UK Customer Satisfaction Index - JANUARY 2018 The state of customer satisfaction in the UK - Institute of Customer Service

 
 
UK Customer Satisfaction Index - JANUARY 2018 The state of customer satisfaction in the UK - Institute of Customer Service
instituteofcustomerservice.com

JANUARY 2018

UK Customer
Satisfaction Index
The state of customer satisfaction in the UK
1
Foreword
                 Joanna Causon Chief Executive

Overall, this UKCSI shows a stable picture of customer          relevance and impact amidst short term business
satisfaction in the UK. Yet beneath the surface there           pressures and a complex environment of increasing
are a number of worrying signs that point, potentially,         political, economic and societal polarisation.
to even greater uncertainty and challenges for many
organisations. The improvement that we have seen                As we enter 2018, there is growing recognition that
recently in some of the lower scoring sectors has               improving productivity is fundamental to the UK’s
stalled. For the first time, the number of organisations        economic performance and social well-being. This
whose customer satisfaction has dropped by at least             will require a sustained and co-ordinated investment
two points has overtaken the number of those that               in skills and infrastructure. It also suggests the need
have improved by two points. Hardly any organisations           for a fresh approach to employee engagement and a
that featured amongst the most improved for                     new kind of informal contract between organisations
customer satisfaction a year ago have maintained their          and employees. Organisations need to be honest with
performance.                                                    themselves and their people about how they engage
                                                                and what they expect from employee engagement.
The customer experience environment is set to become            Organisations have a responsibility not just to provide
much more challenging in 2018, with greater pressure            decent and fair working conditions, but to listen
on incomes, consumer spending and margins, in many              with genuine respect and to be clear with employees
sectors. Yet there are also opportunities. We continue          about what is up for discussion and debate, as well
to see evidence that a high proportion of customers             as what is not. Increasingly, organisations will need
value premium service and experiences. However, it is           to offer pathways of career development for all their
highly likely that customers will become much more              employees. Employees will also need to recognise that
demanding of the experiences and value they receive             moving from a state of passive to active engagement is
from organisations. We have reached the point where             ultimately a personal choice and offers the best route
concentrating on the hygiene factors of customer                to professional and personal fulfilment. Developing
experience, crucial as they are, is not enough.                 this new informal contract of employee engagement,
Organisations need to maintain a coherent focus on              based on mutual respect and trust, will be one of the
integrating customer experience design, technology              vital keys to improving customer service, productivity
and employee engagement to create experiences that              and business performance.
build customer engagement and trust.
                                                                I hope you will find this report insightful and helpful in
Consistency is a vital key to success. Our recent               tackling the challenges you and your organisation face.
research into the relationship between customer                 As ever, I welcome your thoughts and feedback and
satisfaction and financial performance demonstrated             look forward to continuing to drive the service agenda
that consistently achieving higher levels of satisfaction       in 2018.
than competitors and peers is linked to stronger
turnover growth, profit and employee productivity.
Leaders and boards therefore have a particular
responsibility in maintaining consistency of purpose,

                                                            UK Customer Satisfaction Index | January 2018               1
2   UK Customer Satisfaction Index | January 2018
Contents

Executive summary                                                         4

Part 1	Customer satisfaction in the UK: the state of the nation        12

Part 2 The links between customer satisfaction, employee 		             27
       engagement, productivity and business performance

Part 3 Customer segments: variations in attitudes and behaviour         36

Part 4 Customer satisfaction demographics                               45

Part 5 Implications & opportunities                                     51

       Organisations in the UKCSI                                       63

       About the UKCSI                                                  64

       UKCSI sector reports                                             65

       Recent breakthrough research publications                        66

                                                    UK Customer Satisfaction Index | January 2018   3
Executive
Summary
Customer satisfaction in the UK is, overall, broadly
stable, but there are signs that the improving
trend has stalled. For the first time, the number
of organisations whose customer satisfaction has
dropped by two points or more compared to last year
has overtaken the number who have improved by at
least two points.

The January 2018 UKCSI score of 78.1 (out of                The proportion of customers experiencing a
100) is up 0.3 points compared to a year ago                problem fell by 0.4% points, to 12.7%, whereas
and slightly lower, by 0.1 points, than in July             the number of customers whose experience
2017. The overall Net Promoter (NPS) score rose             was right first time has grown by 3% points, to
by 1.4 points to 15.3. The level of customer                80.8%. Satisfaction with complaint handling is
effort has increased by 0.1 (out of 10) points, to          stable. The average level of customers’ trust in
4.9.                                                        organisations is unchanged at 7.7.

                                              78.2                                                           78.2   78.1
                                                     77.9                                             77.8
                                                                                               77.4
                                                            77.1
                                                                                        77.0
                                                                   76.3          76.2
                                                                          76.0

  69.4

Jan-08                                      Jan-13                                                              Jan-18

                                                      UK Customer Satisfaction Index | January 2018                    5
The improving trend in
Transport and Utilities has stalled

The Transport sector has seen a one point fall            Despite the overall stability of the UKCSI, the
in customer satisfaction compared to January              number of organisations whose customer
2017 and has replaced Telecommunications &                satisfaction has dropped by two points or more
Media as the lowest rated sector. Rail operators’         in the last year has overtaken the number who
average satisfaction has declined by 1.3 points,          have improved by at least two points.
to 72.1. Customers in the North of England are
on average the most satisfied with rail operators         Amazon.co.uk is the highest scoring
and customers in London and the South East the            organisation. Yorkshire Bank is the most
least satisfied. Utilities is flat year on year but has   improved organisation having increased by
dropped slightly since July 2017.                         10 points. Across the UKCSI, 10 organisations
                                                          feature for the first time.
The two Public Services sectors both show
higher customer satisfaction compared to a year
ago. But Public Services (National) is practically
unchanged compared to July 2017 and Public
Services (Local) has decreased by 0.4 points.
However, the Telecommunications and Media
sector is 0.6 points higher than a year ago.

6         UK Customer Satisfaction Index | January 2018
The key differences in satisfaction between the
highest scoring organisation in each sector and
the rest, are complaint handling, over the phone
experiences, openness, trust and transparency

Key differentiators between the top quartile and remaining organisations, in each sector

                           Complaint handling (on a scale of 1 - 10)                                   Over the phone (on a scale of 1 - 10)

                           Top quartile                  Remaining                                   Top quartile                   Remaining
                          organisations                organisations                                organisations                 organisations

   Speed of resolving
     your complaint            6.8                          5.2               The ease of getting
                                                                                through (phone)          8.2                           7.2

     The handling of
      the complaint            6.8                          5.3                   Helpfulness of
                                                                                   staff (phone)         8.4                           7.6

     Staff doing what
 they say they will do         7.0                          5.6
                                                                                 Competence of
                                                                                   staff (phone)         8.4                           7.5

 Staff understanding
            the issue          7.0                          5.6

         The attitude
              of staff         7.1                          5.7
                                                                                                     Reputation and trust (on a scale of 1 - 10)

     The outcome of
      the complaint            6.9                          5.6
                                                                                   Reputation of
                                                                                the organisation         8.2                           7.5
                         % of problems and right first time experiences

                               9.0%                        13.8%
                                                                                           Trust         8.3                           7.6
         % problems

  % experiences that                                                                   Open and
                             87.1%                        79.1%                      transparent         8.2                           7.5
  are right first time

In the Services, Telecommunications & Media, Tourism and Transport sectors, a number of measures
are especially salient differentiators between the upper quartile of organisations and the rest (see page
26). These differences underline the fundamental importance of consistently getting the basics right in
achieving superior customer service performance.

