FEATURE16 July 2014

Can't get no satisfaction

The ICS’s UK customer satisfaction index has revealed a third consecutive drop. Could customer insight be a key driver of success in this challenging environment?

Source: ICS July 2014

According to the findings, released by the Institute of Customer Services (ICS), customer satisfaction has dropped across 12 of 13 sectors since January 2014. The exception to this rule is the utilities sector, which recorded a small increase of 0.4 points (though it remains the lowest scoring overall sector). Only 28 of the 197 named organisations that featured in the UKCSI have increased their score by at least one point since July 2013. In contrast, 96 have seen their score fall by more than one point over the same period.

According to Joanna Causon, CEO of the ICS, there are a number of factors that may account for the falling trend in customer satisfaction. One is that consumer expectations are continuing to rise, and “their needs are evolving more rapidly”, with convenience, ease of doing business and speed apparently seen as being particularly important. This could be related to age: the report has revealed that, on average, younger people are less satisfied than older age groups, so customer expectations could to rise even further.

“In the last 18 months we have seen, across multiple sectors, customers’ expectations rising,” says Mark Squires, MD of Watermelon, a research agency specialising in tapping into the voice of the consumer. “Modern data collection methods like QR codes, social media solutions and online overlay techniques facilitate better representation of younger people in research, and this group have higher expectations. As researchers get better at including their views, the benchmark has obviously raised.”

Causon identifies another potential driver of the negative trend as being related to growth in demand and confidence within organisations. As these grow, Causon says, companies “may be tempted to shift their priority away from retaining customers through focusing on customer experiences, towards more emphatically increasing customer numbers and market share”. Given that the UKCSI presents evidence of a link between customer satisfaction and likelihood to remain a customer, notably within the retail food sector, this particular temptation should best be resisted.

Dennis Fois, CEO of customer engagement specialist Rant & Rave is unsurprised by the trend. “Today’s climate sees the power of choice shifted away from brands and very much into the hands of the consumer. Just because you’re producing or distributing a product or offering a service doesn’t give you the right to dictate the terms or set expectations any more – the customer is very much calling the shots.”

Relationship economy

Causon believes that we are now in a “genuine relationship economy”, where an organisations’ success will increasingly be determined by the quality of its relationships; not just with customers, but with suppliers, partners and inside organisations. This could explain the consistent position of John Lewis – famed for its inclusive and customer-focused image – at the top of the UKCSI rankings. Other consistent high scorers are Amazon and First Direct, both of which also make their customer focus central to their brand identity.

“Of course, there are brands out there who are getting things very right – they know how to meet the demands of their consumers by embracing innovations in technology to offer an easy, seamless customer experience,” says Fois. “They listen to what their customers are saying and are agile enough to change to reflect their preferences. But for the laggard brands, those who are yet to respond to these new expectations – this only serves to make the situation worse. The challenge remains that many brands are struggling to keep up with the rate of change their customers are demanding.”

So what’s the advice to organisations in this environment? Causon has a number of suggestions, one of which is to invest in customer insight – good news for research organisations – and to apply it with speed and agility. This, she says, can help inform the necessary focus on the customer experience that will put organisations in the best position “to benefit from the sustainable and tangible business benefit of customer service”.