UKCSI July 2014 | The state of customer satisfaction in the UK UKCSI Customer Satisfaction Index The state of customer satisfaction in the UK
July 2014
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Institute of Customer Service A
UKCSI July 2014 | The state of customer satisfaction in the UK foreword
The July 2014 UKCSI shows a third consecutive We are now in a genuine relationship economy in fall in customer satisfaction. Almost half the which organisations’ success will increasingly be organisations included in the index have seen a determined by the quality of their relationships drop in their customer satisfaction by at least one – with customers, suppliers, partners and inside point compared to a year ago, including companies organisations. These UKCSI results confirm that who have consistently been amongst the highest the bar for customer satisfaction has risen and in rated by customers. At a time when the economy is an era of falling customer satisfaction there will be beginning to grow, this should be a major concern winners and losers. for organisations. So how should organisations respond to this There are a number of factors which may account changed environment? It will be important to for the falling trend in customer satisfaction. invest in customer insight and apply it with Customer expectations are continuing to rise greater speed and agility as customer needs and their needs are evolving more rapidly, with and preferences evolve. Ease of doing business convenience, ease of doing business and speed and convenience have a growing resonance seen as particularly important. For the first time, and need to be embedded in the experiences this UKCSI report shows the levels of satisfaction organisations offer their customers. Customer by age group; the fact that younger people are service skills, capabilities and standards need to on average less satisfied than older age groups be reviewed continuously to ensure that they are suggests that customer expectations will continue current and relevant in a context of heightened to rise in future. As demand and confidence customer expectations. Above all, there needs grow, organisations may be tempted to shift their to be a strategic leadership commitment to priority away from retaining customers through customer service and a focus on the whole focusing on customer experiences, towards customer experience, especially in sectors where more emphatically increasing customer numbers multiple partners and entities are involved in and market share. However, evidence from the providing service to customers. Now is a time for UKCSI continues to point to clear and consistent organisations to hold their nerve and maintain linkages between high levels of customer focus on the customer experience. Those that satisfaction and trust, loyalty, likelihood to do so will be best positioned to benefit from the remain a customer, and in the Retail food sector in sustainable and tangible business benefit of particular, higher sales growth. customer service.
Joanna Causon CEO
Institute of Customer Service 1 UKCSI July 2014 | The state of customer satisfaction in the UK
contents
Key findings 3
Customer satisfaction: the state of the nation 4
Why is customer satisfaction falling? 12
Why customer satisfaction matters: the business impact 20
UKCSI key facts 27
Organisations included in the July 2014 survey 28
About UKCSI 29
Also available 30
Other Institute research 31
Institute of Customer Service 32
2 Institute of Customer Service UKCSI July 2014 | The state of customer satisfaction in the UK key findings
UKCSI July 2014 Customer satisfaction falls - again Most customers want a balance of cost The July 2014 UKCSI results confirm the downward and service, with at least a minimum trend in customer satisfaction at the national level. The threshold level of customer service index registered its third consecutive decline and at When faced with the choice, 60% of consumers favour 76.3 (out of 100) is now 1.9 points below the January a balance of price and service and will not accept 2013 peak of 78.2. low service levels in exchange for a cheap deal. A substantial minority of consumers – 24% – seek Satisfaction drops for most sectors excellent service and are prepared to pay for it. Customers’ satisfaction levels declined across 12 of the 13 sectors covered in UKCSI. The exception was Customer service builds trust the Utilities sector, which saw a small increase (of 0.4 By delivering an increase of 10 percentage points in its points) in customer satisfaction between January 2014 customer satisfaction score, an organisation can expect and July 2014. Nonetheless, Utilities remains the lowest on average an increase of 12 percentage points in the scoring sector. Retail (Non-food) continues to be the trust ratings from its customers. highest performing sector in UKCSI. Customer service drives loyalty Relatively few organisations are raising Organisations with high UKCSI scores have significantly satisfaction levels larger numbers of customers who are very likely to Of the 197 named organisations featured in UKCSI, only remain as customers, compared to those organisations 28 increased their score by at least one point compared with lower levels of satisfaction. to July 2013. But 96 have seen their score fall by more than one point over the same period. Customer service drives recommendation 55% of highly satisfied customers stated that they Consistent high scores at the top of the had recommended the organisation in question. UKCSI rankings Recommendation rates drop below 15% for satisfaction John Lewis tops the UKCSI ratings for July 2014 with a ratings below 6 (out of 10). score of 87.7. It is followed by two other consistent high scorers, Amazon and First Direct. But 37 of the top 50 Customer service drives sales in the retail organisations for customer satisfaction have seen a fall food sector in their score in the past year. Dwr Cymru (Welsh Water) For the fifth consecutive period, the average year-on- is the organisation with the largest increase in its UKCSI year sales growth delivered by food retailers with a score (+6.7 points) over the past year. UKCSI score above the sector average is better than that of the below average competitors, by a margin of 3%. Older customers are on average much more satisfied than younger ones Customers aged 65 and above have an average customer satisfaction score of 80.3 compared to 72.5 for those aged 18 – 24. Customers in socio-economic groups A, B and C1 have lower average satisfaction than those in C2, D and E.
Institute of Customer Service 3 UKCSI July 2014 | The state of customer satisfaction in the UK
customer satisfaction: the state of the nation
Customer satisfaction in the UK has fallen for the third consecutive six-month period. The July 2014 UK Customer Satisfaction Index (UKCSI) – the average of all customer responses in the Institute of Customer Service’s six-monthly customer survey1 - dropped by 0.8 points, to 76.3 (out of 100), from 77.1 in January 2014. We are now seeing a marked downward trend in the satisfaction of UK customers.
