UK customer satisfaction recovers as brands refocus on customer service

Telephone and internet bank first direct is the nation’s best-performing brand for customer service, the latest UK Customer Satisfaction Index (UKCSI) reveals. The latest index also finds that service levels are recovering from a low ebb, with the third consecutive rise, reaching 78.2 (out of 100), a 2.1-point increase year-on-year.

first direct scored 87.0 out of 100 and was followed by John Lewis (86.4) and Hays Travel (86.2). Meanwhile, the most improved brands are insurer PetPlan (up 10.6 points year on year), and travel website On The Beach (up 10.4 points).

Higher customer satisfaction correlates with better financial performance

The findings provide evidence of a strong link between high levels of customer service and sales growth. For those that get the balance right, there are potential rewards in the form of higher sales and greater customer loyalty. More than a third (36%) of UK shoppers are now willing to spend more for excellent service, up from 31% last year. This is the highest since the UKCSI started tracking this metric in 2014.

The research also shows a link between customer satisfaction and financial performance. For example, food retailers with above-average customer service, such as M&S, continue to see strong sales growth. For banks and building societies, better service typically translates into current account gains.

In considering what great service looks like, the UKCSI found that organisations with higher customer satisfaction had mastered the ability to combine excellence in transactional experiences, logistics and delivery, whilst demonstrating genuine care for customers’ personal needs and situations.

Good value is the top aspect that has become more important to customers over the last 12 months, cited by almost a third (32%) of respondents – suggesting a combination of quality, price and service is the key to attracting customers and retaining their loyalty in a difficult market for many businesses.

Beyond complaint handling, satisfaction rose by more than two points across each of the other Five Dimensions of Customer Satisfaction: experience, customer ethos, emotional connection, and ethics.

Jo Causon, CEO of the Institute, says: “We have entered a new world where the basics of delivering a good product or service on time are base-level expectations. Service is the differentiator, and what sets the brands at the top of the UKCSI apart is that they consistently deliver on their service promise. And when things go wrong, you can usually rely on them to put it right.”

“Service-led brands are doing well, and their advertising messages increasingly home in on the superior service they offer, helping reinforce their competitive advantage when they follow through.

“Consumers are feeling unsure about the UK economy but more optimistic about their own finances – so they are spending, but being selective about where. The best-performing organisations understand the importance of keeping promises to customers, and customers are taking note.”

Published every six months by the Institute of Customer Service, the UKCSI is the country’s largest and longest-running longitudinal study of customer service performance. It tracks 13 sectors across the UK economy, all of which saw an increase in customer satisfaction versus last year.

Jo Causon comments: “The next six months will be crucial in reinforcing these latest improvements. It is time to continue investing in what matters – the customer, the service experience, and the people that make it happen – to drive up satisfaction, trust, repeat business, and financial returns. This is how we will return to growth, in our own businesses and for the UK economy.”

The top performing organisations overall are as follows:

FIG 1. Highest rated organisations in the UKCSI