UKCSI Customer Satisfaction Index

UKCSI Customer Satisfaction Index The state of customer satisfaction in the UK July 2014 instituteofcustomerservice.com Institute of Customer Service A

foreword The July 2014 UKCSI shows a third consecutive fall in customer satisfaction. Almost half the organisations included in the index have seen a drop in their customer satisfaction by at least one point compared to a year ago, including companies who have consistently been amongst the highest rated by customers. At a time when the economy is beginning to grow, this should be a major concern for organisations. There are a number of factors which may account for the falling trend in customer satisfaction. Customer expectations are continuing to rise and their needs are evolving more rapidly, with convenience, ease of doing business and speed seen as particularly important. For the first time, this UKCSI report shows the levels of satisfaction by age group; the fact that younger people are on average less satisfied than older age groups suggests that customer expectations will continue to rise in future. As demand and confidence grow, organisations may be tempted to shift their priority away from retaining customers through focusing on customer experiences, towards more emphatically increasing customer numbers and market share. However, evidence from the UKCSI continues to point to clear and consistent linkages between high levels of customer satisfaction and trust, loyalty, likelihood to remain a customer, and in the Retail food sector in particular, higher sales growth. We are now in a genuine relationship economy in which organisations success will increasingly be determined by the quality of their relationships with customers, suppliers, partners and inside organisations. These UKCSI results confirm that the bar for customer satisfaction has risen and in an era of falling customer satisfaction there will be winners and losers. So how should organisations respond to this changed environment? It will be important to invest in customer insight and apply it with greater speed and agility as customer needs and preferences evolve. Ease of doing business and convenience have a growing resonance and need to be embedded in the experiences organisations offer their customers. Customer service skills, capabilities and standards need to be reviewed continuously to ensure that they are current and relevant in a context of heightened customer expectations. Above all, there needs to be a strategic leadership commitment to customer service and a focus on the whole customer experience, especially in sectors where multiple partners and entities are involved in providing service to customers. Now is a time for organisations to hold their nerve and maintain focus on the customer experience. Those that do so will be best positioned to benefit from the sustainable and tangible business benefit of customer service. Joanna Causon CEO Institute of Customer Service 1

contents Key findings 3 Customer satisfaction: the state of the nation 4 Why is customer satisfaction falling? 12 Why customer satisfaction matters: the business impact 20 UKCSI key facts 27 Organisations included in the July 2014 survey 28 About UKCSI 29 Also available 30 Other Institute research 31 Institute of Customer Service 32 2 Institute of Customer Service

key findings UKCSI July 2014 Customer satisfaction falls - again The July 2014 UKCSI results confirm the downward trend in customer satisfaction at the national level. The index registered its third consecutive decline and at 76.3 (out of 100) is now 1.9 points below the January 2013 peak of 78.2. Satisfaction drops for most sectors Customers satisfaction levels declined across 12 of the 13 sectors covered in UKCSI. The exception was the Utilities sector, which saw a small increase (of 0.4 points) in customer satisfaction between January 2014 and July 2014. Nonetheless, Utilities remains the lowest scoring sector. Retail (Non-food) continues to be the highest performing sector in UKCSI. Relatively few organisations are raising satisfaction levels Of the 197 named organisations featured in UKCSI, only 28 increased their score by at least one point compared to July 2013. But 96 have seen their score fall by more than one point over the same period. Consistent high scores at the top of the UKCSI rankings John Lewis tops the UKCSI ratings for July 2014 with a score of 87.7. It is followed by two other consistent high scorers, Amazon and First Direct. But 37 of the top 50 organisations for customer satisfaction have seen a fall in their score in the past year. Dwr Cymru (Welsh Water) is the organisation with the largest increase in its UKCSI score (+6.7 points) over the past year. Older customers are on average much more satisfied than younger ones Customers aged 65 and above have an average customer satisfaction score of 80.3 compared to 72.5 for those aged 18 24. Customers in socio-economic groups A, B and C1 have lower average satisfaction than those in C2, D and E. Most customers want a balance of cost and service, with at least a minimum threshold level of customer service When faced with the choice, 60% of consumers favour a balance of price and service and will not accept low service levels in exchange for a cheap deal. A substantial minority of consumers 24% seek excellent service and are prepared to pay for it. Customer service builds trust By delivering an increase of 10 percentage points in its customer satisfaction score, an organisation can expect on average an increase of 12 percentage points in the trust ratings from its customers. Customer service drives loyalty Organisations with high UKCSI scores have significantly larger numbers of customers who are very likely to remain as customers, compared to those organisations with lower levels of satisfaction. Customer service drives recommendation 55% of highly satisfied customers stated that they had recommended the organisation in question. Recommendation rates drop below 15% for satisfaction ratings below 6 (out of 10). Customer service drives sales in the retail food sector For the fifth consecutive period, the average year-onyear sales growth delivered by food retailers with a UKCSI score above the sector average is better than that of the below average competitors, by a margin of 3%. Institute of Customer Service 3

