no-image

UK Customer Satisfaction results – July ’18 highlights PT1

This is the first of two articles looking at the high and lows of the July ’18 results from the Institute of Customer Service. You can download the Executive summary here.

For a quick skim read of the key takeaways, just read the headers and you’ll be good to go!

Overall customer satisfaction across all industries is slightly down on last year

The numbers. The overall index is 77.9, down 0.3 on this time last year from the joint highest score with Jan ’13 of 78.2.

Of the key customer measures, trust and customer effort remain the same. However the number of customer experiencing a problem has positively decreased (from 13.1% to 12.8%) whilst the number of customer experience that are right first time has declined from 80.7% to 78.7%.

Despite overall satisfaction decreasing, Net Promoter has increased by 1.3 to 18.3.

Retail (non Food) sector scores highest in both CSAT and NPS

Consistently at the top of the table,  Retail (non Food) has a CSAT index of 82.1 and an NPS score of 40.5, with both scores being well above average. Bottom of the table comes Transport with an index of 72.5, having declined from July ’17, whilst for NPS, that position is reserved for Utilities with -4.9 highlighting the gulf in recommendation between highest and lowest performing sectors.

Amazon top the table, followed by John Lewis

Amazon retain their first place from last year with an index of 86.7, followed closely by John Lewis at 87.5. Two companies tie for joint third on 86.1; Next and Yorkshire Bank, with the bank rocketing up the table from 103 this time last year.

First Direct and Nationwide tie for joint fifth on 85.6 with First Direct down from their second place last year.

Other companies that have made significant moves up the table include;

  • Trivago at 16th place, up from 136th last year to 83.3
  • Kia at 33rd place, up from 136th to 81.8
  • Jaguar at 37th, up from 190th to 81.6

Not surprisingly, Yorkshire Bank, Trivago and Jaguar have the largest increases in satisfaction.

Bringing up the rear of the top 50 companies (only published in the free report from the UKCSI) is Toby Carvery at 81.2 and joint 48th. However to give them their just deserves, they were 106th last year!

No utilities companies now reside inside the top 50. Ovo Energy sit just outside at 81, down from their 42nd place at 81.8 last year.

Interestingly nearly twice as many organisation’s scores have declined by two points versus those that have improved by two points (55 vs 28)

There are 4 new entrants to the UKCSI; Great Northern, Dacia, Virgin Money and South East Water.

6 Key differentiators Makes a Difference to higher customer satisfaction performance

  • Low customer effort
  • Ease of getting through
  • Trust
  • Cares about their customers
  • Helpfulness/competence of staff
  • Speed of response

High performing organisation also have higher percentages of right first time experiences (88.2 vs 79.4), lower problems experienced (9.1 vs. 12.5) and higher complaint handling satisfaction (7.1 vs 5.7). This also suggest that customers expect problems rather than expect perfection but they way in which they’re handled is critical to avoid them impacting customer satisfaction.

6 Biggest priorities for improvement

  1. Make it easier to contact the right person to help me
  2. Better website navigation
  3. Better product/service range
  4. Better accessibility
  5. Better quality of product/service
  6. Better speed of response/resolution

Whilst priorities vary by sector, making it easy to contact and better website dominate as a theme across most sectors.

That’s it for part 1. Part 2 covers;

  • Customer satisfaction and business performance
  • Doing the right thing
  • Demographics
  • Opportunities and enablers.

If you want to discuss anything mentioned here further, or want to know how we can help you improve your organisation’s customer experience to reap more business results then please get in touch.

no-image

Northern Power Grid customer service round table

I was recently invited to take part in a round table conversation on the subject of delivering great customer service.

It probably goes without saying that I’m a massive fan of any organisation who looks to learn more about their customers with a view to improving their customer experience.

The organisation in question was Northern Power Grid – the northern distributor of electricity who “keep the lights on, the kettles boiling an the phones charged for 8 million people across the North East, Yorkshire and northern Lincolnshire.”   

They deal with consumers and businesses alike, and other attendees for the group included Northumbrian Water and the Hanro Group

They’ve a unique challenge when it comes to customers though as unless you’ve experienced a power cut, or requested a new connection in a property – you’ve most likely never heard of them!

In a perfect world, they maintain supply, sit quietly in the background and do what they need to, to maintain the network supply. It’s more than likely, most people won’t be able to articulate who they are and what they do which is where their challenge arises.

