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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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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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npower’s toxic customer satisfaction has got worse – no really it has.

It’s that time of year again – the Which? customer satisfaction reviews on utilities are out and it makes for predictable reading.

The full results and reviews can be found here, although I’ll give you the highlights here.

The reviews are based on scoring from 9,400 consumers at the back end of 2014 across UK utility providers and their customer satisfaction performance across a number of categories;   Which best buy

  • Customer Service
  • Value for Money
  • Accuracy and clarity of bills
  • Complaints
  • Helping you to save money

 

Performance in these areas gets combined to give a percentage score overall.

Top 3 performers are;

  1. ecotricity – 84%
  2. goodenergy – 82%
  3. Ebico – 81%

Bottom 3 are (ex Northern Ireland);

  • EDF – 49%
  • Scottish Power – 41%
  • npower – 35%

It probably comes as no surprise that the ‘big 6′ all feature in the bottom half of the table with two of the bottom 3 companies – npower and Scottish Power all current under investigation and sanction from Ofgem.

npower are currently under investigation for potential breaches to their licence on meter installs for larger non domestic clients and potential breeches in standards on final bills and complaint handling standards for consumers. Details are here.

Scottish Power for a regulator imposed financial penalty and investigation into standards around final bills. Again, details are here.

So not great all in all for these companies.

The Utility sector also scores lowest in the UKCSI out this month with an index of 70.9 versus the top performing Retail (non food) sector scoring 81.4. A gap that barely seems to be closing.

Toxic

More interesting is where npower are now compared to exactly two years ago when their new incoming MD, Paul Massara ‘committed to make his company the industry’s number one for customer experience by 2015′ – as reported in Utility week here. More interestingly, their score then was 39%, 4% better than it is now so rather than get better, they’ve actually got worse.

 

I blogged about it last year and whether in practical terms getting to number one in two years could actually be done. If you want to read the original blog post it’s here, but the Which survey says it all really.

As an aside, while I was researching this blog, I came across an online petition, branded by Which? which calls for a ‘Fix the big 6′ campaign in a ‘broken energy market’. It’s currently got just short of 60,000 signatures…

 

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State of the Nation: UKCSI results are out and it’s not pretty!

The most recent results of the UKCSI are out this month and they don’t make for good reading as to the state of the nation for UK Customer Experience.

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The executive summary can be found here if you want to read it but I’ll cover the key highlights and trends for you here.

  • Customer satisfaction in the UK has now dropped for the fourth consecutive period to the lowest point since July 2010.
  • Only 33 out of 196 organisation have recorded an increase in the last 6 month period
  • Only 2 from 13 industry sectors have improved; Utilities and Banks and Building Societies
  • 3 water companies have shown the largest increases in customer satisfaction by any organisation in the measure; Southern Water, Yorkshire Water and United Utilities
  • John Lewis tops the league table overall, as does the Retail (non food) sector, followed by the Retail Food sector with Ocado scoring highest. John Lewis logo
  • Amazon and First Direct come in joint second
  • Bringing up the rear is the Utilities Sector with Public Services second from bottom
  • The 18-24 age group is least satisfied overall, as are people based in the South East. The over 65s are most satisfied as are people living in Wales
  • Aldi and Lidl continue to dominate the Retail Food sector both on customer satisfaction and annual sales according to the Kantar World panel. All the other majors, apart from Asda and Waitrose saw negative sales growth.
  • At a more granular level, only 2 out of 28 metrics that make up the UKCSI have improved in customer’s eyes; ‘outcome of complaint’ and ‘on time delivery’

Not great news to start the New Year, but not really a surprise as I outlined in my last blog post. So what’s going on?

Well this obviously has significant ramifications for UK businesses on many levels and reflects a number of changing factors which include the economic environment, continued and rapid increases in customer expectation and the inability of organisations to keep pace, in part marked by a lack of investment in infrastructure, digital technology and employee engagement.

Customers want increasingly personalised services and businesses are failing to deliver. Those that are more agile, responsive and innovative are now stealing the lead both in customers’ perception, market share and also on the balance sheet.

Consistency, always has and will continue to play a significant role in delivering a great customer experience. When looking across the 5 service components (professionalism, quality & efficiency, ease of doing business, problem solving and timeliness) John Lewis and First Direct feature in the top 5 organisations in all categories. That’s consistent and systemic customer experience delivery.

