By Robert Crawford, Director, Institute of Customer Services
The latest UK Customer Satisfaction Index (UKCSI), which is the National Measure of Customer Satisfaction for UK organisations, has risen very slightly from 75.2 to 75.6. Based on a representative sample of 26,000 adults surveyed over the internet, the research is conducted by The Leadership Factor on behalf of the Institute of Customer Service. The latest wave is the 6th bi-annual UKCSI survey that has been conducted. (results available online at www.ukcsi.com)
As shown in chart 1 , the Utilities sector, though still at the bottom of the table, has shown the most improvement since January, improving by 1.7 percentage points to 69.6. Much closer to the top of the league table, both retail sectors have also seen good improvements, with both food and non-food now achieving 80% along with services.
The best places to live
Changes over the last six months are small for most sectors as they are for England and Scotland but Northern Ireland and Wales have both made good improvements, Northern Ireland by 3 percentage points to 77.7 and Wales by 2.2 to 76.9. If we look at the UKCSI scores for each of the home nations since the first UKCSI results in January 2008, we can see in chart 2 that Northern Ireland and Wales have again improved by the most – both by a very impressive 8.1 percentage points. Initially, the results of all four countries were very close, with only 0.9 percentage points separating them, but at 75.2, England is now lagging well behind leaders Northern Ireland.
Distribution of scores
Of the 153 named organisations scored in the survey, the median score (i.e. the middle- ranking organisation) is 77, the best score is 88 and the worst is 56 (see chart 3 ). As we would expect, organisations are roughly normally distributed (i.e. most are near the average). As usual with customer satisfaction data the dissatisfaction tail is longer than the delighted one.
The best companies
This time 38 organisations have achieved a CSI over 80; seven are over 85. Waitrose (88) has continued to expand its lead over Marks & Spencer (85), its key rival as an upmarket food retailer. That excellent score puts it neck and neck with John Lewis (also with a CSI of 88) in the non-food retail sector, a dominant performance for the brand.
SAGA is another company that delivers excellent service in more than one sector with SAGA Holidays heading the tourism sector and the company just coming second to BUPA in the insurance sector. The 10 highest scoring named organisations are listed below with the top two in each sector shown in chart 4.
- John Lewis (88)
- Waitrose (88)
- Lloyds Pharmacy (86)
- SAGA Holidays (86)
- Virgin Holidays (85)
- Marriott (85)
- Marks & Spencer (food) (85)
- Boots (84)
- First Direct (84)
- Marks & Spencer (non-food) (84)
Every sector with the exception of Utilities has some suppliers who are above the overall UKCSI average, and most have at least one very good organisation.
Looking at the overall performance of sectors can mask differences in the level of satisfaction organisations manage to achieve. Some sectors (e.g. Automotive) are consistently good, some are consistently poor (e.g. Utilities), and others are very mixed (e.g. Tran sport).
Chart 5 shows the gap between the best and worst organisation scored within each sector, with the average marked (o).
We have always said that consistency is a good thing in customer satisfaction. Poor performing organisations are often characterised by a wide range of customer satisfaction scores across call centres, branches, outlets or other business units because there isn’t a company-wide customer focus or strong management ensuring that customer service standards are maintained across the organisation. Often, inconsistency in customer service will irritate customers just as much as a consistently poor customer experience. [Chart 6] supports this assertion. The pattern isn’t perfect, but there is a fairly strong trend for more consistent sectors to have higher levels of overall satisfaction.
It is worth drawing attention to some of the organisations that significantly outperform the average for their sector:
- Eurotunnel in Transport - 11 points over the sector average
- The Identity and Passport Service in Public services (National) - 9
- John Lewis in Retail (non-food) - 8
- First Direct in Finance (banks) - 8
- Waitrose in Retail (food) - 8
These leaders are significantly better than average for their sector (whether it’s a strong or weak sector) and can expect to see competitive benefits from their focus on customer service.
The retail sectors, first and third in the overall sector league table, dominate the complaint handling table chart 7 with improved scores. All those no-quibble refunds seem to be doing the trick, and the economic climate seems to have concentrated retailers’ minds on the value of every customer. Leisure is also performing well in this area.
The complaints index is derived from how well organisations handle complaints plus the extent to which they give customers problems in the first place. shows that tourism is the best sector at giving customers very few problems. Retailers do give customers more problems but they are by far the best at handling complaints.
Complaint handling and customer loyalty
It’s very unfortunate that complaint handling generates by far custo mers’ lowest satisfaction scores in the UKCSI because it makes abig impact on customer loyalty, especially customer defections. As shown in chart 9, across all UKCSI companies, the average loyalty index is 76. This is produced from the scores given by customers to questions about Harvard’s 3Rs of customer loyalty – retention, related sales and referrals. Not surprisingly, customers who have never had any kind of problem with the organisation are more loyal (a loyalty index of 79) but the most loyal are customers who did have a problem but were very satisfied with the way it was handled. Their loyalty index goes up to 81. By contrast, the loyalty index of customers who had a problem but were dissatisfied with the way it was handled plummets down to 36.
As well as being the area where organisations have the most opportunity, and need to improve, complaint handling is also one of the biggest drivers of loyalty. One school of thought suggests that:
- customers who score 9-10 promote that organisation by deed and word-of-mouth
- customers who score 1-5 are detractors
- customers who score 6-8 are passive
shows the percentage of customers who score 9-10 (blue) and those who score 1-5 (red) for complaint handling. The objective should be to have a net blue score.
For complaint handling, no sector has a net blue score. Even the best at complaint handling (non-food retailers), make only 31.5% of customers who experience a problem very satisfied with the way it was handled compared with 38.6% who were dissatisfied – a net detractor score of 7.1%. With net detractor scores in excess of 45%, seven sectors are much worse. They are utilities, telecommunications, transport, both finance sectors and both public sectors.
Ease of doing business
Another big driver of customer loyalty is ease of doing business. On this, chart 11 paints a much better picture. Retail (food) has a very good net promoter score of 44.7 for ease of doing business, with non-food retailers and services and tourism businesses also over 40%, and leisure very close behind. By contrast, utilities and public services (local and national) are at the bottom of this league table with net promoter scores below 10%.
Word of mouth in a connected world
This time we asked customers some extra questions about new media. First of all we asked people which social media tools the y expected companies to use. Most customers expected to see some sort of online presence from organisations, but as shown in chart 12, on ly a minority felt that engagement with the prominent social media platforms is important. Only 6% of customers said that they would b e put off doing business with a company that did not offer these channels.
As you might expect, consumers’ attitudes to this are influenced by age, but shows that even the youngest categories of consumer do not seem heavily engaged with social media when it comes to their dealings with companies.
Things vary a little more by sector. shows that social media are important for the automotive sector with leisure and tourism close behind. Customers see internet reviews as important for most sectors, with the exception of services, where customers seem to make least use of the internet in their dealings with organisations in the public and private sectors.