Engaging and delivering a service to customers who don’t know who they are, and why they’re there is difficult. In the event of a power cut, people just want their supply restored in as fast a time as possible, and that’s stressful for everyone including NPG who are already on the back foot in a situation like that – if it’s not a planned outage.

I’ve worked with a number of utility businesses including Southern Water who were able to boost customer engagement by, of all things, inviting customers to one of their water treatment works!

Apparently, once customers understand the amount of work and effort that goes into cleaning and recycling their water, it shifts customers’ appreciation of what’s involved and, more importantly what their bills contribute towards.

However, NPG are investing time and effort to understand what customers want – both consumer and business and to work towards improving on what good work they already do.

I’m for one keen to keep a track on their progress. Good luck to them!

 

no-image

UKCSI – Customer experience in channels

In the final bite size post around the latest UKCSI from the July results, we’re going to look at the use of and satisfaction with both digital and traditional channel preferences from a customer perspective and some of the key takeaways for organisational learning.

Digital vs. traditional?

Just over a third (36%) of all customer experience take place through a digital channel (web, email, chat, text, app or social media) with the remaining 64% through traditional channels (face to face, phone or writing). Satisfaction between digital and traditional is broadly similar, 77.8 for digital and 78.5 for traditional.

However, there are more notable differences when looking across sectors. Out of 13 sectors, only Utilities and Tourism show over 50% digital channel preference by customers (52.9% and 66.3% respectively). The least digitally adopted customer experience sectors are Retail (Food) at 16.6%, Public services local at 17%, national at 21.8% and Leisure at 18.5%.

Digital continues to be both an opportunity and a challenge for public services with the ongoing cost pressures they face whilst trying to maintain and improve the customer experience. Demographics within a local authority, access to the internet and the complexity of individual circumstances continue to be barriers in service transformation that we at Custerian see directly with public sector clients. Optimised, blended solutions supported by efficient and effective processes, delivered through engaged employees seem to be the way forward.

Does task make a difference to channel or satisfaction?

One key takeaway around channel is that preference doesn’t necessarily lead to higher satisfaction and that customers use channel for different purposes.

Digital takes preference for enquiries with 21.6% of customers versus 12.9% traditional channels but with lower levels of satisfaction for digital (74.1 vs. 77.7).

For purchase, traditional trumps digital at 46.8% versus 39.4%, however here digital has marginally higher customer satisfaction levels (80.3 vs. 80.1).

 Is digital all about the youth?

Whilst the general perception is that digital is dominated by youth, the real usage of the channel is more broadly spread.

The highest usage range ranks as follows;

Interestingly, when you look into digital channel usage by gender, women use email as a higher usage channel than men (9.9% vs. 6.7%) and use it 53.6% of the time when making an enquiry vs. only 30.6% by men.

However again, channel preference doesn’t guarantee satisfaction. Despite the higher adoption of email use by women, they’re less satisfied when compared to men which bucks the overall trend as women are generally more satisfied than men.

Digital strategy and consistency for customer experience

The final key takeaway is that there definitely seems to be different strategies within organisations to a digital vs. traditional channel approach from the results. However what is clear is the need for consistency across channels in terms of customer experiences, allowing customers their preference of choice.

And final thoughts..

This closes out our series of 3 mini blogs on the July ’17 UKCSI results. We’ll continue to keep a keen eye on the numbers as we progress through what could economically and politically be a very disruptive remaining 6 months of 2017, not to mention the continued expansion of digital and technology advances and adoption, which if delivered well by organisations should create better, more integrated and friction less customer experience. Here’s to progress!

no-image

UKCSI July ’17 results. Problems, complaints and the elephant in the room

This is our 2nd of 3 posts about the most recent UKCSI results.

This post focuses on the problems and complaints findings from the report and is expanded on, to show the wider impact to organisations which is the real elephant in the room that’s not being addressed. This is less about the report results per say, but more a reflection on organisational behaviour that needs to, but has yet to significantly change.

Let’s start with the numbers first though.

Improved complaints handing has contributed to the improvement in the customer satisfaction index over recent years. However the volume of complaints is back to the level that it was at in 2015 when overall satisfaction was at its lowest.

13.1% of customer experienced a problem as indicated in the July 17 report, compared to only 10.2% of customers who actually made a complaint following a problem, albeit this is the highest percentage it’s ever been.

If this was extrapolated out as a percentage of the working population (based on ONS working population data) then that’s 5 million people complaining in the last 6 months alone.

