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Customer satisfaction on the rise as organisations respond to changing consumer demands PDF Print E-mail
Wednesday, 20 January 2016

Customer satisfaction in the utilities sector is improving faster than in any other industry, while banks and building societies have stalled, according to the UK’s biggest barometer of customer service. Customers are also more satisfied now, than at any time since January 2014, but their priorities are shifting.


Based on the views of 10,000 UK consumers, the UK Customer Satisfaction Index (UKCSI) reveals the first significant boost in customer satisfaction since 2012 - rising by 0.8 points to 77 (out of 100) but it is still some way off the 2013 peak of 78.2.

Amazon tops the Index, up from second place last year, followed by a newcomer to the index, Utility Warehouse, and first direct. Also in the top ten are Specsavers, New Look and SAGA Insurance, all of whom posted impressive increases of more than three points over the past 12 months. This year’s UKCSI top 50 is more competitive than ever with only 5.7 points between the first placed organisation and the 50th, compared to 7.5 points last year.

Changing customer priorities
This year’s focus on customer priorities reveals that staff attitude and behaviour is much more important to customers now than five years ago. The condition of delivered goods and speed of response in writing still matter, but to a lesser degree than in previous years.

Competence of staff is considered the most important element for customers in 2015 after being ranked only eleventh in 2010. Staff ‘doing what they say they will do’ and competence on the phone were the next most important priorities for customers.

Helpfulness of staff (in person) rose from 21st to fourth in the rankings while friendliness of staff and ease of doing business are also rising on the index of customer priorities.

Jo Causon, CEO of The Institute of Customer Service, says: “Core ingredients of excellent customer service - employee competence, attitudes and behaviour - have become even more significant differentiators. Mass marketing or a ‘one size fits all’ customer experience is delivering diminishing returns and diluting valuable customer relationships. The insight we have gathered from this UKCSI identifies the components of excellent service and where strategic and operational effort should be focused to make further improvements.”

Satisfaction by sector
Retail non-food remains the sector with the highest satisfaction score, but utilities improved most, gaining 1.9 points on last year, closely followed by insurance (1.6) and retail food (1.5).

Banks and building societies fell by 0.4 points despite improving significantly since the banking crisis, while John Lewis, which topped the index in January 2015, fell to sixth place, having been in the top 3 for each of the past 6 reports. It is however one of the organisations that has consistently delivered excellent levels of customer service and, alongside organisations like Waitrose, Nationwide and M&S Food, has scored higher than 80 in every UKCSI since 2013.

Confidence breeds custom
The importance of trust is emphasised again in this year’s results. Organisations that have the highest levels of trust and customer satisfaction, scoring nine or ten out of ten, are more likely to encourage customer loyalty and recommendations. In the case of the retail food sector, there is a proven positive impact on the bottom line. Food retailers with scores of more than one point higher than the sector average see average sales growth of 7.6%, compared to a drop in sales of 0.4% for those with a score below the sector average.

The January 2016 UKCSI also identifies how companies should interpret the use of different channels and platforms of communication by customers. The research shows that those using more than two channels more likely to be unhappy with the service they receive. Organisations monitoring this could act as an early warning to organisations proactively deal with issues before unhappy customers share their experience more widely.

Causon adds: “While the multi-channel environment demanded by customers has the potential to offer a faster more flexible service, it can also exacerbate problems if not done correctly. Challenger brands, often unencumbered by legacy systems and processes are gaining on their larger competitors by offering straightforward, personal, seamless and quick service experience.

“This is reshaping the competitive environment around customer service and removing barriers to entry to create a real opportunity for smaller organisations to succeed against larger rivals.”
 
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