customer satisfaction: the state of the nation Customer satisfaction in the UK has fallen for the third consecutive six-month period. The July 2014 UK Customer Satisfaction Index (UKCSI) the average of all customer responses in the Institute of Customer Service s six-monthly customer survey 1 - dropped by 0.8 points, to 76.3 (out of 100), from 77.1 in January 2014. We are now seeing a marked downward trend in the satisfaction of UK customers. 79 The national UKCSI score, 2009 to 2014 UK Customer Satisfaction Index (UKCSI) 78 77 76 75 74 73 72 72.0 74.1 75.2 75.6 76.7 77.3 77.4 78.0 78.2 77.9 77.1 76.3 71 70 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 1. The UKCSI survey is run twice each year, in May and November. The results are published in the July and January editions of the report. 4 Institute of Customer Service

UKCSI performance by sector The fall in customer satisfaction applies to all sectors except Utilities, which achieved a small increase of 0.4 points between January 2014 and July 2014. However, it remains the lowest-scoring of the thirteen sectors in the UKCSI, with an average rating of 69.4. The biggest drops in satisfaction by sector were seen in Leisure (-1.3), Insurance (-1.3) and Services (-1.4). For the first time since the UKCSI began in 2008, satisfaction with the Insurance sector has fallen behind satisfaction with Banks & Building Societies. It should be noted that the Services sector score has been affected by the UKCSI reclassification of Royal Mail (from Public Services (National) to Services) following the government s sale of a majority share of the organisation. The score in Services excluding Royal Mail was 80.1, a drop of just 0.1 compared to January 2014. UKCSI scores by sector 50 60 70 80 90 100 Retail (Non-food) 82.2 Retail (Food) Tourism Automotive Leisure Services Banks & Building Societies Insurance 80.9 79.8 79.7 79.6 78.8 77.7 77.6 Telecommunications & Media Transport Public Services (Local) Public Services (National) Utilities 72.2 72.1 71.9 70.9 69.4 Jul-14 Jan-14 Institute of Customer Service 5

Customer service performance of organisations Amid the overall drop in satisfaction, there is significant variation in customer satisfaction performance among the 197 named organisations featured in the UKCSI. Only 28 organisations increased their score by at least one point compared to July 2013. But 96 have seen their score fall by more than one point over the period. Evidence from the UKCSI suggests that there are four broad segments of organisations, in terms of customer satisfaction: Segment Business impact Organisations with consistently high customer satisfaction ratings Remain well placed to benefit from customer recommendation, loyalty and trust, but are potentially vulnerable to rising customer expectations and rapidly changing needs Organisations that have seen significant recent improvement in their customer satisfaction Well positioned for sustainable business success provided they retain a focus on customer service and satisfaction Organisations whose customer satisfaction is around or below the average for their sector and is relatively stable Likely to be vulnerable to rising customer expectations and rapidly changing needs and preferences Organisations whose customer satisfaction ratings have declined Likely to experience challenges in maintaining customer trust, loyalty and recommendation, with potentially damaging consequences for sustainable business performance 6 Institute of Customer Service