In addition, the percentage of escalated complaints for non-resolution is also up from 41.4% to 48.6%.

Retail, Public Services and Leisure are the three sectors seeing the highest number of escalated complaints with a year on year average increase of 11%.

Availability of goods/services account for 75.2% of complaint escalations with quality/reliability of goods/services being the most cited reason for a problem.

So what’s changed?

Three main factors have driven the increase in satisfaction with complaints handling;

  1. Faster resolution of complaints
  2. More favourable perceptions of employees’ behaviours during the complaints process
  3. More problems being actively followed up by organisations with customers, to ensure they have been resolved.

However, year on year the increase in customer satisfaction is only up 0.5 to a whopping 5.7 out of 10! This seems like a lot of effort for very little return. I’m not suggesting to not try and improve complaint handling but surely there’s a wider, bigger point to address?

So where’s the elephant then exactly?

From ICS’s own research, they indicate that on average there are 2.8 contacts between a customer and an organisation on a complaint, which rises to 3+ when a complaint isn’t resolved.

70% of these contacts they also state, are by phone, generating an estimated 9.9 million additional telephone calls.

On average the handing of a telephone contact costs £3.55*

An additional 9.9 million calls then costs on average £35,145,000 in unnecessary and probably avoidable cost to organisations and bear in mind this has been increasing year on year, every year for the last 8 years!

In lean six sigma terms this is waste. A lot of waste. Waste that can be identified and eliminated to improve not just the customer experience and their levels of satisfaction, but an increase and optimisation in internal efficiency and effectiveness.

This cost of handling additional contacts doesn’t even take into account the cost of reputational damage to organisations, lack of consumer confidence and trust (transparency and fairness) and business that has gone to competitors that could have stayed in place.

Why waste time and money trying to get better at something, when you could eliminate the need to improve by getting rid of the problem that caused the complaint?

Is it me or am I missing something?

The elephant in the room is that the specific causes and sources of problems aren’t being addressed and fixed. Instead, organisations seem to be getting (marginally) better at handling complaints, rather than eliminating the root causes.

Now you could argue that as customer expectation is constantly on the increase, the customers are more demanding than ever before and so are less tolerant of poor and average performance and that is in part correct.

But at The Customer Experience Coach, born out of our own experience, we see it time and time again. We see it within almost every organisation we work with. We also see it in our design thinking workshops when we get people to the point of clarity on what’s the real problem they’re trying to solve by making a change or driving new innovation.

You can literally see the light bulb moment appear on the faces of the people we share design thinking with who come to the realisation that for years they’ve been throwing solutions at problems that they don’t truly understand. The resulting situations are unnecessary, costly and resource heavy projects that either fail completely, or fail to deliver the solution because nobody took the time to understand what the exact problem was that they were trying to solve in the first place.

And so this is why organisations try to get better at handling complaints because the alternative appears to be too big, too messy to untangle and needs a collaborative approach to solving problems and most organisations aren’t in that space.

Ever heard the phrase “it’s like rearranging deck chairs on the titanic”. Something that’s easy to do but ultimately futile. It makes people look busy and they think they’re making a difference but really?

This isn’t a criticism, more an observation on reality. Organisations aren’t going to make a significant dent on complaints if they’re not prepared to really look at the root causes and fix the real specific problems rather than the imagined ones.

The same goes for design thinking. If you design a solution for a poorly defined problem then you’re not going to solve the problem.

So if this situation resonates with you on any level and you’d like to discuss any of the issues or challenges mentioned then please get in touch.

*Source Contact Babel UK contact centre benchmarking report 2015/16)

no-image

UKCSI – July 17 latest results – Is the high street weathering the turbulent landscape?

In a series of bite size articles, this being the first, we’re going to explore the findings from the latest UK Customer Satisfaction Index results from the Institute of Customer Services.

This first piece covers the high level results, sector performance, key differentiators and loyalty. The following articles look at the impact of problems and complaints and the final part looks at channel preference and usage by customers.

To down load the full report with an executive summary click here

UK CSI Highlights

The overall index is back to its highest point ever, in the UKCSI’s 8 year history, last seen in 2013 at 78.2, up 0.8 year on year (from 77.4) amidst the turbulent back drop of a recent election and the continued Brexit discussions.

Improvements in satisfaction with complaint handing seem to be the significant driver of moving the overall index. However the number of customers indicating problems with organisation is on the increase which suggests a lack of root cause elimination of the causes of customer problems. Something we’ll discuss in more detail in the next post.