                                                                          UK Customer Satisfaction Index | January 2018                            7
Consistently achieving levels of customer satisfaction
 higher than the sector average is linked to better
 turnover growth, profit and employee productivity

 An analysis of organisations’ customer satisfaction and financial performance between 2008 and 2016
 across nine sectors shows the value of consistency in customer service performance. Organisations that
 maintain higher customer satisfaction than their sector average, have achieved stronger turnover growth,
 profit and employee productivity than those whose customer satisfaction is below the sector average.

                                                     Most recent year                      3 year perspective                  5 - 8 year perspective

                                            At least 1 point   At least 1 point   At least 1 point   At least 1 point   At least 1 point   At least 1 point
          Organisations' average level
                                            higher than        below sector       higher than        below sector       higher than        below sector
          of customer satisfaction
                                            sector average     average            sector average     average            sector average     average

          Turnover growth %                  9.1                0.4                5.3               2.5                4.7                 3.5
          Ebitda %                           14.2               15.0               15.1              12.0               24.7                14.5
          Gross Margin %                     39.5               28.5               35.5              37.3               37.0                32.1
          Average revenue
                                             548,166            264,288            549,147           267,749            552,409             257,614
          per employee (£)
          Human capital value add (£)        70,889             62,763             64,484            55,738             59,847              40,863

 Organisations with higher levels of employee
 engagement tend to also achieve superior customer
 satisfaction
Customer Satisfaction

                                                                                               1                                     0.41
                                                                                      1 point increase                               0.41 increase
                                                                                        in employee                                   in customer
                                                                                        engagement                                    satisfaction

                                 Employee Engagement

 22 organisations either shared their employee engagement index results with us, in confidence, or have
 published them in annual reports and financial statements.

 8                      UK Customer Satisfaction Index | January 2018
Superior customer satisfaction is linked to higher
levels of reputation, trust and recommendation

The UKCSI continues to show that achieving the highest levels of customer satisfaction - a 9 or 10 out of
10 - appears to give a notable extra boost to levels of reputation, trust, recommendation and willingness
to remain an organisation’s customer.

                                        Customers who score                         Customers who score
                                   an organisation 9 or 10 out of 10           an organisation 8 - 8.9 out of 10
                                      for customer satisfaction                   for customer satisfaction

                             Loyalty
          % of customers scoring an
                organisation 9 or 10             96%                                        66%
             on intention to remain
                        a customer

                   Recommendation
             % of customers scoring
                     an organisation             92%                                        47%
               9 or 10 on likelihood
                      to recommend

                                Trust
         % of customers who give an
               organisation a 9 or 10            96%                                        49%
                         trust rating

                           Reputation
         % of customers who give an
   organisation a 9 or 10 when asked             86%                                        38%
 “how would you rate the reputation
                of this organisation”

                                                        UK Customer Satisfaction Index | January 2018              9
Despite economic pressures, the number of customers
who prefer premium service, 27.6%, has remained
consistent

                                                                      Prefer “no frills” and lowest price
                                                                      Prefer excellent service even if it costs more

                        27.7%                                27.4%                                      27.6%

                                           14.6%
       14.2%                                                                         14.2%

               Jul-16                              Jul-17                                     Jan-18

Customers are more likely to express a                      Compared to July 2016, there has been an
preference for premium service in the                       increase in the number of customers in the
Automotive, Leisure, Retail (non food) and                  Automotive and Telecommunications and Media
Tourism sectors and less likely in the Banks and            sectors who would pay more for excellent
Building Societies, Telecommunications & Media,             service, but fewer in Transport and Services.
Transport and Utilities sectors.

10       UK Customer Satisfaction Index | January 2018
When customers interact                                    Implications and
with organisations while                                   opportunities
they are at work, their
satisfaction is much lower
than average
44.9% of all customer experiences take place at            High performing organisations tend to be
home and 8.6% at work. Customers are most                  characterised by proactive investment in their
likely to have an experience with an organisation          employees, technology, customer experience
when they are at work in the Banks & Building              design and processes and the ability to integrate
Societies, Insurance and Tourism sectors.                  these elements to deliver strategic clarity and
Satisfaction with experiences that take place              coherent operational outcomes.
when customers are at home are, on average,
higher than for those when they are at work.               We have identified key areas for potential
The difference is especially apparent in the Retail,       investment as well as eight enablers to securing
Tourism and Insurance sectors. These differences           effective return on that investment.
suggest that when organisations are dealing with
customers who are at work, there is a need to                        Key enablers of
                                                                     effective investment
be especially responsive, efficient and to identify
ways of reducing customer effort.
                                                                     1    Leadership

Across all levels of
household income,                                                    2    Employee engagement

younger customers are
the most likely to say they                                          3    Insight

favour premium service
                                                                          Customer experience
                                                                     4    design and processes
The most affluent customers aged 18 – 44 show
a particularly strong preference for premium
service compared both to similarly aged people                       5    Consistency
with lower incomes, as well as older affluent
customers. Amongst customers aged 45 – 79                                 Relentless focus on
there is much less variation by income level in                      6    problems, complaints,
                                                                          getting the basics right
the willingness to pay more for premium service,
than there is for younger people.
                                                                     7    Effective measurement

                                                                          Innovation and business
                                                                     8    improvement

                                                       UK Customer Satisfaction Index | January 2018      11
1
Customer
satisfaction
in the UK
The state of the nation
The UKCSI is a national measure of customer                                           The January 2018 UKCSI score of 78.1 (out of
satisfaction which The Institute has published                                        100) is up 0.3 points compared to a year ago
twice a year since 2008. This UKCSI is based                                          and slightly lower, 0.1 points, than in July 2017.
on 46,500 responses from an online panel                                              This broadly stable picture is reflected in the
which is geographically and demographically                                           smallest year on year movement in customer
representative of the UK population. Customers                                        satisfaction since July 2015.
are asked to rate their experiences of dealing
with an organisation on over 30 customer                                              The overall Net Promoter (NPS) score2 rose by
experience metrics using a scale of 1 – 10.                                           1.4 points to 15.3. Most other key measures are
The customer satisfaction index score for an                                          stable. The level of customer effort3 increased by
organisation is based on an average of all its                                        0.1 points, to 4.9. The proportion of customers
customers’ responses and is expressed as a score                                      experiencing a problem fell by 0.4% points, to
out of 100. The sector score is the mean average                                      12.7%, whereas the number of customers whose
of all responses for that sector. The overall UKCSI                                   experience was right first time grew by 3% points
is based on the mean average of each sector’s                                         to 80.8%. The improving trend in complaint
score.                                                                                handling, highlighted in the July 2017 UKCSI, has
                                                                                      stalled. The average level of customers’ trust in
                                                                                      organisations is unchanged at 7.7.

                                                                      78.2                                                                            78.2
                                                             78.0                                                                                             78.1
                                                                               77.9                                                         77.8
                                            77.3     77.4                                                                          77.4
                                                                                        77.1
                                                                                                                           77.0
                                   76.7
                                                                                                 76.3             76.2
                                                                                                         76.0
                          75.6
                 75.2

        74.1

72.0

Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Jan-18

1 To find out more about the UKCSI methodology, see About the UKCSI (p.64)
2 Net
      Promoter Score (NPS) is based on customers’ responses to “how likely would you be to recommend xx to friends or relatives.” NPS is calculated by subtracting
 the % of detractors - respondents scoring 0 – 6 (out of 10) - from the % of advocates, who scored 9 – 10.
3 Customer effort is based on responses to the question "how much effort did you have to make to complete your transaction, enquiry or request?"

