HOW TO SIMPLIFY T&CS IN A COMPLEX WORLD

SMALL PRINT

BIGIMPACT

CONTENTSWHY BOTHER WITH T&CS? 4

THE CHALLENGE AHEAD 5

OUR FINDINGS: A SUMMARY 6

INDUSTRY INSIGHTS 8

A NEW ERA OF T&CS 13

BENEFITS TO BUSINESS 14

CONTACT US 16

THAT DON’T READ THE T&CS ARE PUT OFF WHEN THEY ARE TOO LONG ”

“70%

No one reads terms and conditions (T&Cs), right? So how can businesses use them to communicate important, often regulatory, information about their products and services to customers?

Going one step further, how can T&Cs be used to better engage and build trust in their brand?

At Communisis, we’re focused on helping our clients to communicate more effectively with their customers. And we have long suspected that T&Cs are a valuable opportunity to reinforce brand values and build advocacy. So, we asked customers and businesses for their thoughts.

In two separate surveys we asked a total of 2,300 British adults how useful they find T&Cs, how they made them feel about brands and what would encourage them to read the ‘small print’.

Four major institutions also told us about how they see T&Cs evolving in the coming years, including opportunities for innovation.

Both industry and government have recognised the role T&Cs play in treating customers fairly.

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INFORMATION ON CUSTOMERS’ TERMS

OF THOSE SURVEYED SAID THEY READ THE T&CS SOMETIMES OR MORE OFTEN”

“44%

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WHY BOTHER WITH T&Cs? WHY ARE CUSTOMERS IGNORING T&Cs?Our study confirmed that customers are not reading information which, at best, can help them make the most of their product or service or, at worst, render it void.

We reached out to a group of people from all backgrounds so we could better understand:

How often they read T&Cs

What prevents them from reading the information

And what might encourage them to make time for their T&Cs in future

We also spoke to businesses about how they are seeking to find the balance between customer-friendly and regulatory compliance.

And the results were wide-ranging:

44% of people read T&Cs, sometimes or more often

42% that don’t always read T&Cs said it was because they didn’t have time to

29% of people said they’d blame the brand if they miss information immersed in a long and complex set of T&Cs

27% of people who don’t always read T&Cs said complexity of a product or service influences their decision to read

Paper is still by far the most popular way to receive T&Cs, even in this digital age

Customers assume T&Cs will be too complex and too long to read.

A BAD REPUTATION

PRODUCTS, AND THEIR T&CS, VARY IN COMPLEXITY BETWEEN SECTORS.This is reflected in customer expectations for whether T&C wording will be complicated, or not.

Our research showed that the three industries judged by customers to use the most complex T&Cs are (in order):

Insurance

Banking

Mobile phone networks

Just over one quarter (27%) of people who don’t always read T&Cs said the complexity of a product or service they are buying influences their decision to read the T&Cs.

The most common reason given – the documents are simply too long.

So how much content is absolutely necessary?

A 2016 survey by Which? showed that the length of some T&Cs has increased over the past three years, possibly because:

T&Cs are not reviewed when extra terms are added

Products are becoming increasingly complex

Increased regulation means businesses feel they are obligated to disclose more information

The Which? study suggested that 90% of people have agreed to T&Cs at the time they purchase their product or service.

This means that 10% don’t, which can mean hundreds of thousands of lost customers.

It also suggests that businesses feel they are under pressure to achieve the impossible – to cram more, and increasingly complex, information into shorter, more customer-friendly documents.

THE CHALLENGE AHEAD

OF PEOPLE DON’T AGREE TO THE T&CS AT THE TIME OF PURCHASE”

“10%

Brands face a double challenge: to be compliant with regulations and meet the needs of customers.

FINDING A BALANCE

“29%OF PEOPLE SAID THEY’D BLAME THE BRAND IF THEY MISS INFORMATION IMMERSED IN A LONG AND COMPLEX SET OF T&CS”

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INFORMATION OVERLOAD 70% of respondents said that when

a document is too long, they stop reading the T&Cs for a product or service they want to buy

53% said long T&Cs would make them feel more negative about the company

39% said they would be less willing to buy products or services from a brand if there was a lot of small print

42% of respondents who do not always read the T&Cs said they ‘don’t have time’ to read them

STRAIGHT TALKING Out of the people who do not

always read terms and conditions, 35% of respondents said confusing language prevented them from reading T&Cs

THAT DON’T READ THE T&CS ARE PUT OFF WHEN THEY ARE TOO LONG”

“70%

OUR FINDINGS: A SUMMARY OUR STUDY IDENTIFIED FOUR KEY REASONS WHY CUSTOMERS DON’T READ THEIR T&CS DOCUMENTS

TIME FOR CHANGE 15% of respondents would

consider reading a contract or agreement’s T&Cs in a digital format, rather than on paper.

