£36 billion – the cost of poor service

Ombudsman Services has just issue a press release that highlights the findings of their fourth annual Consumer Action Report.  It has calculated that the total cost to UK operators of poor service is £36 billion.  The main points are:

  • More than a quarter (28%) of consumers spent less or left a brand altogether as a result of bad service
  • Number of complaints increased to 55 million in 2016 – up by three million from 2015
  • Continued poor service by brands leaves customers disillusioned.

The sector which receives the most complaints is retail, with 24% of the total.  The ombudsman calculates this results in over £10 billion of lost sales.

As we explain in our book (page 229), operators may be reluctant to shift from simple quality inspection, to the more sophisticated assurance approach because “the value of of lost repeat business and customer dissatisfaction is not easy to assess”.  Studies like this now make it clear just how high such quality costs might be.

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This entry was posted in Chap 09 Quality, Sector: Energy & Utilities, Sector: Financial Services, Sector: Hospitality & Tourism, Sector: Retail. Bookmark the permalink.

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