The national UKCSI score, 2009 to 2014 79
78 78.2 78.0 77.9 77 77.3 77.4 77.1 76 76.7 76.3
75 75.6 75.2 74
73 74.1
72 UK Customer Satisfaction Index (UKCSI) 72.0 71
70 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14
1. The UKCSI survey is run twice each year, in May and November. The results are published in the July and January editions of the report.
4 Institute of Customer Service UKCSI July 2014 | The state of customer satisfaction in the UK
UKCSI performance by sector
The fall in customer satisfaction applies to all sectors except Utilities, which achieved a small increase of 0.4 points between January 2014 and July 2014. However, it remains the lowest-scoring of the thirteen sectors in the UKCSI, with an average rating of 69.4.
The biggest drops in satisfaction by sector were seen in Leisure (-1.3), Insurance (-1.3) and Services (-1.4).
For the first time since the UKCSI began in2008 , satisfaction with the Insurance sector has fallen behind satisfaction with Banks & Building Societies.
It should be noted that the Services sector score has been affected by the UKCSI reclassification of Royal Mail (from Public Services (National) to Services) following the government’s sale of a majority share of the organisation. The score in Services excluding Royal Mail was 80.1, a drop of just 0.1 compared to January 2014.
UKCSI scores by sector 50 60 70 80 90 100
Retail (Non-food) 82.2
Retail (Food) 80.9
Tourism 79.8
Automotive 79.7
Leisure 79.6
Services 78.8
Banks & Building Societies 77.7
Insurance 77.6
Telecommunications & Media 72.2
Transport 72.1
Public Services (Local) 71.9
Public Services (National) 70.9 Jul-14 69.4 Utilities Jan-14
Institute of Customer Service 5 UKCSI July 2014 | The state of customer satisfaction in the UK
Customer service performance of organisations
Amid the overall drop in satisfaction, there is significant variation in customer satisfaction performance among the 197 named organisations featured in the UKCSI. Only 28 organisations increased their score by at least one point compared to July 2013. But 96 have seen their score fall by more than one point over the period.
Evidence from the UKCSI suggests that there are four broad segments of organisations, in terms of customer satisfaction:
Segment Business impact
Remain well placed to benefit from customer Organisations with consistently high customer recommendation, loyalty and trust, but are potentially satisfaction ratings vulnerable to rising customer expectations and rapidly changing needs
Well positioned for sustainable business success Organisations that have seen significant recent provided they retain a focus on customer service and improvement in their customer satisfaction satisfaction
Organisations whose customer satisfaction is around Likely to be vulnerable to rising customer expectations or below the average for their sector and is relatively and rapidly changing needs and preferences stable
Likely to experience challenges in maintaining customer Organisations whose customer satisfaction ratings trust, loyalty and recommendation, with potentially have declined damaging consequences for sustainable business performance
6 Institute of Customer Service UKCSI July 2014 | The state of customer satisfaction in the UK
Top 50 named organisations UKCSI score UKCSI score Change in UKCSI UKCSI Rank UKCSI Rank July 2014 July 2013 July 2013 - July 2014 July 2013 July 2014
John Lewis 87.7 90.8 -3.1 1 1 Amazon 87.6 89.0 -1.4 2 2 First Direct 86.3 87.2 -0.9 3 4 Tesco Mobile 85.8 82.6 +3.2 4 31 Marks & Spencer (Food) 85.6 86.7 -1.1 5 5 Waitrose 85.0 88.5 -3.5 6 3 Specsavers 84.4 n/a 7 Aldi 84.2 86.2 -2.0 8 8 Next 84.0 82.2 +1.8 9 35 Nationwide 83.5 83.7 -0.2 10= 23 The Co-operative Bank 83.5 86.7 -3.2 10= 5 Pret A Manger 83.4 n/a 12 Center Parcs 83.3 78.9 +4.4 13 89 Argos 83.0 83.7 -0.7 14= 23 LV= 83.0 83.3 -0.3 14= 27 Boots 82.9 81.8 +1.1 16 44 Toby Carvery 82.8 83.7 -0.9 17 23 Skoda 82.7 85.6 -2.9 18= 10 Tesco Bank 82.7 76.4 +6.3 18= 123 Mercedes Benz 82.6 84.4 -1.8 20 18 Greggs/Baker's Oven 82.5 84.8 -2.3 21= 14 Honda 82.5 84.7 -2.2 21= 15 Iceland 82.1 85.8 -3.7 23 9 P&O Cruises 82.0 78.6 +3.4 24= 94 Premier Inn 82.0 82.1 -0.1 24= 37 Hyundai 81.8 81.5 +0.3 26= 48 Morrisons 81.8 80.9 +0.9 26= 58 eBay 81.7 82.8 -1.1 28 29 P&O Ferries 81.6 81.9 -0.3 29 41 Kia 81.5 84.6 -3.1 30= 17 Superdrug 81.5 n/a 30= Marriott 81.4 85.3 -3.9 32= 12
Institute of Customer Service 7 UKCSI July 2014 | The state of customer satisfaction in the UK
Top 50 named organisations UKCSI score UKCSI score Change in UKCSI UKCSI Rank UKCSI Rank (continued) July 2014 July 2013 July 2013 - July 2014 July 2013 July 2014
Subway 81.4 82.4 -1.0 32= 34 RAC 81.3 81.1 +0.2 34= 55 Sainsbury’s 81.3 82.5 -1.2 34= 33 Hilton 81.2 84.2 -3.0 36 21 Autoglass 81.1 81.9 -0.8 37 41 BMW/Mini 81.0 82.0 -1.0 38= 40 Toyota 81.0 82.8 -1.8 38= 29 Asda 80.9 82.2 -1.3 40= 35 Audi 80.9 84.3 -3.4 40= 20 Costa Coffee 80.9 82.1 -1.2 40= 37 Wilkinson 80.9 83.5 -2.6 40= 26 Yorkshire Bank 80.9 n/a 40= Northern Ireland Electricity 80.8 77.1 +3.7 45 114 Marks & Spencer (Non-food) 80.7 86.7 -6.0 46 5 Pizza Express 80.6 81.8 -1.2 47 44 AA 80.5 81.0 -0.5 48= 57 Caffe Nero 80.5 82.1 -1.6 48= 37 SAGA Insurance 80.5 83.9 -3.4 48= 22 Volkswagen 80.5 81.4 -0.9 48= 51
John Lewis and Amazon continue to be the highest as helpful, friendly and competent - are particular ranked organisations for customer satisfaction. John strengths. Amazon meanwhile has emerged as a Lewis has reclaimed the no.1 position in UKCSI in leader in the areas of “Ease of doing business” and July 2014, having been placed no.2 in January 2014. “Timeliness”. This is despite its score being 3.1 points lower than a year ago. Two organisations appear in the top 10 for the first time. Specsavers makes its first appearance in John Lewis receives consistently high scores across UKCSI and Tesco Mobile’s ratings have continued all customer experience metrics in UKCSI. Its to improve, making it the fourth highest ranked ratings in the area of “Professionalism” - driven by organisation. customers’ experiences with staff commonly rated
8 Institute of Customer Service UKCSI July 2014 | The state of customer satisfaction in the UK
The most improved organisations A number of organisations have defied the national trend of declining customer satisfaction. Ten organisations recorded a UKCSI score improvement of more than 3.5 points between July 2013 and July 2014.
