13th Dec 2017
A total of £81.5 billion could be added to the UK’s GDP in just 12 months if businesses make improvements to their customer service. That’s according to a new report from The Institute of Customer Service, The Customer Service Dividend.
The study is the largest of its kind, mapping customer satisfaction scores against several financial measurements. These include turnover, profit, revenue per employee and human value capital add (HVCA).
Jo Causon, chief executive of The Institute of Customer Service, says this research is “compelling evidence” that excellence in customer service “holds the key to stronger financial performance”.
The study shows that businesses maintaining an above average customer satisfaction score, as measured in the UK Customer Satisfaction Index (UKCSI), benefit from 9.1% revenue growth year-on-year.
There are also other benefits, as Causon explains: “Our new report shows that organisations with strong customer satisfaction also have more industrious staff.” This results in as much as a 114% increase in revenue-per-employee.
Organisations with a higher-than-average UKCSI score enjoy £552,409 revenue per employee, compared with £257,614 revenue per employee for lower ranking companies.
Premier Inn and Aldi are two of the UK firms that achieved some of the best long-term revenue growth while maintaining a high level of customer satisfaction. In the latest UKCSI, Aldi’s score stands at 84.3 while the average for the sector (food retail) is 81.5. Premier Inn’s score is 83.4, beating the tourism sector’s average score of 80.7. For these two businesses, a higher score has translated into financial gains.
The Institute’s study looked at figures over a 12-month period. The tourism sector saw the biggest year-on-year turnover improvements, at 32%. The telecommunications sector benefited from the largest growth over three years, producing a 16.8% increase. Trends found in the study were common across a number of sectors, including leisure, services, transport and retail (both food and non-food).
The Customer Service Dividend highlights the need for customer service improvements to be encouraged by those at the very top of organisations, concludes Causon.
“Mistakes are too costly and every investment needs to generate a genuine return,” she says. “That is why we are calling on businesses to place their service strategy at the heart of their boardroom. It will add value not only to their customer relationships, but also to their bottom lines.”