strategy which focuses on providing the best possible outcomes for customers.
“Doing so can deliver enormous benefits, such as deeper relationships with existing customers and an increase in new relationships from customer advocacy.”
In its latest annual Consumer Action Monitor (CAM) report Ombudsman Services revealed it received 119,639 complaints about energy and telecommunications providers in the first half of 2019.
Of these, 30,171 energy complaints were eligible for investigation, meaning the company was unable to resolve the complaint in-house after a period of six to eight weeks or the company had issued a deadlock letter.
The report may go some way to explaining the disparity in Huntswood’s figures.
It found that many people are taking to social media, complaining to friends and family, suffering in silence or simply switching provider rather than logging an official complaint with the company.
It also suggests that a combination of disillusionment, distrust and dissatisfaction is putting consumers off the traditional complaints process.
Matthew Vickers, chief executive at Ombudsman Services, said: “As trust in business declines, most complaints are now passive – with consumers sharing their frustration with friends and family but doing little else.
“Younger generations in particular will often simply suffer in silence or switch to a different provider or supplier rather than complaining to a business.
“This is a shame, because complaining directly to the business will enable it to make improvements and raise standards for the benefit of other consumers.
“The challenge for businesses is to win the trust of consumers so they feel able and willing to come forward with a complaint when something goes wrong.
“A business that achieves this stands more chance of retaining customers and growing sustainably.”