These top 10 improvers represent a range of sectors and business models. A number of them are from sectors which are not among the highest performing for customer satisfaction. Their performance demonstrates that despite the influence of economic conditions and rising customer expectations, it is possible to improve customer satisfaction by focusing on customer experience and service.
Top 10 most improved organisations UKCSI UKCSI +/- Sector July 2014 July 2013
Dwr Cymru (Welsh Water) 76.9 70.2 +6.7 Utilities Tesco Bank 82.7 76.4 +6.3 Banks and Building Societies HM Passport Office 77.4 72.3 +5.1 Public Services (National) Homeserve 75.2 70.4 +4.8 Services Center Parcs 83.3 78.9 +4.4 Tourism East Midlands Trains 75.9 71.7 +4.2 Transport First ScotRail 74.0 69.9 +4.1 Transport Butlins 80.1 76.3 +3.8 Tourism Northern Ireland Electricity (NIE) 80.8 77.1 +3.7 Utilities Santander 77.4 73.8 +3.6 Banks and Building Societies
Institute of Customer Service 9 UKCSI July 2014 | The state of customer satisfaction in the UK
Sustained improvement in customer satisfaction
Short term improvements in customer satisfaction are an encouraging indicator of future performance, but realising the business benefits of better customer service requires a sustained and consistent focus.
The three organisations with the largest rise in customer satisfaction over the past five years (since July 2009) are:
• Northern Ireland Electricity, up 13.8 points • Homeserve, up 10.6 points • Nationwide (Building Society), up 7.1 points
The chart illustrates the UKCSI score improvement achieved by these three organisations. These are shown alongside John Lewis, Boots and Premier Inn. These are three of the twelve organisations that have received scores of more than 80 (out of 100) in every set of UKCSI results since July 2009, an achievement which indicates sustained high levels of customer satisfaction2.
2. In total 110 named organisations have received UKCSI scores in all 11 surveys from July 2009 to July 2014. Of these 110, 12 have received a UKCSI score of 80 or above in every survey during this five-year period. There are two organisations that have received a UKCSI score above 80 in 10 of the 11 UKCSI results since July 2009, and which did not appear in just one set of results; these are First Direct and Saga Insurance. Amazon have appeared in all five sets of UKCSI results since January 2012 and have scored over 80 on each occasion.
10 Institute of Customer Service UKCSI July 2014 | The state of customer satisfaction in the UK
The 12 organisations with UKCSI scores above 80 in every set of results since July 2009
Organisation Sector The AA Services Asda Retail (Food) Boots Retail (Non-food) Hilton Tourism John Lewis Retail (Non-food) Marks & Spencer (food) Retail (Food) Marks & Spencer (non-food) Retail (Non-food) Marriott Tourism Premier Inn Tourism RAC Services Toby Carvery Leisure Waitrose Retail (Food)
UKCSI performance over five years for selected organisations 95
90
85
80
75 UKCSI Score
70
John Lewis Nationwide 65 Boots Northern Ireland Electricity Service (NIES) Premier Inn Homeserve 60 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14
Institute of Customer Service 11 UKCSI July 2014 | The state of customer satisfaction in the UK
why is customer satisfaction falling?
The January 2014 UKCSI report suggested a number of factors which may help explain why customer satisfaction has fallen since January 2013, having previously risen continuously from 2008. Feedback from a number of our members has amplified this analysis:
• Cuts in business and public sector investment • Customer needs and preferences are evolving. prompted by the prolonged economic downturn Convenience, ease of doing business and speed may have had a negative impact on the customer are becoming increasingly important experience at many organisations • The issue of trust has remained firmly in the • As growth returns to the economy, there is a spotlight - organisations in a range of sectors temptation for strategic focus to shift from have come under intense scrutiny over their retaining customers through a deliberate focus business practices, their responsiveness to on customer service to aggressive and rapid customer and public concerns and their ability to growth in customer numbers and market share manage crisis situations.
