Does regulation impede customer service?

7th Jul 2016

Regulation is one of many factors that affect customer satisfaction, the All-Party Parliamentary Group (APPG) on Customer Service concluded at its latest meeting, and cannot be blamed for poor performance.  Yet, as one amongst many, its importance should not be underplayed.

Though data from the latest UK Customer Satisfaction Index (UKCSI), produced by the Institute of Customer Service, warns that customers are less satisfied with heavily regulated sectors than those with fewer procedures and protocols, the APPG agreed that removing regulation is not the answer. 

Instead, the group, which brought together MPs, regulators and business executives from a range of industries, called for fewer regulatory restraints, but with a sustained focus on greater transparency and more incentives for competition. The majority of members shared the view that, while prescriptive regulation can stifle innovation and an organisation’s ability to think laterally about customers’ needs, without it, industries could be at risk of overlooking certain customer priorities. 

Attendees also found that regulation is more significant for some industries than it is for others. The group agreed that regulation can, and should, be implemented to ensure good customer service in industries where customers lack choice about their supplier. It can also help to ensure that customers receive the same treatment across the board, regardless of their perceived commercial value to an organisation. .

Other outcomes from the APPG included some regulators agreeing with the findings emerging from the Institute’s UKCSI, and suggesting that regulation is not the only factor contributing to satisfaction levels. The group found that empowering customers to make informed choices and instilling greater trust in staff are top concerns for a range of industries, but that human interaction and ‘getting it right first time’ are also key to keeping customers happy. 

The APPG determined that, regardless of regulatory requirements, organisations need to ensure that they recognise what really matters to their customers if they are to boost satisfaction levels.

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