                                                                                UK Customer Satisfaction Index | January 2018                                   13
The biggest year on year
                                                           improvements are for the
                                                         number of experiences rated
                                                         as right first time. Otherwise,
                                                          most measures are broadly
                                                                flat year on year.

Year on year changes: selected measures
                                                                                       YOY
                                                                 Jan 2018   Jan 2017
                                                                                       change

UK Customer Satisfaction Index (UKCSI)                           78.1       77.8       +0.3

Net Promoter Score (NPS)                                         15.3       13.9       +1.4

Customer effort                                                  4.9        4.8        +0.1

Trust                                                            7.7        7.7        -

% of experiences right first time                                80.8%      77.8%      +3.0%

% of customers experiencing a problem                            12.7%      13.1%      -0.4%

Satisfaction with complaint handling                             5.6        5.6        -

14       UK Customer Satisfaction Index | January 2018
The improving trend in
Transport and Utilities
has stalled

In recent UKCSI surveys, improvements in many                The two Public Services sectors both show
of the lower scoring sectors such as Public                  higher customer satisfaction compared to a year
Services, Telecommunications & Media, Transport              ago but Public Services (National) is practically
and Utilities have contributed to a steady growth            unchanged compared to July 2017 and Public
in overall satisfaction. However, in this UKCSI,             Services (Local) has decreased by 0.4 points.
there are signs that the improving customer                  However, the Telecommunications & Media
satisfaction in some of these lower ranked                   sector has improved by 0.6 points.
sectors may have stalled.
                                                             Retail (Non-food) remains the highest scoring
The Transport sector has seen a one point fall in            sector but has fallen by 0.5 points. Insurance
customer satisfaction compared to January 2017               is 0.7 points lower than in January 2017. The
and has replaced Telecommunications & Media                  Automotive, Banks & Building Societies, Leisure
as the lowest rated sector. Utilities is flat year on        and Services sectors have all improved, but by less
year but has dropped slightly since July 2017.               than one point. Customer satisfaction in the Retail
                                                             (Food) sector is the same as in January 2017.

Changes in sector customer satisfaction in the last 12 months
                                                                                              Change from      Change from
                                                   UKCSI score   UKCSI score   UKCSI score
 Sector                                                                                       Jan-17 to        Jul-17 to
                                                   Jan-18        Jul-17        Jan-17
                                                                                              Jan-18           Jan-18

 Retail (Non-food)                                 82.0          82.2          82.5           -0.5 q          -0.2 q

 Retail (Food)                                     81.3          81.5          81.3           0.0 =           -0.2 q

 Tourism                                           80.7          80.7          80.2           0.5 p           0.0 =

 Leisure                                           80.0          80.3          79.6           0.4 p           -0.3 q

 Banks & Building Societies                        79.8          79.7          79.5           0.3 p           0.1 p

 Automotive                                        79.5          79.4          78.8           0.7 p           0.1 p

 Insurance                                         78.7          78.9          79.4           -0.7 q          -0.2 q

 Services                                          78.7          78.5          78.2           0.5 p           0.2 p

 Public Services (National)                        76.1          76.0          74.5           1.6 p           0.1 p

 Public Services (Local)                           75.0          75.4          74.4           0.6 p           -0.4 q

 Utilities                                         74.4          75.1          74.4           0.0 =           -0.7 q

 Telecommunications & Media                        74.2          74.0          73.6           0.6 p           0.2 p

 Transport                                         73.7          74.5          74.7           -1.0 q          -0.8 q
p Increase in UKCSI score of less than one point   q Fall in UKCSI score       p Increase in UKCSI score of one point or more

                                                        UK Customer Satisfaction Index | January 2018                    15
Lower customer satisfaction in Transport can be
attributed to airlines and rail operators

Average satisfaction for airlines is higher than for             Rail operators’ average satisfaction has declined by
coach or rail operators but it has fallen by 2.2 points          1.3 points, to 72.1. There is, however, a mixed picture
compared to the same time last year. Six of the eight            in the rail sector; seven of the 16 rail operators in
airlines included in the UKCSI suffered a decrease in            the UKCSI fell by at least one point whereas four
customer satisfaction of at least one point, with the            improved by the same amount. This contrasting
biggest drops for Ryanair (- 4.7 points) and Virgin              performance was most apparent in London and the
Atlantic (- 4.6 points).                                         South of England. Southeastern was one of the most
                                                                 improved organisations in the UKCSI (up 8 points),
By contrast, coach/bus operators’ average customer               whilst Southern Railway fell by 7.0 points and is the
satisfaction increased by 1.1 points, although it                lowest scoring organisation in the Transport sector.
remains lower than that for both airlines and rail
operators.

Customer satisfaction by mode of Transport

                                                          76.4

                              72.1

                                                                                      70.9

                           Rail/Train                     Air                      Coach/Bus

                                                   UKCSI (out of 100)

16         UK Customer Satisfaction Index | January 2018
Customers in the North of England are on average the most satisfied with rail operators and customers in London
and the South East the least satisfied. The biggest gaps in customer satisfaction between these two regions are
focused around experiences with employees (speed of service, helpfulness and competence); the number of
experiences that are “right first time”; the number of problems; price; reputation; openness and transparency.

UKCSI average score for rail operators
by country and region

                                                                                       Further information about the customer service
73.3                                                                                   performance of each sector, and organisations within
                                                                                       each sector, on the range of customer experience
                                                                     76.6              metrics is available in 13 sector reports4.

                                                                     73.9
73.7

72.4                                                                 68.9

4 Sector reports are available as a member benefit to Institute organisational members; benefits vary by membership level. The reports can be purchased by
 non-members at www.instituteofcustomerservice.com

                                                                                UK Customer Satisfaction Index | January 2018                                 17
The top
50 organisations

                                                                                             Change
 Jan-18                                                         Jan-18   Jan-17    Jan-17    in score
          Organisation             Sector
 Rank                                                           Score    Score     Rank      Jan-17 to
                                                                                             Jan-18

 1        Amazon.co.uk             Retail (Non-food)            86.6     87.3      1         -0.7
 2        first direct             Banks & Building Societies   86.1     84.4      6         1.7
 3        Yorkshire Bank           Banks & Building Societies   85.3     75.3      184       10.0
 4        Superdrug                Retail (Non-food)            85.1     82.2      29        2.9
 5=       John Lewis               Retail (Non-food)            85.0     85.4      3         -0.4
 5=       Wilko                    Retail (Non-food)            85.0     83.6      13        1.4
 7=       M & S (Bank)             Banks & Building Societies   84.7     81.7      37        3.0
 7=       Nationwide               Banks & Building Societies   84.7     84.4      6         0.3
 9=       Jet2holidays.com         Tourism                      84.2     NO DATA   NO DATA   NO DATA

 9=       Tesco mobile             Telecommunications & Media   84.2     83.3      19        0.9
 9=       Waitrose                 Retail (Food)                84.2     84.6      5         -0.4
 12       Greggs                   Leisure                      84.0     84.4      6         -0.4
 13 =     Aldi                     Retail (Food)                83.9     83.0      20        0.9
 13 =     Next                     Retail (Non-food)            83.9     83.4      16        0.5
 13 =     Pets at Home             Retail (Non-food)            83.9     NO DATA   NO DATA   NO DATA

