By: 15 August 2023
First4Lawyers: FCA’s Consumer Duty is something we could all learn from

Delivering good customer service should be a top priority for every business and even more so now for those, such as insurers, that are regulated by the Financial Conduct Authority (FCA) following the introduction of its new Consumer Duty, writes Andy Cullwick, head of marketing at First4Lawyers.

The Duty aims to improve outcomes for consumers by ensuring that firms offer products and services that meet their needs, offer value for money, communicate in a way they can understand and give them the support they need.  

It also aims to eradicate bad behaviour such as hidden charges and fees, or products that are easy to take out but a headache to cancel.  

Firms will need to evidence what they are doing to comply with the Duty, which could include regular testing, monitoring, analysis and evaluation of customer outcomes. They will be expected to identify where they are falling short and the changes they have made to address the problem. 

The Duty, which took effect for open products and services from 31 July, only applies to financial services of course, but the principles are sound and should act as a useful checklist for any firm serving the public.  

Products and services 

The FCA hopes to tackle harm that occurs where products or services have been poorly designed or marketed at customers they were not designed for. 

It’s not rocket science that a poorly designed product is unlikely to have any longevity, but the takeaway here is the importance of identifying your target market – i.e. those most likely to buy your products or services – so as not to waste marketing resource. 

Firms should use more than just gut instinct but carry out proper research about what their typical customer looks like. As well as market research, this could include data analysis, looking at those who already use existing products or services or your social media following.  

Price and value 

Value for money is about far more than just price. As the FCA states: “It does not mean firms are expected only to offer products and services at a low price. Products or services that cost more for customers may well provide value if that reflects their quality and benefits.” 

While price comparison websites are prolific in the insurance industry, this view will chime with many working in the legal industry who believe such sites represent a ‘race to the bottom.’ Most law firms do not object to the consumer demand for transparent pricing, and the Solicitors Regulation Authority now requires firms to publish certain costs information, but firms want it to be in context of the levels of service, experience and expertise involved.   

Consumer understanding 

The FCA wants firms to support consumers to make informed decisions by communicating, whether verbally, visually or in writing, in a way they will understand.  

Shouldn’t we all be doing that anyway? At First4Lawyers, we routinely listen back to calls and ask for feedback at different stages of the customer journey to ensure we are providing the best possible service.  

This is also a good principle to apply to the content firms put out into the public domain on their websites or on socials. Quality content pays dividends. Google, in an algorithm update released late last year, said its search engine would prioritise original content that answered users’ questions and added value.  

Consumer support 

Most of us will have experienced trying to end a mobile phone contract, gym membership or similar, which is typically far trickier than taking it out. The FCA hopes to stamp out these so-called ‘sludge practices,’ such as longer waiting times and exit charges, by demanding higher levels of consumer support. 

Firms can track this by monitoring customer feedback and examining data on, for example, call waiting and response times. Savvy businesses should already be doing this anyway – it stands to reason that customers who have a positive experience are more likely to return, recommend the firm and leave good reviews. 

 

One of the most difficult parts of the Duty for firms will be evidencing their efforts to comply should the FCA come knocking, but data is likely to play an important part in that and harnessing the power of data should be a priority for us all.  

It can be intimidating for those without an analytics background, but compiling data derived from your existing customers on a simple spreadsheet is a good place to start. I promise the insights it gives will be invaluable to your marketing strategy and future success.  

Image: First4Lawyers 
Josie Miller
Josie is an editor for Claims Media. She welcomes feedback, comments, and opinion at josie.miller@barkerbrooks.co.uk