Is automation the future in compensating customers when services fail?

Rebecca Crook, CGO
03 April 2019

This week five UK broadband and landline providers announced that they will automatically compensate customers when their services don’t work. This includes delayed repairs, missed engineer appointments and not switching on services on the date specified.

Ofcom, the industry regulator has said there are 7.2million cases every year where broadband or landline customers suffer these sorts of inconveniences. I’m surprised that there are not more when you look at the Ofcom reports:

Customer satisfaction: Broadband

Customer satisfaction table

Customer satisfaction: Landline

Customer Satisfaction Survey: Landline

Customer satisfaction: Mobile

Customer satisfaction: Mobile

Although we do like to moan about our bad experiences with companies, most customers do not formally complain. And of those who do, only about one in seven customers receive something monetary for their inconvenience. I suspect by the time you’ve had the run-around chasing on the missed appointment or service outage, you are so drained that the prospect of having to phone the call centre and have to barter to get a few pounds back isn’t all that appealing, so many customers don’t waste their time.

This new voluntary automatic compensation code of practice is a good thing on two levels. Firstly, it recognises the customer pain of having to complain in the first instance. But with this new scheme, the provider will compensate for their poor service and errors without the customer having to do anything. Secondly and arguably more importantly, the new rules will hopefully provide an incentive for providers to actually deliver through on what they sell and promise to customers. This should avoid problems occurring in the first place. However, the jury will be out for me whether this does improve service levels. I dream of a utopia world where every service-led company actually delights customers, ending the need for complaints and dissatisfaction.

It’s not a huge amount of money for customers under the terms of the agreement. For example, if an engineer does not arrive on time or cancels within 24 hours, the compensation will be £25, if a service stops working and isn’t fully fixed a customer will receive £8 a day in compensation, and for new services not being switched on, on the due date there is a £5 a day compensation.

Looking at this across the market with an average of 7.2million problems, taking an average of a compensation level payment of £20 per customer that’s a £144,000,000 from the bottom line from these companies.

Some providers have opted in straight away (BT, Sky, TalkTalk, Virgin Media and Zen), Hyperoptic and Vodafone will join the scheme later this year with EE joining in 2020.