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 2010.
According to the latest UKCSI, customer satisfaction has fallen to its lowest level since January 2015. More than 40pc of customers say they avoided using businesses again if they were dissatisfied with the customer service.
The Institute of Customer Service survey is an independent, objective benchmark which provides consistent measures on 282 organisations and types in 13 sectors.
Customer satisfaction has slumped to its lowest level in 14 years.
UK Customer Satisfaction Index – Key Findings
- 6 of the 13 UKCSI sectors have fallen by at least 1 point compared to July 2023
- 27 organisations have improved by at least 2 points compared to July 2023 but 80 organisations have dropped by 2 points or more
- Timpson (86.0), Nationwide (85.2) and John Lewis (85.0) are the highest rated organisations in the July 2024 UKCSI
- 45% of customers say that whether or not an organisation does the right thing, in its business practices or its impact on society, has influenced their satisfaction
- 62% of customers believe that bad practices or behaviour by a company will damage its long-term reputation and that an entire sector can be tarnished by the actions of one or a small number of companies
- 56% of customers say their satisfaction with an organisation has been influenced by whether they felt it understood and cared for their personal situation and needs
Organisations are taking longer to resolve complaints and more problems remain unresolved.
More people are financially struggling in the cost-of-living crisis. 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
The monthly cost to UK organisations of service failures and problems is £6.8bn in lost time according to Joanna Causon, Chief Executive of the UKCSI. That’s a staggering £81.6bn a year wasted due to poor customer service.
Full-time employees spend an average of 3.3 days a month dealing with complaints, problems and service failures.
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.
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 Scottish Public Services Ombudsman (SPSO) in April 2024 highlights this antiquated excuse.
This delay of up to 4 months is just to allocate a complaint – not do anything with it!
Customer satisfaction – the worst performers
Average customer satisfaction with energy companies is higher than a year ago but satisfaction with water companies has declined.
Customer satisfaction with energy companies has improved by 1.9 points compared to July 2023 at 69.8. It remains 4.3 points lower than in January 2022 and 6 points below the July 2024 UKCSI all-sector average.
Average customer satisfaction with water companies has dropped by 3.1 points compared to July 2023 to 69.5.
This will not come as a surprise to anyone. Thames Water has made the headlines for all the wrong reasons. A rise in sewage pollution and £15.2bn of debt puts Thames Water at a risk of financial collapse if investors do not step in by June 2025.
UK Customer Satisfaction Index – Top 10 Firms
Timpson topped the charts for providing consistently good customer service.
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.
Joanna Causon, Chief Executive of the UKCSI said:
“It is heartening to see that the highest performers in the UKCSI over the past 5 years have in most cases achieved impressive financial results and are looking towards the future with ambition and confidence.
These organisations have several characteristics in common.
- They recognise that customer service is a key business asset and a driver of long-term value
- They demonstrate agility and boldness in response to a challenging environment
- They focus on organisational culture to drive standards and behaviours
High performing organisations also combine financial discipline with a long-term service strategy underpinned by leadership commitment.”
Rocio Concha, Which? Director of Policy and Advocacy, said:
“This research lays bare the dismal state of customer service. While some businesses say they have invested in their customer service, our research shows there’s still a long way to go for companies to get their customer service up to scratch.
“Which?’s research has shown that the drop in standards is felt particularly keenly in essential sectors like energy and broadband – with Virgin Media, British Gas, Ovo and Scottish Power named the worst performers in these sectors. It is never OK for firms to provide sub-standard customer service, but in essential sectors providing vital services millions rely on every day, it is completely unacceptable.
“People should be able to contact companies easily and get the answers they need without unnecessary barriers and in the way that suits them best – whether that is speaking to a person or a chatbot. Any firms that are falling short need to make improvements urgently and ensure they are offering customers the service they expect.”
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 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.
Finally
Firms are making it more difficult for customers who have legitimate complaints. I see it every day with tried and tested tactics (and new ones) to deny consumers a remedy.
It’s the same firms that create the most complaints. They even have Facebook pages with thousands of members sharing their abysmal experiences and seeking advice.
What are your thoughts on the UK Customer Satisfaction Index and 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!