In a service based economy customers are key, and embracing this can drive the success of individual businesses and UK GDP as a whole.
This is the message being put forward by the Institute of Customer Service, whose bi-annual Customer Satisfaction Index was recently released.
The organisation gathers data on UK companies based on five areas that indicate an overall level of performance, including professionalism, quality and efficiency, ease of doing business, timeliness, problem solving and complaint handling.
The index was launched in January 2009 and showed initial improvement in the first few years as firms embraced the importance of the issue and began to realise the competitive advantage it could produce, however in recent years figures have shown a slight reversal of this trend.
Institute of Customer Service CEO, Jo Causon, explains the latest findings, saying “what we have seen is that, if anything, customer satisfaction has flat-lined a little bit. It is now scoring 76.2 out of 100, which means it is up slightly since January, as an average across 13 sectors; in January it was 76. But it is lower than it was last July, when it was 76.3. So, it’s a marginal change.
“What is interesting is that there is a whole range of performance of organisations and some evidence of polarisation. You have got some organisations that are performing extremely well and are bucking the trend and you have got other organisations which are falling further down the pack.
“Previously high scoring sectors have been things like retail food and the automotive industry. Now, this time round they have fallen as sectors quite a lot. So, retail food - all the supermarkets - that sector is actually down by 1.2 points on last year and the automotive sector is down by 1.4 on last year.
“By contrast, however, previously low scoring sectors are starting to increase their satisfaction levels. The ones that have been towards the bottom of the index - the utilities the public services, the banks - are all starting to improve. Some of them are a bit marginal, but they are more positive.”
Ms Causon says that over the past six years, since the creation of the index, there have been some consistently high achievers who are leading the way in customer satisfaction.
This group includes John Lewis, Amazon, Waitrose, Aldi, Nationwide and FirstDirect which tops the list, scoring 87 out of 100.
For the ICS, there is a direct correlation between good customer service and financial success and it is urging those companies lower down the index to recognise the link.
According to Ms Causon: “The customer experience is clearly intrinsically linked to business performance. So, we find that customers who score organisations highly for customer satisfaction are more likely to recommend them to others and to make repeat purchases. But that only happens if the companies are scoring really highly.
“The index shows that as customers we are more discerning, we are more choosey, we have less money in our pockets, we are more vociferous – all of those things. So firms need to be scoring almost nine out of ten to get those sorts of levels of return. Where an organisation has scored nine out of ten 96% will retain the customer. And where they score nine out of ten 55% will recommend that brand to friends and family. So, what we are seeing is it is not good enough just to be ok or good, you have got to exceptional these days.”
The CEO goes on to describe how customer satisfaction levels can be improved and warns against seeing the issue as separate from other business goals.
She says: “For me if I look at great organisations they do a number of things consistently well and they really apply to those five key areas. So, their staff are well-trained, they have high levels of emotional intelligence, they are empowered to be able to respond to the customer and they respond quickly. It’s much more about having dialogue these days, rather than just saying ‘computer says no.’
“How staff interact with customers is really important. There is a clear link between employee engagement and the level of customer satisfaction. The culture of an organisation is absolutely critical.
“Secondly, as customers we are short on time. So the easier you can make that interaction, the better. And that needs to be really joined up. One of the things people complain about a lot is that they can’t find a telephone number on a website, and things like that. And that is why Amazon do so well. Amazon make it really easy to work with them.
“Companies must think about how you integrate your whole customer experience, end to end, so it is really joined up. So, customer service is not a department, it’s not a function but it’s about what everybody is doing inside that organisation to be able to deliver that end experience for the customer. It’s about culture, processes, strategy and the most important thing is the boardroom commitment. That’s about not seeing customer service as a department but really thinking about how they integrate their customer experience into their business plans - how they measure that, what they look for, and how they reward and recognise their staff on delivery of that customer experience.”
“The good news is it is becoming a really important topic in the boardroom and really driving the business agenda. The tough news is you can’t just stick a plaster on it. It’s not about a system change. It’s not just about ticking a box and moving on. It is about sustained focus and performance and looking at every part of that customer experience. It’s hard work, but it’s worth it.”
Getting this right, Ms Causon adds, can play a central role in driving economic recovery.
“We are living in more challenging times. It is a much more competitive environment that we are working in. There are a lot of external challenges as well in terms of the environment – so not just local competition but the global environment.
“78% of GDP in the UK is generated through service. Over 70% of employees in the UK are in a customer related job. So, if you think about, if we have highly engaged individuals and organisations then we have better performing organisations. If we have better performing organisations we get better customer satisfaction as part of that. If we get better performing organisations we get a better performing UK. And our ability to be able to compete globally given the fact that we are now in a virtual world is absolutely critical. So I do see this as a mainstay of the UK economy and a really heightened focus on the customer experience will help the UK economy perform.”
As the global economy becomes increasingly competitive and further government spending cuts loom, there has never been a better time for UK businesses to take the initiative.