• Customers’ expectations of service are rising. They are better informed and often have greater choice. They have become less tolerant and more demanding of the organisations they deal with and are highly selective about where, and if, they buy. When customers are dissatisfied they are increasingly likely to express or escalate it through social media
12 Institute of Customer Service UKCSI July 2014 | The state of customer satisfaction in the UK
Customer needs and expectations
We have examined a number of factors which are shaping the context for customer service in the UK. These include expectations and satisfaction levels by customer segment; how customers interpret the relative importance of price and service; and customers’ emotional response to the organisations they deal with. Customer satisfaction varies by customer segment
Customer satisfaction is significantly higher, on average, among older people. Indeed, levels of customer satisfaction rise progressively with each age cohort. One possible explanation is that younger people’s expectations are driven at least in part by the ease of doing business and wealth of information they are accustomed to in the online world. They may therefore be more demanding and less tolerant with the service they experience across a wide range of sectors.
There are also notable differences in the UKCSI scores of different socio-economic groups, though they are less pronounced than those for different age groups. Individuals in the “A” socio-economic group, which includes senior professionals and managers, are on average less satisfied than those in the C2, D and E groupings. In some cases the age and socio-economic profiles collide; the lower age profile of the C1 group (typically administrative and clerical workers) may contribute to the average satisfaction score for this group being lower than that for the B group (typically managers, administrators and professional people at intermediate levels).
Institute of Customer Service 13 UKCSI July 2014 | The state of customer satisfaction in the UK
UKCSI score by age group UKCSI score by socio-economic group 80.3
77.4 79.5 75.9 76.0 78.5 78.6 74.4 77.9 77.6
72.5 76.1
18 - 24 25 - 34 35 - 44 45 - 54 55 - 64 65+ A B C1 C2 D E
There are a number of implications for organisations in the customer satisfaction differences between customer segments:
• Organisations need to develop a deep • Organisations that serve a wide range of understanding of the needs and preferences, customers, of different ages, and from different across the whole customer experience, of the socio-economic groups, will find it difficult customer segments they serve to raise their overall satisfaction unless they understand and respond to the different • The relatively lower levels of satisfaction in preferences and expectations of all customer younger age groups suggest that, now and in segments, including the most demanding. the future, organisations will continue to be challenged by rising customer expectations
14 Institute of Customer Service UKCSI July 2014 | The state of customer satisfaction in the UK
Customers’ attitudes towards the relative importance of price and customer service
Price is an important facet of customer satisfaction for most customers, but there are distinct differences in the way customers weight the relative importance of price and service. UKCSI asks customers to rate how they balance price and service by providing a score from 1 to 10, where 1 = “no frills service and low price” and 10 = “excellent service and high price”.
19% 17% 17%
13%
7% 6% 6% 5% 5% % of all customers 4%
1 2345678910 No frills service and low price Excellent service and high price
Price vs service score % of Characteristics of this segment (1 = “no frills service and low price”, customers 10 = “excellent service and high price”) surveyed3
• These customers are driven to secure the cheapest deals • They are likely to shop around and switch between sup- 1 to 3 15% pliers • They may be prepared to compromise service levels to get the cheapest deal
These customers favour a reasonable balance of price and 4 to 7 60% service, but require at least a minimum level of service
These customers seek excellent service and are prepared to 8 to 10 24% pay a higher price to get it
The majority of customers will not accept a low level of service in return for a better deal. Faced with the choice, they opt for a balance of service and value, seeking at least a minimum threshold level of customer service. There is a notable minority of customers – just under one quarter – who are seeking excellent service and will pay a premium price for it, as well as a segment (15% of customers) who are primarily motivated by low pricing.
3. Due to the rounding of percentages, figures do not add up to 100%.
Institute of Customer Service 15 UKCSI July 2014 | The state of customer satisfaction in the UK
There are marked differences in price / service preferences in different sectors. In the Utilities and Telecommunications sectors, there are significantly larger proportions of customers who prioritise lower pricing and fewer who say they will pay more for excellent service. By contrast in the Automotive, Leisure, Retail, Services and Tourism sectors, there are higher than average numbers of customers who place a high value on service and say they would be prepared to pay more for it.
Price vs service score (1 = no frills service and low price; 10 = excellent service and high price)
Sector 1 to 3 4 to 7 8 to 10
Automotive 10% 62% 27% Banks and building societies 17% 61% 21% Insurance 15% 63% 22% Leisure 13% 59% 27% Retail (Food) 16% 58% 26% Retail (Non-food) 14% 59% 27% Services 11% 60% 28% Telecommunications and Media 15% 65% 20% Tourism 10% 59% 31% Transport 17% 62% 20% Utilities 24% 58% 18%
16 Institute of Customer Service UKCSI July 2014 | The state of customer satisfaction in the UK
What customers think and feel about organisations
Customers were asked to provide three adjectives to describe their experience with the organisation they had dealt with. The most common adjectives are “easy”, “friendly” and “helpful”. This serves as a reminder that, even in a context of declining overall satisfaction, most customers are satisfied, most of the time, with the service they receive.
There are qualitative differences in the service experience between sectors. In Retail (Non-food), there is a strong emphasis on ease of doing business and speed - “easy”, “quick” and “helpful”. In Retail (Food), “friendly” is the most frequently cited adjective, but “easy” is becoming prevalent, reflecting the growing use of convenience formats and online-enabled home delivery.
Customers use a number of positive adjectives, including “friendly” and “helpful”, to describe their experiences with Local and National Public Services. However, in both sectors the relatively low frequency of “easy” suggests these sectors may need to focus more on keeping up with customers’ expectations around ease of doing business.
In the Utilities and Transport sectors, the word “expensive” is cited much more frequently than in other sectors, reflecting the relative significance of price as a driver of satisfaction in these sectors.