Average NPS is slightly up by 1.3 to 17 compared to this time last year but down by a massive 5.2 points from 22.2 in 2013. The average level of trust is unchanged year on year (at 7.7 out of 10) but customer effort has increased (+0.2 to 4.9), meaning customers are finding it more difficult to deal with organisations to get what they need.

6 sectors have increased by more than one point, and interestingly these include public services and utilities.

Of the 245 organisations in the CSI, 63 increased their score by over two point whilst 29 organisations fell by the same amount.

Of the 20 most improved organisations, 8 are utilities (6 water companies and 2 energy) and 5 are train operating companies driven in part by the desire from the regulator for better customer experiences.

The top 50

The usual suspects lead the league table; Amazon take top spot with 87, followed by first direct on 85.8 and John Lewis on 85.4.

Jet 2 Holidays are in the CSI for the first time and have come straight in at 4th place with a score of 84.8.

The only other new entrant in the top 50 is Pets at Home, in at joint 15th with Wilko and Premier Inn who all score 83.4

The largest year on year increase in satisfaction at 6 points is M&S (financial services), with the largest decrease seen by Iceland at 1.9, dropping their position from 16th last year to joint 47th this year. 

So what’s different about the top 50 from the rest?

Apart from year on year consistency overall, complaints handling, phone experiences and getting things right first time are the key differentiators.  

The graphic shows the 3 key differentiators broken down into their respective components and the difference in scores across each. Cleary the top 50 organisations are capable of delivering higher and more consistent performance in  these areas.

So is loyalty dead?

This is a discussion and debate that’s been around for a while now along with the ‘is it worth wowing customers versus delivering brilliant basics?’

Certainly in respect to the loyalty question the answer is no. However customers are much more discerning and demanding with where they choose to place their loyalty (trust and confidence) than ever before.

From the numbers perspective the impact on the difference in loyalty, trust, recommendation and reputation are quite marked between customers who score 8 out of 10, to those who score a 9 or 10 out of 10. That 1 point of difference in score could mean a significant amount in repeat business (or lack of) to an organisation. If you think of all those moments of truth (or interactions) that a customer experiences, there are a lot of opportunities to make a difference and organisations need to both understand and capitalise on them if they’re going to continue to succeed. The graphic shows the difference in percentage terms that 1 point can make.

Outcome focus

The July results report finishes with 6 areas of focus that have implications but are also areas of opportunities for organisations that should in an ideal world, already be on the radar;

1.       Quality of customer experience design

2.       Eliminating problems

3.       Engaged, competent people still make the difference

4.       Positioning service in a context of rising prices

5.       Segmenting by customer preference

So that’s a roundup of the high level numbers. The next part will focus on problems and complaints results and trends and the real elephant in the room that’s still not being tackled.

 

 

no-image

State of the Nation: UKCSI Jan 2016 results. New Year New Start?

The latest results are out and make in the main for encouraging reading.

This month, the UKCSI, the national measure of customer satisfaction on the high street has seen an index 2 year high, reversing, for the second consecutive period the previous two year decline we saw between January ‘13 and ‘15.

39,000 customer responses were collated covering 296 organisations, which gave an overall index of 77.0 (out of 100) this month, up 0.8 points compared to July 2015 (76.2) and up one point compared to January 2015 (76.0).

However this is still below the all-time high of 78.2 seen in January 2013 so whilst it’s a positive sign, we’re not there yet in terms of customer recovery.

However of those 296 organisation, 96 saw an increase, whilst only 44 saw a decrease in results.

Other key highlights include;

  • Amazon topping the charts with a score of 86.6, albeit down marginally (0.1) in the Jan16 UKCSI top 19 last 12 months. They displace First Direct who have held the top spot for a while now to 3rd place behind Utility Warehouse
  • Retail (food) and Retail (non-food) still top the sectors
  • Utilities as a sector shows the biggest increase with 1.9 points, albeit 12th from 13 sectors overall. Encouraging gains but not out of the woods just yet as 1 of 5 sectors below the average.
  • Utility Warehouse (top of their Utility sector and straight in at 2nd place), Trailfinders (top of their Tourism sector)and RIAS (over 50’s insurance) all appear in the Top 50 for the first time
  • T-Mobile sees the biggest increase at 9 points over the last twelve month which is a significant shift, a similar performance last seen by Lovefilm in July 2015 with an 8.2 point increase.
  • Banks and Building Societies is the only sector down by over 1 point in the last twelve month
  • Telecomms and Media still languish at the bottom with a sector average of 72.6
  • The 25 and over 65 age groups remain the most satisfied
  • As do the Welsh amongst areas in the UK, compared to the Southwest who saw a decline in satisfaction
  • As are Women who are more satisfied in general than men (apart from in the Automotive sector)
  • For the naysayers who still don’t believe that great experiences and high levels of satisfaction drive (financial) results, Food retailers with a UKCSI at least one point higher than the sector average achieved average sales growth of 7.6% compared to a drop in sales of 0.4% for those with a UKCSI at least a point below the sector average.