 16 =     M & S (Food)             Retail (Food)                83.8     85.0      4         -1.2
 16 =     Premier Inn              Tourism                      83.8     82.8      23        1.0
 18       The Trainline.com        Transport                    83.7     81.2      49        2.5
 19       Nationwide Insurance     Insurance                    83.6     81.1      51        2.5
 20       P&O Ferries              Transport                    83.5     83.4      16        0.1
 21       Brittany Ferries         Transport                    83.4     NO DATA   NO DATA   NO DATA

 22 =     Ebay                     Retail (Non-food)            82.9     81.7      37        1.2
 22 =     Halfords autocentre      Services                     82.9     79.1      106       3.8
 24       Netflix                  Leisure                      82.8     80.8      56        2.0
 25 =     Ikea                     Retail (Non-food)            82.7     79.2      105       3.5

18        UK Customer Satisfaction Index | January 2018
Change
Jan-18                                                        Jan-18    Jan-17     Jan-17      in score
         Organisation         Sector
Rank                                                          Score     Score      Rank        Jan-17 to
                                                                                               Jan-18

25 =     SAGA Insurance       Insurance                       82.7      80.5       73          2.2
25 =     Škoda UK             Automotive                      82.7      81.1       51          1.6
25 =     Subway               Leisure                         82.7      83.5       15          -0.8
29 =     Jet2                 Transport                       82.6      83.0       20          -0.4
29 =     Mercedes-Benz        Automotive                      82.6      81.7       37          0.9
31 =     Haven Holidays       Tourism                         82.4      80.8       56          1.6
31 =     Specsavers           Retail (Non-food)               82.4      81.5       44          0.9
33 =     Honda                Automotive                      82.2      77.0       157         5.2
33 =     M&S                  Retail (Non-food)               82.2      84.3       9           -2.1
33 =     RAC                  Services                        82.2      79.7       91          2.5
36 =     booking.com          Tourism                         82.1      81.7       37          0.4
36 =     Caffe Nero           Leisure                         82.1      79.6       95          2.5
36 =     Iceland              Retail (Food)                   82.1      84.3       9           -2.2
39 =     P&O Cruises          Tourism                         82.0      83.6       13          -1.6
39 =     Sainsbury's          Retail (Food)                   82.0      80.8       56          1.2
41       Lidl                 Retail (Food)                   81.9      80.7       65          1.2
42       LV=                  Insurance                       81.7      83.4       16          -1.7
43       giffgaff             Telecommunications & Media      81.6      84.3       9           -2.7
44 =     OVO Energy           Utilities                       81.5      82.5       26          -1.0
44 =     Suzuki               Automotive                      81.5      81.7       37          -0.2
46 =     Argos                Retail (Non-food)               81.4      82.5       26          -1.1
46 =     HM Passport Office   Public Services (National)      81.4      78.9       112         2.5
46 =     Prudential           Insurance                       81.4      NO DATA    NO DATA     NO DATA

49 =     Debenhams            Retail (Non-food)               81.3      80.1       79          1.2
49       Hilton               Tourism                         81.3      80.7       65          0.6

                                               UK Customer Satisfaction Index | January 2018           19
The sector profile of the top 50
organisations has remained stable

The Retail sectors are strongly represented in the top 50 but it also includes organisations from all
11 commercial sectors in the UKCSI as well as from Public Services (National). Seven of the top 50
organisations are from the three lowest ranked sectors, Utilities, Telecommunications & Media and
Transport. This shows that it is possible for organisations in any sector to achieve high levels of customer
satisfaction.

Profile of the top 50 organisations

       12                              6                           6                            4
       Retail                        Retail
                                                                 Tourism
     (Non-food)                      (Food)

                                                                                              Leisure
                                                                                           Automotive
                                                                                     Banks & Building Societies
                                                                                            Insurance
                                                                                            Transport

                  13 of the top 50 organisations grew their customer satisfaction by at
                  least two points compared to January 2017, with the largest increase,
                  of 10 points, for Yorkshire Bank.

                  Three organisations - M & S (Non-food), Iceland and giffgaff - fell by
                  more than two points, although they remain amongst the highest
                  rated organisations in their sector.

     20 organisations did not appear in the UKCSI top 50 in January 2017. Brittany
     Ferries makes its debut in the UKCSI. Jet2holidays.com and Pets at Home
     were part of the top 50 organisations in the July 2017 UKCSI but did not have
     sufficient responses to be included a year ago. Prudential is amongst the top 50
     UKCSI organisations for the first time.

20        UK Customer Satisfaction Index | January 2018
Across the UKCSI as a whole there are 10 new entrants:

  · Frankie and Bennys (Leisure)                  · Clarks (Retail Non-food)
  · Prezzo (Leisure)                              · British Gas (Services)
  · Spotify (Leisure)                             · Brittany Ferries (Transport)
  ·D isclosure and Barring Service               · Thameslink (Transport)
    (formerly Criminal Records Bureau,            · Bristol Water (Utilities)
    CRB) (Public Services National)               · Essex and Suffolk Water (Utilities)

Despite the overall stability of the UKCSI, fewer organisations have grown their customer
satisfaction by at least two points compared to January 2017

    253 44
   Organisations and               Organisations have
                                                                       49
                                                                      Organisations have
      organisation                improved their score                  dropped by at
   types in the UKCSI             by at least two points               least two points

                                              UK Customer Satisfaction Index | January 2018   21
The number of organisations whose customer
  satisfaction has declined by at least two points has
  now overtaken the number that have improved by the
  same margin

  There has been a drop in the number of                                        In each sector where customer satisfaction has
  organisations whose customer satisfaction has                                 dropped, the gap between the highest and lowest
  improved by at least 2 points compared to the                                 performing organisations has increased.
  previous year and an increase in the number
  whose customer satisfaction has fallen by two
  points or more.

  This trend of more organisations seeing a fall
  rather than an increase in customer satisfaction
  of at least two points is most marked in the
  Insurance, Retail, Utilities and Transport sectors.

   The number of organisations whose customer satisfaction improved or dropped by at least 2 points

                          100                                                                Number of organisations that have
                                                                                             improved their UKCSI by at least 2 points
                                                                                             Number of organisations whose UKCSI
                                                                                             has dropped by at least 2 points
                          80
Number of organisations

                          60

                                                                                                                               49
                                                                                                                               44
                          40

                          20

                           0
                                Jan-16                Jul-16               Jan-17                 Jul-17                   Jan-18

  22                            UK Customer Satisfaction Index | January 2018
Most improved                                                                                   The 20 most
                                                                                         improved organisations
organisations                                                                          have achieved the strongest
                                                                                       gains in getting things right
                                                                                          first time and dealing
                                                                                            with problems and
                                                                                                 complaints

                                                UKCSI score    UKCSI score
 20 most improved organisations over one year                                 Change     Sector
                                                January 2018   January 2017

