Jo Causon, CEO of the Institute of Customer Service, argues that established high street names must not rely on a short-term approach to attract and retain customers and, instead, focus on improving how easy they are to do business with over a sustained period.
She says: “Whether it’s on the high street or online, customers are demanding faster service, increased choice and better quality goods as the price for their loyalty. It means that how retailers respond and improve the overall customer experience is increasingly becoming a key differentiator and the retailers most likely to succeed, and consistently perform, will be those better able to personalise their service.
“Our own research shows that customer satisfaction in the retail sector has dropped over the past 12 months. It is partly because customers are demanding more, but is also a sign that challenger brands have made real inroads into the customer base of more established retailers, through a sustained focus on the customer experience. Those retailers who respond with innovative ideas that put customer needs at the heart of what they do, making greater connections across the whole service experience and understanding personal needs will be the ones to see performance, profitability and market share improve.”
This is borne out by The Institute’s latest UK Customer Satisfaction Index in which top spot has not been awarded to a British retailer for the first time since the Index was created in 2009. Across the retail non-food sector, levels of customer satisfaction have declined during the past year, meaning that the number one position has gone to a bank, as the financial services sector steps up its effort to rebuild reputations and trust.
Customer satisfaction in the sector has also fallen slightly over the past year, dropping by 0.6 points. However, it is not all bad news for retailers as, with a score of 81.6 (out of 100), the sector remains the best overall performer out of 13 sectors analysed by the Institute of Customer Service. It also provides three of the top five and 11 of the top 50 organisations across all sectors in the UKCSI.
Amazon is the top scoring organisation in Retail (Non-Food), just ahead of John Lewis. New Look and Currys/PC World have been the companies with the largest increases in satisfaction over the last year.
An example to follow
Despite losing top spot in the individual company index, the Retail (Non Food) sector scores above the overall UKCSI average in 27 out of 28 measures of customer experience. It scores particularly strongly, compared to the national average, on all the measures associated with complaint handling, as well as price/cost, condition of delivered goods, speed of response in writing and on time delivery.
Over the last year, the percentage of customers saying they experienced a problem with an organisation has also dropped slightly. At 7.7% the figure is below that of 2014 (8.0%) and considerably lower than the current pan-sector average for the UK (9.7%). Even when a complaint is made, the sector leads the way in its reaction, as illustrated with the five most frequently encountered responses to a problem being positive. Customers said, for example, that problems were “dealt with immediately” or that apologies were quickly forthcoming.
No room for complacency
While the number of customer complaints fell, there remains room for improvement in some areas. The data indicates that satisfaction levels fall when customers get in touch with companies over the phone. Question marks also remain over whether staff will do what they say they will do and whether they genuinely understand what customers are asking for. Scores for both of these issues fell below 6.5 (out of 10), indicating that customers don’t necessarily trust that they will always get what they want.
Jo Causon, CEO of the Institute of Customer Service, says: “The Retail Non Food sector is still leading the way for customer service in the UK, but Boardrooms should not take this for granted. In such a competitive environment small actions can make a big difference and with customers becoming increasingly demanding it will take innovative thinking to ensure the sector stays ahead in the future.”
The research also revealed that websites have become more important than ever for customer service, with more customers turning to mobile devices to buy products or interact with companies, than in any other sector. They are also focused on whether organisations make information easy to find and make the check-out process easy in the digital arena and are quick to turn to social media as a route to resolve issues.
Causon concludes: “We have reached a point where the digital arena is not just a necessary component of a credible customer service strategy but one which offers powerful insights that can drive better innovation, co-creation and collaboration. To make this a reality, digital content and connectivity needs to be a central part of a coherent, sustained and long-term focus on customer service strategy’’