Customer preference by channel and method of interaction;

  • In person (46.9%)
  • Website (22.6%)
  • Over the phone (20.2%)

However, when you look at the new channels of contact including apps and social media the results are not as I expected them to be;

Jan16 UKCSI channel preference

  • Out of all 13 sectors, apps only provide the highest levels of customer satisfaction in the Bank and Building Societies sectors although it’s unclear how widespread apps are deployed across the other sectors.
  • Public sector local and national websites provide the least satisfying experiences (think HMRC – ok so maybe that’s not a surprise)
  • Webchat only features in the Telecomms and Media sector and not for the right reasons being below average satisfaction

Channel Hopping

Nothing new here on this but goes to reinforce previous research and patterns of customer behaviour;

  • Most customers (58%) use one channel of communication when they interact with organisations.
  • A sizeable minority say that they use two (34.1%), but then there’s a marked drop off in usage (both overall and across sectors) to three (5.6%) or more than three (2.3%) channels.
  • Customers who used three or more channels were much more likely to say that they had experienced a problem (27.7%) with the organisation in the previous three months and give them a lower customer satisfaction rating. This is 3x higher than those that use 1 channel.

I can personally testify to doing this with a company when I didn’t get the results I wanted by email and phone, before taking to twitter to complain. This is all about customer effort. More effort = less satisfaction.

Customer Priorities

Also at the end of 2015, the UKCSI reviewed the importance of customer priorities which was last reviewed in 2010 and there’s some noticeable changes across the – wait for it, 47 customer priorities.

The top 4 most important all relate to staff attitude with the 5th being complaint handling. In order they are;

  1. Staff competence (in person)
  2. Staff doing what they say they will do
  3. Staff competence (over the phone)
  4. Helpfulness of staff (in person)
  5. Handling of the complaint

Interestingly, value for money only features at 13th with price/cost at 20th.

And finally a word about the most important features of delivering a great customer experience; employees.

Employees’ friendliness, helpfulness and competence have become relatively more important in the eyes of customers over the last 5 years, as well as speed of service, especially when dealing with employees in person. Ease of doing business has also increased in importance along the theme of reduced customer effort we’ve discussed over the last 12 months.

All in all interesting times and a continuingly changing customer and business landscape where the agile, fleet of foot excel and the legacy industrial monoliths creak and groan. Here’s to a continued improvement and let’s see what the next 6 months brings.

You can download the report in full here

Source: UKCSI Executive Summary Results January 2016.

no-image

Lush tops Which? customer service survey

The annual customer service survey from Which? is out and the usual suspects feature at both the top and bottom of the list of the 100 big brands rated. You can read the full results here but we’ve summarised the highlights below.

Lush_Logo_640x350The top rated brands were;

1. Lush – 89%

2. First Direct – 86%

3. Lakeland – 84%

=4. Body Shop – 83%

=4. John Lewis – 83%

=4. Waitrose – 83%

Floundering around at the bottom of the list, providing little in the way of surprises came these brands;

=95. Ryanair – 66%

=95. Vodafone – 66%        Which best buy

97. Talk Talk – 64%

98. BT – 63%

99. npower – 61%

100. Scottish Power – 59%

Each brand was rated across 5 areas of service with a possible 5 star maximum in each. The areas scored were;

  • making their customers feel valued
  • knowledge of products and services
  • helpfulness of staff
  • resolving complaints or problems
  • access to customer support.

The 3,501 general public respondents were also asked to give brands an overall rating for customer service, which is where the customer service score comes from. Amazon, M&S, Pets at Home, Waterstones, Dunelm, Clarks and the RAC all made the top 10.

Despite being voted Which? supermarket of the year in 2014, Aldi only managed joint 73rd with 14 other brands including Virgin, British Gas and JD Sports all scoring 71%.

