Customer satisfaction in UK plateaus for first time, Insititute’s latest Index reveals

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Causon: retailers could be doing more

Causon: retailers could be doing more

Customer satisfaction in the UK has plateaued for the first time, according to the latest UK Customer Satisfaction Index (UKCSI). 
 
The overall UKCSI has levelled out over the last year, achieving 78 out of 100 in July 2012 and 77.9 in July 2013.
 
Yet, this masks considerable movement in organisations’ scores, with consistent high performers racing ahead.
 
The UKCSI is the national measure of customer satisfaction, from the Institute of Customer Service (ICS), which gauges the quality of UK customer service each year. July 2013’s sample includes 30,683 responses from 9,890 customers.
 
Waitrose (88.5) and first direct (87.2) continue to score highly. Meanwhile, M&S (non-food) appears in the top five for the first time with a rating of 86.7 while Sainsbury’s Insurance has greatly improved (76.2 in July 2012 to 81.1 in July 2013).
 
John Lewis is the highest scoring organisation overall and appears in the UKCSI top five for the third consecutive year, achieving 90.8 out of 100. 
 
The retail industry continues to dominate the UKCSI, with non-food retail scoring 84.4 out of 100 and food retail 81.6. 
 
Jo Causon, chief executive of the Institute of Customer Service, said: “Despite some strong performances over the last six months, the fact that UK customer satisfaction has levelled off suggests that organisations could be doing more to improve their customer service. 
 
“In a fast-paced, recessionary world, consumers have become increasingly discerning and more willing to act if they experience poor service. As a result, those dynamic organisations that are adapting to changing customer needs are continuing to out-perform their competitors.
 
“The success of both established brands with a reputation for service, as well as more recent challengers, demonstrates that customer service is a key differentiator that enables organisations to respond in tough economic conditions.”
 
Top Performing Organisations: Overall
Rank
Organisation
UKCSI score / 100
1
John Lewis
90.8
2
Amazon
89.0
3
Waitrose
88.5
4
first direct
87.2
5 =
Marks & Spencer
86.7
5 =
Marks & Spencer (food)
86.7
5 =
The Co-operative Bank
86.7
8
Aldi
86.2
9
Iceland
85.8
10
Skoda
85.6
 
Table: Top Performing Sectors (July 2012 vs. July 2013)
 

Non-food retail

Consistently the best performing sector for customer satisfaction, non-food retail once again topped the overall board with a score of 84.4. 

Top Performing Organisations: Non-food Retail
Rank
Organisation
UKCSI score / 100
1
John Lewis
90.8
2
Amazon
89.0
3
Marks & Spencer
86.7
4
Debenhams
84.7
5
Argos
83.7
 
John Lewis is the top performer in this sector with 90.8, an improvement on its score of 88.5 in July 2012. 
 
John Lewis consistently achieved 90 points or more in all areas (professionalism, quality and efficiency, ease of doing business, problem solving and timeliness), well above the average overall UKCSI score of 77.9.
 
Amazon maintained its 2nd place position, scoring 90.6 in July 2012 and 89 in July 2013.
 
Meanwhile, Argos improved customer satisfaction, leaping from 13th (81.9) to 5th position (83.7) over the same period.
Causon said: “Successful retailers achieve high customer satisfaction across a wide range of measures. 
 
“Top perfomers such as John Lewis and Amazon have created distinct business models with a clear focus on service to differentiate themselves from competitors. Their success shows that in the highly competitive retail sector, customer service is a key ingredient for organisations.” 
  

Food retail

The top five performing organisations in the food retail sector have all achieved growth in sales and market share (comparing 12 weeks to 26 May 2012 with 12 weeks to 25 May 2013). 
 
Across the sector as a whole, organisations with a higher than sector average UKCSI score saw year-on-year sales growth of 9%, compared to 3% for those with lower scores. The top performing organisations also achieved better market share growth than those with below average UKCSI scores; +0.12%, compared to -0.18%.
 
Waitrose maintained its 1st place position in this sector, with a score of 88.5, compared to 87 in July 2012.
 
The top 5 organisations – Waitrose, Marks and Spencer, Aldi, Iceland and Sainsbury’s all score highly for friendliness and helpfulness of staff. Waitrose and Marks and Spencer also score particularly highly for reputation and staff competence while Aldi and Iceland score strongly on their price proposition. 
  
Top Performing Organisations: Food Retail
Rank
Organisation
UKCSI score / 100
1
Waitrose
88.5
2
Marks & Spencer (food)
86.7
3
Aldi
86.2
4
Iceland
85.8
5
Sainsbury’s
82.5
 
Causon said: “In the retail food sector there is a clear link between high customer satisfaction, sales and market share growth. 
 
“Helpful and friendly staff are a key requirement for all retail customers. However, the range of retailers in this UKCSI’s top five demonstrates that the best performing organisations are those that consistently deliver on a promise, whether that is price, reputation or quality and condition of goods. 
 
“Not only is their consistency rewarded by high levels of customer satisfaction, but crucially, by sales growth and market share.”  
 

Financial services: insurance 

 
In the insurance sector, there is a strong link between higher satisfaction and recommendation. Thirty per cent of customers of companies that score higher than the UKCSI sector average have recommended their provider, compared to 21% for companies with lower scores. 
 
SAGA moved up from 5th place in the insurance sector to 1st between July 2012 (80.2) and July 2013 (83.9). In contrast, AXA has moved down from 3rd (81.2) to 8th position (79.9).
 
Top Performing Organisations: Insurance
Rank
Organisation
UKCSI score / 100
1
SAGA
83.9
2
LV=
83.3
3
M&S
82.6
4
Virgin Money
81.6
5
AA
81.2
  
Causon said: “In the highly competitive insurance sector, customers are looking for companies that can deliver across a range of customer satisfaction measures including: helpfulness, speed of response, problem solving and of course, price. 
 
 “In a sector where customers must frequently make decisions about whether to renew or change their provider, customer satisfaction is a way of driving recommendation and loyalty.”
 
Financial services: banks and building societies 

First direct tops the banks and building societies table, scoring 87.2. Natwest moved up four places from 8th in July 2012 (scoring 78.3) to 4th in July 2013 (with a score of 79.3).
 
The latest Index finds that more customers (29%) have recommended banks and building societies with higher than average UKCSI scores than those with lower satisfaction scores (24%).
 
First direct scores particularly strongly for customer satisfaction measures such as friendliness and competence of staff as well as ease of getting through to speak to someone. In addition the top three organisations for customer satisfaction – first direct, the Co-operative Bank and Nationwide – all score notably well for reputation and the quality of information they provide their customers. 
 
Top Performing Organisations:  
Banks and Building Societies
Rank
Organisation
UKCSI score / 100
1
first direct
87.2
2
The Co-operative Bank
86.7
3
Nationwide
83.7
4
Natwest
79.3
5
HSBC
78.0
 
Causon said: “Excellent service has a key role to play in creating long-term success, but sustainable performance also depends on an organisation’s ability to protect its reputation through effective management of its business model and operations.”