Services sector shows extremes in quality of customer service - revealing challenges for national and local business

29th Oct 2014

With RAC expected to announce plans to join the London Stock Exchange, at an expected value of around £2bn, the performance of all facets of the business will no doubt come under close scrutiny.

Fortunately the Institute of Customer Service’s UK Customer Satisfaction Index (UKCSI) has good news for the firm as it approaches possible floatation.With a UKCSI score of 78.8, the services sector is the sixth highest-scoring (out of 13) for customer satisfaction.

However with a score of 81.3, the RAC is the best performing named organisation in the sector.The sector was characterised by notable diversity in the customer service performance of organisations. At the top end, with a UKCSI score of 87.8, “Your local hairdresser” receives the highest rating.

The other end of the scale saw six organisations scoring below the UK all-sector average of 76.3, with “Your local estate agent” receiving the lowest score in the sector of 67.7.This sector’s average score is 2.5 points (out of 100) higher than the UK all-sector average of 76.3.

However our research also showed that 60 per cent of customers are seeking a balance of price and customer service, and well over one quarter (28 per cent) are willing to pay a premium for excellent service. Only 12 per cent are looking for the cheapest deal.

Jo Causon, chief executive from Institute of Customer Service commented:“Across the 13 sectors covered by the UKCSI, we can see that customer satisfaction is closely related to measures of loyalty. In this sector local service providers score highly in measures of intention to remain a customer, to repurchase and to recommend, all of which are shown to be directly linked to customer service. It is therefore essential that organisations see customer service as a driver of business performance and benchmark their delivery against local organisations as well as the market leaders.”

Causon, continued:

“Clearly the services sector is an incredibly diverse collection of organisations, some are amongst the top performers for customer satisfaction in the UK. Many are local providers with close connections to the communities they serve where the loss of just one local customer has a real impact on business. The challenge for many of the larger organisations in the index is to emulate this close connection.”

The UKCSI, carried out by the Institute of Customer Service, includes over 40,000 responses from more than 9,000 customers. During these interviews customers gave insight into 197 of the UK’s leading brands across 13 different sectors. Of these, Services ranked in 6th place and the sector includes over 3,000 customer responses.

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