UK Customer Satisfaction Lowest Since 2015

The Institute of Customer Service in the UK has just released their annual research gauging customer satisfaction in the UK. The headline figure is the UK Customer Satisfaction Index (UKCSI), which is now 76.9, that's 0.8 points lower than in January 2019 and its lowest level since July 2015.

John Lewis, first direct, and Next take the top three positions for customer satisfaction by specific brands, but 28% of the 259 companies listed fell by over 2% this year. Throughout the report there is this general concern that satisfaction is declining and in some industries that decline is accelerating.

Creating a great customer experience is expensive, but there is a great example on my CX Files podcast from last year where Mike Havard of Ember Group describes his own experience working with Lego. As most people know, Lego has a fantastic approach to customer service - they go above and beyond normal customer expectations. They worked with Mike to explore if there is a business case for not spending so much on creating a fantastic customer experience. Maybe they could just deliver a satisfactory service instead? Lego found that in several areas, not least customer advocacy, the investment in better service pays off.

I think this can also be demonstrated with the UKCSI research. Take a look at retail in the UK. The two highest performers for customer satisfaction in Retail (Food) – Aldi and Ocado – experienced year on year sales growth of 6.3% and 12.7% respectively. So the brands that are delivering the best service can also be seen to be also delivering the best results for the business.

Some brands are also leaving cash on the table too. There are many customers who are happy paying more if it guarantees better service. Why are so many brands only offering a one-size-fits-all customer experience? 25.9% of customers want to receive excellent service, even if it means paying more. 59.9% of customers want a balance of price and service. Only 14.2% of customers prefer no frills, low cost service. Very few customers are focused on price alone - most want to enjoy their experience with your brand.

25.9% of customers want to receive excellent service, even if it means paying more

Channels are clearly important. Allowing a customer to use the channel they prefer has a huge difference on customer satisfaction. 78.5% are satisfied when using their preferred channel compared to 61.5% when forced to use an alternative. The classic response to a social media interaction of "call us on this number" just isn't good enough.

The UKCSI research makes some clear points. There is still a strong return for those brands that invest in delivering a great customer experience, but at a broad national level customer satisfaction in the UK is in decline. There are many reasons for this and not all are directly linked to the customer service efforts of the individual companies involved. Consumer debt is at record levels, wage growth has declined in recent years, retailers are feeling more squeezed that ever, and customer expectations on service levels and issues such as transparency and ethics are dramatically increasing.

The channel mix is also becoming increasingly complex. Brands are more or less familiar with social networks, but now there are new challenges such as smart speakers and voice-controlled assistants. If I ask my Alexa to recommend a hotel for tomorrow night in central Manchester then I will no longer scroll through one or two pages of results, I will just expect a single good recommendation. Traditional SEO goes out of the window in this environment. How many customer-facing brands are ready for this?

As the CX Rock Star James Dodkins said on a recent episode of my CX Files podcast, everyone working in CX in 2020 needs to justify their role. If companies are not seeing returns from CX investment then many people in this area may be facing an uncertain future.

One of the problems is that although CX investment does consistently correlate to an improvement in the bottom line, there is often a lag. It doesn't happen quickly and it needs continuous support. As the UKCSI research states:

"Improvements in customer satisfaction alone are not always sufficient to generate immediate financial return. Our research has shown that organisations with consistently higher levels of customer satisfaction than their sector average, have achieved stronger revenue growth, margin and ebitda than those who are below the sector average."

So there you have it. Customer satisfaction is in decline and brands are getting nervous about the amount they are spending on CX. The most important message that comes through in this research is to hold your nerve - it will be worth it. Brands like Lego quantified the value to their company of consistently investing in CX - it can also work for you.

Photo by Steve Higgins licensed under Creative Commons