Top 50 named organisations UKCSI score July 2014 UKCSI score July 2013 Change in UKCSI July 2013 - July 2014 UKCSI Rank July 2014 UKCSI Rank July 2013 John Lewis 87.7 90.8-3.1 1 1 Amazon 87.6 89.0-1.4 2 2 First Direct 86.3 87.2-0.9 3 4 Tesco Mobile 85.8 82.6 +3.2 4 31 Marks & Spencer (Food) 85.6 86.7-1.1 5 5 Waitrose 85.0 88.5-3.5 6 3 Specsavers 84.4 n/a 7 Aldi 84.2 86.2-2.0 8 8 Next 84.0 82.2 +1.8 9 35 Nationwide 83.5 83.7-0.2 10= 23 The Co-operative Bank 83.5 86.7-3.2 10= 5 Pret A Manger 83.4 n/a 12 Center Parcs 83.3 78.9 +4.4 13 89 Argos 83.0 83.7-0.7 14= 23 LV= 83.0 83.3-0.3 14= 27 Boots 82.9 81.8 +1.1 16 44 Toby Carvery 82.8 83.7-0.9 17 23 Skoda 82.7 85.6-2.9 18= 10 Tesco Bank 82.7 76.4 +6.3 18= 123 Mercedes Benz 82.6 84.4-1.8 20 18 Greggs/Baker's Oven 82.5 84.8-2.3 21= 14 Honda 82.5 84.7-2.2 21= 15 Iceland 82.1 85.8-3.7 23 9 P&O Cruises 82.0 78.6 +3.4 24= 94 Premier Inn 82.0 82.1-0.1 24= 37 Hyundai 81.8 81.5 +0.3 26= 48 Morrisons 81.8 80.9 +0.9 26= 58 ebay 81.7 82.8-1.1 28 29 P&O Ferries 81.6 81.9-0.3 29 41 Kia 81.5 84.6-3.1 30= 17 Superdrug 81.5 n/a 30= Marriott 81.4 85.3-3.9 32= 12 Institute of Customer Service 7

Top 50 named organisations (continued) UKCSI score July 2014 UKCSI score July 2013 Change in UKCSI July 2013 - July 2014 UKCSI Rank July 2014 UKCSI Rank July 2013 Subway 81.4 82.4-1.0 32= 34 RAC 81.3 81.1 +0.2 34= 55 Sainsbury s 81.3 82.5-1.2 34= 33 Hilton 81.2 84.2-3.0 36 21 Autoglass 81.1 81.9-0.8 37 41 BMW/Mini 81.0 82.0-1.0 38= 40 Toyota 81.0 82.8-1.8 38= 29 Asda 80.9 82.2-1.3 40= 35 Audi 80.9 84.3-3.4 40= 20 Costa Coffee 80.9 82.1-1.2 40= 37 Wilkinson 80.9 83.5-2.6 40= 26 Yorkshire Bank 80.9 n/a 40= Northern Ireland Electricity 80.8 77.1 +3.7 45 114 Marks & Spencer (Non-food) 80.7 86.7-6.0 46 5 Pizza Express 80.6 81.8-1.2 47 44 AA 80.5 81.0-0.5 48= 57 Caffe Nero 80.5 82.1-1.6 48= 37 SAGA Insurance 80.5 83.9-3.4 48= 22 Volkswagen 80.5 81.4-0.9 48= 51 John Lewis and Amazon continue to be the highest ranked organisations for customer satisfaction. John Lewis has reclaimed the no.1 position in UKCSI in July 2014, having been placed no.2 in January 2014. This is despite its score being 3.1 points lower than a year ago. John Lewis receives consistently high scores across all customer experience metrics in UKCSI. Its ratings in the area of Professionalism - driven by customers experiences with staff commonly rated as helpful, friendly and competent - are particular strengths. Amazon meanwhile has emerged as a leader in the areas of Ease of doing business and Timeliness. Two organisations appear in the top 10 for the first time. Specsavers makes its first appearance in UKCSI and Tesco Mobile s ratings have continued to improve, making it the fourth highest ranked organisation. 8 Institute of Customer Service

The most improved organisations A number of organisations have defied the national trend of declining customer satisfaction. Ten organisations recorded a UKCSI score improvement of more than 3.5 points between July 2013 and July 2014. These top 10 improvers represent a range of sectors and business models. A number of them are from sectors which are not among the highest performing for customer satisfaction. Their performance demonstrates that despite the influence of economic conditions and rising customer expectations, it is possible to improve customer satisfaction by focusing on customer experience and service. Top 10 most improved organisations UKCSI July 2014 UKCSI July 2013 +/- Sector Dwr Cymru (Welsh Water) 76.9 70.2 +6.7 Utilities Tesco Bank 82.7 76.4 +6.3 Banks and Building Societies HM Passport Office 77.4 72.3 +5.1 Public Services (National) Homeserve 75.2 70.4 +4.8 Services Center Parcs 83.3 78.9 +4.4 Tourism East Midlands Trains 75.9 71.7 +4.2 Transport First ScotRail 74.0 69.9 +4.1 Transport Butlins 80.1 76.3 +3.8 Tourism Northern Ireland Electricity (NIE) 80.8 77.1 +3.7 Utilities Santander 77.4 73.8 +3.6 Banks and Building Societies Institute of Customer Service 9

