By Kat Matfield
For businesses and consumers, customer service is more important than ever. But, while you’d be hard put to find a business that disagrees, many businesses struggle to make a firm connection between the effort they put into service and its impact on their bottom line.
If you’re having this problem, you should take a look at the UK Customer Satisfaction Index report released at the end of last month. The report’s authors have compared customer service scores (based on surveys of more than 25,000 UK consumers) with companies’ sales growth in the pre-Christmas period. The correlation is clear, as you can see in the chart below.
The Institute of Customer Service (ICS) has calculated that around half of the companies on this chart who have suffered serious falls in sales are 10% below the sector average for customer service ratings. Customer care is certainly not the only thing influencing a business’s success, but with 85% of UK consumers saying they choose retailers based on customer service*, it’s an important factor.
*Fly Research consumer survey, September 2011
The benefits of a customer service focus
Savvy businesses have been picking up on the growing importance of service for some time, and starting to use their reputation for customer care to attract customers. You can spot some of these companies in the chart above – John Lewis, for example.
By differentiating yourself from the competition through your customer care, you’re not only catching the attention of all those consumers who are looking out for businesses who deliver great service. You’re also avoiding the damage of competing solely on prices.
Price competition damages margins and can devalue your offering in consumers’ minds. Competing on service avoids all this, and has other benefits too. The resources you invest now in great service will be repaid by increased customer loyalty, and you’ll ultimately spend less keeping your existing customers than you would acquiring new customers.
Service across channels
For the first time, the ICS have focused part of the UK Customer Satisfaction Index on how companies deliver customer support across different channels. Unfortunately, the average scores for each channel show that businesses aren’t managing to provide a consistent quality of service everywhere:
Consumers now expect to be able to get customer service from their preferred channel – whether that be phone, email, websites, in-stores or even social networks like Facebook and Twitter. A representative from the ICS is quick to point out that the real winners in the Index (and in sales growth) are those businesses who have good scores for service delivered across all channels.
Read the executive summary of the UK Customer Satisfaction Index for more details.