Automotive: Banks & Building Societies:
fairness experienced money feedback modern adequate knowledgeable adequate accessible affordable annoying effective frustrating empathic expensive understanding freindly pleasant staff pleasant timely fantastic average know informative acceptable competent good trustworthy quality polite good difficult honest courtesy value costly service fun helpful secure fast helpful bank poor quick exceptional reliable effective don’t unhelpful courteous satisfying clear fine knowledgable service confident frustrating honest efficient local happy efficient comfort convenient simple angry annoying satisfied great competent car know cost fair happy reliable caring polite average easy cool boring confusing fair clean satisfied excellent simple friendly competant brilliant accurate ease brilliant speedy disappointing safe exciting nice helpful slow difficult cool easy don’t convenient well rewarding excellence fast friendly nice fine enjoyable satisfactory satisfactory professional informative satisfying slow expensive useful quick great efficent competant flexible useful busy excellent cheap quality trustworthy confusing disappointing straightforward caring professional speedy complicated comfortable competitive
Institute of Customer Service 17 UKCSI July 2014 | The state of customer satisfaction in the UK
Insurance: Public Services (National): caring cheaper acceptable great quality honest unreliable knowledgeable affordable competitive brilliant clean speedy service average annoying kind competent consuming competent reliable honest caring excellent useful don’tsimple cheap good competant flexible annoying trustworthy fast helpfulprompt bad effective bureaucratic free confident happy unhelpful reasonable quality value confusing polite satisfying quick satisfactory friendly cheapest clear bad easyconvenient long good staff costly slow frustrating informative delayed convenient boring safe rude simple complicated courteous complicated straightforward happy polite ease easy satisfactory average fast cost long straightforward adequate efficientfine local fair great competant know ease informative don’t value speedy incompetent busy poor cool nice efficient service loyal british friendly excellent angry price difficult disappointing clear helpfulquick comprehensive expensive fair experienced reliable nice pleasant expensive insurance slow pleasant prompt fine satisfied supportive frustrating time difficult money car professional customer courteous knowledgeable time professional effective disappointing confusing trustworthy consistent understanding
Leisure: Retail (Food):
competitive entertaining straightforward frustrating warm forward exceptional cheerful satisfied cost filling welcoming satisfactory amazing satisfying dirty helpful staff fun affordable different reliable exciting offers simple effective cool value competitive great coffee qualityfun slow bargains helpful staff comfortable boring fast reasonable freindly busy clean tasty happy don’t relaxing expensive efficient brilliantefficient polite speedy choice good quick stock cost money polite delicious fantastic quality know slow local cheap big reasonable pleasant simple local clean best cold good professional nice economical know reliable quick satisfiedfriendly easy affordable fair pleasant choice fine excellent easy fresh busy price disappointing fast service average hot enjoyable enjoyable cheap ease basic money friendly happy satisfactory effective expensive fine crowded fantastic great convenient value service food convenient food don’t nice excellent familiar satisfying competent successful cheerful fresh consistent competentrange poor professional average variety trustworthy prices smooth frustrating products
Public Services (Local): Retail (Non-food):
approachable availability trustworthy bargains reasonable reassuring fantastic nice speedy expensive accessible warm slow poor bad inexpensive comprehensive informative range informative rude difficult fantastic great trustworthy bad disappointing extensive basic ease annoying choice excellent brilliant excellent delivery consuming goodaverage convenient boring caring effective good enjoyable customer complicated competitive staff fast cheerful confusing staff busy satisfactory long easy happy helpful friendly exciting frustrated kind efficient angry clean amazing useful value pleasant comfortable ease calm know clean simple cost great variety friendly cool bargain competent knowledgeable effective speedy easy poor reliable money expensive simple quality fun cool quality professional local efficient affordable cheap helpful fair useful unhelpful fast fine big polite competent wait convenient know busy brilliant quick slow don’t frustrating quick local boring satisfying satisfied nice time prompt reliable happy pleasant don’t straightforward professional satisfactory service annoyed freindly price frustrating expert exceptional service adequate efficent arrogant disappointing waiting appointment straightforward interesting
18 Institute of Customer Service UKCSI July 2014 | The state of customer satisfaction in the UK
Services: Transport: unreliable enjoyable free comfortable fantastic punctual know difficult frustrating expert satisfactory slow crowded efficent prompt annoying affordable approachable caring local happy relaxing clear fine polite efficent fun quick great pleasant busy adequate safe pleasant expensive courteous clean reasonable unhelpful convenient average quality fast good competent caring cheap available cheerful excellent speedy timely late difficult bad friendly acceptable useful cheap reliable cool efficient polite long delivery punctual excellent enjoyable helpful satisfactory hard poor frustrating good ontime adequate prompt easy bad pricey unhelpful value simple ease coolfriendly time busy competent exciting nice fair timely service fast simple useful nice easy helpful quality efficient average costly clean chatty bus competant boring dirty cost professional reliable basic poor great competitive expensive informative convenient quick value don’t happy cramped informative staff fair local freindly trustworthy annoying comfortable time satisfied frills disappointing unreliable reasonable service slow experienced professional competitive trustworthy effective courteous thorough satisfied effective confusing knowledgable understanding straightforward price delayed disappointing
Telecommunications & Media: Utilities:
knowledgeable competant distant average arrogant hard unreliable straightforward nothing acceptable consuming disappointing professional lengthy disappointing satisfied pleasant customer satisfactory excellent competent speedy simple competent irritating time okay confusing fair informative call poor competitive rubbish simple frustrating best courteous know necessary friendly efficient bad fine fair long stressful quick long greedy informative friendly price clearexpensive polite fast satisfying difficult reliable polite convenient reliable easy annoying professional great service satisfied fine clear service easy consuming amazing bad quick knowledgable good fun satisfactory fast unhelpful convenient angry don’t useful happy effective efficient cool time effective slow costly great adequate value pleasant slow none lengthy cheap customer don’t helpfulaverage helpful hard know quality unhelpful value nice frustrating speedy expensive frustrated straightforward honest quality happy prompt good poor trustworthy difficult confusing complicated costlycheap annoying incompetent efficent uncaring brilliant understanding boring excellent knowledgeable trustworthy overpriced
Tourism:
poor modern exceptional dont bad fantastic clear customer useful relaxing cost accessible freindly price welcoming annoying enjoyable cheerful quality effective entertaining great convenient amazing standard reliable comfortable boring warm satisfied brilliant comfy friendly cheap comfort expensive basic consistent pleasant fun affordable professional easy helpful prices reasonable use fast fine polite service difficult happy excellent efficient ease inexpensive choice know exciting value fair competent clean adequate different good interesting satisfying quick family nice straightforward informative average budget dirty simple flexible trustworthy competitive satisfactory confusing caring disappointing
Institute of Customer Service 19 UKCSI July 2014 | The state of customer satisfaction in the UK
why customer satisfaction matters: the business impact
The declining trend in customer satisfaction has important implications for business performance in two key respects:
For individual organisations For the UK economy
The link between customer satisfaction and There is a risk that falling levels of customer future business performance means that those satisfaction in the UK may impact negatively on organisations with high and / or improving the country’s reputation as an attractive place to satisfaction will be much better placed to take invest and do business. Moreover, the ability of UK advantage of increasing customer demand than companies – in all sectors - to benefit from growing those with weaker levels of satisfaction demand in global markets is underpinned by the customer experience they offer.
