THE NATIONALMEASURE OFCUSTOMERSATISFACTION

Wave 6 bi-annual UKCSI

The latest UK Customer Satisfaction Index (UKCSI), which is the National Measure ofCustomer Satisfaction for UK organisations, has risen very slightly from 75.2 to 75.6.Based on a representative sample of 26,000 adults surveyed over the internet, theresearch is conducted by The Leadership Factor on behalf of the Institute of CustomerService. The latest wave is the 6th bi-annual UKCSI survey that has been conducted.

(results available online at www.ukcsi.com)

Latest results

As shown in Chart 1, the Utilities sector, though still at the bottom of the table, has shownthe most improvement since January, improving by 1.7 percentage points to 69.6. Muchcloser to the top of the league table, both retail sectors have also seen good improve-ments, with both food and non-food now achieving 80% along with services.

Robert Crawford

Executive DirectorInstitute of Customer Service

www.instituteofcustomerservice.com

Stephen Hampshire

Client ManagerThe Leadership Factor

If you have any thoughts about thisarticle you can contact Stephen atstephenhampshire@leadershipfactor.com

Chart 1: UKCSI results July 2010

Utilities

Public Services (national)

Public Services (local)

Telecommunications

Transport

Finance (banks)

Leisure

Finance (insurance)

Automotive

Tourism

Retail (non-food)

Services

Retail (food)

0 10 20 30 40 50 60 70 80 90 100

75.6

80.2

80.2

80.0

79.3

77.4

77.2

76.7

75.3

72.3

72.2

72.1

70.0

69.6Jan-10Jul-10

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Customer

The best places to live

Changes over the last six months are smallfor most sectors as they are for Englandand Scotland but Northern Ireland andWales have both made good improve-ments, Northern Ireland by 3 percentagepoints to 77.7 and Wales by 2.2 to 76.9. Ifwe look at the UKCSI scores for each of thehome nations since the first UKCSI resultsin January 2008, we can see in Chart 2 thatNorthern Ireland and Wales have againimproved by the most – both by a veryimpressive 8.1 percentage points. Initially,the results of all four countries were veryclose, with only 0.9 percentage points sep-arating them, but at 75.2, England is nowlagging well behind leaders NorthernIreland.

Distribution of scores

Of the 153 named organisations scored inthe survey, the median score (i.e. the mid-dle-ranking organisation) is 77, the bestscore is 88 and the worst is 56 (see Chart3). As we would expect, organisations areroughly normally distributed (i.e. most arenear the average). As usual with customersatisfaction data the dissatisfaction tail islonger than the delighted one.

The best companies

This time 38 organisations have achieved aCSI over 80; seven are over 85. Waitrose(88) has continued to expand its lead overMarks & Spencer (85), its key rival as anupmarket food retailer. That excellent scoreputs it neck and neck with John Lewis (alsowith a CSI of 88) in the non-food retail sec-tor, a dominant performance for the brand.

SAGA is another company that deliversexcellent service in more than one sectorwith SAGA Holidays heading the tourismsector and the company just coming sec-ond to BUPA in the insurance sector. The10 highest scoring named organisationsare listed below with the top two in eachsector shown in Chart 4.- John Lewis (88)

- Waitrose (88)

- Lloyds Pharmacy (86)

- SAGA Holidays (86)

- Virgin Holidays (85)

- Marriott (85)

Chart 3: Normal distribution

Chart 4: Top 2 organisations by sector

Severn Trent Water

Scottish and Southern Energy (SSE)

Virgin Atlantic

Eurotunnel

Virgin Holidays

SAGA Holidays

T-Mobile

Your local electrician

Your local hairdresser

Lloyds Pharmacy

John Lewis

Marks & Spencer (food)

Waitrose

Post office

The Identity & Passport Service

GP surgery / health centre

Your local Ambulance Service

Your local fish & chip shop

Your local restaurant

SAGA

BUPA

The co-operative bank

First Direct

Honda

Mazda

50 60 70 80 90 100

Number oforganisations

O2

Utilities

Transport

Tourism

Telecommunications

Services

Retail (non-food)

Retail (food)

Public Services (National)

Public Services (Local)

Leisure

Insurance

Banking

Automotive

16

14

12

10

8

6

4

2

0

60 70 80 90 100

Chart 2: The best places to live

England

Wales

Scotland

Northern Ireland

75.6

77.7

77.2

76.9

75.3

Jan-08

Jul-08

Jan-09

Jul-09

Jan-10

Jul-10

- Marks & Spencer (food) (85)

- Boots (84)

- First Direct (84)

- Marks & Spencer (non-food) (84)

Every sector with the exception of Utilitieshas some suppliers who are above theoverall UKCSI average, and most have atleast one very good organisation.