 Yorkshire Bank                                 85.3           75.3           10.0       Banks & Building Societies
 T-Mobile                                       79.5           70.7           8.8        Telecommunications & Media
 Southeastern (train operating company)         65.0           57.0           8.0        Transport
 United Utilities (water)                       77.3           69.9           7.4        Utilities
 HMRC (Inland Revenue)                          65.0           58.4           6.6        Public Services (National)
 Pizza Hut                                      80.2           74.9           5.3        Leisure
 Honda                                          82.2           77.0           5.2        Automotive
 Yodel                                          74.3           69.3           5.0        Services
 The Co-operative Energy                        74.8           70.0           4.8        Utilities
 DVLA                                           80.0           75.7           4.3        Public Services (National)
 TransPennine Express                           75.5           71.5           4.0        Transport
 Halfords autocentre                            82.9           79.1           3.8        Services
 Renault                                        79.4           75.7           3.7        Automotive
 Ikea                                           82.7           79.2           3.5        Retail (Non-food)
 Nissan                                         80.1           76.6           3.5        Automotive
 BT                                             69.9           66.8           3.1        Telecommunications & Media
 M&S (Bank)                                     84.7           81.7           3.0        Banks & Building Societies
 Harvester                                      78.4           75.5           2.9        Leisure
 Superdrug                                      85.1           82.2           2.9        Retail (Non-food)
 Scottish Water                                 76.9           74.1           2.8        Utilities
 Toby Carvery                                   79.1           76.3           2.8        Leisure

Yorkshire Bank is the most improved organisation                      BT is at its highest point since July 2013,
in the UKCSI compared to a year ago. Its 10                           although it remains below the average for the
point increase makes it the third highest rated                       Telecommunications & Media sector.
organisation in the UKCSI.

Two Public Services (National) organisations,
DVLA and HMRC, are amongst the most
improved in the UKCSI.

                                                                 UK Customer Satisfaction Index | January 2018        23
The performance of the most improved organisations
is welcome but is reported with a note of caution

The evidence suggests that many organisations            In the previous two UKCSI surveys, rail operators
that have previously featured amongst the most           have featured prominently amongst the most
improved have been unable to sustain their               improved organisations. However, in January
customer satisfaction performance. 12 of the 20          2018, only two of the most improved organisa-
most improved organisations in January 2017              tions were rail operators, TransPennine Express
have dropped by at least one point compared to a         and Southeastern, further underlining the over-
year ago; another six are broadly unchanged. The         all downturn in customer satisfaction in the rail
exceptions are Yodel and M & S (Bank), who have          sector.
continued to improve, by five and three points
respectively.

The key differences in satisfaction between the
highest scoring organisation in each sector and
the rest are for complaint handling, over the phone
experiences, openness, trust and transparency

In this UKCSI we have compared the                       over the phone experiences and perceptions of
performance of the top quartile organisations            openness and transparency. This underlines the
and other organisations in each sector on the            fundamental importance of consistently getting
range of customer experience metrics. This               the basics right in achieving superior customer
analysis provides insights into both consistent          service performance. As we will show in chapter
differentiators across the sample of over 250            2, organisations that maintain higher levels of
organisations in the UKCSI and the dynamics of           satisfaction than their sector average have also
particular sectors.                                      tended to show the strongest levels of turnover
                                                         growth, profit and employee productivity.
The most significant differences between the
highest performing organisations and the rest
are focused around the number of problems
and complaints, how complaints are handled,

24       UK Customer Satisfaction Index | January 2018
Key differentiators between the top quartile and remaining organisations, in each sector

                          Complaint handling (on a scale of 1 - 10)                                 Over the phone (on a scale of 1 - 10)

                          Top quartile                  Remaining                                 Top quartile                   Remaining
                         organisations                organisations                              organisations                 organisations

  Speed of resolving
    your complaint            6.8                          5.2             The ease of getting
                                                                             through (phone)          8.2                           7.2

    The handling of
     the complaint            6.8                          5.3                 Helpfulness of
                                                                                staff (phone)         8.4                           7.6

    Staff doing what
they say they will do         7.0                          5.6
                                                                              Competence of
                                                                                staff (phone)         8.4                           7.5

Staff understanding
           the issue          7.0                          5.6

        The attitude
             of staff         7.1                          5.7
                                                                                                  Reputation and trust (on a scale of 1 - 10)

    The outcome of
     the complaint            6.9                          5.6
                                                                                Reputation of
                                                                             the organisation         8.2                           7.5
                        % of problems and right first time experiences

                              9.0%                        13.8%
                                                                                        Trust         8.3                           7.6
        % problems

 % experiences that                                                                 Open and
                            87.1%                        79.1%                    transparent         8.2                           7.5
 are right first time

                                                                         UK Customer Satisfaction Index | January 2018                          25
In certain sectors, there appear to be especially salient
differentiators between the highest scoring quartile of
organisations and the rest

                                      Differentiators between upper quartile and the rest which are
 Sector
                                      particularly important in this sector

                                      Differences are less marked in this sector but may be influenced
                                      by type of experience. A relatively high proportion of customer
Insurance
                                      experiences with top quartile organisations are concerned with
                                      policy renewals.

                                      • Openness and transparency
                                      • Reputation
Services
                                      • An organisation caring about its customers
                                      • Over the phone experiences

                                      • E ase of getting through (phone)
                                      •C  ompetence of staff (phone)
Tourism
                                      • Reputation
                                      •C  ustomer effort

                                      •%  of customers experiencing a problem
                                      • % experiences that are right first time
                                      •P  rice / cost
Telecommunications
                                      •B  eing kept informed
& Media
                                      •O  penness and transparency
                                      •C  ustomer effort
                                      • Trust

                                      • % of customers experiencing a problem
                                      • % experiences that are right first time
                                      • Price / cost
Transport                             • Being kept informed
                                      • Openness and transparency
                                      • Product / service reliability
                                      • Trust

26        UK Customer Satisfaction Index | January 2018
2
The links between
customer
satisfaction,
employee
engagement,
productivity
and business
performance
        UK Customer Satisfaction Index | January 2018   27
Demonstrating the
return on investment in
customer experience

This section examines the critical set of                                             In November 2017, The Institute published The
relationships between employee engagement,                                            Customer Service Dividend: how organisations
customer satisfaction, productivity and business                                      have achieved ROI and greater productivity5.
performance. It draws on The Institute’s latest                                       Using data from the UKCSI and organisations’
research into the short and long term links                                           financial reporting, the research explores the
between customer satisfaction and financial                                           links between customer satisfaction and key
metrics; a comparison of customer satisfaction                                        financial metrics such as turnover, ebitda and
and current account net gains and losses in                                           gross margin as well as measures of employee
the banking sector; the relationship between                                          productivity, revenue per employee and human
organisations’ employee engagement and                                                capital value add.
customer satisfaction results; and persistent
evidence that superior customer satisfaction is                                       The research covers 124 organisations
allied to strong levels of trust, reputation and                                      in nine sectors (Insurance, Leisure, Retail
recommendation.                                                                       (Food), Retail (Non-food), Services, Tourism,
                                                                                      Telecommunications & Media, Transport and
Demonstrating the financial return on investment                                      Utilities). It draws on UKCSI and financial
is an essential concern for leaders, investors and                                    reporting data between 2008 and 2017,
all who are involved in designing and delivering                                      enabling both a short and longer term
customer experience. Yet the range of factors                                         perspective on the relationship between levels of
influencing financial results – acquisitions,                                         customer satisfaction and business performance.
divestments, competitive pressure, regulatory
action, organisational transformation – can
make it problematic to identify the role of
customer satisfaction in driving and sustaining
business performance. The increased number of
organisations whose customer satisfaction has
fallen, and the stalled improvement in a number
of sectors revealed by this UKCSI, reaffirms the
need to show compelling evidence of the impact
of customer service on business performance.

