The Importance of the Complaint Handling within the Financial Services of the United Kingdom - Coursework Example

IMPORTANCE OF COMPLAINT HANDLING WITHIN THE RETAIL FS MAKRET OF UK AND SIGNIFICANSE OF THE CONTRACT LAW and Section # of course> Thursday 7th February 2008 Introduction In this article we will deal with the importance of the complaint handling within the financial services of United Kingdom. The article in its first paragraph will first state the general importance of handling the complaint which is important in all types of market, and then few problems within the financial services of United Kingdom market are shown with different solution. In the last section of our article the importance of these complaints handling with statistical data is shown ending with significances of contract law. Importance of Complaint Handling The customer handling is an essential phenomena and the key factor that helps in organization in attracting the loyal customers. The customer handling is a tactic that helps you in increasing the retention rates of the customers. The customer loyalty with your company can enhance your sales and helps in increasing your yearly turnover. These customer complaints when handle properly inform the organization what actually the customers wants in product, their needs and what changes they further want in your product or service. The importance of these complaints, requirements and ideas from the customers are very important due to the reason that the company actually serving these people. So these complaints are actually the customer voice that meant a lot for the organization. The after sale service of a company is important because customers may feel some problems while the usage of the product and dealing with problems may help in gaining their loyalty. These customers compliant handling is not only important to the sales and marketing department of the product launching compnay but also important for the service providing companies. The purpose of this article is to deals in importance of complaint handling within the retail FS UK market. We will consider that what problems actually the customer were facing and how the problem solving enhances their service market. Some critical issues of the financial market of UK In 2003 the life insurance company which was based in financial market of UK paid the fine of 675,000 pounds due to their mortgage endowment complaints which were not handled properly by their service department. Similarly in 2004, the same Life Insurance Company paid the fine of 725,000 due to their bad handling of mortgage endowment complaints, which they were facing the last year. The only reason was that the company was unable to provide better services before and after the sale of their product and services. In 2005, High Street Bank paid the fine of 800,000 pounds due to their worst handling of customer complaints. In 2006, again the same Life Insurance Company paid the fine of 750,000. In 2007, IFA paid 330,000 of pounds as fine against worst compliant handling of their customers. These all fines which are paid by the companies mention above are the only reason of bad customer services they provide to the customers. These companies then need to take a deep look inside their customer relation services in order to know that what the root cause of the problem is. Where the main problem lies We try to search and find some issues which these companies lack and these were The financial service companies were fail to give efficient customer services as customer advisory department were failed to advise the customer the which service suit them most. The importance to the customer within the company wasn't matter when they first step in the company. The companies were unable to investigate deeply in order to know that where the company lacks or performing badly and the only reason was that they lack a sufficient communication level. The companies were unable to launch such systems and strategies that can improve the customer relations with their employee's and the reason was this that they actually don't know that where the problem was. The companies were unable to provide awareness to the customers that what they actually hold for them, simply lacking a well advertising technique. The customers are unable to know their whole procedure as they were not familiar what actually they hold services for them. Similarly, the customer was unable to know that how long the company will deal, what will be their process of providing the service, what will be their after sale services, and what actual product or service of the company will suit them better. Similarly the company was unable to provide such services like complaint handling and resolution of different problems with their customers. Their are many reasons behind this poor services and these are First of all the company was unable to handle the complaints properly. The company's staff was not trained and unable to handle customers with their complaint. These complaints were not passed to the top management due to their bad communication level. And most of all, the company has no resolution strategy that can handle and solve these customer problems. All these together causes the quitting of customers from the company and thus each year the company faces a huge fine that was paid by the company. Looking at these problems, their rise the importance of customer handling within the organization. First of all we will look that how these problems were solved and then we will see the importance of these handling by the effect they causes on the company. Training and awareness is produced in the lower level staff, those directly dealing with customers, this will provide efficient information to them that how they have to deal with the customers and how pass these problems to top management. This awareness enhances the dealing level of staff that pleases the customers. Empowerment was the first strategy that must be launched by the company which enables the bottom line staff to direct deal with the problems of these customers and handles themselves. The employees need the technique of problem solving skills and decision making power in the employee. For this, the sufficient training and presentation helps the company in order to provide these skills in the customers. The empowerment strategy not only provides motivation to your employees but also provides the satisfaction level to them. This satisfaction directly satisfies your customers and thus you can easily win their loyalty. Companies need to Invest in training and development programs which will help a lot for the company. This training and development causes an initial cost to the company but the productivity level they will produce in future not only overcome that cost but also increases the over all sales of the company at the end of the year. Remuneration with showing the best career path to the employees will be the best strategy and will make the employees loyal. If you want to enhance the quality service of your company, then remuneration packages for those employees providing quality service will directly affect the quality for the company and will enhance the overall company's operation. The salary packages and bonuses with promotion will provide job satisfaction to your employees of the company that in turn satisfied the customers. Clearly describe the process of handling the problems and complaints, and communicating them to the top management is taught to the staff. How these complaints should be handled is taught to these lower staff members. Then the strategy or system of continuous analysis should be launched by the company to know the root cause of the problems in the vertical hierarchy as in vertical hierarchy more problems are seen. Similarly the company should launch the tool for the total quality assurance, for instance benchmarking, in order to provide the continuous quality at each step. The risk and root