The younger the age group, the more open they are to receiving this information in new ways.

(15%: website 8%, live chat 4%, social media 3%)

THE TRUST FACTOR

Out of the people who do not always read terms and conditions, 40% of them said they don’t read the T&Cs if they trust the company they are buying from. If the customer then finds there is an issue because they have not read important information, that trust is undermined

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TIME FOR ACTIONBusinesses already see the value in transforming their T&Cs.

OUR SECOND EXAMPLE IS A HOME INSURANCE PROVIDER, WHO ADMITS IMPROVEMENTS TO T&CS TEND TO HAPPEN INCREMENTALLY, AND NOT JUST OUT OF REGULATORY NECESSITY.

It also identified that it has a high volume of customers contacting its call centre and, with a policy booklet that is 50 pages long, many calls were made by customers seeking information about their policy.

So, the company took action by:

Reviewing policy documents annually

Conducting customer research before making changes

Introducing visual devices, or ‘help’ boxes, to ensure customers understand key terms

Its T&Cs team also produced a responsive digital version for those who would rather not receive the A5 booklet.

It reviewed which stakeholders are involved in the production of T&C policy documents, which can include input from marketing through to compliance and legal and risk.

“Legal and risk used to dictate the order of the booklet, but there is now more balanced input from stakeholders,” a company spokesperson says.

PAGES OF T&CS RESULTED IN HIGH CALL CENTRE VOLUMES”

“50

TEAM EFFORT

T&Cs should not be left to legal and compliance teams. They are everyone’s responsibility to get right.

INDUSTRY INSIGHTS: GLOBAL BANK

INDUSTRY INSIGHTS:

OUR RESEARCH INCLUDED SPEAKING TO LEADING ORGANISATIONS WITH UK HEADQUARTERS.

One major bank told us that two of its biggest challenges in trying to communicate with

14.5 million customers are:

Consistency

Clarity

So, the bank acted by:

Developing tone of voice guidelines

Employing specialist writers to translate legal jargon into plain English

Using behavioural economics to identify and prioritise most relevant information

In an ideal world, all customers would receive bespoke T&Cs which match their individual needs, but for brands with millions of customers, this can seem impractical.

“So, we work on making the overall style and content as simple and clear as possible,” the bank spokesperson says.

The length of its T&Cs documents (sometimes up to 13 pages) can make it difficult for customers to find information which relates to them, and it’s only when it’s time to renew or make a claim (mostly the latter) that they will be referred to, he says.

“So, we also encourage customers to choose their own channel of preference.”

MILLION CUSTOMERS NEED CONSISTENCY AND CLARITY”

“14.5

HOME INSURANCE PROVIDER

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A THIRD CONTACT, A MAJOR UK UTILITIES BRAND, WAS EXPERIENCING CLASSIC SYMPTOMS OF COMPLEX AND CONFUSING T&CS – HIGH VOLUMES OF CALL CENTRE CALLS FROM CUSTOMERS WHO WANTED TO BETTER UNDERSTAND THEIR PRODUCT OR SERVICE.

Communisis worked with its T&Cs team to identify which products and services information was most relevant and how it could be better presented to customers.

The result was a T&Cs document which used imagery, information signposting and personalised content, tailored to the individual. This transformed the customer experience and dramatically reduced call centre traffic.

The utilities brand feedback to Communisis was that “they even received unsolicited feedback on how the T&Cs document had made their life easier” – surely a goal we all share?

INDUSTRY INSIGHTS:MAJOR UK UTILITIES BRAND

IN THE PICTURE

As well as using plain English, brands can use design and layout to make information more accessible for customers.

OUR FOURTH CASE STUDY IS A BUSINESS WHICH CONSTANTLY LOOKS TO IMPROVE ITS T&CS, BUT HAS FOUND IT IS OFTEN LIMITED BY ITS REGULATORY OBLIGATIONS.

Financial services organisations must provide certain information to customers in a specified format. But legislation is not keeping pace with innovation.

Challenger banks, as new entries to market, are free of the legacy content, so can truly innovate in the design and distribution of their T&Cs communications.

TIME FOR A T&CS SPRING CLEAN

INDUSTRY INSIGHTS: FS PROVIDER

MAKING OBLIGATION AN OPPORTUNITY

But these legal obligations do offer a chance for businesses to improve, step-by-step.

