The Institute of Customer Service publishes a survey twice a year to measure customer satisfaction in the retail sector. The UK Customer Satisfaction Index (UKCSI) has fallen to an all-time low and has recorded its lowest score since 2015.
The Institute of Customer Service survey is an independent, objective benchmark which provides consistent measures on 281 organisations and types in 13 sectors.
Customer satisfaction has slumped at the fastest pace on record.
Organisations have taken longer to resolve complaints and more problems remain unresolved.
All sectors have lower customer satisfaction than last year. Transport and Utilities sectors have recorded the biggest declines compared to July 2022.
Only 5% (15 organisations out of 281) have significantly improved on customer satisfaction compared to July 2022.
More people are financially struggling in the cost-of-living crisis. Nearly 1 in 5 consumers (18%) feel their financial well-being is poor or very poor compared to 1 in 8 (12%) in July 2022.
Those whose financial well-being is in bad shape are more likely to suffer a detriment due to deteriorating levels of customer service. They are already struggling with their finances and many are in dire straights.
Customer satisfaction – cost to the economy
Firms taking longer to handle complaints is costing the economy an estimated £9.8bn a year in lost time according to Joanna Causon, Chief Executive of the UKCSI, citing that it is a big blow to productivity.
Perfect storm
Soaring prices and costs, firms unable to hire enough staff and a lack of investment in staff training and effective use of technology has left customers increasingly frustrated and unable to resolve their complaints.
Joanna Causon said, “In some respects the current environment shares a number of characteristics similar to those experienced in the 1970s – a difficult economic situation with high interest rates, high inflation, and a wide range of labour disputes across a range of industry sectors.”
Covid and Brexit
Staff shortages everywhere post-Covid and Brexit has resulted in strike action not seen since the 1970s.
Public sector workers have seen real-term pay cuts for many years. Unions have been pushing for pay rises that reflect the soaring cost of living.
Firms have made it increasingly difficult for customers to contact them.
Covid was seen as a perfect opportunity for many firms to remove all contact details from their websites.
Many organisations are still using ‘the Covid chestnut’ as an excuse for unacceptable delays in responding to queries. A snapshot from the Future Pension Centre highlights this antiquated excuse.
Phone lines are not busier than normal due to coronavirus. Staff “working from home” is the problem here.
Staff who are meant to be providing customer service have been replaced by virtual assistants and chatbots.
Many people will agree that the decline in customer service has coincided with staff “working from home”, and has nothing to do with Covid and Brexit.
Customer satisfaction – the worst performers
Energy and water companies have recorded the biggest drops in customer satisfaction – 5.3% and 3.5% respectively.
OFGEM, the energy regulator, has raised serious concerns about E.On, citing ‘severe weaknesses’ in its customer service performance.
E.On is not alone. They are just the worst in this sector.
OFGEM has highlighted moderate weaknesses and issues with unacceptable customer service waiting times with 11 other suppliers. Others named include Scottish Power, OVO, EDF and British Gas.
OFWAT, the water regulator, named Thames Water the worst for customer service. Southern Water came second in the table of worst performers.
Utility companies may be bad, but they pale into insignificance compared to local and national Government departments such as the DVLA.
Customer satisfaction – the best performers
First Direct and Starling Bank topped the charts for providing consistently good customer service. First Direct consistently ranks as one of the best organisations every year.
I am surprised that Octopus were not mentioned in the best performers. I have never heard anyone complain about their customer service. Greg Jackson, CEO and founder of Octopus Energy, openly displays his email address for customer issues on Twitter and regularly deals with issues directly.
I was with Bulb, who sadly went into administration. Octopus managed the transition seamlessly and I am pleased with how easy they are to deal with.
The Importance of Great Customer Service
The one thing that sets a firm apart from its competitors is great customer service.
Silent losses is the biggest problem firms face, particularly in the private sector. 96% of customers do not complain. They simply walk away and take their custom elsewhere.
Cutbacks on customer service is a short-sighted strategy. Firms need to invest in their staff and training, treat and pay them well.
Richard Branson famously said, “If you look after your staff well, they will look after your customers.” He is also quoted as saying, “Clients do not come first. Employees come first. If you take care of your employees, they will take care of the clients.”
Customers want a frictionless experience and are willing to pay more for it. It’s a win-win. Higher customer service standards equals higher profits and increased loyalty.
Mistakes happen and consumers know that. It’s how they are dealt with that makes the difference.
What are your thoughts on customer service? Do you think it’s worse than ever? Which firms would you recommend or avoid?
If you are struggling with a complaint, I have a book that can help you with that!