5 The
     Customer Service Dividend: How organisations have achieved ROI and greater productivity is available as a membership benefit to The Institute’s
 organisational members. It can be purchased by non members at www.instituteofcustomerservice.com

28             UK Customer Satisfaction Index | January 2018
Customer satisfaction
and financial
performance:
key findings

  • Organisations with higher customer satisfaction than their sector average have achieved better
  • turnover growth than their peers, from a year on year, 3 year and longer term perspective

  • Organisations that have improved their satisfaction to at least the level of the sector average
  • achieved the highest average turnover growth; those whose satisfaction has fallen and is below
  • the sector average saw the weakest turnover growth

  • Organisations with higher customer satisfaction have demonstrated better employee productivity
  • in terms of revenue per employee and human capital value added

  • On average, organisations with higher customer satisfaction than others in their sector have
  • achieved better ebitda and profit margins over 5 – 8 years

  • Many high performing organisations have explicitly referenced investment in customer experience
  • as an essential enabler of their business strategy

  • Performing consistently better than the sector average for customer satisfaction is key to
  • sustainable financial growth.

Customer satisfaction and financial performance: a short, medium and long-term perspective
                                        Most recent year                        3 year perspective                  5 - 8 year perspective

                               At least 1 point   At least 1 point     At least 1 point   At least 1 point   At least 1 point   At least 1 point
Organisations' average level
                               higher than        below sector         higher than        below sector       higher than        below sector
of customer satisfaction
                               sector average     average              sector average     average            sector average     average

Turnover growth %               9.1                0.4                  5.3               2.5                4.7                 3.5

Ebitda %                        14.2               15.0                 15.1              12.0               24.7                14.5

Gross Margin %                  39.5               28.5                 35.5              37.3               37.0                32.1

Average revenue
                                548,166            264,288              549,147           267,749            552,409             257,614
per employee (£)

Human capital value add (£)     70,889             62,763               64,484            55,738             59,847              40,863

                                                                     UK Customer Satisfaction Index | January 2018                            29
The consistency
imperative

A central finding of our research into customer
satisfaction and financial performance is the
importance of maintaining consistently high levels
of customer satisfaction, especially compared
to direct competitors and peers. This UKCSI
shows examples of organisations that have
achieved significant improvement in customer
satisfaction but not managed to sustain it. One
of the key factors to achieving sustained business
performance, especially in relation to ebitda and
gross margin, appears to be the ability to maintain
superior levels of customer satisfaction.

Business change and transformation are
crucial factors and potential risks influencing
organisations’ short-term financial performance.
Evidence from our review of company reports
reveals examples of organisations whose revenue
and profit fell because of costs associated with
business transformation. Often, organisations
subsequently recovered and grew their numbers
but in some cases the turnaround took longer
than anticipated. Customer experience is therefore
seen by many organisations as a key enabler of
business performance. Where organisations are
undergoing significant transformation, customer
experience can also act as a valuable asset in
retaining customers and maintaining consistency
and reputation. Given the many challenges and
constant change that organisations face, there is a
key role for leaders in supporting and reinforcing
a long-term commitment to customer service.

30        UK Customer Satisfaction Index | January 2018
Customer satisfaction,
sales growth and market
share in Retail (Food)

Retail (Food) is one of the most congested                                                                                                 Customer experiences recorded in the UKCSI for
sectors in the UKCSI with a gap of just 6.3                                                                                                this sector remain predominantly “in person”,
points between the highest scoring organisation                                                                                            accounting for almost 80% of all customer
(Waitrose) and the lowest (Co-op). All                                                                                                     experiences. However, the growth of Ocado and
organisations have grown sales compared to                                                                                                 evidence of growth in Morrison’s ecommerce
last year except the Co-op. However, only Aldi,                                                                                            sales6 suggests that online sales will become an
Lidl and Ocado increased their market share                                                                                                increasingly significant feature of grocery shopping.
(Iceland’s share was unchanged).

Retail (Food): Customer satisfaction and yoy sales growth6
                                                                                                                    Retail Food Jan-18 UKCSI: 81.3
                                                                                         20%
                            Annual sales growth for the 12 weeks ending 8 October 2017

                                                                                                                                           Lidl
                                                                                         15%
                                                                                                                                                             Aldi
                                            Source: Kantar Worldpanel

                                                                                         10%
                                                                                                                   Ocado

                                                                                         5%
                                                                                                                    Morrisons                                                 Average
                                                                                                                                           Iceland        Waitrose
                                                                                                                                                                       3.1%    sales
                                                                                                                             Tesco                                            growth
                                                                                                                     ASDA                Sainsbury's
                                                                                         0%
                                                                                                 Co-op Food

                                                                                         -5%
                                                                                            77       78       79       80        81       82         83    84        85
                                                                                                                              UKCSI Jan-18

Retail (Food): Customer satisfaction and yoy market share change6
                               Food retailers with                                                                         Food retailers with               Food retailers with
                                  UKCSI at least                                                                              UKCSI within                     UKCSI at least
                          1 point below sector average                                                                       + / - 1 point of              1 point above average
                                                                                                                             sector average

                                                                                          -0.2%                                0.1%                              0.3%

6 Source: Kantar Worldpanel for the 12 weeks ending 8 October 2017

                                                                                                                                    UK Customer Satisfaction Index | January 2018            31
Over the longer term, our analysis of customer
satisfaction and financial performance in the Retail
(Food) sector 7 shows that organisations whose
customer satisfaction is consistently higher than the
sector average have also tended to achieve stronger
turnover growth.

Average customer satisfaction and turnover growth (2008 - 16): Retail (Food)

                                               10   Organisations' average
                                                    customer satisfaction
                                                                                                    8.6%
                                                         Organisations at least one point
                                                8        above the sector average
 % in organisations' average turnover change

                                                         Organisations at least one point
                                                         below the sector average
                                                6
                                                                                                                                           4.7%
                                                                  3.8%
                                                4

                                                2                                                                                          1.3%

                                                0

                                               -2                                                -2.7%
                                                                  -3.3%

                                               -4
                                                              Most recent                        3 year                         Longer term
                                                          year on year change               compound growth              compound growth (5 - 8 years)

In a climate of tight margins, especially for                                                         The UKCSI continues to show that employee
retailers with high investment in physical stores,                                                    skills, behaviours and competence are the
it will be increasingly important to invest in                                                        aspects of customer experience which show
technology to improve back-office and frontline                                                       some of the biggest differences between the
productivity, whilst enhancing in-store experience                                                    highest performing organisations for customer
through the quality and range of products and the                                                     satisfaction and the rest.
quality of employee interactions with customers.

7 Analysis of customer satisfaction and financial performance 2008 – 2016 in The Customer Service Dividend: How organisations have achieved ROI and greater productivity,
 Institute of Customer Service, 2017

32                                                  UK Customer Satisfaction Index | January 2018
Banks & Building Societies:
customer satisfaction and
current account net gains
and losses

A comparison of the Current Account Switching                                                                      Organisations whose customer satisfaction
Service’s data on current account net gains and                                                                    was higher than the sector average recorded
losses in Q1 20178 and the corresponding UKCSI                                                                     an average 5,492 current account net gains
provides evidence that in this sector too, higher                                                                  compared to an average net loss of 3,407
customer satisfaction helps organisations achieve                                                                  accounts for banks with lower satisfaction.
better business results.

