When we look around ourselves in today’s environment, for me, two words stand out: fragmentation and polarisation.
This is true on many levels: in geopolitics, local/national politics, socially and in business. We see fragmentation because old binary alliances and certainties have splintered into many more groups. Geopolitically, it is no longer as simple as ‘East vs West’. There are shifts and ambiguities entering global dynamics, together with increasing nationalism and protectionism.
Nearer to home, it is clear from the local elections that we are no longer a two-party state. Politics has become more complex with new players on the rise. Socially – and therefore from a business point of view – we are a very diverse society with multiple customer groups, some of whose needs and interests overlap, while others differ. Navigating this customer complexity is therefore a key task for businesses if they are to ensure that the customer offer remains relevant, timely and inclusive.
The other big theme, polarisation, arises almost as a result of fragmentation. Because our world is splitting into a greater number of groups and cohorts, their experiences and attitudes move further apart. Politically, of course, extremism has been growing. But polarisation is not only about extremes. It is also about the fact that people’s situations are simply more different.
Customer complexity
Take our UK Customer Satisfaction Index (UKCSI). The most recent edition showed a wide gap between the financial outlook of customers and also their perception of their interaction with brands. Amongst those describing their financial position as ‘good’ or ‘very good’ (48% of customers), nearly two thirds (62%) expected their finances to be even better in 12 months’ time; contrast that with those customers who described their financial position as ‘poor’ or ‘very poor’ (15% of customers), where only 19% expected an improvement in a year’s time. Financial wellbeing also has a significant impact on the customer experience: 77% of those with strong finances believed that the brands they interact with care about them as customers, but that drops to just 58% of those in poor financial health.
Fragmentation and polarisation also apply within the business landscape itself. Some sectors, such as financial services, are in strong health; other sectors, notably consumer-facing areas like retail, hospitality and leisure, are finding the going much tougher. Nevertheless, within challenged sectors we still find organisations that are performing strongly. I was struck, for example, by the robust performance of catering business Compass Group, whose recent financial results showed significant growth in revenue and profits. In our UKCSI, we also find some perennial strong performers like Hays Travel and Jet2 who are achieving high levels of customer satisfaction and profitability despite operating in a challenged sector, alongside retail stalwarts like John Lewis, M&S and Holland & Barrett.
Taking a longer-term view
This shows us that, despite the difficult environment, there remain opportunities as well as challenges for organisations. The key in dealing with fragmentation, polarisation and the continual pace of change is to take a long-term approach founded on strong leadership, clarity of purpose and commitment to the service agenda. Those who remain committed to their core purpose and stay true to it can navigate the complexities. This requires flexibility as well as steadfastness – embracing technology to deliver the right channel mix and enhance the customer experience across the whole service chain, balancing self-service through apps and AI with the appropriate level of human support to serve customers with complex or individual needs. At the same time, it’s vital to focus on the backend of the customer service chain to improve efficiencies and in many cases drive up effectiveness.
We live in an always-on age where service expectations are continually moving higher. We are also increasingly existing in an echo chamber where the 24/7 news cycle and social media amplify issues at lightning speed. The danger lies in constantly reacting to the latest drama and getting so caught up in the moment that you lose sight of what you are really trying to achieve.
Leadership qualities
Times such as these call for calmness and long-term vision. Leaders need to recognise customer fragmentation and polarisation at the same time as bridging the gaps through consistent quality, service and value. This is what leadership means in a service context.
Those that do this will win over the long term because their customers will have trust and confidence in the brand. Those who get lost in the revolving doors of our frantic age will almost certainly start to lose focus on their core proposition and service will suffer as a result.
Despite the macro challenges, customer satisfaction has been moving on an upward trend for the last three six-month periods of the UKCSI. After such a turbulent first half of 2026, it will be fascinating to see what the picture is in our next Index in July. I hope that we’ll see a continuation of the delivery of excellent service as organisations keep their focus on what really matters to customers – uniting the customer experience through commitment to the values that drive their brands.
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