Regulating for Excellent Customer Service

19th Jul 2016

The All-Party Parliamentary Group on Customer Service works to bring parliamentarians, businesses, third sector organisations and other stakeholders together to discuss and share best practice on delivering excellent customer service and how this can benefit business, consumers and the wider economy. 

On 6th July 2016 the group held a session on ‘Regulating for Customer Service’. The meeting included representatives from a number of different regulators and businesses: The Institute of Customer Service, Financial Conduct Authority, Office of Rail and Road, Legal Services Board, Competition and Markets Authority, Civil Aviation Authority, South West Trains and Manchester Airports Group.

The Institute of Customer Service introduced the meeting by highlighting that regulated industries do not perform as well as other less regulated sectors in its bi-annual UK Customer Satisfaction Index. The meeting went on to discuss the possible reasons for this and what could be done about it. 

Why do regulated sectors score more poorly on the UK Customer Satisfaction Index (UKCSI)? 

The meeting agreed that one problem in highly regulated areas was that they tended to be highly monopolistic, with less choice for consumers making it very hard for them to switch if they are unhappy with the service they are getting. However, it was pointed out that in some sectors the service can be very good but the nature of the sector means the outcome for people could often be negative, for example the Courts Service or hospitals.

It was agreed that for any organisation it was important to deliver an excellent overall customer experience and that meant focussing on quality, efficiency and giving customers reliable information. 

Is there a contradiction between customer service and regulation?

There were differing views on this subject in the meeting. Some attendees felt that good customer service could not be regulated for – stating that it could only be delivered if the culture and practices within an organisation are right and that was about management and training.  

However, others felt that while in competitive markets that may be true, in areas of less competition organisations can easily become complacent and ignore the needs of customers, hence the need for good regulation. This led the Competition and Markets Authority to say that competition is always the best way to ensure good customer service is delivered.

Is regulation really necessary? Can it not be a disincentive to improving customer service?

Again here differing views were expressed. Some attendees claimed regulation was essential to protect vulnerable customers, particularly in sectors with less competition. Others pointed out that less regulated areas managed to prioritise the needs of all consumers without the need for regulation and that regulation can dissuade companies from striving to go further than they are required to. However, a consensus emerged that what was needed was the right sort of regulation that does not inhibit or restrict organisations from innovating and improving their level of customer service.

The meeting concluded that regulation needed to become more “outcome-based” so that it was less about process and more about what level of service had to be delivered. In addition, it is vital that organisations treat people as individuals and prioritise their individual needs rather than those of the business or organisation. That is a way to improve customer trust and in turn their levels of satisfaction and ultimately business performance. 

You can read to the full minutes of the meeting here and find more about the APPG here.

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