The last decade has been one of the most turbulent and challenging in recent history for British retailers.
From John Lewis to Asos, the pressure to cut costs and drive up efficiencies has been intense. The latest edition of the UK Customer Service Index, which we have run since 2008, shows that in the last three years scores have slipped across the board.
This is the longest continuous run of declining customer service in the history of our index, taking it back to levels last seen in 2015.
- Retail customer satisfaction sees longest period of decline since records began
- COMMENT: Easing business rates is welcome, but is it too little, too late?
- Big Interview: Jo Causon, CEO, The Institute of Customer Service
The performance of retail firms – specifically, non-food retail – has been hit, with evidence that customers are becoming ever more considered in their purchasing choices.
At the most basic level, getting things right first time, keeping promises and preventing problems are fundamental drivers of customer satisfaction. The most effective organisations do this consistently, but they do much more. They design experiences around their customers’ needs, and they demonstrate high ethical standards in their relationships with customers, employees, partners and suppliers. They combine technology and people to create experiences that work and feel personal. They are authentic and use customer service to build understanding and better relationships. They are clear about their purpose, relevance and the impact they create.
“Customers are becoming ever more considered in their purchasing choices”
John Lewis and Next topped the retail (non-food) sector, demonstrating how to hit the right balance between customer service hygiene factors such as speed of complaint handling, and drivers of satisfaction such as designing their experiences around customers.
This is particularly true for John Lewis. Over the past year it has implemented a series of initiatives in response to changing customer needs. This includes its buy-back trial, allowing loyalty members to receive money for returning clothing, and trialling a reusable click and collect bag made from 100 per cent recycled materials.
Despite individual highlights, as a whole, brands’ scores for ethos, emotional connection and ethics all fell further in the last 12 months than the more rational and transactional elements such as service experience and complaints handling.
The risk is that, as economic conditions continue to bite, brands cut back on service aspects of their offer, and enter a spiral of decline as customers turn away companies who are not fulfilling their brand promise.
“It is time for a reset and a reminder about what excellent service looks like”
Businesses should note that over a period of five to eight years, organisations whose customer satisfaction is at least one point better than their sector are on average 70 per cent more profitable than those with lower than average customer satisfaction.
The challenges of this new decade will require retail brands to demonstrate agility, innovation and consistency of purpose. Despite decades of effort, the customer experience offered by many organisations still feels mundane, mediocre or doesn’t deliver what customers need. It is time for a reset and a reminder about what excellent service looks like and why it matters to our employees, organisations and the overall UK economy.
Exceptional service is not just a collection of transactional experiences that can be turned on and off at will. It requires constancy of purpose underpinned by leadership commitment, engaged employees and relentless focus on operational excellence.
Excellent customer service matters because it delivers better financial results, helps improve productivity and builds trust. Over a quarter of customers surveyed are willing to pay more for better service, that almost twice the proportion would sacrifice service to get the lowest price.
Now is the time to refocus, innovate and drive up service standards across the retail sector to reach and retain modern consumers that demand greater openness, transparency and sustainable products and services.
We have all to play for – and much to gain – in creating a national culture that is underpinned by brilliant service.