Drop in customer satisfaction signals threat to organisations in a growing economy

 

By the Institute of Customer Service

The UK Customer Satisfaction Index (UKCSI) has revealed that customer satisfaction in the UK fell during the last quarter of 2013. The national measure of customer satisfaction, which is published every 6 months by the Institute of Customer Service, also recorded a fall in July 2013, following an unbroken series of increases between January 2009 and January 2013.

Overall customer satisfaction in the UK is 77.1 (out of 100) in the January 2014 UKCSI, compared to 78.2 in January 2013. Customer satisfaction levels have fallen in 12 of the 13 sectors covered by UKCSI, with only the banking and building societies sector bucking the trend with a small increase of 0.2 points.

Having already established the link between customer service and a business’ bottom line, these results represent a threat to organisations’ ability to take advantage of economic growth and recovery in the UK. The bar has been raised for customer satisfaction. Customers have become more savvy, selective, and have greater choice and opportunity about where they make purchases.

UKCSI also demonstrates that customer service is a key part of customers’ buying decisions. 60 per cent of customers favour a balance of price and service and will not accept low service levels in exchange for a cheap deal. 25 per cent of customers prefer the highest levels of service and are prepared to pay a premium for it, whilst just 15 per cent of respondents are looking for low cost, no-frills service,

Some organisations are better placed than others to take advantage of the opportunities of economic growth. 39 organisations achieved an increase of one point or more in their customer satisfaction score since January 2013, whereas 81 saw a fall of at least one point. The remaining 69 organisations included in UKCSI either registered no movement or moved up or down by less than one percentage point. Amazon is the highest scoring organisation with John Lewis in second place on the index, but only four of the top 20 ranked organisations increased their customer satisfaction by more than one point, signalling the importance of keeping a clear focus on service.

Jo Causon, CEO Institute of Customer Service; says: “As the economy begins to grow organisations need to recognise that the customer service experience they deliver is increasingly important in customers’ buying decisions. Those organisations that focus on differentiating through customer service are well placed to achieve sustainable performance. But to do this they need to view customer service as integral to building customer relationships across the value chain, not just as a series of transactions.

“These results are a wake-up call to UK business. In an environment where customers are more aware than ever about the standard of service they should receive, organisations cannot afford to lessen their focus on customer service. This is important because it impacts not only the success individual organisations, but also the growth and competitiveness of the UK economy as a whole.

Causon continues “UKCSI has consistently demonstrated the close link between customer service and market share, loyalty and sales growth. In the retail food sector the highest performing organisations for customer service have increased their market share, further strengthening the business case for customer service.”

The index revealed that food retailers with a UKCSI score above the average for the sector saw an average year on year growth (based on the 12 week period prior to 14th October 2013) of 9 percent compared to only 3 percent period for those with scores below the sector average, evidence that delivering better than average customer satisfaction boosts sales.

Retail (non food) remains the highest performing sector, despite posting a drop of 1.3 points (from 84.4 in July 2013 to 83.1 in January 2014). Utilities is the lowest performing sector with a score of 69, down 2 points since July 2013.

For the first time, the UKCSI January 2014 report includes ratings for the top 50 organisations that have the highest scores for customer satisfaction. The organisations with the biggest improvement in their customer satisfaction scores over the past year are Tesco Bank, Northern Ireland Electricity Service, and Center Parcs.

About the Institute of Customer Service

The Institute of Customer Service is the professional body for customer service delivering tangible benefit to organisations and individuals so that our customers can improve their customers’ experience and their own business performance.

The Institute is a membership body with a community of over 400 organisational members – from the private, public and third sectors – and over 5,000 individual memberships.

For more information about the Institute of Customer Service go to: www.instituteofcustomerservice.com 

UK Customer Satisfaction Index

UKCSI (UK Customer Satisfaction Index) is the national measure of customer satisfaction. It is based on an online survey of consumers, geographically and demographically representative of the UK population.

The UKCSI began in January 2008 and is published twice a year, normally January and July. The Index covers 13 sectors – 11 in the private sector as well as local and national public services. Sector reports giving a detailed breakdown of scores by sector and organisation are available.

Customers are asked to rate organisations on customer priorities that they have identified as important. Priorities are grouped in terms of professionalism; quality and efficiency; ease of doing business; problem solving and timeliness. Each priority is given a weighted score. The weighted satisfaction scores are used to produce the index.

Customers score their responses for each measure on a 1-to-10 scale. Overall scores for each sector are mean averages of all responses. The overall UKCSI score for each organisation is the average of all of its customers’ satisfaction scores, weighted for each question grouping.

The July 2013 UKCSI includes over 40,000 unique responses. More than 12,000 customers have been surveyed. Customers are geographically and demographically representative of the UK population and participate in the survey through an online panel. Customers are asked to provide a score for organisations based on their most recent transaction.

181 individual organisations received a UKCSI rating. Only organisations that exceed a minimum sample size are scored in the 13 sector reports. In addition, scores are given for 15 generic providers including “your local NHS / Hospital”, “your local Council”, “your local restaurant” etc.

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