Measure Business impact The evidence Trust • Central to an organisation’s ability An increase of 10 percentage points to retain and acquire customers in an organisation’s UKCSI score, cor- relates to an average increase of 12 • Affects an organisation’s ability to percentage points in the trust rating collaborate effectively with from its customers partners and suppliers • Influences reputation with the media and analysts, with potential implications for shareholder value and ability to raise investment funds Loyalty • Enables retention and increased • Organisations achieving relatively spend from existing customers high UKCSI scores (more than 82.5 points out of 100) benefit from high levels of customer loyalty. 88% of their customers score 9 or 10 out of 10 when asked to rate their liklihood of remaining a customer • An organisation with a UKCSI score below 77.5 can expect less than one third of its customers to show these high levels of loyalty
20 Institute of Customer Service UKCSI July 2014 | The state of customer satisfaction in the UK
Measure Business impact The evidence Recommendation A leading indicator of future growth • The majority of customers (55%) who gave an organisation an overall satisfaction rating of 9 or 10 points (out of 10) in UKCSI stated that they had subsequently recommended the organisation • Just 29% of customers who gave an organisation a rating of 7-7.9 had given a recommendation • Average recommendation rates drop below 15% for satisfaction ratings below 6 Sales growth in the Retail food sector Drives the organisation’s growth and During 2013 and 2014 there has market share in a competitive market been a consistent link between where customer spend is tight customer satisfaction and sales growth • The sales growth delivered by the food retailers with a UKCSI score above the sector average has been better than that of the below average competitors by a margin of at least 3% • The combined market share of companies with a higher than average UKCSI has grown, while the combined share of the below average UKCSI organisations has decreased
Year on year sales performance in the 12 weeks to 25 May 2014 • Food retailers with a July 2014 UKCSI score above the sector average (80.9 points) achieved average growth of 8% • All companies with a UKCSI score above the sector average increased sales, except Morrisons which registered a fall in sales of 4% • Food retailers with UKCSI scores below the sector average delivered average growth of 5%. However, the performance of Lidl, whose sales growth was 23%, was a significant influence on this figure. Without Lidl, the below-average organisations registered an average sales decrease of 0.5%
Institute of Customer Service 21 UKCSI July 2014 | The state of customer satisfaction in the UK
Customer satisfaction and trust
10
9
8
7
6 Trust rating for the organisation (out of 10) 5
4 50 55 60 65 70 75 80 85 90 UKCSI rating for the organisation (out of 100)
22 Institute of Customer Service UKCSI July 2014 | The state of customer satisfaction in the UK
The 17 organisations scoring 8.2 (out of 10) or more for customer trust all have UKCSI scores that are considerably higher than the national average.
Most trusted organisations Trust score UKCSI Rank UKCSI Score
John Lewis 8.9 1 87.7 Marks & Spencer (Food) 8.8 5 85.6 Aldi 8.5 8 84.2 Amazon 8.5 2 87.6 First Direct 8.5 3 86.3 Waitrose 8.5 6 85.0 Boots 8.4 16 82.9 Next 8.4 9 84.0 Skoda 8.4 18 82.7 Tesco Mobile 8.4 4 85.8 Greggs/Bakers Oven 8.3 21 82.5 Honda 8.2 21 82.5 Hyundai 8.2 26 81.8 Iceland 8.2 23 82.1 Marks & Spencer (Non-food) 8.2 46 80.7 Pret A Manger 8.2 12 83.4 Wilkinson 8.2 40 80.9
Note: Where organisations have the same published trust rating, they are listed in alphabetical order.