Utilities and telecoms continue to struggle to get to grips with customer service with Scottish Power who were 99th last year swapping places with npower who have been bottom for at least the last two years. Scottish Power, attributed their woes to the often blamed scapegoat of IT. “Last year all our customer accounts were migrated on to a new IT system, which resulted in a very busy period as disappointingly we experienced more problems with the new system than we would have liked.”

IT aside, these two sectors have done little to visibly improve, with big players losing significant ground and customers to the disruptive likes of Ovo Energy and Ecotricity.

If this continues, I wouldn’t be surprised if the respective regulators for these two industries ‘impose’ a change on behalf of customers. Interesting times!

 

no-image

Are Digital Marketers Missing A Trick?

The top three obstacles that marketers face in 2015 are apparently;

  1. New business development
  2. Quality of leads
  3. Keeping up to date with current marketing technology and trends

This is according to research conducted globally across 5000 marketing professionals and published in the 2015 State of Marketing by salesforce.com Marketing Cloud.

The report is interesting and you can find a copy here via the fierce website. Below is the full list of 20 challenges that were articulated;

Most pressing business challenges_2015

The report goes on to further confirm the focus on digital platforms for marketing and that this year is the ‘definitive’ year for mobile.

The report also talks about ‘using technology to craft the customer journey’ and goes on to state;

“For the past 10 years, digital channels and data points have been accumulating at breakneck speed. Every industry has been disrupted. The customer now rules, and speed is the new currency of business. Marketers have scarcely had a moment to make sense of it all with a single big idea that ties everything together. Enter the customer journey. A growing number of marketers today are envisioning their entire marketing strategy under the umbrella of a cohesive customer journey, which we define as all of the interactions a customer has with brands, products, or services across all touchpoints and channels.
According to recent research, 86% of senior-level marketers say that it’s absolutely critical or very important to create a cohesive customer journey. Another 11% view the customer journey as moderately important.

Technology is the essential glue that connects various moments along the customer journey to create one-to-one experiences. From analytics that help marketers create personalized interactions, to mobile applications that create personal brand experiences for every interaction, to CRM tools that let marketers track the span of a customer relationship, the customer journey relies completely on its technological elements.”

The article goes on to chart exactly which technologies are priority to creating a cohesive customer journey, which is as equally important to start ups as it is to established businesses;

Technologies for cohesive customer journey_Sept15

The top 3 being;

  1. Mobile applications
  2. Marketing analytics
  3. CRM tools

So it was at this point that the penny dropped. What about customer retention? Why isn’t this a business challenge?

Are 5000 global marketers saying that customer retention is really not a challenge? Arguably, it could sit outside of the top 20 or it could sit within the ‘other’ category at 1% but to me this doesn’t feel right.

Now I’m not a marketer I must confess, but this feels like marketing are trying to do what they’ve always done. That is to focus pretty much exclusively on front end customer acquisition, with a sprinkling of a focus on ‘in life’ customer interaction but with little or no focus on customer retention, advocacy and loyalty throughout the customer journey. They’re currently trying to do this by moving away from more traditional marketing tools and instead using lots of sparkly new digital toys without truly understanding new digital, personalised customer habits and trends. As a result, there’s no paradigm shift to a new marketing mind set that sees the total customer lifetime as their responsibility beyond mere acquisition.

Now it might be that these 5000 marketers have in their business, someone else responsible for customer retention but surely if this is the case, these should be symbiotically related and so as to share the responsibility of customer retention beyond mere acquisition? It’s more costly just to shovel new customers in at the front end without the opportunity to retain and grow those same customers for life.

To further substantiate this point, looking at the top 10 technologies to create a cohesive customer journey, there’s no mention of any Voice of Customer (VoC) technology to provide customer insight into the journey at critical touch points as a way to further inform and improve the customer experience and subsequently the marketing process.

VoC Hub Dashboard

VoC systems such as SandSIV’s VoC Hub are as much an asset to marketing as they are to any other part of the business and marketing are missing a trick if they’re not ‘plugged in’ to, or even considering tools like this to complete the holistic picture of the end to end customer experience.

Whilst it shows an increased willingness for marketers to communicate with customers across multiple channels and touch points, the rationale for this is still based on what’s most important to the business first (new customer acquisition), rather than what’s most important to customers.

‘Listen hard and act fast’ as SandSIV would say and include VoC within the marketing mind set and on the technology wish if you want to stay ahead.

