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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.

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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!

 

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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?

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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.

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Mandatory (mine) fields

Tech target emailI was talking to a client this week about using workforce automation to build better customer experiences so it seemed timely when an email popped into my inbox with the title “How automated workforce management improves customer satisfaction”.

After clicking on the link I met with this and there’s a couple of observations to be had;

Firstly, in order to download the 8 page document, you’re expected to fill in 13 mandatory fields! Not just 1 or 2 but 13. It would take me longer to fill this out than read the 8 page document I wanted to download. I don’t even have to go to this much effort to log onto my online banking with all it’s security checks.

Frustration index downloadMy second observation, was the title;

“Service Industry Consumer Frustration Index.”

What beautiful irony. What’s actually more frustrating than having to complete 13 mandatory boxes? -Not much to be honest. So much so that I never started which makes me question the value of the article and the motives behind this approach.

In an ever growing content and value world, building trust with both brands and individuals through sharing is now common place without companies and contributors asking much if anything in return.

However, those 13 boxes are clearly in the companies own self interests for future marketing purposes. The way they’ve gone about it though is clumsy and reminiscent of marketing from 20 years ago where companies wanted (and held) most of the control and the consumer had very little. It’s not like that anymore but it appears that not everyone has realised..

How much effort would you got to access content?