Institute of Customer Service 23 UKCSI July 2014 | The state of customer satisfaction in the UK
Customer satisfaction drives loyalty
100% 88% 90% % of customers that are very loyal (i.e. those scoring 9 - 10 for 80% likelihood of remaining a customer 70%
60% 47% 50% 38% 40% 32% 30% 26% 18% 20% 10% 10%
0% Below 70.0 70.0 to 72.4 72.5 to 74.9 75.0 to 77.4 77.5 to 79.9 80.0 to 82.4 82.5 & above UKCSI score of the organisation
Customer satisfaction drives recommendation
60% 55% % of customers that have recommended the organisation 50% 41% 40%
29% 30%
20% 20% 14% 11% 10% 5% 4% 1% 0% 1 - 1.92 - 2.93 - 3.94 - 4.9 5 - 5.9 6 - 6.9 7 - 7.9 8 - 8.9 9 - 10.0 Customer’s satisfaction rating (1-10 scale)
24 Institute of Customer Service UKCSI July 2014 | The state of customer satisfaction in the UK
Customer satisfaction and sales growth: the retail food sector
40%
Aldi 35%
30%
25% Lidl 20%
15%
10%
Waitrose
Source: Kantar Worldpanel 5% Asda Iceland Co-op (Food) Sainsbury’s 0%
Tesco Morrisons -5% Annual sales growth for the 12 weeks to 25th May 2014
-10% 72 74 76 78 80 82 84 86 UKCSI score
Retail food year on year sales growth
0% 1% 2% 3% 4% 5% 6% 7% 8% 9%
8%
5% Organisations with above sector average UKCSI Organisations with below sector average UKCSI
Institute of Customer Service 25 UKCSI July 2014 | The state of customer satisfaction in the UK
Retail food year on year market share change
1.5%
Aldi 1.0%
Lidl 0.5% Waitrose
Asda 0.0% Iceland Co-op (Food) Sainsbury’s -0.5% Morrisons
Source: Kantar Worldpanel -1.0%
-1.5% Tesco
Annual market share change for the 12 weeks to 25th May 2014 -2.0% 72 74 76 78 80 82 84 86 UKCSI score
Retail food year on year market share change
-0.3% -0.2% -0.1% 0.0% 0.1% 0.2%
0.10%
-0.25% Organisations with above sector average UKCSI Organisations with below sector average UKCSI
26 Institute of Customer Service UKCSI July 2014 | The state of customer satisfaction in the UK
UKCSI key facts
6 Number of years UKCSI has run, beginning in January 2008
Number of sectors UKCSI covers, 11 in the private sector as well as local and national public sector. Sector reports with a detailed 13 breakdown of scores by sector and organisation are published for each sector.
Number of unique responses included in July 2014 UKCSI from 9,522 customers. Customers are geographically and 40,842 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 interaction.
Number of individual organisations and organisation types which received a UKCSI rating. 197 named organisations which 213 have exceeded a minimum sample size are scored in the 13 sector reports. In addition, scores are given for 16 generic providers including “your local Council”, “your local restaurant” etc.
Number of times per year UKCSI is published, normally January and July. To view the latest UKCSI results, please visit 2 www.instituteofcustomerservice.com/ukcsi
Institute of Customer Service 27 UKCSI July 2014 | The state of customer satisfaction in the UK
organisations included in UKCSI July 2014
Automotive: Esure Public Services (National): DHL Transport: Audi Hastings DVLA Enterprise Rent-A-Car Arriva - Bus group BMW/Mini Legal & General HM Passport Office Green Flag British Airways Citroen LV= HMRC (Inland Revenue) Hertz East Coast Fiat M&S Jobcentre Plus Homeserve East Midlands Trains Ford More Th>n NHS / hospital service RAC easyJet Honda Nationwide Post office Royal Mail / Parcelforce Eurotunnel Hyundai Prudential Timpson First Capital Connect Jaguar SAGA Insurance Retail (Food): Your local builder First Great Western Kia Sainsbury’s Aldi Your local dry cleaner First Group - bus companies Land Rover Sheila’s Wheels Asda Your local electrician First ScotRail Mazda Tesco The Co-operative (food) Your local estate agent First TransPennine Express Mercedes Benz The Co-operative Insurance Iceland Your local hairdresser Flybe Nissan Virgin Money Lidl Your local painter & decorator London Midland Peugeot Zurich Marks & Spencer (food) Your local plumber London Underground Renault Morrisons Your local solicitor Monarch Airlines Seat Leisure: Sainsbury’s National Express Skoda Burger King Tesco Telecommunications & Media: Northern Rail Toyota Caffe Nero Waitrose 3 P&O Ferries Vauxhall Cineworld BT Ryanair Volvo Costa Coffee Retail (Non-food): EE (Everything Everywhere) South West Trains VW Domino’s Pizza Amazon Giffgaff Southeastern Trains Greggs/Baker’s Oven Argos O2 Stagecoach Banks & Building Societies: Harvester B&Q Sky The Trainline.com Bank of Scotland JD Wetherspoon Boots Talk Talk Virgin Atlantic Barclays KFC Currys/Dixons/PC World Tesco mobile Virgin Trains First Direct LOVEfilm Debenhams T-Mobile Halifax McDonalds eBay Virgin Media Utilities: HSBC Odeon H&M Vodafone Anglian Water Lloyds Pizza Express Homebase British Gas Nationwide Pizza Hut Ikea Tourism: Dwr Cymru (Welsh Water) NatWest Pret A Manger John Lewis Butlins E.ON RBS Starbucks Marks & Spencer Center Parcs EDF Energy Santander Subway Matalan Expedia first utility Tesco Bank Toby Carvery New Look Haven Holidays Northern Ireland Electricity The Co-operative Bank Vue Cinema Next Hilton (NIE) TSB Your local fish & chip shop Poundland Holiday Inn Northumbrian Water Yorkshire Bank Your local restaurant Primark Lastminute.com npower Specsavers Marriott Scottish and Southern Energy (SSE) Insurance: Public Services (Local): Sports Direct P&O Cruises Scottish Power AA GP surgery / health centre Superdrug Pontins Scottish Water Admiral Your housing association WH Smith Premier Inn Severn Trent Water Aviva / Norwich Union Your local Ambulance Service Wilkinson SAGA Holidays South West Water AXA Your local council Thomas Cook Southern Water BUPA Your local Fire Service Services: Thomson Thames Water Churchill Your local Police Service AA Travelodge United Utilities Direct Line Autoglass Virgin Holidays Wessex Water Endsleigh City Link Yorkshire Water
28 Institute of Customer Service UKCSI July 2014 | The state of customer satisfaction in the UK about UKCSI
UKCSI (UK Customer Satisfaction Index) is the UKCSI survey focuses on customers’ actual Institute of Customer Service’s national measure experiences of organisations. Respondents of customer satisfaction. It provides insights into are asked to rate their experience of individual the state and direction of customer satisfaction organisations they have dealt with in the previous at a national level, across 13 key sectors and for three months. To do this they score a series of individual organisations. metrics on a scale from 1 to 10. These metrics relate to professionalism, quality and efficiency, UKCSI was launched by the Institute of Customer ease of doing business, timeliness, problem Service in 2008. It provides a unique way of solving and complaint handling. The metrics reflect measuring the current customer satisfaction of UK the priorities that consumers rate as the most customers, as well as trends over time. important elements of the customer experience, according to Institute of Customer Service Methodology research. To create UKCSI, the Institute of Customer Service runs a large online survey of consumers twice a The UKCSI score for each organisation is the year: average of all of its customers’ satisfaction scores. Overall scores for each sector – and for the UK as a • The July 2014 UKCSI results included in whole – are mean averages of all responses. this report are based on 40,842 survey responses. Each response is a completed Each published set of UKCSI results incorporates online questionnaire relating to the customer the data from the previous two surveys, which experience with a specific organisation creates a rolling measure of the state of satisfaction. In the July 2014 results, therefore, • These responses are provided by 9,522 individual the responses included are those from the UKCSI customers. The respondents are representative of surveys completed in November 2013 and May the UK adult population, according to region, age 2014. and gender.
