Why better complaint handling doesn’t lead to fewer complaints

Most organisations are getting better at handling complaints, but across all sectors complaint volumes continue to rise. Whilst the quality of complaint handling is improving, is enough being done to improve the underlying services that are driving those complaints in the first place?

Many organisations find themselves expanding complaint teams while the underlying demand continues to grow. It raises an uncomfortable question: are complaints being managed efficiently, but not understood deeply enough?

Regulators are increasingly using complaint data to understand whether customers are receiving good outcomes - not just whether firms are following the rules. The focus is shifting away from whether complaints are handled correctly, towards what they reveal about customer outcomes. That places complaints much closer to the centre of service strategy than many organisations are used to.

One of the first challenges is understanding what complaints are really about. The stated issue is not always the underlying cause.

A policyholder may complain about a claim decision, but the frustration often began earlier - with delays, missed expectations or uncertainty about what would happen next.

A tenant may complain about a repair, but the real problem may be the lack of visibility and ownership once the job was logged. In many services, customers do not complain because something went wrong once; they complain because progress is unclear or confidence has been lost.

Seen in that light, complaints often tell a story about how services actually work day to day. They highlight where work stalls, where communication breaks down, and where responsibility becomes blurred. They can show which parts of a journey generate repeat contact and which customers struggle most to navigate the system.

But this kind of insight does not always emerge from standard complaints reporting. High-level figures rarely explain why problems occur or why they persist.

This raises important questions about how complaint information is used inside organisations. Many firms have established root cause analysis processes, but the connection between insight and action is often less clear. Identifying a cause is one thing; making changes that prevent the issue from recurring is another. Even where changes are made, it can be difficult to demonstrate whether they have improved outcomes in practice.

And what if the root cause of the issue lies not in the processes or technology, but instead lies in the “management system” - including the ways in which people are recognised and rewarded for doing the work?

There are also questions about the way complaint information reaches senior decision-makers. Boards and executive teams typically receive regular complaint reports, but the format and level of detail vary widely. Some reports focus heavily on volumes and trends, while others attempt to link complaints to customer groups or parts of the journey. It is not always clear what kind of information is most useful for making decisions about service design or investment priorities.

For service and operations leaders, there is a further challenge. Complaint teams sit at the end of the process, dealing with issues after they have occurred. The processes and systems that generate complaints are usually owned elsewhere. Turning complaint insight into operational change depends on cooperation across functions - product teams, digital teams, operational managers and transformation programmes. That connection is often harder to establish than expected.

All of this suggests that complaints may be one of the most direct ways to understand how a service performs from the customer’s point of view. They bring together operational performance, communication, product design and customer expectations in a way few other measures do. The question is not simply how well complaints are handled. It is whether organisations are making full use of what complaints can tell them, and whether that insight is reaching the people who can change the service itself.

Want to continue the conversation? Join fellow service and operations leaders in London on 26th March for our next live event - The Strategic Value of Complaints - for practical insights on turning complaint data into fewer complaints and lower costs.