Research from the Institute of Customer Service proves Customer Satisfaction leads to year-on-year sales growth

 

By Jo Causon

The UKCSI, carried out by the Institute of Customer Service, involved more than 12,000 interviews with consumers about their customer experiences. During these interviews customers gave insight into 189 of the UK’s leading brands across 13 different sectors. Of the 13, Retail Food retained its place as the second highest scoring sector with a score of 81.0 (out of 100), 3.9 points above the UKCSI average of 77.1.

Although the average score for this hugely competitive sector fell by 0.6 points between July 2013 and January 2014, the score conceals notable diversity between the organisations within it, with a difference of more than 10 points between the sector leader and the lowest scoring organisation.

Although customer satisfaction scores have fallen over the past two years, a number of organisations within the Retail Food sector continue to perform well. The results provide further evidence that the need to differentiate through service has never been so important to improving business performance.

Organisations with customer satisfaction ratings higher than the sector average have shown stronger sales performance than those with lower than average satisfaction. In addition, those scoring highest in the sector also tend to score higher in customer retention, propensity to buy and recommendation.

For the first time since the UKCSI began in 2008, each survey included questions about the balance of price and service. It showed that most customers (57 per cent) prefer a balance of price and service when buying from a food retailer and are not prepared to compromise service levels in pursuit of the cheapest deal. In addition, retail food has one of the largest proportion of customers (28 per cent) who are seeking excellent service and are willing to pay a premium price to get it.

Although Aldi and Waitrose cater for different markets, both are achieving sales growth by understanding their customers’ needs and focusing on the overall experience they offer, achieving consistently high UKCSI scores in the process.

About the author and the Institute of Customer Service

Jo Causon is CEO at 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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