Understanding Vulnerable Customers: The Role of Research in Designing Inclusive Services

During my career of designing and delivering research projects, I have worked with and seen many organisations successfully develop their services when understanding and measuring customer’s needs.

This paper takes on a slightly different angle as it focusses on using research in service design for vulnerable customers.

During the last 15 years I have supported a number of Utilities sector organisations Water, Gas and Power and Financial Services businesses to measure and develop their services and address customer vulnerabilities. I hope sharing some of these learnings will be helpful to others and inform best practice.

Vulnerable customers are people who, due to personal circumstances, may be at greater risk of harm when engaging with services, they are customers in every sector, from financial services to utilities and hospitality.

Through legislation organisations that fail to consider customer vulnerabilities risk non-compliance with regulatory frameworks such as the Financial Conduct Authority (FCA) Consumer Duty, which requires firms to ensure good outcomes for all customers, particularly those in vulnerable circumstances.

The FCA provides comprehensive guidance on the fair treatment of vulnerable customers. This guidance is outlined in documents such as FG21/1, which emphasises the importance of understanding the needs of vulnerable consumers and ensuring they receive fair treatment across all firms and sectors regulated by the FCA12.

The guidance highlights several key points:

• Understanding Vulnerability: Firms must recognise the characteristics of vulnerability and how these may affect consumers' ability to make decisions and represent their interests
• Appropriate Care: Firms should provide a level of care that is appropriate to the needs of vulnerable consumers, which may differ from the care provided to other consumers
• Embedding Fair Treatment: The fair treatment of vulnerable customers should be embedded in the firm's culture, policies, and processes throughout the entire customer journey

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The Office of Gas and Electricity Markets (Ofgem) has a comprehensive approach to protecting vulnerable consumers. Their Consumer Vulnerability Strategy 2025 focuses on several key areas, including:

• Improving identification of vulnerability and smart use of data
• Supporting those struggling with their bills
• Driving significant improvements in customer service for vulnerable groups
• Encouraging positive and inclusive innovation
• Working with partners to tackle issues that cut across multiple sectors

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Ofgem and Ofwat mandate that Utility and Water companies maintain a register of customers needing special assistance, especially in emergencies. Companies aim to have at least 7% of customers on their priority services register by 2025. Ofwat has also introduced a dedicated condition in the licence of each water company to ensure they treat customers, including those in vulnerable circumstances, with the highest standards of service.

By leveraging customer research, businesses can develop services that are inclusive, ensuring they meet both regulatory requirements and customer needs effectively.

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1. Why Understanding Customer Vulnerabilities is Critical

Customer vulnerabilities can stem from a range of factors, including:

• Financial instability - A sudden loss of income or long-term financial hardship can make customers more reliant on fair and transparent services
• Health conditions - Physical disabilities, cognitive impairments, or mental health challenges can make it difficult for customers to navigate services
• Technological exclusion - The growing reliance on digital platforms can marginalise those without digital access or literacy
• Situational vulnerabilities - Life events such as bereavement or job loss can place customers in temporary but acute states of vulnerability

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Organisations that fail to address these issues risk alienating customers, damaging their reputation, and facing regulatory penalties. However, those that proactively understand and respond to customer vulnerabilities build stronger relationships, increase customer trust, and drive long-term loyalty.

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2. The Role of Research in Identifying and Addressing Vulnerabilities

Traditional customer experience metrics, such as satisfaction and Net Promoter Score (NPS), do not always capture the nuanced experiences of vulnerable customers.

In my experience, a more targeted research approach is required, certainly at least as part of a research project and to support a customer centered design.

Key Research Methods to Identify Vulnerabilities:

• Deep-dive qualitative research - In-depth interviews and focus groups help uncover real-life challenges faced by vulnerable customers
• Behavioural and System 1 techniques - Implicit testing and sentiment analysis can reveal subconscious barriers that customers may struggle to articulate
• Journey mapping - Identifying pain points in the customer journey highlights where vulnerabilities may be exacerbated
• Segmentation analysis - Clustering customers based on vulnerability profiles enables organisations to tailor interventions more effectively

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It is important to understand attitudes and behaviours for example, in financial services, research might reveal that customers experiencing financial distress are more likely to disengage from communication, highlighting the need for proactive and sensitive outreach strategies.

3. Using Research to Design Services that Support Vulnerable Customers

Once vulnerabilities are identified, insights need to be translated into tangible service improvements.

Research plays a key role by informing:

• Service accessibility - Ensuring that services are inclusive, whether through alternative communication channels, simplified digital interfaces, or staff training
• Policy and process design - Embedding fairness into decision-making processes, such as more flexible payment options or tailored financial guidance
• Proactive support mechanisms - Using predictive analytics to identify early signs of vulnerability and intervene before customers reach crisis points

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A case study I am familiar with in the utilities sector found that implementing a vulnerability index based on customer interactions, complaints, and payment history allowed providers to pre-emptively offer support, reducing service disconnections and improving customer trust.

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4. Validating Consumer Duty Against Customer Vulnerabilities

Under Consumer Duty, firms must demonstrate that their services lead to good outcomes for all customers, including the most vulnerable.

Research plays a critical role in validating this by:

• Testing communications for clarity - Ensuring that information is understandable and accessible to all customer segments
• Measuring real-world impact - Conducting pre and post-service evaluations to assess whether interventions genuinely improve outcomes for vulnerable customers
• Benchmarking against best practices - Comparing service standards against industry leaders to drive continuous improvement

Without robust research, businesses risk compliance without impact, meeting regulatory requirements on paper but failing to drive meaningful change in customer experiences.

Conclusion: A Research-Led Approach to Fair and Inclusive Services

Understanding customer vulnerabilities is not just about regulatory compliance it is about building fairer, more inclusive services that work for everyone.

By leveraging deep customer insights, organisations can create services that are not only compliant with regulatory requirements, they are also commercially and ethically sustainable.

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In a world where trust and fairness increasingly define customer relationships, those who listen, understand, and act on vulnerability insights will lead the way in customer experience excellence.

If you would like to know more DM me.