So where now? Well I don’t think, this decline in results is at the bottom just yet unfortunately. Businesses always have a choice as to what to do next. Some focus on Hard workshort terms results and quick fixes. Others take the more strategic, longer view in which the customer is front and centre as a priority. Benchmarking, measurement, insight and leadership should command more attention this year combined with a fierce determination to deliver more consistently for customers. It’s now time for everyone to roll up their sleeves and stop talking.

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UK economy grows, customer satisfaction declines

With signs that the UK economy is now starting to recover after the worst slump since World War 2, customer satisfaction however is on the decline.

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July saw the most recent update of the UK Customer Satisfaction Index, which showed the third consecutive drop in customer satisfaction recorded over the last 18 months.

12 of the 13 industry sectors declined with the Retail (non food) sector remaining top of the league whilst the Utilities sector continues to flounder at the bottom of the list despite a small increase in satisfaction over the last six months.

Of the 197 organisations featured, only 28 increased their satisfaction scores, with a massive 96 seeing their scores decline.

The usual suspects remain at the top of the table namely John Lewis, Amazon and First Direct being consistent over the last 12 months. The only noticeable absence is Waitrose, who have dropped to 6th place, down from 3rd in 2013.

John Lewis logo

Within the top fifty organisations, Centre Parcs has shown the biggest improvement rising to 13th place, up from 89th in 2013 with Welsh Water showing the largest improvement out of all the organisations.

So what’s going on then?

Well as we’ve seen since the UKCSI started in January 2008, customer expectation has continued to rise and organisations certainly over the last 18 months have failed to keep pace. In addition to that, customer needs and preferences are evolving. The use of mobile technology is a good example and generally speaking, organisations have been slow to responded to the changing landscape of the customer and digital experience.

The trust issue, or the lack of, has remained front and centre with customers and the continued exposure of poor practice and treatment of customers in addition to some high profile cases of deliberate malpractice has done nothing but undermine customer confidence. There is a very marked and direct correlation between customer  TrustWordCloudsatisfaction and trust, and the trust will need to be rebuilt in order for the direction of the index to reverse.

Finally both public and private sector cost cutting and stalled investment is likely to have had an adverse impact on customer satisfaction, which when combined with the other variables above is painting a less than positive picture of the state of customer satisfaction in the UK.

However, within this environment, there are also opportunities for organisations that can be lean, agile, and innovative with both products and services and who can deliver consistent, simple and effortless customer experiences. In fact now, more than ever in recent years, is a good opportunity to steal a march on the competition for those bold enough to lead the way.

Organisations are going to need to redouble their efforts over the next 12 months and beyond if they’re going to want to see results improve as further decline will start to adversely impact the bottom line.

For further details, visit UKCSI

 

 

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UKCSI results – Consumer satisfaction is on the decline

January 2014 saw the releases of the most recent wave of the UK Customer Satisfaction Index as commissioned by The Institute of Customer Services. The full summary can be found here.

Some of the highlights include;  Companion_member_logo_-_full_colour

  • Customer satisfaction has fallen for the second consecutive period (12 months in total) down by 0.8 to 77.1 out of 100 – a significant change
  • Customer satisfaction declined in 12 out of 13 sectors. Banking ironically was the only sector to buck the trend!
  • The top 5 organisations continue to perform consistently with Amazon ranking highest at 88.6 from 100
  • There’s large diversity in performance over the 120 organisations included with 81 of those seeing performance drop.
  • A 10 point increase in customer satisfaction sees a 13% increase in customer trust
  • A 1 point increase in customer satisfaction (out of 10), generates a 10% increase in customer loyalty and recommendation.
  • When faced with the choice, 60% of customers favour a balance of price and service and will not accept low service levels in exchange for a cheap deal.
  • A substantial minority of consumers – 25% – seek excellent service and are prepared to pay for it, while 15% are highly motivated to find the cheapest deals.

Some great insight from these results and a reminder that organisations can’t afford to ‘ease off the gas’ when it comes to delivering consistently great customer experiences in a backdrop of rising customer expectation.

It’s going to make for an interesting year!