Sustained improvement in customer satisfaction Short term improvements in customer satisfaction are an encouraging indicator of future performance, but realising the business benefits of better customer service requires a sustained and consistent focus. The three organisations with the largest rise in customer satisfaction over the past five years (since July 2009) are: Northern Ireland Electricity, up 13.8 points Homeserve, up 10.6 points Nationwide (Building Society), up 7.1 points The chart illustrates the UKCSI score improvement achieved by these three organisations. These are shown alongside John Lewis, Boots and Premier Inn. These are three of the twelve organisations that have received scores of more than 80 (out of 100) in every set of UKCSI results since July 2009, an achievement which indicates sustained high levels of customer satisfaction 2. 2. In total 110 named organisations have received UKCSI scores in all 11 surveys from July 2009 to July 2014. Of these 110, 12 have received a UKCSI score of 80 or above in every survey during this five-year period. There are two organisations that have received a UKCSI score above 80 in 10 of the 11 UKCSI results since July 2009, and which did not appear in just one set of results; these are First Direct and Saga Insurance. Amazon have appeared in all five sets of UKCSI results since January 2012 and have scored over 80 on each occasion. 10 Institute of Customer Service

The 12 organisations with UKCSI scores above 80 in every set of results since July 2009 Organisation The AA Asda Boots Hilton John Lewis Marks & Spencer (food) Marks & Spencer (non-food) Marriott Premier Inn RAC Toby Carvery Waitrose Sector Services Retail (Food) Retail (Non-food) Tourism Retail (Non-food) Retail (Food) Retail (Non-food) Tourism Tourism Services Leisure Retail (Food) 95 UKCSI performance over five years for selected organisations 90 85 UKCSI Score 80 75 70 65 John Lewis Nationwide Boots Northern Ireland Electricity Service (NIES) 60 Premier Inn Homeserve Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Institute of Customer Service 11

why is customer satisfaction falling? The January 2014 UKCSI report suggested a number of factors which may help explain why customer satisfaction has fallen since January 2013, having previously risen continuously from 2008. Feedback from a number of our members has amplified this analysis: Cuts in business and public sector investment prompted by the prolonged economic downturn may have had a negative impact on the customer experience at many organisations As growth returns to the economy, there is a temptation for strategic focus to shift from retaining customers through a deliberate focus on customer service to aggressive and rapid growth in customer numbers and market share Customer needs and preferences are evolving. Convenience, ease of doing business and speed are becoming increasingly important The issue of trust has remained firmly in the spotlight - organisations in a range of sectors have come under intense scrutiny over their business practices, their responsiveness to customer and public concerns and their ability to manage crisis situations. Customers expectations of service are rising. They are better informed and often have greater choice. They have become less tolerant and more demanding of the organisations they deal with and are highly selective about where, and if, they buy. When customers are dissatisfied they are increasingly likely to express or escalate it through social media 12 Institute of Customer Service

Customer needs and expectations We have examined a number of factors which are shaping the context for customer service in the UK. These include expectations and satisfaction levels by customer segment; how customers interpret the relative importance of price and service; and customers emotional response to the organisations they deal with. Customer satisfaction varies by customer segment Customer satisfaction is significantly higher, on average, among older people. Indeed, levels of customer satisfaction rise progressively with each age cohort. One possible explanation is that younger people s expectations are driven at least in part by the ease of doing business and wealth of information they are accustomed to in the online world. They may therefore be more demanding and less tolerant with the service they experience across a wide range of sectors. There are also notable differences in the UKCSI scores of different socio-economic groups, though they are less pronounced than those for different age groups. Individuals in the A socio-economic group, which includes senior professionals and managers, are on average less satisfied than those in the C2, D and E groupings. In some cases the age and socio-economic profiles collide; the lower age profile of the C1 group (typically administrative and clerical workers) may contribute to the average satisfaction score for this group being lower than that for the B group (typically managers, administrators and professional people at intermediate levels). Institute of Customer Service 13