 

 

no-image

Customer loyalty, trust and the limbic brain

I recently re watched the inspiring Ted Talk from Simon Sinek on how great leaders inspire.

Simon talks about the notion of a golden circle or 3 concentric circles. At the centre, is ‘why’ – the emotion or purpose of why you do what you do (or why a business does what it does). Next out is ‘how’ and the outer circle is ‘what’. Customers buy from the inside out based on the why first, then how and what. Businesses however, sell and communicate from the outside in which is why they often fail in their approach.

limbic brains

They’re very good at telling you what they do and how they do it, but not very articulate (if at all) about why they do what they do. The really important bit that customers really buy and that makes a significant difference between businesses in terms of their success.

Therein lies an often over looked paradox in relation to customers and customer experience.

Businesses want customers to be loyal. Loyalty, as is commonly known drives recommendation, referral and repeat business (Harvard’s 3Rs model). Businesses also want the beholden golden goose of customer trust. The unquestioning kind where customers stay loyal despite challenges and issues because they believe in a brand or business.

These appear to be at first glance rational needs (the what and the how) and requirements from a business perspective but they are not.

Decisions around loyalty and trust come from emotion (the why). Emotion comes from the very oldest and fastest part our brains (as opposed to the more recent neocortex). It’s a part called the limbic system where arguably our intuition and gut feel also stems from. It’s the part of the brain that drives us towards pleasure and away from pain and pretty much kept us alive in prehistoric times.

3 Brain system

Customers act loyal (or trust) based on how they feel first then how they think second by rationalising their decisions. Few people realise this as it contradicts the classic economic theory as first mentioned by Adam Smith in his publication The Wealth of Nations. His idea (now largely debunked yet not widely believed) was that we are all rational decision makers most of the time and that we act only in our own self interest, balancing up costs and benefits before making a decision. In fact, the very reverse is true.

Most, if not all of the time we are emotional decision makers who then rationalise our decisions to avoid believing we made a bad or poor decision in the first place. We also look for supporting evidence to back up our decisions, so we further believe we made the right choice (see the brilliant book ‘Predictably Irrational by the equally brilliant Dan Ariely).

Business (in the main) acts and communicates in the opposing direction to how customers act, by delivering and expecting rational acts (customers buying on features and benefits as an example) to evoke emotion in customers (hopefully positive but often negative!) in order that they’ll buy a product or service.

Emotion is always evoked so that’s definitely a successful outcome delivered. However, in the majority of cases it’s apathy from the customer’s perspective (think financial services and products like pensions), or unless you’re Apple, Disney or Zappos who excel at creating positive emotion. Alternatively it’s frustration or anger that’s generated especially if you’re Ryan Air or npower.

So there’s a lot to be gained by starting at the ‘why’ in business before moving to the ‘how’ and ‘what’ given that’s how customers function but it’s either not done often enough or it’s not done very well. Starting at the ‘why’ in relation to anything customer related is going to be a more positive experience for everyone involved.

‘Why’ moves people to act. ‘Why’ can be a powerful, purposeful story that evokes unstoppable emotion and that lasts. It also builds trust and loyalty and that’s what customers really want; not features and benefits.

So what’s your why?

no-image

UKCSI – State Of The Nation Update

Customer satisfaction on the high street seems to be pulling out of the destructive nose dive we’ve seen in the last 4 waves.

The July 2015 results from the UKCSI are out now and as in earlier posts, I’ve trawled the results and here is a summary for you. Uk map UKCSI

The previous two years of decline seems to have now plateaued with the index rising by a meagre 0.2 from this survey wave to 76.2 overall (out of 100). Way down from the heady heights of 78.2 in January 2013.

194 companies received a score with 56 companies improving by 1 point or higher, with 86 companies registering a fall of 1 point or more.

Interestingly, the historically lowest performing sectors like public sector and utilities are up by at least 1 point in the last 12 months, whereas the higher performing sectors like retail food (-1.2), automotive (-1.4), leisure (-1.4) and services (-1) are down by at least 1 point in the last 6 months.

In terms of sectors, retail food is still top overall with Amazon the highest ranked company at 86.3. Retail food is second with Waitrose ( 84.5) and Tourism is third with Centre Parcs (82.1) taking pole.

UKCSI sector table

Variation within sector though is still vast, with public sector and travel showing a 21 point difference between highest and lowest performers.

Whilst the sectors included are still the same overall there’s some noticeable new entrants signalling a change to established players who need to be wary and double their efforts if they want to keep their ground and not loose further gains.