Consistency

Looking at the overall performance of sec-tors can mask differences in the level ofsatisfaction organisations manage toachieve. Some sectors (e.g. Automotive)are consistently good, some are consis-tently poor (e.g. Utilities), and others arevery mixed (e.g. Transport).

Chart 5 shows the gap between the bestand worst organisation scored within eachsector, with the average marked (o).

We have always said that consistency is agood thing in customer satisfaction. Poorperforming organisations are often charac-terised by a wide range of customersatisfaction scores across call centres,branches, outlets or other business unitsbecause there isn’t a company-wide cus-tomer focus or strong managementensuring that customer service standardsare maintained across the organisation.Often, inconsistency in customer servicewill irritate customers just as much as aconsistently poor customer experience.Chart 6 supports this assertion. The pat-tern isn’t perfect, but there is a fairly strongtrend for more consistent sectors to havehigher levels of overall satisfaction.

It is worth drawing attention to some of theorganisations that significantly outperformthe average for their sector:- Eurotunnel in Transport - 11 points over

the sector average- The Identity and Passport Service in

Public services (National) - 9- John Lewis in Retail (non-food) - 8- First Direct in Finance (banks) - 8- Waitrose in Retail (food) - 8

These leaders are significantly better thanaverage for their sector (whether it’s astrong or weak sector) and can expect to

see competitive benefits from their focuson customer service.

Complaint handling

The retail sectors, first and third in the over-all sector league table, dominate thecomplaint handling table (Chart 7) withimproved scores. All those no-quibblerefunds seem to be doing the trick, and theeconomic climate seems to have concen-trated retailers’ minds on the value of everycustomer. Leisure is also performing well inthis area.

The complaints index is derived from howwell organisations handle complaints plusthe extent to which they give customersproblems in the first place. Chart 8 showsthat tourism is the best sector at giving cus-tomers very few problems. Retailers do givecustomers more problems but they are byfar the best at handling complaints.

Complaint handling and customer loyalty

It’s very unfortunate that complaint handlinggenerates by far customers’ lowest satisfac-tion scores in the UKCSI because it makes a

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Customer

Chart 5: Consistency by sector

Chart 6: Consistency pays

Public Services (national)

Telecommunications

Finance (banks)

Public Services (local)

Utilities

Transport

Services

Finance (insurance)

Automotive

Tourism

Leisure

Retail (non-food)

Retail (food)

Overall

0 10 20 30 40 50 60 70 80 90 100

69.5

77.3

76.3

75.6

75.1

74.2

70.4

70.3

67.8

67.3

66.4

65.0

63.8

63.3

Transport

Public services (local)

Public services (National)

Services

Retail - non-food

Leisure

Tourism

Finance - insurance

Finance - banks

Telecommunications

Retail - food

Utilities

Automotive

50 60 70 80 90 100

Gap from best to worst

Satisfaction (CSI)

068

70

72

74

76

78

80

82

5 10 15 20 25 30

Retail - foodRetail - non-foodTourism

LeisureServices

Finance - insurance

Finance - banks

Automotive

Telecommunications

Transport

Public services (local)

Public services (National)

Utilities

Jan-10

Jul-10

Chart 7: Complaints index

Customer

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TelecommunicationsPublic Services (national)

Finance (banks)Public Services (local)

UtilitiesTransport

LeisureRetail (food)

Retail (non-food)Automotive

Finance (insurance)ServicesTourism

Overall

0% 20% 40% 60% 80% 100%

88% 9%

94% 5%

92% 6%

92% 7%

92% 6%

92% 7%

90% 8%

90% 7%

89% 7%

87% 11%

84% 11%

83% 14%

82% 13%

81% 17%

ComplainedDidn't complainNo problem

30

40

50

60

70

80

90

100

Loyalty Indexall customers

No problem Complaint dissatisfied Complaint satisfied

81

36

7976

Public Services (national)

Public Services (local)