UKCSI score by age group 80.3 UKCSI score by socio-economic group 74.4 75.9 76.0 77.4 77.9 77.6 78.5 78.6 79.5 72.5 76.1 18-24 25-34 35-44 45-54 55-64 65+ A B C1 C2 D E There are a number of implications for organisations in the customer satisfaction differences between customer segments: Organisations need to develop a deep understanding of the needs and preferences, across the whole customer experience, of the customer segments they serve The relatively lower levels of satisfaction in younger age groups suggest that, now and in the future, organisations will continue to be challenged by rising customer expectations Organisations that serve a wide range of customers, of different ages, and from different socio-economic groups, will find it difficult to raise their overall satisfaction unless they understand and respond to the different preferences and expectations of all customer segments, including the most demanding. 14 Institute of Customer Service

Customers attitudes towards the relative importance of price and customer service Price is an important facet of customer satisfaction for most customers, but there are distinct differences in the way customers weight the relative importance of price and service. UKCSI asks customers to rate how they balance price and service by providing a score from 1 to 10, where 1 = no frills service and low price and 10 = excellent service and high price. 19% 17% 17% % of all customers 5% 4% 6% 7% 13% 6% 5% 1 2 3 4 5 6 7 8 9 10 No frills service and low price Excellent service and high price Price vs service score (1 = no frills service and low price, 10 = excellent service and high price ) % of customers surveyed 3 Characteristics of this segment 1 to 3 15% These customers are driven to secure the cheapest deals They are likely to shop around and switch between suppliers They may be prepared to compromise service levels to get the cheapest deal 4 to 7 60% 8 to 10 24% These customers favour a reasonable balance of price and service, but require at least a minimum level of service These customers seek excellent service and are prepared to pay a higher price to get it The majority of customers will not accept a low level of service in return for a better deal. Faced with the choice, they opt for a balance of service and value, seeking at least a minimum threshold level of customer service. There is a notable minority of customers just under one quarter who are seeking excellent service and will pay a premium price for it, as well as a segment (15% of customers) who are primarily motivated by low pricing. 3. Due to the rounding of percentages, figures do not add up to 100%. Institute of Customer Service 15

There are marked differences in price / service preferences in different sectors. In the Utilities and Telecommunications sectors, there are significantly larger proportions of customers who prioritise lower pricing and fewer who say they will pay more for excellent service. By contrast in the Automotive, Leisure, Retail, Services and Tourism sectors, there are higher than average numbers of customers who place a high value on service and say they would be prepared to pay more for it. Price vs service score (1 = no frills service and low price; 10 = excellent service and high price) Sector 1 to 3 4 to 7 8 to 10 Automotive 10% 62% 27% Banks and building societies 17% 61% 21% Insurance 15% 63% 22% Leisure 13% 59% 27% Retail (Food) 16% 58% 26% Retail (Non-food) 14% 59% 27% Services 11% 60% 28% Telecommunications and Media 15% 65% 20% Tourism 10% 59% 31% Transport 17% 62% 20% Utilities 24% 58% 18% 16 Institute of Customer Service

What customers think and feel about organisations Customers were asked to provide three adjectives to describe their experience with the organisation they had dealt with. The most common adjectives are easy, friendly and helpful. This serves as a reminder that, even in a context of declining overall satisfaction, most customers are satisfied, most of the time, with the service they receive. There are qualitative differences in the service experience between sectors. In Retail (Non-food), there is a strong emphasis on ease of doing business and speed - easy, quick and helpful. In Retail (Food), friendly is the most frequently cited adjective, but easy is becoming prevalent, reflecting the growing use of convenience formats and online-enabled home delivery. Customers use a number of positive adjectives, including friendly and helpful, to describe their experiences with Local and National Public Services. However, in both sectors the relatively low frequency of easy suggests these sectors may need to focus more on keeping up with customers expectations around ease of doing business. In the Utilities and Transport sectors, the word expensive is cited much more frequently than in other sectors, reflecting the relative significance of price as a driver of satisfaction in these sectors. Automotive: fairness experienced adequate feedback knowledgeable affordable effective frustrating freindly empathic pleasant timely fantastic competent good trustworthy difficult courtesy value costly poor quick fun reliable exceptional courteous satisfying confident happy efficient honest comfort annoying satisfied great know car cost caring polite average cool confusing fair clean simple competant brilliant speedy exciting nice easyhelpful slow don t convenient excellence fast fine enjoyable satisfactory service friendly expensive excellent cheap professional comfortable competitive informative useful quality disappointing Banks & Building Societies: money adequate modern expensive annoying accessible pleasant understanding average staff know good informative acceptable quality polite service honest helpful secure fast helpful bank effective don t unhelpful clear fine knowledgable frustrating efficient local simple angry convenient competent easy friendly reliable fair happy boring satisfied excellent brilliant accurate ease disappointing safe difficult cool well rewarding nice satisfactory quickprofessional satisfying slow great efficent competant flexible useful busy trustworthy confusing straightforward caring speedy complicated Institute of Customer Service 17

