When it comes to the pensions industry, there’s a disconnect in customer service that needs to be solved. I believe many pension providers are falling short.
The pensions industry, despite being, at its heart a customer-centred business model, sometimes gets a bad rap from its client base. Constantly under the microscope for its practices and in the news for funds being under scrutiny, customer services are sometimes given less attention than they perhaps need to be.
This is true across all financial services but was recently highlighted in particular by the PPF (Pensions Protection Fund) as being particularly neglected within the pensions sector.
The PPF’s Chief Executive, Oliver Morley recently told Pensions Expert: “The financial services industry as a whole isn’t, I’d say, on the cutting edge of customer service, and the pensions industry is less so.”
A former head of customer experience at Thomson Reuters and most recently chief executive of the Driver and Vehicle Licensing Agency, Mr Morley says he would like to use his “outsider” status to improve standards across the industry.
But how will this be achievable? Within pensions, one issue that has been highlighted and should be of real concern is record keeping. If customer records or CRM systems are not accurate, then this will no doubt stymie any efforts to improve matters.
Investing in technology is one thing the PPF is advising, but unless firms are guided as to which areas they must seek out to improve, many will either not invest or will invest in products or services that will not serve them or their customers right.
Customer service can often be boiled down to how a customer perceives a company’s communication, be that through traditional means or via online methods.
For example, according to Hubspot Research, 90% of customers rate an "immediate" response as important or very important when they have a customer service question. 60% of customers define "immediate" as 10 minutes or less. While this might seem like a tight response time for many companies, many are making availabilty and transparency with their customers a priority.
After all, the old adage of customers sharing bad service more than they share the news of good service still stands and in these days of switching services frequently. If services are seen as bad, or not responsive enough, customers will inevitably vote with their feet. In the same way that you are able to switch your bank account or energy provider, the list of service providers you are able to change at a moment’s notice is only likely to increase over time.
How to mitigate this? Think of the customer journey at present. If you are stuck in endless call centre queues, automated phone option trees and ultimately, aren’t able to find out what you need to quickly, you are bound to be frustrated. Even worse, reaching the end of some options and being told to go online. If a customer has chosen to call, it is possibly their last resort and being told to double back on themselves can seem insulting.
There are several ways to combat customer apathy and frustration, here are a few:
● Be there for every preference. According to Hubspot Research, 62% of customers want to communicate with companies via email for customer service. 48% want to use the phone, 42% live chat, and 36% "Contact Us" forms. This means that simply having a great phone system is no longer enough. If a customer uses email primarily because they are time poor, for example, then the fact your phone system is great could mean nothing.
● Focus more on the customer journey: Businesses can grow revenues between 4% and 8% above their market when they prioritise better customer service experiences. This is especially true when pensions providers offer additional services, the chance to upsell obviously increases if they have had a positive experience.
● A maintained approach: Investing in new customers is between 5 and 25 times more expensive than retaining existing ones. This is even more pertinent to pensions providers, often a pension is something people only ever choose the once, making sure a customer stays with you and is retained is more important than ever with increased competition.
By Jamie Brown