Private and public sector organisations in Britain are failing to keep pace with their customers' complaints, at a time when the volume of complaints and sense of urgency are rising sharply.
The finding from the National Complaints Culture Survey (NCCS), published by organisational development company TMI and the Institute of Customer Service, are important for employers because successful handling of complaints are a key element in building employer brand, employee engagement and morale and reducing stress.
The retail and leisure sectors were seen as the best at complaints handling, with consumers naming the John Lewis Group, Tesco, Marks and Spencer and independent hotels among the top companies.
The weaker sectors were government, communications and utilities, with BT, NTL/Telewest, local councils and British Gas being most frequently mentioned for poor handling of complaints.
More than 60 per cent of customers were now willing to complain most of the time; a 10 per cent increase in five years.
Fifty-two per cent of customers believed UK organisations were getting worse at handling complaints, compared with 42 per cent five years ago.
Only five per cent said their complaint was resolved at the first point of contact.
Customers' main frustration was responsiveness, or lack of it.
Complaining by e-mail had shot up to 40 per cent in 2006 from seven per cent in 2001.
A total of 94 per cent of people making complaints by email wanted their complaints handled within one week, but only 49 per cent saw this in reality.
Sixty-one per cent said they expected a telephone complaint to be resolved on the same day, compared to fifty-one per cent in 2001.
Between 85 and 90 per cent expected a written complaint to be acknowledged within a week, though the preference to complain by letter has fallen from 30 to 14 per cent.
Clive Hicks, senior consultant and report author at TMI, said: "Five years of data show there is a yawning gap between customers' expectations and organisations' actual performance."
David Parsons, ICS chief executive, added: "Today's customers are more demanding than five years ago and simply won't tolerate their complaints being mismanaged. In fact, 89 per cent who have a bad service experience tell others.
"Organisations are blind to the opportunities a healthy complaints culture presents. People who complain more are also likely to pay more for exceptional service. Sixty-eight per cent of customers will pay up to 20 per cent more.
"Complaints can be positive for businesses that learn from them and adapt. The main issues arising from this survey are a lack of responsiveness to complaints and a failure to equip customer-facing staff with the means to resolve them," he concluded.
"Trust is built through being easy to do business with and more open and honest communication, particularly when it comes to complaints management," added Hicks.
"There is clear evidence that employees empowered to fix complaints are more positive on a range of measures including building trust with customers. Trust in an organisation will reflect success in matching customer expectations," he added.
The results rated more than a quarter of organisations as being in crisis and 30 per cent in danger in terms of a misalignment of customer and employee views of the organisation.
Hicks said: "The widening gulf between customer expectations and organisations' actual performance suggests directors and leaders of organisations are ignoring customers' views, despite 93 per cent of them believing their complaints culture affects the reputation of their organisation.
"Directors and their organisations participated in this survey as they recognised the need to improve service delivery, wanted to understand the combination of employee and customer perspectives, benchmark their organisations against others and discover best practice. This gives us hope that lessons are hitting home and being learned," he added.
Recommendations for improvement were made in five areas: taking responsibility for complaints management, listening to the customer viewpoint, leading an agenda for change, equipping and deploying enough resource and having an implementation plan.