18 Institute of Customer Service UKCSI July 2014 The state of customer satisfaction in the UK easy efficient friendly helpful quick good reliable cheap fast competent value expensive simple professional excellent competitive frustrating informative fair trustworthy convenient reasonable straightforward satisfactory average polite fine pleasant service great happy quality competant cost effective honest know annoying don t price acceptable affordable difficult nice prompt clear courteous disappointing knowledgeable satisfied cheaper customer cheapest money bad confusing experienced insurance loyal speedy brilliant caring complicated confident consistent cool ease long satisfying time adequate angry car comprehensive flexible slow useful friendly easy good fast tasty efficient enjoyable cheap fun clean expensive quick value quality helpful excellent reliable delicious fresh busy food convenient happy satisfying service relaxing comfortable competent nice slow local pleasant great choice filling staff cheerful affordable consistent cool fantastic polite entertaining exciting warm frustrating reasonable satisfied average coffee fine simple welcoming brilliant cold freindly professional dirty satisfactory amazing competitive disappointing don t hot know cost effective money friendly efficient helpful good easy competent caring frustrating quick fast professional reliable busy excellent difficult slow annoying informative nice time expensive unhelpful bad fine convenient don t fair know clean local long reassuring cool service trustworthy effective comfortable disappointing kind useful happy speedy approachable consuming fantastic complicated angry annoyed average calm confusing frustrated great knowledgeable pleasant polite satisfactory staff straightforward adequate ease expert poor quality simple waiting appointment arrogant boring brilliant efficent freindly rude wait warm efficient friendly easy fast helpful quick expensive reliable frustrating caring competent professional good slow excellent convenient annoying informative busy confusing simple time unhelpful boring fine pleasant service speedy difficult fair long bad disappointing knowledgeable staff average local polite straightforward clear consuming effective free satisfactory complicated costly happy unreliable clean competant ease nice quality trustworthy value bureaucratic courteous delayed honest incompetent kind safe understanding british don t great poor prompt rude supportive easy friendly cheap efficient quality good convenient quick helpful value busy fast clean excellent reliable expensive enjoyable pleasant choice local affordable competitive competent fresh nice range service simple professional cost effective food happy average great price satisfied satisfactory big cheerful polite satisfying slow variety ease offers money reasonable boring crowded fun poor prices speedy bargains different don t exceptional fair familiar stock economical frustrating know products staff straightforward successful trustworthy basic best fantastic fine forward smooth easy efficient cheap fast quick friendly reliable good convenient helpful excellent quality value choice enjoyable expensive competent simple clean pleasant variety competitive speedy affordable busy fun great range satisfying brilliant professional service price happy satisfied trustworthy exciting amazing satisfactory delivery don t ease effective know useful comprehensive disappointing inexpensive bad fantastic reasonable staff straightforward big cool frustrating informative local nice bargain cheerful cost customer interesting slow availability boring extensive accessible bargains basic exceptional money poor prompt Insurance: Public Services (National): Leisure: Retail (Food): Public Services (Local): Retail (Non-food):

