On the face of it, our January 2022 UK Customer Satisfaction Index (UKCSI) results are great news. Customer satisfaction is up by 1.6 points compared to a year previously, at 78.4 (out of 100). This is the highest overall score we have ever recorded, and also the biggest rise in a 12-month period that we have seen.
It’s a testament to the hard work, commitment and professionalism of the UK customer service industry as they have continued to pull out all the stops to keep serving customers through the pandemic with its varying (and unpredictable) levels of restrictions, along with the supply chain issues and post-Brexit complications that also dogged last year.
It has also been a sector-wide achievement, with 10 of the 13 sectors we track seeing rises of 1 point or more. The Transport sector jumped a huge 5.2 points to 75.1. Only Local Public Services declined, seeing a 1 point fall.
On an individual basis, half (52%) of the 273 organisations in the UKCSI have improved by at least 2 points compared to a year ago.
However, while these achievements are real and to be applauded, I am actually very concerned about the path ahead of us. And some of the warning signs are already there.
Most notably, while satisfaction scores were up, we also saw a significant rise in customer problems and complaints. In fact, 16.4% of customers experienced a problem which is the highest we have ever recorded. The reason this didn’t spill over into lower satisfaction ratings is that organisations have gotten better at complaint handling. But this is not a sustainable solution in itself. We must be looking to prevent problems from arising in the first place, not just solve them when they do.
Another reason that the problems customers encountered didn’t heavily jaundice their view is that the majority of incidents were to do with process issues like delivery times or availability, rather than people issues. So they were less emotive problems, and affected customers’ overall perceptions less.
Challenging period ahead
It’s certainly an odd situation to have record customer satisfaction levels and record numbers of customer problems at the same time. But my fear is that, unless businesses fix the issues, they will begin to have a bigger impact in terms of influencing customer attitudes – and this could be heavily exacerbated by the very challenging wider economic conditions we will be experiencing.
Costs are rising, inflation is climbing and interest rates have also started to increase (with more rises expected this year). Energy bills – already high – are set to rocket from April. For many people, and by no means just low earners, there will be a real squeeze as the year progresses. Those struggling financially as conditions tighten will naturally become more impatient with any service issues they encounter as well as having to consider where and what they spend their money on.
These economic pressures are likely to polarise our society even more. This is another factor that we are already seeing in the UKCSI, where there was a jump in the number of people who said they are prepared to pay more for excellent customer service. A third (34%) of people are happy to pay more, up 4.5 points from a year ago. For many others, this will simply not be an option and even less so as the cost of living pressures rise this year. Organisations, therefore, will increasingly need to find strategies for successfully serving a very diverse – if not divided – customer base.
Another significant trend over the last year has been the rise in customers who say that ethical issues are important to them. Around 60% of customers chose an organisation for at least one ethical reason – with the most common being the business’ focus on customer service, being a local company, or its commitment to environmental sustainability. For progressive businesses, this shift towards ESG-type credentials can be viewed as an opportunity rather than a threat – but those that get it wrong will find there is an increasingly heavy price to pay in terms of customers defecting elsewhere.
Staying focused on the customer journey
There is much to learn from our latest UKCSI. We see clear signs that companies’ investment in digital pathways is paying off, for example. Customers are better able to navigate organisations’ websites and use technology to self-serve – particularly through apps – only needing to interact with an agent for more complex or personal issues. Satisfaction with the customer experience when using apps is the highest of any channel, at 82.3%.
Organisations need to build on this digital success and also continue to invest in their people strategies. But with one of the most difficult economic (and geo-political) periods for 30 years or more looming, it’s critical that businesses get to the root of service problems and solve them at source, to help drive up productivity and effectiveness while continuing to invest in their people so they can deliver human solutions with empathy and build trust.
For all these reasons, while I am delighted to see customer satisfaction at an all-time high, I am also concerned about the outlook. As ever, it’s those organisations who stay absolutely focused on the customer journey that will be best placed to ride out what could become something of a cost of living storm.