By law, financial services businesses must notify customers of any amendments to their T&Cs, for instance. But this is a chance for the business to:

Make the communication engaging and user-friendly

Encourage the customer to revisit the full terms online

The visual layout of T&Cs is also important, the spokesperson says. “We are considering a change to a Q&A style for our T&Cs.

“Initial customer feedback indicates this would be more engaging than the status quo.”

Regulatory obligations to improve T&Cs is also an opportunity to build stronger customer relationships.

“ OUR APPROACH TO TAILORED T&CS

THE CUSTOMER EXPERIENCE AND REDUCED CALL CENTRE VOLUMES”

FRESH

TRANSFORMED

SIGNIFICANTLY

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THE BIG PICTUREHow T&Cs are used, and whether they are fair to customers, came to the attention of the government in 2016. It has since made moves to:

Make T&Cs more user-friendly

Encourage customers to engage with them

Ask consumers about how they would like T&Cs to work better for them

GOVERNMENT PROMISES STIFFER PENALTIESBritish consumers gained extra support from the 2017 Budget in the form of a crackdown on small print. Officials fear that long, complicated and opaque T&Cs typically go unread by shoppers, leaving them unaware of what they are signing up to. Companies that mislead their customers are also likely to face stiffer penalties.

REGULATORS ON BOARDFor customers shopping for insurance or a financial services product, price has become king thanks to comparison websites.

The Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) are keen to educate consumers through T&Cs so they can make more informed choices.

Investors purchasing packaged retail investment products, for instance, will also now receive an additional Key Information Document (KID) form 2018 – a stand-alone, standardised summary of product details and potential risks.

CUTTING THROUGH THE NOISET&Cs face competition: customers are bombarded with messages that they have to process, from emails to online banners and radio to TV adverts.

They also assume T&Cs are ‘always the same’. Our research found that one quarter of our respondents don’t read T&Cs if they think they already know what is in the document.

While our research also highlighted that only 21% of people say they ‘always’ or ‘often’ read T&Cs before making a purchase – 17% of people told us that there is nothing that would make them read T&Cs.

FORWARD-THINKING STRATEGY

Brands which act now to improve T&Cs will stay one-step-ahead of regulatory changes.

OF PEOPLE ‘ALWAYS’ OR ‘OFTEN’ READ T&CS BEFORE MAKING A PURCHASE”

“21%

A NEW ERA OF T&Cs

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BENEFITS TO BUSINESS

SO, WHAT STRATEGIES ARE WE NOW SEEING BUSINESSES ADOPT? THERE ARE SOME SIMPLE STEPS WHICH ARE ALREADY MAKING A DIFFERENCE: Personalising T&Cs to individual customers, where possible

The use of ‘help’ boxes in T&Cs to provide context

Simplified language, particularly for the main product or service details

Providing all information in one place or document

Removing jargon and legal wording

Giving customers a choice about how they are presented with T&Cs

OF RESPONDENTS WERE CONCERNED THAT THE T&CS WOULD FAVOUR THE COMPANY”

“22%

VALUABLE RESOURCE

Improved T&Cs benefit both the brands’ bottom line and the customer.

WHAT’S GOOD FOR CUSTOMERS IS GOOD FOR BUSINESSImplementing change in a large organisation is a complex challenge, as T&Cs tend to need sign off from multiple stakeholders. A holistic approach is required.

But making T&Cs clearer and more user-friendly benefits businesses, as it reduces the number of timewasting incorrect claims and complaints.

It also means customers feel valued and remain loyal to the brand.

So, what outcomes can organisations expect from their investment in T&Cs?

REDUCED CUSTOMER CALLS: When customers read, and understand T&Cs, they no longer need to call to check the details.

FEWER COMPLAINTS: Many complaints occur when customers make assumptions about their product or service. INCREASED TRUST: Increased engagement can change customer perception as 22% of respondents were concerned that the T&Cs would favour the company.

CHANCE TO COMMUNICATE: T&Cs offer an opportunity to get brand messages across in a clear and focused way.

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CONTACT USGROUPBIDSTEAM@COMMUNISIS.COM

Contact Communisis today about how we can help you to transform your T&Cs from obligation to opportunity.

Sources:

All findings are based on research of 2 separate surveys; YouGov Plc online survey of 2,017 GB adults and a survey of 300 internal employees on behalf of Communisis PLC, July – October 2016, unless otherwise stated. The figures of the YouGov survey have been weighted and are representative of all GB adults (aged 18+)

UK Government Department for Business Innovation & Skills

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