Royal Mail struggles to reduce customer complaints post-privatisation

23 August 2018 Authored by Consultancy.uk

According to a new study, Royal Mail is enjoying mixed results after its three years of full privatisation. The sale of shares by the Government was completed in 2015, since when Royal Mail has seen a meteoric rise in denial of receipt give customers cause for concern in particular.

One of the key arguments for the privatisation of state run public services is always that the free market can make a more efficient fist of it. To that end, the UK Government completed its fire-sale of Royal Mail in October 2015, with a 13% stake being sold for £591 million. In total the sale raised £3.3 billion, however the Government was criticised for having undervalued the entity to facilitate a swift sale.

Now, three years on, the boom in online shopping over the last decade has continued to see retailers and merchants becoming heavily reliant on the postal/courier service to deliver their products, meaning the internet, which was once billed as making Royal Mail an expensive liability to the tax-payer, has seen its new private owners the beneficiaries of a considerable windfall. But what of the service itself? Did the privatisation of Royal Mail really yield improved standards of service and efficiency? According to the latest data, the jury is still out.

Analysing data provided by Royal Mail itself, British online marketplace OnBuy.com has weighed up the figures to discover the number of complaints and amount of compensation that had been paid out for different issues regarding their service in the financial year of 2017/18. Overall, from the 11 complaint categories considered within the research, Royal Mail received a total of 1,022,212 complaints from customers in 2017/18. Compensation which was paid out in 80% of these cases, with fees totalling a huge £4,272,693, suggesting Royal Mail still have work to do when considering how to reduce customer dissatisfaction.

Royal Mail struggles to reduce customer complaints post-privatisation

Lost post remains the top customer complaint for Royal Mail, with over 250,000 such notices lodged. While this represents a massive 705 ‘lost’ complaints each day, Royal Mail bosses would undoubtedly point out that this is actually a 5% decrease on last year’s numbers. At the same time, cancelling this out, ‘Other’ complaints numbered at close to 170,000, representing a 14% rise. And while the ‘General Complaint’ category saw an impressive 24% decline, it was one of the smallest segments of customer problems, compared to ‘Denial of Receipt’, which saw around 135,000 complaints, and a substantial 51% incline.

Denial of receipt cases occur when a package is supposedly delivered, with a customer or somebody claiming to represent them signing for a package delivered by Royal Mail. Rather than delivery staff simply taking more signatures as a matter of urgency, this is likely related to the boost ecommerce has provided Royal Mail, boosting the number of deliveries which actually need signing for. As a result, it begs the question why there has been such a dramatic rise in the sector of customer complaints, alongside ‘P739 Failure’, which results when a form is issued by a postal worker to a customer who is not at home to receive an item of mail, which rose 14%.

Denial of receipt complaints and P739 failure were the third and fourth highest number of complaints respectively, but only 2% of Royal Mail customers for each problem were rewarded compensation. With the paper trail apparently backing Royal Mail up, this may be because the company feels more comfortable disputing such claims, though such a dramatic rise suggests the mathematic probability that they are unlikely to all be false claims.

Cas Paton, Managing Director of OnBuy.com commented, “The boom in online shopping over the last decade has increased the dependence of businesses and consumers on postal service and courier companies. With that has come a developed expectation for them to provide a reliable and speedy delivery network. This though, is not always the case... Looking into the future, as companies seek to offer more ambitious and instantaneous shipping options such as same day delivery, they must do so only if they have the adequate resources and infrastructure. Otherwise, they face the risk of customer dissatisfaction and the occurrence of more complaints.”

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