19 Institute of Customer Service friendly efficient easy fast reliable helpful competent expensive good quick excellent professional cheap value trustworthy convenient service quality happy local annoying slow competant pleasant polite satisfactory great nice reasonable satisfied speedy caring effective experienced informative average simple chatty clean courteous relaxing difficult bad expert fantastic frustrating prompt time knowledgable understanding adequate busy comfortable disappointing poor useful approachable competitive cool enjoyable fair pricey punctual unhelpful unreliable delivery efficent freindly fun hard price thorough timely easy efficient friendly helpful frustrating quick expensive fast reliable cheap good annoying difficult competent excellent service simple confusing value professional unhelpful average don t slow time know poor polite consuming satisfied complicated convenient disappointing satisfactory bad customer happy costly effective fine informative lengthy angry great fair unreliable adequate best irritating knowledgable quality uncaring useful amazing competitive fun hard knowledgeable long rubbish satisfying speedy trustworthy brilliant clear cool pleasant straightforward stressful call distant frustrated easy efficient friendly cheap comfortable clean good value quick excellent convenient helpful reliable expensive enjoyable fast affordable quality basic fun professional pleasant exciting informative service happy simple competent great relaxing average choice competitive adequate nice comfort satisfying dirty price satisfactory straightforward caring comfy reasonable welcoming disappointing fine trustworthy flexible interesting satisfied amazing budget cost ease effective fair fantastic polite exceptional useful bad cheerful consistent dont family freindly use accessible annoying boring brilliant clear confusing customer different difficult entertaining inexpensive know modern poor prices standard warm easy efficient friendly expensive fast cheap reliable quick comfortable good helpful convenient clean frustrating value service simple excellent professional time competent basic annoying average fair pleasant cool informative crowded punctual affordable enjoyable late slow adequate busy timely polite bad dirty fine unreliable ease effective know quality satisfied straightforward delayed don t happy prompt staff clear difficult trustworthy confusing safe competitive cost costly disappointing nice useful acceptable courteous cramped great ontime satisfactory boring caring cheerful exciting reasonable available bus efficent free frills local long poor unhelpful easy helpful expensive good efficient quick friendly reliable professional informative polite frustrating service fast greedy happy none annoying unhelpful poor average competent fair simple fine incompetent clear confusing slow long bad don t great satisfied pleasant nice straightforward know time satisfactory boring cheap excellent honest knowledgeable trustworthy necessary convenient customer prompt understanding acceptable difficult lengthy price quality arrogant consuming costly disappointing hard effective efficent nothing okay overpriced speedy competant courteous value Tourism: Transport: Services: Utilities: Telecommunications & Media:

why customer satisfaction matters: the business impact The declining trend in customer satisfaction has important implications for business performance in two key respects: For individual organisations The link between customer satisfaction and future business performance means that those organisations with high and / or improving satisfaction will be much better placed to take advantage of increasing customer demand than those with weaker levels of satisfaction For the UK economy There is a risk that falling levels of customer satisfaction in the UK may impact negatively on the country s reputation as an attractive place to invest and do business. Moreover, the ability of UK companies in all sectors - to benefit from growing demand in global markets is underpinned by the customer experience they offer. Measure Business impact The evidence Trust Loyalty Central to an organisation s ability to retain and acquire customers Affects an organisation s ability to collaborate effectively with partners and suppliers Influences reputation with the media and analysts, with potential implications for shareholder value and ability to raise investment funds Enables retention and increased spend from existing customers An increase of 10 percentage points in an organisation s UKCSI score, correlates to an average increase of 12 percentage points in the trust rating from its customers Organisations achieving relatively high UKCSI scores (more than 82.5 points out of 100) benefit from high levels of customer loyalty. 88% of their customers score 9 or 10 out of 10 when asked to rate their liklihood of remaining a customer An organisation with a UKCSI score below 77.5 can expect less than one third of its customers to show these high levels of loyalty 20 Institute of Customer Service

Measure Business impact The evidence Recommendation A leading indicator of future growth The majority of customers (55%) who gave an organisation an overall satisfaction rating of 9 or 10 points (out of 10) in UKCSI stated that they had subsequently recommended the organisation Just 29% of customers who gave an organisation a rating of 7-7.9 had given a recommendation Average recommendation rates drop below 15% for satisfaction ratings below 6 Sales growth in the Retail food sector Drives the organisation s growth and market share in a competitive market where customer spend is tight During 2013 and 2014 there has been a consistent link between customer satisfaction and sales growth The sales growth delivered by the food retailers with a UKCSI score above the sector average has been better than that of the below average competitors by a margin of at least 3% The combined market share of companies with a higher than average UKCSI has grown, while the combined share of the below average UKCSI organisations has decreased Year on year sales performance in the 12 weeks to 25 May 2014 Food retailers with a July 2014 UKCSI score above the sector average (80.9 points) achieved average growth of 8% All companies with a UKCSI score above the sector average increased sales, except Morrisons which registered a fall in sales of 4% Food retailers with UKCSI scores below the sector average delivered average growth of 5%. However, the performance of Lidl, whose sales growth was 23%, was a significant influence on this figure. Without Lidl, the below-average organisations registered an average sales decrease of 0.5% Institute of Customer Service 21

Customer satisfaction and trust 10 Trust rating for the organisation (out of 10) 9 8 7 6 5 4 50 55 60 65 70 75 80 85 90 UKCSI rating for the organisation (out of 100) 22 Institute of Customer Service