Ovo energy tops the utilities sector, with Giff Gaff leading Telecomms and Media whilst LOVEfilm top the leisure sector. No surprise on the really latter given its acquisition by Amazon in 2011.

ovo-energy

The usual suspects are still top of the table; first direct, Amazon and John Lewis, despite the latter two showing a decline in performance over the last 12 months down 1.3 and 1.5 respectively.

Again LOVEfilm have had a storming 12 months with the single biggest increase out of the top 50 companies, up a whopping 8.2 points year on year to take them up to fourth place overall.

Skoda is the only automotive company in the top 20 at 11th place (83.0 up 0.3), and Premier Inn is the only hotel chain in the top 50 (80.8 down 1.2).

Most improved, in addition to LOVEfilm are Ryanair (up 8.6 to 68.8) and Southeastern Trains (up 8.4 to 66.9).

Ease of doing business is a key driver to high levels of customer satisfaction and a differentiator between high and low performers. Most of the top 20 performers also rated highly on ease of doing business and low customer effort should be included by organisations looking to improve their overall customer experience.

So why does all this matter?

Well, the UKCSI has tracked the relationship for the last 3 years between customer satisfaction, sales growth and market share for food retailers, a very pressurised market for consumer spend and behaviour, where customer preferences quickly affect business performance.

The research show a strong correlation between customer satisfaction, growth and market share with organisations seeing a 5.5% increases in growth with a score of 1 point higher than the average, compared to a 1% reduction in growth with a mere 1 point performance below the UKCSI average.

Retail Sales Growth

According to the Kantar World panel, Aldi (7th in the UKCSI) lead the way with 15% annual growth follow by Lidl at 10% (outside the top 50) and below the sector average despite performing lower on satisfaction than Waitrose, Iceland and Asda.

The July results further demonstrate and reinforce the view that we have firmly entered the relationship economy.

Customers giving an organisation a 9 or 10 out of 10 are much more likely to trust, recommend and stay with an organisation over those that score 8 showing that companies need to be both aiming and performing at the highest levels in order to keep customers in an era of rapid technology advances and disruptive new entrants to markets.

Organisations achieving scores of 9 or 10 achieve 96% loyalty compared to only 65% of companies getting scores of 8. In addition they achieve 55% of customer recommendation compared to only 39% of those that get an 8.

TrustWordCloud

The biggest gap is around trust with 83% of customers trusting an organisation which they score 9 or 10 out of 10, compared to only 39% of customers who score an 8.

That’s a massive difference that pushes the performance (and expectation) bar only higher.

Companies also need to address how they serve the millennial generation (born 1981-2004) who are the least satisfied generation and the only age group to have fallen year on year, even behind 18-24 year olds. Interestingly however, younger people appear to be more tolerant (and satisfied) when it comes to complaint handling.

The Welsh are most satisfied at 78, compared to the South East who are the least satisfied at 75.2. From a gender perspective, women are on average more satisfied than men, although this varies at sector level where for example in automotive, men are more satisfied, compared to utilities where it’s women.

The volume of complaints expressed by customers are broadly the same year on year at 13.2% with some sector like utilities with lower satisfaction levels, experiencing a higher percentage of complaints at 14.9% compared to retail non food at 9.8% with telecoms at 22.2%.  However nearly a third of customers (26.9%) are ‘silent suffers’  with the view that making a complaint won’t make a difference.

Shouting down phone

The top 3 problems experienced by customers are;

  1. Quality or reliability of good or services (30%)
  2. Staff competence (25.9%)
  3. Late delivery or slow service (25.1%)

A more alarming trend seems to be around escalation and compensation.  41.3% of customers who made a complaint needed to escalate it, up 3% year on year with 31.7% of customers asking for compensation up from 28.1% 12 months ago.

Complaint handling is both a hygiene factor and a differentiator and staff should be empowered and empathetic to meet the needs of customers to avoid damaging relationships and trust, which is difficult to recover.

It’s clear from this latest set of results that customer expectation continues to rise at pace with competition with the pace of change intensifying. The relationship economy continues to be built on quality relationship with customers, and those organisations that see beyond the product and commodity view of the world and both meet and deliver on customer’s psychological needs will continue to outperform and lead the way. However, this is a long term game and businesses should set their sights accordingly, whilst be flexible and adaptive to change. The ‘agile’ approach is the way forward for business and customers.