for failure must be noted at each step. When all these precautionary measures are taken in account by the company then the company can better handle with their customers for whom they are serving for. IMPORTANCE OF COMPLAINT HANDLING WITHIN THE RETAIL FS UK MARKET The importance of these customers handling is very essential for almost all types of organizations either dealing in product manufacturing or services. But in the case of Services Company which basically serves the people need essential steps in order to capture the maximum market share. When we talk about the insurance company or banking sector then these are the regions where the companies need to show minimum level of failure. The reason is that these are the most sensitive regions, as it involves the income. Once you are trying to provide the better future and saving deposits for your customer more customer will rely on your services. This is the reason that financial service market of the UK was not in proper conditions from the last few years due to unfair banking techniques. Let now look at these importance's that can cause a great success for the company. These customer complaints handling is very important in the case of services as this may cause in gaining the customer loyalty. This customer loyalty helps in increasing the retention rate of the customers. The more the customer loyal, more they will remain with you and thus affecting your overall turnover of the company. These retention rates help the company in gaining the long term objectives of the company as the company knows that they are attracting maximum customers. When company knows that maximum of market is attracted by them then they are able to launch their other new programs as in this condition the uncertainty level is minimum. The other most important benefit that the company gains is that it help in reducing the extra cost and wastages of the company. When your employees are skilled and trained, know how they have to deal with your customers and how to solve their problems then few problems will arise and it helps in reducing different other extra costs of the organization. It is seen in the current year that the UK financial services market, after launching the better complaint handling services, the 10,000 pound extra cost was reduced to 0 pound. The better you handle your customer, making them satisfy and convenient, lower will be your extra costs that are applied when you are unable to handle these complaints. When you are going to handle these problems then you will come to know that what actually the customer wants. These complaints are the voice of the customer. Once you easily get to know these complaints then you can provide these needs, demand and wants of the customer. This is only possible by making the company communication system more enhanced. Once your bottom line employees provide you the right information, the right tactics you can adopt in order to satisfy your customer needs.. These complaints are very important as with these complaints you can predict about your company and its future. If you are getting more complaints from your customers then it is the sign that the company needs to predict their whole system, processes and each step in order to know that root cause of the problem. On the other hand if the company gains the minimum level of complaints then it shows that the customers are satisfied with your services. This is the point where the uncertainty in macro-environment is minimum and when this point is achieved then you can easily launch the new products and services for your customer in the near future. Therefore, the service company can predict easily in both conditions and can easy use many strategies in order to face the above mentions two conditions. The financial service departments must be very active as they need more advancement, more fine dealing and continuous analysis in order to remain at top in the market. The financial service sector of UK based companies start handling the complaints in better form in the year 2007 and launches different strategies in order to fulfill the demand of their customers. The result of these was that these companies increase their sales from $753 billion to $1359 billion from 2004 to 2007. Premium income of the insurance companies in UK increases to 16%, whereas the income of banking sector in UK increases to 16%, within 8 months in 2007. The total income of the banking sector increases to 7271 billion pounds, especially when the HSBC launches its services in UK. Therefore, these complaint handling is very essential for each type of company. These complaints actually inform about their customer needs and hold much information for the company. Once this is deal in proper manner then the company can achieve the stable position in the market. SIGNIFICANCE OF CONTRACT LAW Contract law is very important especially in the case of service departments, as it can easily manage the dealing within the company and its customers. These contracts are important in the banking sector and in insurance company where the very first step is the contract law. Usually this contract law holds some rules and regulations that must be adopted or obey, that help the management department to manage different issues of the company. The customers once agreed with these rules and regulation he can not violate these rules and similar is the case with the company. This contract law means the meeting of mind of different people, which simply an agreement or contract showing that both the parties are agreed on given laws and rules. The significance of these contract laws is shown in the financial service market of United Kingdom. These significant are shown as The contract law helps in managing the whole process and systems of the organization and service departments. It manages the relations within the organization and the customers and help in providing better services. The customers and organizations know that what laws they have to fulfill and what obligations they have to each other in order to fulfill these rules. These contract laws thus make a systematic system or a nice management which keeps all the work on the track. These laws help the company to know that they have to fulfill these rules and have to provide mentioned services in the contract for their customers. The contract law really helps in the services market especially in the case of United Kingdom where the financial service market was facing problems from last few years. This contract law tries to solve different conflicts and problems not among different customers and organization but also between organization and their employees. These laws are specially important in service departments like banking sector and insurance company and will helps in settling the both teams on same agreement or contract. These settlements help in maintaining the future relationship of company and its customer. The contract law in the banking sector is the key factor that keeps the customer and bank tight in a single agreement and neither of them can violate these rules. This again helps to maintain and manage the long term relations in the future. The relationship management actually emphasis on the contract law which is a simple way in order to manage different relations. The contract law is now consider to be the most important and key factor in the banking sector as it helps in removing many contradictions and helps in maintaining the long term relations and increases the retention rate of the customer. References/Bibliography Allen. P. & Wootten. G., 1998. Selling. 5th ed. Pitman Publishing Broadhurst. P., Williams. V. A. & Horsted. J., 1996. Law & Practice for Mortgage Lenders. Financial World Publishing. UK. Jobber. D., 1997. CIM Handbook of Selling & Sales Strategy. Butterworth Heinmann Payne.A.,ed.1995. Relationship Marketing for Competitive Advantage. Butterworth Heinemann. 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