At the beginning of this week, Business Secretary Peter Kyle offered a novel suggestion – that MPs’ pay should be linked to economic growth. He argued that this would incentivise parliamentarians to vote for potentially contentious pro-growth measures such as planning reform, infrastructure projects and so on.
How that might work in practice is anyone’s guess. To avoid the short-termism that consistently hampers our country’s drive for sustainable growth, long-term incentives would be required, and unpicking whose decisions led to which economic outcomes (and when) would make for an interesting activity!
However, the Business Secretary’s suggestion is perhaps an interesting thought experiment rather than a serious suggestion for bringing business-style performance-related pay into the halls of Westminster.
There is one approach I am certain would be more effective at driving growth in the UK: focusing on service.
Regular readers will know that 80% of the country’s GDP is generated by services, and that over 60% of the UK’s workforce is in some kind of customer-facing role. To me, it makes much more sense to make this the driving force behind our growth efforts.
A clear link between service and growth
The link between good service and profitability has been borne out by our research over many years. Supermarkets see faster sales growth, and banks gain more current accounts when their service experience exceeds the average.
In fact, across all sectors of the economy, UK businesses’ financial results are better when their customer service is above their sector average, and worse when they are below it.
What’s more, 36% of customers are willing to pay more for excellent customer service, a number which has been steadily growing. And on the flipside, businesses lose approximately £6.5bn per month in dealing with the consequences of service failures.
The above research findings from our latest UK Customer Satisfaction Index suggest two things. One is that UK consumers are increasingly willing to increase spending – if they are confident they will receive a good service experience and see real value in that experience. Second, and just as important: in a global marketplace, UK businesses that compete on service can win, boosting not only their own profits but the economy as a whole – and the public finances too.
And here’s the really good news. As we revealed last week, the UK Customer Satisfaction Index shows a further increase in customer satisfaction, with all sectors improving compared to this time last year. UK customer satisfaction has now reached 78.2 (out of 100), up by 2.1 points compared to a year ago and the highest since July 2022, when it was 78.4.
And again, as I urged last week, businesses need to build on this progress by maintaining a focus on service and the customer experience, deploying AI intelligently and keeping their promises to customers.
What businesses really need from MPs
Much of the hard work does lie with businesses themselves. However, a strong message from politicians that they support the service agenda’s success could help inspire the confidence needed to make the necessary investments.
This means putting service front and centre of efforts to boost growth and to sell ‘brand Britain’ abroad.
We should recognise the value of service skills to the economy and our productivity, in the design apprenticeship schemes and within the education system, from entry-level to the Boardroom
It also means sending a message that customer-facing workers are valued – first and foremost by backing our campaign to make assaulting them a standalone offence, whatever sector they work in.
Together, we can build a service economy we can be proud of and put our country back on the path to sustainable growth.
Related Posts
