UK CSI: State of the nation January 2017 – positive start to the New Year.
Along with the New Year, Burns night and a New American president in office before the end of January, the most recent UK Customer Satisfaction Index results are out and here’s a rundown of the highlights. If you want to read the full exec summary, look at the infographic or the video, you can access everything here (https://www.instituteofcustomerservice.com/research-insight/uk-customer-satisfaction-index)
So are we up, down or the same?
The overall UKCSI index is up by 0.8 (to 77.8) on the same period last year which is the fourth consecutive increase since the low point of 76 in January 2015, and the index is tracking well to match the highest ever score of 78.2 in January 2013. So in the short term, Brexit hasn’t impacted customer satisfaction but the jury is still out on that one.
Interestingly though despite the increase in satisfaction, overall NPS (likelihood to recommend) has declined by 5.2 points (to 13.9) and customer effort has increased by 0.3 (to 4.8) so customers are having to work harder to get what they want but are less willing to commit to repeat business (increased spending) or recommendation to friends and family. Trust stands at 7.7 (out of 10) up a slim 0.1 on last year.
All industry sectors have seen a positive increase apart from automotive, despite 2016 being a record year for new car registrations (not sales).
What about the usual suspects and new players?
Retail (food and non-food) top the table at 82.5 and 81.3, respectively, with Telecoms/Media and Utilities bringing up with rear with scores of 73.6 and 74.4.
In terms of top performing organisation by sector, no surprise that Amazon top non-food (87.3), M&S top food (85.0), Nationwide Building Society joint (84.4) with first direct for financial services and interestingly HM Passport office for public services (78.9). Seemingly gone are the days of passport backlogs by the look of things! The highest utility company is OVO at 82.5 and giffgaff lead telecoms at 84.3.
In the overall top 50 of organisations, retail companies claim all top 5 spaces; Amazon, ASOS (new entry) John Lewis, M&S Food and Waitrose.
Only 9 companies from 50 have seen results decrease year on year with first direct dropping 1.3 points to joint 6th with Nationwide and Greggs.
Other new entrants are Appl
e (82.5 at 29th) and Sheila’s Wheels (81.9 at 33rd).
The differential between the top 50 and the other 180 organisations is driven by complaint handling and over the phone experiences, but the gap is narrowing and there’s only 6.1 points between 1st and 50th showing just how small increments of improvement are made at this level of satisfaction and performance.
So what’s going on with NPS?
The UKCSI doesn’t publicly publish NPS at organisational level – only on sector average but even across that, there’s huge variation.
With an average of 13.9 across all sectors, the highest NPS sector is Retail (non-food) at 39.7 compared to wait for it, utilities (!) at -8.3 with Telecomms being the only other sector with a negative NPS score at -4.9. In fact all sector NPS scores have dropped year on year apart from Transport which is up 0.6 to 8.9 so I’d suggest Southern Rail aren’t in the UKCSI currently!
This should be seen as a concerning trend for organisations who should be working hard to drive customer loyalty unless, in fact they’re struggling more with the rise of digital and multi channel, information parity for consumers and the seemingly almost permanent sales of one description or another especially in the run up to Christmas. Black Friday seemed to run for at least two weeks alongside cyber Monday and the January sales started on Boxing day!
Who’s most improved?
20 organisations have improved the most with London Midland (Transport) at the top with a huge 9.3 point increase to 77.4, followed by P&O Ferries, up 7.9 to 83.4 with Marriott in third, up 7.6 points to 81.8.
Does satisfaction drive market share?
The UKCSI look to the Retail (Food) sector to answer this question, along with sales data from the Kantar Worldpanel. Whilst not the highest satisfaction score for a food retailer at 83.0/20th in the top 50, Aldi drive a 10% growth rate, where Sainsbury and Asda who sit outside of the top 50 are at 0% and -5% growth respectively. Whilst not the sole driver or variable, it certainly plays a significant part given the Aldi model of low prices, restricted range and speed of checkout service.
Likewise, in financial services, those organisations who perform at sector average or above (Nationwide, first direct, TSB and Santander) are all seeing positive gains on new account openings with those below average seeing account closures and declines in customer numbers.
What’s in a point?
Looking at the difference between scores of 8-8.9 and 9-10 show some quite radical variation given only 1-point difference in satisfaction.
This to me, speaks about the marginal gains approach employed by UK Cycling’s Dave Brailsford. Look for 10 things that each make a 1% improvement, not 1 thing that boosts a 10% performance increase, and a lesson that organisations would do well to head in improving customer satisfaction.
Does channel and frequency make a difference?
Indeed it does. Dealing with an organisation’s website or in person score highest at a joint 79.7, with email down at 72.1, despite a near doubling in the percentage of people using that channel for contact; 4.9% last year up to 9% this year.
Frequency counts but more is not always better. 19.2% of people who use an organisation once a week are most satisfied at 80.7, with remaining customers who interact daily, once a month or once every 3 months score lower at an average of 77.2
Linking employee engagement to customer satisfaction
The ICS has conducted some initial research on quantifying the link between the two and initial findings show that a 1-point increase in employee engagement increases customer satisfaction by 0.41 of a point so as well as fixing customer issues and reducing effort, organisations need to double down on improving employee engagement hand in hand with customer. They’re planning a much larger piece of work on this so watch this space.
And that’s a wrap!
They are the key takeaways from the January results. Many of the themes we talk about here at Custerian such as reducing customer effort through organisational efficiency and effectiveness are mirrored here as well as driving brand engagement both internally with employees and externally with customers is a cornerstone of growth and success that organisations should have as a priority focus.
A positive outlook to frame the year amidst a changing geo political landscape and uncertainty both over Brexit, Europe and the U.S political change.
I think organisations will continue to work hard both for employees and customers to drive growth and market share whilst also understanding how to leverage digital more and the other trends that we mentioned in our future trends bog that you can read here if you missed it. Here’s to your continued success this year and be on the lookout for those marginal gains.
CX Improvement Specialist – Custerian