UKGI Compliance Manual

Analysing customer feedback is one way in which firms can gauge how well they are delivering good customer outcomes. There are many ways in which firms can gather unsolicited feedback from customers relatively easily and cheaply such as:

In the course of businessThe most obvious and easy way is to log and record customer feedback that comes to you in the normal course of conducting business. This may be via complaints, frustrations, suggestions and compliments that customers actively share. It is a good idea to train customer facing staff in how to identify customer responses and feedback and set up ways in which this can be recorded, reviewed, and analysed as part of the firm’s ongoing management information review, with the findings of any analysis shared throughout the business to improve customer experience.
Website AnalyticsFirms can also use other sources of information to help build a picture of customer experience.  For example, website analytics can be very useful in terms of helping firms to understand whether customers access certain information more often or are missing important information due to the way that the website is structured or how information is presented.
Social Media InteractionFirms may also receive unsolicited feedback via social media interaction.  It is becoming more and more popular to voice opinions regarding customer experience on social media. Common channels where people go to air their views include Facebook, YouTube, Twitter, Instagram, and TikTok.  Some customers are more likely to provide feedback via social media platforms than they are over the telephone or face to face, so monitoring your own social media channels, and comments or threads about your company, products and services on other people’s platforms, helps you detect small issues before they turn into larger problems. You can also better anticipate your customers’ needs to provide them with a proactive customer experience.  Customers also expect you to be present for them on these channels, and news also travels fast on social media, so it is in the best interests of firms who engage in social media communications to manage and respond to feedback promptly.

The requirements of the Consumer Duty place a higher expectation than ever before in relation to monitoring customer outcomes, and the Consumer Understanding and Consumer Support outcomes require firms to take appropriate steps to test the effectiveness of customer communications and support channels.  Firms may therefore be considering taking a more formal, proactive approach to soliciting customer feedback via :

  • User Testing
  • Interviews and Focus Groups
  • Customer Surveys

There are benefits and drawbacks to all of the above methods.  Some of these may require a financial commitment, specific skills, software or systems enhancements, and all will require your resource and time for the exercise to be effective.

It is therefore vital that, when deciding what approach to gathering feedback a firm will take, that it fully considers:

  • What the intended purpose of the feedback is, i.e., is it for a specific purpose such as:
    • customer research, e.g., when developing a new product or service concept;
    • to inform an approval process, e.g., when launching a new product or digital app/service;
    • business insights, e.g., do you want to know why a particular product isn’t selling as well as anticipated or why one product or service is more successful than another;
    • understanding how effective the customer journey is in relation to the provision of information or support; or
    • general/regular pulse checks on customer service and support.
  • How complex its products and services are and whether there are specific customer vulnerabilities to consider in relation to what depth of testing is necessary and appropriate.

The typical characteristics of its target market and the most effective communication channel(s) to use.

User testing

This approach usually involves randomised trials which test a recipient’s responses to different variants of communication.

It is particularly useful where a firm is looking to inform a design and approval process for more complex products and services which involve significant risk of customer harm, or a service/support channel that will have a significant reach and that is aimed at customers who may have specific or significant characteristics of vulnerability. It requires specialist knowledge, resource and a large enough sample of customer participants to make sound comparisons. For this reason, firms who determine that this type of testing is necessary will usually need to use a third-party provider who specialises in running such trials and can facilitate and collate results and analysis for the firm. This means that there is a cost consideration for this type of testing and smaller firms may therefore wish to complete a cost/benefit analysis for Board approval before deciding whether this is the most effective means of gathering customer feedback for their purposes.

Interviews and focus groups

These methods can be useful when carrying out customer research at product/service design stage, to gather specific business insights. They can also be used by firms looking for in-depth feedback on how well customers understand products and services, particularly where these are more complex in nature.

Interviews allow you to gather very detailed responses, i.e., they go further than simply gaining a yes/no response to a question and are usually designed to elicit personal opinions and experiences. Focus groups represent a sample of the target market and can be a convenient way to collect thoughts and opinions from several people simultaneously.

As with all forms of gathering customer feedback, willing participants are required, and they are most successful when carried out by a person who is a trained interviewer/facilitator who can ask open and probing questions which encourage participants to expand on their responses. In such circumstances, it can be useful for the interviewer to be supported by a note taker who can record responses, and who can also identify non-verbal indicators such as long pauses or a reluctance to provide a response.

Focus groups in particular can be subject to skewed information arising from the impact of dominant personalities which can lead to false conscious/bias, polarising more extreme views that do not necessarily represent the whole of the group due to other participants feeling unable or unwilling to disagree or provide contrasting opinions. Again, having trained facilitators can help to manage this.

In some cases, a firm may be able to draw inexpensively on their own customer base to identify those who would be willing to take part in customer research activities. Thorough preparation is needed to ensure that the interview/discussion is focused on the right demographic and customer characteristics, and that the questions/topics are relevant for the purpose for which the activity is carried out. Due to the necessary skills involved and to ensure the right selection of participants, firms often choose to engage third-party specialists to facilitate this type of feedback.

Customer Surveys

Customer surveys are probably the most widely used and cost-effective means for most firms to solicit feedback from customers and, in particular, they provide a useful means of gathering feedback from customers on their customer journey and experience.

Surveys can be targeted at specific customer groups or support channels or be used to provide a more general/pulse check across a firm’s customer base. They can be conducted via a range of different communication channels, for example, firms can send out written surveys by post or e-mail, have built in feedback pages or pop-up surveys available on websites, request automated telephone or SMS text responses, or carry out verbal surveys by telephone or in face-to-face interactions.

The main drawback with customer surveys is that they are wholly dependent on the customer response rate; firms will therefore normally need to target a large number of customers in order to obtain a sample of sufficient size for analysis.

In order to elicit the right information, firms should also carefully consider the purpose of surveys and the types of questions they use. For example, if a firm wishes to gain an insight into how well a customer has understood information when purchasing a product it will need to use open questions. It is not sufficient to simply ask ‘did you understand the product?’ as this will not tell you whether the customer has understood correctly. Questions such as ‘what was the cost of the product?’ or ‘Please tell us the cover options that were offered to you’?  or ‘what was the excess on your policy?’ will enable firms to determine if the customer has correctly understood the information and options provided.

Firms can choose to design and administer surveys themselves or use third-party providers, and there are a range of online tools that can help you to design and carry out surveys. Online solutions can be relatively inexpensive (some are even free) dependent on the nature and scale of the exercise. As many firms will be considering incorporating customer surveys into their practices, we have produced a useful Customer Survey Guidance document to help you with key considerations and tips to get started.