£45.38 billion missed by UK retailers due to poor customer service
New research report analyses impact of customer service across the UK on brand loyalty and sales. By Jeremy Michael.
By Jeremy Michael
Customers who experience positive staff interaction and assistance will spend on average 39 per cent more than those who are not helped or greeted, according to new research released last weak by customer insight agency SMG.
The research, which surveyed over 100,000 genuine UK retail and leisure customers in 2011, found that the average spend jumps from £23.36 per person by those who do not receive assistance, to £32.47 for those that are helped by staff.
SMG has found that British retailers are missing out on as much as £45.38 billion each year in sales. Retailers that master customer service are likely to attract a bigger portion of the “floating pound” in sales over poorer performing competitors.
UK satisfaction on the High Street – going to extremes
Based on the responses 100,000 plus UK customers, SMG has created the Customer Satisfaction Index to measure customer experience in terms of friendliness of staff, availability of assistance and problem resolution to identify its impact on sales and absolute loyalty.
The SMG Customer Satisfaction Index in the UK has a score of 6.1 (out of a possible 10.). The worst place in the UK for customer service is Worcestershire, Dorset, Berkshire whilst the best places are Herefordshire, Northumberland, East Yorkshire.
The Olympics will see the UK take to the global stage, and presents our retailers with the ideal opportunity to showcase the best of British shopping. Our research into a huge number of genuine UK customers has identified that the quality of customer service is a key driver to increasing sales and building loyalty.
With over 30 million visitors expected this year, it is vital that stores invest in staff training to appropriately engage with customers to enhance customer experiences, and therefore improve sales.
Dealing with complaints
According to the research, loyalty is best advanced by providing excellent customer service through problem resolution.
Respondents who were highly satisfied with problem resolution were 21 per cent more likely to return than those who were highly satisfied but didn’t experience a problem. 17 per cent were more likely to recommend, and 11 per cent were more satisfied with their experience overall.
As the UK high street fights for survival amid the proliferation of e-commerce, store closures and a double–dip recession, this research provides food-for-thought for retailers to identify trends, improve customer service and, ultimately, sales.
Personal happiness – the middle muddle
SMG has found that customers aged between 25 to 49 are the least satisfied with their overall customer experience. Under 18s were nearly a third (31 per cent) more likely to state they have received exceptional service than customers aged 25 to 34.
This research mirrors the Personal Happiness Index “u-bend” effect, which is used by governments to plan policy in relation to contentment levels in the nation.
Retailers need to consider the varying satisfaction levels across varying customer demographics. In particular, UK retailers should educate staff about the misperceptions in relation to young and older customers and ensure all customers are receiving excellent customer service.
Satisfaction – the problem with sex
Women customers are eight per cent more likely to recommend than men, as well as more likely to return and report a better experience than men in the UK. Furthermore, men are more likely experience a problem than women, yet are more satisfied with how these problems are resolved.
Best time to shop – Thursday 11 o’clock
The research also looked at the best times and days to shop, identifying Thursday as the day when customer overall satisfaction is at the highest. Meanwhile, customers are most likely to be greeted and receive assistance before 11am.
The SMG UK Customer Satisfaction Index whitepaper was developed using 108,048 responses by UK retail and leisure customers in 2011. This data was analysed, and the full report can be found at http://www.smg.com/customerindex, along with key recommendations to retailers.
About the author
Jeremy Michael is managing director, SMG UK. Based on the outskirts of London, Jeremy is responsible for the development of SMG in the UK. Jeremy spent several years working in the service industry in France, Spain and the USA before joining the global research agency TNS in London. Over an eight-year period he was responsible for over 75 customer research projects that included working on brands such as Harrods, Pret a Manger and Mitchells & Butlers. Since 2006, Jeremy has been working on both customer satisfaction and mystery shopping programmes. He was heavily involved with a range of over 90 retail and hospitality clients, including HMV, Holiday Inn, Sony and Subway. Since 2010 Jeremy has been managing director of SMG. His current clients consist of a broad range of both retail and leisure outlets including Pets At Home, Mothercare, Burger King, TGI Friday’s and Republic. Jeremy has appeared as an industry expert on a range of broadcast media, including ITV News, BBC News, CNBC and BBC Radio 4 discussing a variety of key issues relating to the retail industry. Jeremy also regularly speaks at industry events, including Retail Week conferences.
Service Management Group (SMG) is a forward-thinking research agency conducting store-level, ongoing customer experience measurement and analysis in more than 90,000 locations worldwide. SMG integrates this customer research into actionable business intelligence and service improvement tools for retail, restaurant and service-based companies, linking results to financial performance.