UK firms lost £37bn in 2016 due to poor customer service

British firms lost over £37bn last year, as poor customers service saw approximately a quarter of consumers opting to spend less with a company or switch to a rival company, industry data has shown.

According to research published from Ombudsman Services, 28% of the 2,500 consumers surveyed ditched a particular brand after receiving poor customer service. Ombudsman Services, which offers independent dispute resolutions across a host of UK industries, said the number of complaints towards British firms rose by three million last year to 55 million.

The retail sector was the most-complained about industry last year, accounting for 24% of complaints, with the telecom industry and the energy sector a distant second and third, with 13% and 10% of reports respectively.

However, the rail sector recorded a huge increase in complaints, with the number of consumers reporting issues with the industry jumping 30% from the previous year to two million.

Along with the banking and transport sectors, the retail industry is more likely to lose money as it is easier for consumers to switch current account providers or shop into a different store, rather than change energy providers.

Some 79% of the respondents said they would be unlikely to shop again with a business which they felt had handled their complaint badly.

"This research shows that much more needs to be done to make the customer 'king' from a customer service point of view," said Lewis Shand Smith, chief ombudsman at Ombudsman Services.

"The problem is that 63% of consumers feel disillusioned and feel resigned to poor service, and no longer trust businesses to do the right thing."

However, the report added the research only provided a partial snapshot of the degree of dissatisfaction of UK customers, given a number of consumers are so disillusioned with customer service they do not report issues they might encounter.

"At the moment, consumers feel that complaining is often a waste of their time, because they see no change in the behaviour of big business," added Shand Smith.

"By putting consumers at the heart of what they do, businesses can prevent customers from taking their custom elsewhere, which is good for consumers and good for business."