Legislation and customer service

Legislation can help protect customers, but excellent customer service requires sustained focus from organisations

Legislation can help protect customers, but excellent customer service requires sustained focus from organisations.

A new Consumer Rights Bill is predicted to boost the economy by £4 billion over the next ten years. The Bill is foreseen to combine overlapping consumer regulations into one single transparent Bill, making it easier both for businesses and consumers to understand their rights and obligations.

Although the Bill will bring clarity, results from latest UKCSI report, the national measure of customer satisfaction, published by the Institute of Customer service, show that customers are more likely to buy and stay loyal to a company that they trust. This illustrates that businesses will need to do more than follow legislation if they want to deliver excellent customer service.

According to government estimations, consumers spend more than 59 million hours a year dealing with problems related to goods and services. This costs them an estimated £3 billion a year¹.

The new regulation will make it easier for customers to claim their money back when a product is faulty and challenge unfair terms and conditions.

Jo Causon, CEO of the Institute of Customer Service:

“The new legislation will hopefully bring more transparency both for businesses and customers in terms of rights and obligations. Our research shows that today’s customers are savvy, more demanding and discerning and expect organisations to deal with them as individuals, not just as transactions. Legislation is important to provide appropriate protection for customers and to help create a climate of trust. But to drive standards of customer service up, it’s important that customers, organisations and shareholders have access to objective information which tells them which organisations perform consistently well for customer service and how to improve.”

The January 2014 UK Customer Satisfaction Index (UKCSI), the national measure of customer satisfaction published by the Institute of Customer Service, illustrates a strong link between trust and customer satisfaction. Our results show that delivering high standards of customer service enables organisations to build trust with their customers. Indeed, by delivering an increase of 10 points (out of 100) in its UKCSI score, an organisation will receive on average an increase of 13 percentage points in the trust rating from its customers.

Moreover, when a customer’s satisfaction score is increased by one point (out of 10), there is on average an increase of 10 percentage points in their likelihood to remain a customer and an increase of 11 percentage points in their likelihood to buy another product from the organisation.

Causon added:

“UK customer satisfaction fell by 0.8 points to 77.1 (out of 100). This is the second consecutive six-monthly drop to take place after consecutive increases from 2008 to January 2013. UKCSI is a wake-up call to organisations that there’s no room for complacency – and a reminder that sustainable success is underpinned by customer relationships, as satisfied customers will drive growth.”

[1] https://www.gov.uk/government/news/consumers-and-businesses-1-step-closer-to-new-bill-of-rights

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Categories: Customer satisfaction