Businesses losing customers from bad service

The study commissioned by lifestyle company WhiteConcierge found that three out of four customers switched at least one product or service in the last two years.

More than one in five blamed bad customer service for switching to other finance, telecoms and utilities brands.

The report says car insurance, electricity and home insurance firms are the worst affected by customers switching providers as a result of poor service.

Firms are losing 20 million customers which costs them around £3.4bn.

Professor Merlin Stone of Oxford Brookes University who conducted the study, says: “Organisations have to work harder than ever to keep their best customers.

Consumers have become increasingly demanding and discerning, and with the rise of price comparison websites for example, it is now much easier to compare and switch products.”

Jonathan Breeze, managing director of WhiteConcierge, said: “Price is undoubtedly one important factor for causing people to change providers but many companies cannot compete on this at the moment.

“As our research findings show, issues surrounding customer service experiences are also key and can be addressed more readily.”

Tighter rules concerning utilities firms doorstop selling have come in to play today following an investigation by utilities watchdog Ofgem.

The rules aim to prevent cases of mis-selling, one of the reasons the sector is often criticised for providing poor customer service.

The new riles state that when customers are sold a new price plan on the doorstep, by phone or in stores, they must be given a written quote before the sale goes through.