Institute of Customer Service 29 UKCSI July 2014 | The state of customer satisfaction in the UK
also available
UKCSI sector reports ServiceMark
Sector reports are available for all 13 sectors ServiceMark is a national standard which covered in UKCSI at demonstrates an organisation’s commitment to www.instituteofcustomerservice.com/ukcsi customer service. ServiceMark provides an independent validation Use the sector reports to: of an organisation’s achievement in customer • Benchmark your organisation against others in service, identifies opportunities for improvement the sector, using the detailed data on customer and learning and helps motivate and engage your satisfaction, complaints and each of the employees. customer priorities ServiceMark consists of three elements: • Identify the organisations rated highest for customer satisfaction in the sector and Assesses how your customers Business rate your organisation against understand their service strengths, as viewed by Benchmarking more than 25 priority measures their customers UKCSI of satisfaction • Compare the sector to others in the UK economy A unique assessment tool which provides insights into your ServCheck • Identify which channels customers in this sector employees’ engagement with your customer service strategy use and how satisfaction varies by sector Independent assessment including a report with Assessment Business Benchmarking recommendations for action planning UKCSI
Members of the Institute of Customer Service are Find out more at: able to benchmark themselves against the results www.instituteofcustomerservice/servicemark of the UKCSI survey, using the Institute’s Business Benchmarking service. This provides detailed insights into an organisation’s service performance and comparisons against the highest scoring organisations in their sector.
Members of the Institute also have the option to benchmark themselves against business-to- business sector averages, where this is relevant to their business model and target market.
30 Institute of Customer Service UKCSI July 2014 | The state of customer satisfaction in the UK other institute research
The power of service Are you being engaged? How Utilities can improve customer focus and 2014 business performance. Shows how Utilities can address the challenges Employee engagement and its influence on and opportunities of a changing market by placing customer satisfaction and buying behaviour. a renewed focus on the customer. Includes This research demonstrates the importance of frameworks and recommendations for improving employee engagement as a driver of positive customer satisfaction and enhancing trust and customer experiences and improved business reputation. performance. It updates research the Institute published in 2012 on this topic.
Customers and citizens
Further Building the Case for Customer Service in the Public Sector. This research examines the key challenges in Visit: www.instituteofcustomerservice/research delivering excellent customer service in the for more information and to access Institute public sector. It provides organisations, including research. government, with recommendations for developing customer focus and delivering better outcomes for citizens.
Structures for success
How models of business ownership can influence customer service. Examines whether some business models are better at delivering customer service than others. Highlights ways in which organisations can learn from other business model types in order to improve service, be they mutuals, PLCs, private companies, partnerships or franchises.
Institute of Customer Service 31 UKCSI July 2014 | The state of customer satisfaction in the UK
Institute of Customer Service
The Institute of Customer Service is the UK’s Key activities undertaken by the Institute include: independent, professional body for customer • Research and reports on the latest customer service, with over 400 organisational members service trends and thinking and over 5,000 individual members. Our purpose is to enable organisations to achieve tangible • Publication of the UK Customer Satisfaction business benefits through excellent customer Index (UKCSI) twice a year service aligned to their business goals; helping individuals to maximise their career potential • Benchmarking and diagnostic tools to identify and employability by developing their customer areas for improvement by surveying customers service skills. and employees
We provide a framework for our members to • Training and accreditation programmes for share and learn from each others’ service delivery customer service professionals experiences and offer wide-ranging support for • Professional qualifications for individuals at all continuous customer service improvement. As the stages of their career professional body we are independent – setting standards so that our customers can improve • Public policy development. their customers’ experiences and their business performance. For further information please visit
www.instituteofcustomerservice.com
32 Institute of Customer Service
UKCSI Sector Reports
Get the latest insights on the state of customer satisfaction based on the experiences of customers in your sector
Use the UKCSI sector reports to:
• Benchmark the customer satisfaction • See the link between customer service and performance of leading organisations on business priorities including loyalty and trust a range of key metrics • Identify which channels customers use and • Identify the highest rated and most improved how satisfaction varies by channel organisations for customer satisfaction
• Compare the customer satisfaction performance of 13 sectors
UKCSI sector reports are available for:
• Automotive • Banks & Building Socities • Insurance • Leisure • Public Services (Local) • Public Services (National) • Retail (Food) • Retail (Non-food) • Services • Telecommunications & Media • Tourism • Transport • Utilities
Carnival House T: 0207 260 2620 5 Gainsford Street E: [email protected] London instituteofcustomerservice.com SE1 2NE