Why you should focus on ‘vulnerable’ customers

When the UK economy went into lockdown, Peter (not his real name) knew he had to act to protect his savings. An avid fund watcher, he wasted no time in getting online and switching around his investment portfolio.

Unfortunately, Peter knew nothing about managing funds during a crisis. By the end of the week the stock market had fallen 30%, but Peter had done far worse. Ninety percent of his savings were gone.

You might not think of Peter as ‘vulnerable’. He was affluent, educated, and had access to technology. But when the situation changed, those were the very characteristics that put Peter into a high risk group.

In the wrong circumstances, any customer can be vulnerable.

That is particularly true in these volatile times. More organisations are discovering they have a problem - as evidenced by the huge spikes in demand to their customer care lines that they are experiencing.

When organisations are unaware of customers who are in vulnerable circumstances, they can easily fail in their duty of care. That’s when bad publicity can hit them from out of the blue.

In the past year, we’ve seen social media firms questioned for exposing their users to misleading information; medical companies exposed for offering customers cosmetic surgery without evaluating their mental health; and financial services companies discovering they have given their customers access to tools that can wipe out their prosperity at the press of a button.

Organisations can quickly lose reputation, customer loyalty, or attract the attention of regulators. In other words, vulnerability is a problem that every board of directors needs to address. Ignorance is no protection.

The first step in tackling this problem is to have a clear definition of vulnerability. The Financial Conduct Authority (FCA) defines a person in a vulnerable position as ‘someone who, due to their personal circumstances, is especially susceptible to detriment, particularly when a firm is not acting with appropriate levels of care’.

Helpfully, a number of regulators have identified four drivers of vulnerability:

• health (for instance, illness)
• life events (such as relationship break-up)
• resilience (including lack of a support structure)
• capability (in Peter’s case, having the wrong kind of knowledge).

This model is a useful template for anyone thinking about vulnerability

However, with so many variables, there are no simple markers. Instead, firms need to put in place proper programmes to identify where the risk is acute and which customers are slipping into vulnerable situations.

The next step is to design customer journeys with vulnerability in mind. At cxpartners, we’ve found that this improves services for everyone, and leads to better outcomes for the organisations that put these changes in place.

We sometimes call people in vulnerable circumstances ‘canaries’ because they help you spot problems early — before they grow to affect all users.

Our work (with organisations such as Samaritans, Macmillan Cancer Care, and Women’s Aid) reveals that creating services that work for people in vulnerable circumstances isn’t trivial.

Often, the obstacles are not obvious. ‘Common sense’ solutions turn out to be ineffective. And even talking to customers (who may need to describe difficult experiences) requires masterful skills.

Over the coming weeks, cxpartners will be sharing insights to help you and your colleagues think about how to support customers in vulnerable situations: 

• How do you identify, talk to, and understand people in vulnerable situations?
• How do you motivate your organisation to address this hidden challenge?
• What tools can you put in place to address vulnerability?
• Case studies and examples.

If you would like further information, or have a problem you would like to solve, contact us at hello@cxpartners.co.uk.

UPDATE: I've edited this article so that it refers to 'people in vulnerable circumstances' rather than 'vulnerable people', or at least putting the term in inverted commas. This felt more in tune with the spirit of the piece, emphasising that anyone can find themselves in a vulnerable situation.