Customer satisfaction and current account switching
                                                                                  Banks & Building Societies Jan-17 UKCSI: 79.5
                                                                  40,000                                                                          Nationwide

                                                                  30,000
                             Current Account Net Gains / Losses

                                                                  20,000

                                                                                                                                      TSB
                                                                  10,000
                                                                                HSBC
                                                                            Bank of Scotland                           Halifax
                                                                                                      Tesco
                                                                       0
                                                                                                                     Santander

                                                                                         RBS
                                                                  -10,000                                                  The Co-operative Bank
                                                                                                     Lloyds
                                                                                                                 NatWest
                                                                                              Barclays
                                                                  -20,000
                                                                         74           76             78            80            82         84            86
                                                                                                               UKCSI Jan-17

                                                                           Organisations with lower than                                 Organisations with higher than
                                                                        sector average customer satisfaction                          sector average customer satisfaction

                                                                                    -3,407                                                         5,492

                  Net current account gains
                  Net current account losses

8 Current Account Switching Service Dashboard Issue 16. 12 of the 17 banks in the Dashboard also appeared in the January 2017 UKCSI.

                                                                                                               UK Customer Satisfaction Index | January 2018                 33
Customer satisfaction,
  employee engagement
  and productivity

  The Institute’s research into employee                                              22 organisations either shared their employee
  engagement9 highlighted the specific ways that                                      engagement index results with us, in confidence,
  engaged employees positively affect customer                                        or have published them in annual reports and
  satisfaction, through discretionary effort, personal                                financial statements. This analysis shows that
  empathy, ideas for business improvement and a                                       organisations with the highest levels of employee
  focus on quality and consistency.                                                   engagement tend also to achieve superior
                                                                                      customer satisfaction. It may also be the case
  The high levels of revenue per employee and                                         that organisations with a reputation for service
  human capital value add achieved by organisations                                   are better able to attract and retain engaged
  with higher customer satisfaction than their sector                                 employees. Our analysis suggests that a one
  average (see page 29) suggests that there is a link                                 point improvement in employee engagement is
  between employee engagement, productivity and                                       linked to 0.41 uplift in customer satisfaction.
  customer satisfaction.

  For this UKCSI, we have updated an analysis of
  the correlation between organisations’ levels of
  customer satisfaction and employee engagement.
Customer Satisfaction

                                                                                                 1                                         0.41
                                                                                        1 point increase                                   0.41 increase
                                                                                          in employee                                       in customer
                                                                                          engagement                                        satisfaction

                               Employee Engagement

  The growing prominence of the debate about how to address the UK economy’s productivity challenge has
  highlighted the need for a sustained focus on skills, training and infrastructure investment. Evidence from our
  research suggests that a consistent focus on employee engagement and customer satisfaction must also be
  recognised as essential to unlocking the UK’s productivity potential.
  9 The Customer Knows: how employee engagement leads to greater customer satisfaction and loyalty, Institute of Customer Service 2016

  34                    UK Customer Satisfaction Index | January 2018
Reputation, trust and
recommendation

The UKCSI has consistently shown that achieving
the highest levels of customer satisfaction - a 9 or
10 out of 10 - appears to give a notable extra boost
to levels of reputation, trust, recommendation and
willingness to remain an organisation’s customer.

                                        Customers who score                         Customers who score
                                   an organisation 9 or 10 out of 10           an organisation 8 - 8.9 out of 10
                                      for customer satisfaction                   for customer satisfaction

                             Loyalty
          % of customers scoring an
                organisation 9 or 10             96%                                        66%
             on intention to remain
                        a customer

                   Recommendation
             % of customers scoring
                     an organisation             92%                                        47%
               9 or 10 on likelihood
                      to recommend

                                Trust
         % of customers who give an
               organisation a 9 or 10            96%                                        49%
                         trust rating

                           Reputation
         % of customers who give an
   organisation a 9 or 10 when asked             86%                                        38%
 “how would you rate the reputation
                of this organisation”

                                                       UK Customer Satisfaction Index | January 2018          35
3
Customer segments:
variations in
attitudes and
behaviour
In our preview of customer service trends for 2018, we highlighted that a combination of rising prices
and stagnant incomes is likely to make many customers even more demanding of the experiences and
value they receive from organisations. This section examines the extent to which customers’ preferences
for premium or “no frills”, lowest cost service have evolved and how preferences vary by sector, age
group and household income. We also look at differences in customer experience depending on
whether customers interact with an organisation when they are at work, at home or on the move.

36        UK Customer Satisfaction Index | January 2018
The number of customers who prefer either premium
or “no frills” service has remained consistent

In July 2016, July 2017 and now for January 2018             paying more. 27.6% of customers preferred
we asked customers to prioritise the relative                premium service, with 14.2% indicating a strong
importance of service and price on a scale of 1 –            preference for “no frills” service. The remaining
10. A score of 1 to 3 implies a preference for the           customers, 58.2%, favour a balance of price
lowest price, “no frills” service. A score of 8 – 10         and quality of service. The relative number of
expresses a preference for “premium” service –               customers with each type of preference has
an excellent standard of service, even if it means           remained consistent since July 2016.

Service preferences: premium or no frills?
                                                                         Prefer “no frills” and lowest price
30                                                                       Prefer excellent service even if it costs more

                          27.7%                                  27.4%                                       27.6%

25

20

15       14.2%                                  14.6%                                       14.2%

10

 5

 0
                 Jul-16                                 Jul-17                                      Jan-18

                                                  % of customers

                                                        UK Customer Satisfaction Index | January 2018                     37
Customers are more likely to express a                     Compared to July 2016, there has been an
preference for premium service in the                      increase in the number of customers in the
Automotive, Leisure, Retail (Non-food) and                 Automotive and Telecommunications & Media
Tourism sectors and less likely in the Banks &             sectors who favour premium service but the
Building Societies, Telecommunications & Media,            number has declined in the Transport and
Transport and Utilities sectors.                           Services sectors.

Changes in preference for premium service

                                                                                            27.6%
     UK all-sector average
                                                                                            27.7%

                                                                                                               34.2%
                Automotive
                                                                                                          32.2%

                                                                                    25.9%
  Banks & Building Societies
                                                                                    25.8%

                                                                                       27.2%
                  Insurance
                                                                                       26.3%

                                                                                            28.1%
                     Leisure
                                                                                            27.1%

                                                                                       26.9%
               Retail (Food)
                                                                                       26.5%

                                                                                               28.7%
          Retail (Non-food)
                                                                                               29.5%

                                                                                                       27.9%
                    Services
                                                                                                       31.7%

                                                                                    25.6%
Telecommunications & Media
                                                                            23.5%

                                                                                                            31.6%
                    Tourism
                                                                                                            33.3%

                                                                                      24.6%
                  Transport
                                                                                      26.7%

                                                                            23.4%                   January 2018
                    Utilities
                                                                            22.4%                   July 2016

                                5                 15                         25                                35
                                                           % of customers

38         UK Customer Satisfaction Index | January 2018
Variations in satisfaction
by household income are
not uniform across age
groups

People with either the highest (more than
£75,000) or lowest (£30,000) annual household
incomes have higher customer satisfaction than
those with incomes that are £30,000 - £75,000.

