This week’s latest inflation figures from the Office for National Statistics have issued a timely reminder of the difficult road ahead for our UK organisations and the economy overall.
Inflation rose to 3.8% in July, up from 3.6% the month before and marking the highest level since January of last year. A stark contrast to last July, when inflation stood at 2.2%, the outlook on prices today is considerably more challenging and diminishes the likelihood of a further rate cut in September.
However, as workplaces begin to fill up again after summer holiday season, the next few weeks provide a critical moment to reset ahead of what will be an important trading period for UK PLC.
An opportunity for the services sector to lead with purpose
For service-led businesses, the 0.3% rise in services inflation to 5% on Wednesday is especially significant.
This brings with it a range of challenges, from a further purchasing power squeeze on consumers already grappling with the cost of living to driving up operating costs for businesses facing higher labour expenses.
While these pressures are real, they also present an opportunity for the Service Nation – which represents 80% of GDP and employs 60% of the workforce – to step up, lead from the front and differentiate through service excellence.
This doesn’t mean starting from scratch but rather building on the positive momentum we’ve seen in recent months. July saw customer satisfaction rise to 77.3 out of 100, its highest level in more than three years. This is a positive start, giving us the confidence needed to push forward and turn it into a trend.
The ROI of service
As business activity gets back to full speed after the summer lull, refocusing on the customer will be more critical than ever in navigating the current economic headwinds.
These headwinds and associated fiscal risks certainly won’t make things easy for organisations, and cutting costs can often become a short-term necessity.
At the same time, they emphasise the importance of two vital components of a compelling service offering, which the most successful organisations in our latest UKCSI do consistently: getting it right first time for their customers and demonstrating genuine empathy and care.
Investment in these areas may be necessary, whether that’s through staff training, enhancing your digital interface to achieve the optimum fusion of human and technology, or refreshing the physical space and experience you offer to customers.
However, the bottom-line value on offer in doing so is clear. Our data has consistently shown that over a third (33.5%) of customers are willing to pay more for excellent service, while 82% would be more likely to make a major purchase as a result of receiving excellent service.
Now is the time for businesses to capitalise on the ROI of service, using it as a foundation to weather the storm and steer our economy back towards long-term, sustainable growth.
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