Service means business

According to Joanna Causon, chief executive officer of the Institute of Customer Service, good service can be just the tonic. She bases her comments on empirical evidence, including the January 2022 UK Customer Satisfaction Index (UKCSI) – a survey in its twelfth year that polls 10,000 consumers to track the effects of customer service on business performance.

As Ms Causon points out, the top 10 organisations combined “functional efficiency and human care” while “the highest rated organisations not only care about their customers, they also make it easy to contact the right person to help and build trust while giving reassurance”. 

She highlights: “All of our research demonstrates that where an organisation has consistently higher than average customer satisfaction in their sector over a five to eight year period, they will have better levels of financial performance, reputation, loyalty and productivity.”

"34 per cent of customers prefer excellent service, even if it costs more"

The pandemic has pushed service up the corporate agenda by “demonstrating the critical role that customer service plays in the performance of any organisation,” says Ms Causon. “From a consumer perspective, there are so many ways that we can communicate and feed back our concerns and issues in a very public way if we are not satisfied.”

This year’s index noted that “34 per cent of customers prefer excellent service, even if it costs more – an increase of 4.5 per cent compared to a year ago, and 8.1 points more than in the January 2020 UKCSI.” 

Furthermore, the Institute’s own research found that significant numbers of customers deliberately choose an organisation for a range of ethical reasons, particularly a focus on customer service, local relevance and/or a commitment to environmental sustainability. 

SPIN OFF BENEFITS

It doesn’t take a doctorate to realise that good customer service leads to trust, loyalty, and recommendations. “As consumers we want to buy from brands that are well trusted, care about us as customers, are ethical, and do the right thing,” Ms Causon says. “But in addition to the financial benefits for businesses, enhanced reputation and greater trust help build better relationships with stakeholders, partners and regulators… and it enhances your ability to attract and retain employees.”

On the flipside, poor service adds cost, with remedial action needed further down the line. The Institute sees increases in complaints and problems leading to poor productivity, damaged employee morale, and difficulty in winning business. Organisations have even lost franchises through poor service performance.

For Ms Causon, customer satisfaction can help predict future financial performance: “We have seen organisations cut investment in service, which has led to a reduction in satisfaction, and financial performance has fallen in future years.” 

She reckons that far fewer businesses now see short-term cuts to service as a good long-term strategy. In a retail environment, where a firm is looking to improve, a ‘customer service charter’ is a good place to start.

The Institute helps its members develop their service offering through resources on its website, some of which are available to non-members. As to what a customer charter should say, her response is direct: “It should always reflect the values and purpose of the organisation, focus on what’s important to customers, define clear standards and provide differentiation.”

GETTING BUY-IN

Having a policy is one thing; making it work is another. The Institute’s The Customer Knows research addresses this question: “Employee engagement is critical because it leads to more discretionary effort, emotional connection with customers, improvement ideas, and consistent performance.” 

The research found that while pay and reward are part of the picture, if pay is sufficient, the real keys to engagement are purpose, training and development, the manager relationship, recognition, and communication.

Firms also need to broadcast their efforts. Ms Causon says that word of mouth is still crucial, particularly at a local, independent level. Some businesses communicate via email, social media or in-store displays. But “what is most important is consistently hitting those standards and keeping promises to customers.”

In terms of getting feedback and assessing performance, Ms Causon suggests “giving customers different opportunities to provide feedback, such as surveys, focus groups, social media comments – and listening to your own people.” 

As for complaints: “Avoid them in the first place,” but “drivers of satisfaction with complaint handling are speed of response, keeping customers informed, and following up after resolution.”