Understanding Vulnerable Customers

Vulnerable Customers can include individuals experiencing:

And then there are those who don’t realise they’re vulnerable

The many, not the few . . .

Almost every organisation will have customers who, at times, find it harder than usual to make informed decisions about the choices offered to them, due to their circumstances. This does not mean that they necessarily lack mental capacity, just that they have additional support needs. Challenging personal situations may be unexpected, short-term or long-lasting; either way, they may affect your customers' ability to interact with your business and will need to be considered so you can better support the customers' needs.

For example, a vulnerable customer may need different information, support or interaction to help them make a decision or purchase. Adjustments may need to be made across all your communications channels: from phone calls to email and snail mail, to live chats, SMS and even face-to-face encounters.

One of the biggest challenges firms face is in identifying which customers or prospects are in vulnerable circumstances and at which stage during their relationships. The FCA reported in the summer of 2022, that 40% of UK customers were still going unidentified as being in a vulnerable circumstance, until it was too late and harm had been done. If you don’t know which customers are vulnerable how do you know to offer or make a reasonable adjustment? And that’s where our consultancy and training solutions come in.

Prior to the Covid-19 pandemic it was estimated that approximately 50% of UK adults were displaying characteristics associated with a vulnerable circumstances, however, the FCA reported that the pandemic (2020-21) has had a "profound and harrowing" impact on the financial resilience of people in the UK with numbers surging 15% year on year. The effects of the pandemic are expected to be with us for a number of years. The early findings from the 2022 Financial Lives report show that the numbers are still high with 24.9 million UK adults (that’s 47% of the UK adult population) still showing signs of vulnerability in May ’22. With the current cost-of-living crisis now in full swing these numbers are not set to reduce any time soon.

Yet many firms underestimate the number of customers in vulnerable circumstances that they are serving at any one time, typically because they are struggling to recognise those customers or front-line teams are scared of making mistakes or recording the ‘wrong thing’ on a CRM so don’t record anything, leaving the customer unidentified and reasonable adjustments not made. Handling contacts with customers in vulnerable circumstances is not something to be shied away from.

It's also essential to consider the impact of the pandemic on staff, who are either working from home or working in newly socially distanced workplaces. Having the confidence to identify and interact with vulnerable customers offering them guidance on how to access support from your own services and those available externally can build not only revenues and brand advocacy, but also staff satisfaction and retention rate, lower complaints and your costs.

With a Voice of the Customer (VoC) programme in place, your ability to identify customers in vulnerable circumstances will improve and with training, coaching and support, your staff can better support your customers and staff can also be supported as they handle these challenging conversations with your customers. We can help you to achieve both - what’s not to like?!

"Vulnerable customers are not bad customers. They're just people who have fallen into a difficult situation who are facing challenges and need support."  Leonora Miles, Financial Services Policy Adviser, Macmillan Cancer Support