Customer satisfaction by household income and age group

                                          UKCSI
  Household income                                  18 to 24     25 to 34     35 to 44     45 to 54     55 to 64     65 to 79
                                          average

  £0 to £30,000                           78.7      74.7         74.9         76.2         79.0         80.2         83.1

  £30,001 to £50,000                      76.4      74.0         72.4         76.1         77.8         78.8         81.3

  £50,001 to £75,000                      76.6      71.8         76.3         76.4         76.1         80.2         77.0

  More than £75,000                       79.4      77.1         83.2         79.9         76.6         78.0         72.3

  Biggest gap between income
                                         3.0        5.3          10.8         3.8          2.9          2.2          10.8
  groups in each age cohort

                                                                  At least 1 point higher than the average for this income group
                                                                  At least 1 point lower than the average for this income group

Amongst 18 – 44 year olds, people with high                    By contrast, customers aged over 45 with middle
incomes have the highest levels of customer                    or relatively low incomes are more satisfied with
satisfaction; this is especially the case for 25 – 35          organisations than those on higher incomes.
year olds. These younger affluent customers tend               This is especially the case amongst customers
to be more satisfied in particular for complaint               aged 65 – 79. Older customers on low or middle
handling and over the phone experiences.                       incomes express higher satisfaction than their
Variations in customer satisfaction by income                  more affluent peers in particular for measures
amongst younger people are less pronounced for                 of trust, reputation, openness and transparency
online experiences.                                            and an organisation caring about its customers.
                                                               A relatively high proportion of older affluent
                                                               customers’ experiences are online, whereas
                                                               customers with low or middle incomes have
                                                               more experiences with organisations in person.

                                                        UK Customer Satisfaction Index | January 2018                       39
Across all levels of household income, younger
customers are the most likely to say they favour
premium service

The most affluent customers aged 18 – 44 show
a particularly strong preference for premium
service compared both to similarly aged people
with lower incomes, as well as older affluent
customers. Amongst customers aged 45 – 79
there is much less variation by income level in
the number of customers who prefer premium
service, than there is amongst younger people.

Preference for premium service by age group and household income

                   All income groups   £0 to £30,000     £30,001 to £50,000    £50,001 to £75,000     More than £75,000

 18 to 24             30.3%               28.8%             31.8%                 28.4%                  42.4%

 25 to 34             36.6%               29.5%             35.1%                 42.4%                  65.3%

 35 to 44             31.3%               26.8%             31.2%                 32.1%                  51.6%

 45 to 54             24.8%               25.1%             23.6%                 26.1%                  33.2%

 55 to 64             21.9%               21.0%             23.2%                 25.0%                  20.3%

 65 to 79             20.9%               20.7%             23.3%                 18.4%                  26.9%

                                                                              At least 3% points higher than the UK average
                                                                              At least 3% points lower than the UK average

The evidence in this UKCSI suggests that                  This evidence suggests that organisations
consistent numbers of customers have distinct             need to understand their customers' range
preferences for either premium or no frills               of preferences and consider ways of tailoring
service. The preference for premium service is            propositions to meet the needs of key customer
most marked in the Automotive, Leisure, Retail            segments.
(Non-food) and Tourism sectors and amongst
younger, affluent customers.

40       UK Customer Satisfaction Index | January 2018
44.9% of all customer
experiences take place at
home, 8.6% at work

We asked customers aged 25 – 64 to specify
where they were when they interacted with
the organisation they reported on in the UKCSI.
Almost half of customer experiences, 44.9%,
took place when customers were at home.
8.6% of all customer experiences occurred
when customers were at work and 2.7% when
customers were on the move. The remainder
were generally "in person" experiences in a shop,
office or branch or other public space.

Where were you when you interacted with an organisation?

                            At home                                         Other, e.g. “In person”
                                                                            (office/store/branch)

                                    44.9%                              43.8%

                                          2.7%        8.6%
                                On the move
                                                      At work

                                                    UK Customer Satisfaction Index | January 2018     41
Customers are most likely to have an experience                         In the Insurance sector, almost all customer
with an organisation when they are at work,                             experiences occur either when customers are
in the Banks & Building Societies, Insurance                            at home (70.3%) or at work (13.4%), reflecting
and Tourism sectors. By contrast, over 80% of                           the relatively low proportion of "in person"
experiences with Utilities and more than 70%                            experiences in this sector.
with Telecommunications & Media companies
took place at home.

% of all customer experiences that take place at home or at work
                                                                    35.5%                                                At home
                   Automotive                                                                                            At work
                                          9.0%

                                                                               44.5%
     Banks & Building Societies
                                           10.7%

                                                                                                    70.3%
                      Insurance
                                                13.4%

                                                        19.5%
                        Leisure
                                        6.3%

                                                                30.6%
         Public Services (Local)
                                         8.1%
                                                                30.0%
      Public Services (National)
                                          9.2%

                                                 13.9%
                  Retail (Food)
                                        6.3%

                                                                             41.1%
              Retail (Non-food)
                                        7.1%

                                                                        39.1%
                       Services
                                         6.8%

                                                                                                     72.3%
Telecommunications & Media
                                         8.7%

                                                                                            62.2%
                       Tourism
                                          10.0%

                                                                              43.4%
                      Transport
                                          8.6%

                                                                                                                 82.6%
                        Utilities
                                        7.0%

                                    0              20                   40             60                   80               100

42            UK Customer Satisfaction Index | January 2018
When customers interact with organisations while
they are at work, their satisfaction is much lower than
average

Customer satisfaction is highest when customers
interact with organisations in person and tends
to be particularly low when they interact with
an organisation while at work. Satisfaction with
experiences that take place when customers are
at home are, on average, higher than for those
when they are at work.

Customer satisfaction when interacting with an organisation at home, at work or on the move

80

79

78

77
                  76.4

76

75

74

73
                                                                                      72.4

72

71                                                  70.7

70
                At home                            At work                         On the move
                                          Average UKCSI (out of 100)

                                                   UK Customer Satisfaction Index | January 2018   43
The difference in satisfaction between customer              Customers are much more likely to be making an
experiences at home and at work is especially                enquiry or a regular appointment / check when
apparent in Retail, Tourism and Insurance.                   they are at work and less likely to be making a
It occurs in all sectors except Public Services              purchase or checking a bill or account statement.
(Local), where satisfaction is higher when a
customer contacts an organisation when they                  These variations in experience suggest that when
are at work rather than at home.                             organisations review customer journeys they
                                                             need to consider the context and environment
Satisfaction when customers interact with                    in which experiences are taking place. For
organisations while at work tends to be lower                customers who are at work when they contact
than those at home for all types of experience               organisations, there is a need to be especially
except complaints, where satisfaction is slightly            responsive, efficient and identify ways to reduce
higher when customers contact an organisation                customer effort.
from their workplace.

Customer satisfaction for experiences at home and at work
                                                                                              76.4
                       Overall
                                                                                      70.7
                                                                                                   78.2
                   Automotive
                                                                                            74.1
                                                                                                   78.7
     Banks & Building Societies
                                                                                           72.9
                                                                                                   78.9
                      Insurance
                                                                                       71.9
                                                                                              76.7
                        Leisure
                                                                                      70.4
                                                                                  65.6
         Public Services (Local)
                                                                                   67.9
                                                                                      70.5
      Public Services (National)
                                                                                    68.8
                                                                                                       82.2
                  Retail (Food)
                                                                                    68.7
                                                                                                       83.1
              Retail (Non-food)
                                                                                       72.4
                                                                                          75.2
                       Services
                                                                                    68.7
                                                                                        72.8
Telecommunications & Media
                                                                                    68.8
                                                                                                       82.1
                       Tourism
                                                                                       72.5
                                                                                            74.5
                      Transport
                                                                                    69.1
                                                                                         73.9                 At home
                        Utilities
                                                                                      70.8                    At work

                                    0      20                40            60                     80               100

44           UK Customer Satisfaction Index | January 2018
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