Finance (banks)

Utilities

Finance (insurance)

Telecommunications

Transport

Services

Automotive

Tourism

Leisure

Retail (food)

Retail (non-food)

0 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

0 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

31%

31%

28%

26%

23%

20%

17%

17%

17%

15%

14%

13%

13%

39%

42%

43%

51%

48%

60%

64%

66%

64%

60%

62%

60%

64%

Utilities

Public Services (local)

Public Services (national)

Transport

Telecommunications

Automotive

Finance (banks)

Finance (insurance)

Leisure

Tourism

Retail (non-food)

Retail (food)

Services 54%

52%

50%

49%

48%

44%

43%

41%

37%

37%

35%

35%

32%

11%

7%

8%

8%

9%

13%

18%

12%

23%

17%

28%

27%

23%

Chart 9: Complaint handling and loyalty

Chart 8: Problems and complaints

Chart 10: Net detractors on complaint handling

Chart 11: Net promoters on ease of doing business

big impact on customer loyalty, especiallycustomer defections. As shown in Chart 9,across all UKCSI companies, the averageloyalty index is 76. This is produced from thescores given by customers to questionsabout Harvard’s 3Rs of customer loyalty –retention, related sales and referrals. Not sur-prisingly, customers who have never had anykind of problem with the organisation aremore loyal (a loyalty index of 79) but the mostloyal are customers who did have a problembut were very satisfied with the way it washandled. Their loyalty index goes up to 81.By contrast, the loyalty index of customerswho had a problem but were dissatisfiedwith the way it was handled plummets downto 36.

As well as being the area where organisa-tions have the most opportunity, and need toimprove, complaint handling is also one ofthe biggest drivers of loyalty. One school ofthought suggests that:- customers who score 9-10 promote that

organisation by deed and word-of-mouth- customers who score 1-5 are detractors- customers who score 6-8 are passive Chart 10 shows the percentage of cus-tomers who score 9-10 (blue) and those whoscore 1-5 (red) for complaint handling. Theobjective should be to have a net blue score.

For complaint handling, no sector has a netblue score. Even the best at complaint han-dling (non-food retailers), make only 31.5%of customers who experience a problemvery satisfied with the way it was handledcompared with 38.6% who were dissatisfied– a net detractor score of 7.1%. With netdetractor scores in excess of 45%, sevensectors are much worse. They are utilities,telecommunications, transport, both financesectors and both public sectors.

Ease of doing business

Another big driver of customer loyalty is easeof doing business. On this, Chart 11 paints amuch better picture. Retail (food) has a verygood net promoter score of 44.7 for ease ofdoing business, with non-food retailers andservices and tourism businesses also over40%, and leisure very close behind. By con-trast, utilities and public services (local andnational) are at the bottom of this leaguetable with net promoter scores below 10%.

Chart 12: Customers’ internet expectations

Chart 13: Social media by age

Chart 14: Social media by sector

Automotive

Finance - insurance

Finance - banking

Leisure

Public Services (local)

Public Services (national)

Retail - food

Retail - non-food

Services

Telecommunications

Tourism

Transport

Utilities

I don't expect any of these Onsite reviews of products/services A Facebook page/group A Twitter account

A Facebookpage/group

Onsite reviews ofproducts/services

18 to 24

25 to 34

35 to 44

45 to 54

55 to 65

65+Twitter Facebook Onsite reviews of products/services I don’t expect any of these

38%

8%

14%

40%

I don’t expect any of these

A Twitter account

Word of mouth in a connected world

This time we asked customers some extraquestions about new media. First of all weasked people which social media tools theyexpected companies to use. Most cus-tomers expected to see some sort of onlinepresence from organisations, but as shownin Chart 12, only a minority felt that engage-ment with the prominent social mediaplatforms is important. Only 6% of cus-tomers said that they would be put offdoing business with a company that did notoffer these channels.

As you might expect, consumers’ attitudesto this are influenced by age, but Chart 13shows that even the youngest categories ofconsumer do not seem heavily engagedwith social media when it comes to theirdealings with companies.

Things vary a little more by sector. Chart 14shows that social media are important forthe automotive sector with leisure andtourism close behind. Customers see inter-net reviews as important for most sectors,with the exception of services, where cus-tomers seem to make least use of theinternet in their dealings with organisationsin the public and private sectors.

Customer

S