Skip to content
businessman fixing decreasing financial graph with tool wrench stop loss Minimize losses for profit concept vector

It is certainly disappointing and concerning that UK customer satisfaction has fallen again (the third straight period of decline) and now stands at its lowest level since 2015, according to our UK Customer Satisfaction Index (UKCSI).

This is a disappointment because, naturally, we want to see the UK leading the way as the centre for customer service excellence. Customers have a right to expect appropriate levels of service from those brands that have made service promises. But it’s also important because our research at The Institute consistently shows a clear ROI to investing in the customer agenda. Between 2017 and 2023, those organisations with higher than sector average customer satisfaction achieved stronger revenue growth, Ebitda and revenue per employee than their competitors. Putting the customer at the heart of how the business operates leads to better financial performance and improved employee engagement as well as productivity and efficiency gains. Imagine the combined effect and impact on UK productivity and prosperity if that was multiplied across all businesses.

Economic conditions remain challenging, with many organisations under cost and performance pressure. Many also continue to face significant challenges in recruiting, developing and retaining the skills required to deliver the right level of customer experience, or have failed to plan adequately for their workforce needs. And organisations have also sometimes overestimated their capacity to integrate technology, data and design to deliver both efficiency gains and customer satisfaction. Whilst technology has a huge role to play in facilitating the customer experience, it is not a panacea in itself. We still find widespread evidence of customers becoming frustrated by technology and finding it hard to get through to a human being to help.

A downward trend

As a result, the overall UKCSI now stands at 76.0 (out of 100). We haven’t recorded an increase in satisfaction for two years (January 2022) when it climbed to 78.4. Since then, the trend has been down. All dimensions of customer satisfaction are now lower than they were in January 2023. The biggest fall in satisfaction has been with complaint handling – customers are simply finding it too difficult and too protracted to get their problems resolved. We estimate a monthly cost of £7.1 billion to the UK economy through the time and lost productivity taken up in dealing with customer complaints.

In tandem with this, we recorded falls in satisfaction across every single one of the 13 sectors that we track. Retail is the sector recording the highest levels of customer satisfaction, with a score of 80.4, but this is a drop of -0.4 from the last UKCSI in July 2023. The sector seeing the biggest fall between July and now is Services (which includes postal and delivery businesses) where the score fell by -1.0. Once again, Utilities is the bottom-ranking sector with a score of 69.5. A possible source of encouragement here, however, is that their score was in fact static from July – the only sector to manage that.

Pockets of excellence

However, as always, we do see examples of outstanding service. Indeed, I believe that the gap between those organisations getting it right, and those getting it wrong is widening. This is not so much a sector play, as a matter of individual organisational performance. When we look at this period’s top ten performers, it is a diverse set with six different sectors represented.

Ocado topped the list with an impressive score of 85.7. Was it also a coincidence that they enjoyed record Christmas trading, I wonder? first direct and John Lewis – both perennial strong performers – completed the top three.

Reviving the service agenda

How can more organisations follow suit and lift customer satisfaction, with all the consequent business benefits this brings? Firstly, it is key that organisations stay closely attuned to the times. The cost of living is still a real concern, and many households remain hard pressed. People are more discerning and true service matters more. Our research has found that 41% of customers say that if they feel dissatisfied with the service from an organisation, they won’t do business with them again. Conversely, 31% of customers say they prioritise excellent service, even if it costs them a bit more.

The message is clear: the path to success lies in offering not only financial value but service value too. This is about many things: understanding evolving customer needs and behaviours, providing the right blend of people-led and technology-led service channels, consistency of operational performance, developing employee skills and engagement, and the leadership to ensure that the organisation’s mission and culture is inspiring and clear.

For the benefit of customers, businesses and the wider economy alike, we simply can’t afford to let customer satisfaction continue to slide. This is a pivotal time to restate and recommit to the value of customer service – putting a smile back on more customers’ faces and seeing the benefits in the bottom line.

Jo joined The Institute as its CEO in 2009. She has driven membership growth by 150 percent and established the UK Customer Satisfaction Index as the country’s premier indicator of consumer satisfaction, providing organisations with an indicator of the return on their service strategy investment.

Back To Top