Can you regulate for customer service?

By Jo Causon, CEO, The Institute of Customer Service

A recent meeting of the All Party Parliamentary Group on Customer Service concluded regulation needed to become more ‘outcome-based’ in order to better incentivise customer service improvements. The meeting, which brought parliamentarians, regulators and businesses together, discussed a variety of views about the necessity of regulation and how it might help or hinder customer service improvements.

Whilst some attendees claimed regulation was essential to protect vulnerable customers, particularly in sectors with less competition, others pointed out that less regulated areas managed to prioritise the needs of all consumers without the need for prescriptive rules. They noted that regulation can dissuade companies from striving to go further than they are required to. However, a consensus emerged that what was needed was the right sort of regulation that does not inhibit or restrict organisations from innovating and improving their level of customer service. That is something we would echo. Organisations need to focus on personalisation of service and meeting their particular customers’ needs rather than meeting minimum regulatory standards.

This is the route to greater customer trust, which in turn will lead to improved satisfaction levels and ultimately improved business performance. There is an ongoing challenge for organisations in the more heavily regulated sectors – transport, utilities, telecoms and financial services. These sectors consistently perform worse than other sectors in the UK Customer Satisfaction Index.

Whilst some of this difference will be down to the different nature of some of these sectors there needs to be recognition that customers are seeking the same experiences they receive elsewhere, personalised, authentic and relevant service. To achieve this, organisations in all sectors – whether heavily regulated or not – should focus on the core ingredients of excellent service, employee competence, attitudes and behaviours. Regulation is clearly always going to be more relevant for some industries than it is for others. However, regulated sectors need to aspire to deliver the kind of service experience customer received elsewhere. To do these regulators need to focus on outcomes rather than processes and organisations need to strive to deliver for their customers rather than just meet regulatory requirements.