Is the UK customer satisfaction index right?

The July 2013 UK Customer Satisfaction Index report suggests that the overall level of customer satisfaction in the UK may well have plateaued. Here at Customer Champions we have seen this flat-lining of customer satisfaction across a wide range of companies over the years, yet it certainly has not indicated that customers are portraying high levels of loyalty.

So is satisfaction the wrong measure, or are we missing the detail? The answer is probably ‘yes’ to both.

For some time now there has been a general acceptance that overall customer satisfaction is not a strong predictor of customer behaviour. Yet companies still choose to measure satisfaction. Having said that, an increasing number are choosing a basket of measures, commonly including ‘recommendation’ (NPS) and/or ‘value for money’ (VFM or CVM). This latter approach (VFM) takes into consideration what it is costing the customer to receive the product or service. A good example of how important this is, is to consider the Which? Report on customer service published in September 2013. Bottom of the UK companies for customer service was Ryanair. Now although people do complain about the service level, what they are clearly doing, in ever increasing numbers, is to balance what they are paying against what they are receiving, ie value for money. Satisfaction on its own just doesn’t consider the financial aspect of a relationship or interaction.

Returning to the UK Customer Satisfaction Index it is interesting to observe where particular industries are, and the relationship they have with their customers. The highest scoring sector is the retail sector, with industries such as Tourism and Leisure achieving above average scores. For many people these would be enjoyable and desirable experiences where there is significant choice between suppliers. With customers proactively choosing to invest their time and money they are therefore more likely to start off with a positive disposition towards these market sectors. On the other hand you look at the lowest performing sector of Utilities and below average performing sectors of Telecommunications, Transport, and the Public Sector these will be seen as necessities rather than desirable experiences. Surely their starting point will not be so positive. If this significantly drives the difference in customer satisfaction, comparing them all on one table may not be appropriate. Comparison within a market sector is much more meaningful as the customer has the same starting point and the option to switch between suppliers in that sector.

One final thought, as market sector boundaries blur with offers such as Marks & Spencer offering energy, and Tesco offering telecommunications, will these companies’ overall level of customer loyalty be reduced because of the nature of the new service?


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