The 17 organisations scoring 8.2 (out of 10) or more for customer trust all have UKCSI scores that are considerably higher than the national average. Most trusted organisations Trust score UKCSI Rank UKCSI Score John Lewis 8.9 1 87.7 Marks & Spencer (Food) 8.8 5 85.6 Aldi 8.5 8 84.2 Amazon 8.5 2 87.6 First Direct 8.5 3 86.3 Waitrose 8.5 6 85.0 Boots 8.4 16 82.9 Next 8.4 9 84.0 Skoda 8.4 18 82.7 Tesco Mobile 8.4 4 85.8 Greggs/Bakers Oven 8.3 21 82.5 Honda 8.2 21 82.5 Hyundai 8.2 26 81.8 Iceland 8.2 23 82.1 Marks & Spencer (Non-food) 8.2 46 80.7 Pret A Manger 8.2 12 83.4 Wilkinson 8.2 40 80.9 Note: Where organisations have the same published trust rating, they are listed in alphabetical order. Institute of Customer Service 23

Customer satisfaction drives loyalty 100% 90% 80% 70% % of customers that are very loyal (i.e. those scoring 9-10 for likelihood of remaining a customer 88% 60% 50% 47% 40% 30% 20% 10% 10% 18% 26% 32% 38% 0% Below 70.0 70.0 to 72.4 72.5 to 74.9 75.0 to 77.4 77.5 to 79.9 80.0 to 82.4 82.5 & above UKCSI score of the organisation Customer satisfaction drives recommendation 60% 50% % of customers that have recommended the organisation 55% 41% 40% 30% 20% 10% 0% 29% 20% 14% 11% 4% 5% 1% 1-1.9 2-2.9 3-3.9 4-4.9 5-5.9 6-6.9 7-7.9 8-8.9 9-10.0 Customer s satisfaction rating (1-10 scale) 24 Institute of Customer Service

Customer satisfaction and sales growth: the retail food sector 40% Annual sales growth for the 12 weeks to 25th May 2014 Source: Kantar Worldpanel 35% 30% 25% 20% 15% 10% 5% 0% -5% Co-op (Food) Lidl Asda Sainsbury s Tesco Aldi Waitrose Iceland Morrisons -10% 72 74 76 78 80 82 84 86 UKCSI score Retail food year on year sales growth 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 8% 5% Organisations with above sector average UKCSI Organisations with below sector average UKCSI Institute of Customer Service 25

Retail food year on year market share change Annual market share change for the 12 weeks to 25th May 2014 Source: Kantar Worldpanel 1.5% Aldi 1.0% Lidl 0.5% Waitrose Asda 0.0% Iceland Co-op (Food) Sainsbury s -0.5% Morrisons -1.0% -1.5% Tesco -2.0% 72 74 76 78 80 82 84 86 UKCSI score Retail food year on year market share change -0.3% -0.2% -0.1% 0.0% 0.1% 0.2% 0.10% -0.25% Organisations with above sector average UKCSI Organisations with below sector average UKCSI 26 Institute of Customer Service

UKCSI key facts 6 Number of years UKCSI has run, beginning in January 2008 13 Number of sectors UKCSI covers, 11 in the private sector as well as local and national public sector. Sector reports with a detailed breakdown of scores by sector and organisation are published for each sector. 40,842 Number of unique responses included in July 2014 UKCSI from 9,522 customers. Customers are geographically and demographically representative of the UK population and participate in the survey through an online panel. Customers are asked to provide a score for organisations based on their most recent interaction. 213 Number of individual organisations and organisation types which received a UKCSI rating. 197 named organisations which have exceeded a minimum sample size are scored in the 13 sector reports. In addition, scores are given for 16 generic providers including your local Council, your local restaurant etc. 2 Number of times per year UKCSI is published, normally January and July. To view the latest UKCSI results, please visit www.instituteofcustomerservice.com/ukcsi Institute of Customer Service 27

organisations included in UKCSI July 2014 Automotive: Audi BMW/Mini Citroen Fiat Ford Honda Hyundai Jaguar Kia Land Rover Mazda Mercedes Benz Nissan Peugeot Renault Seat Skoda Toyota Vauxhall Volvo VW Banks & Building Societies: Bank of Scotland Barclays First Direct Halifax HSBC Lloyds Nationwide NatWest RBS Santander Tesco Bank The Co-operative Bank TSB Yorkshire Bank Insurance: AA Admiral Aviva / Norwich Union AXA BUPA Churchill Direct Line Endsleigh Esure Hastings Legal & General LV= M&S More Th>n Nationwide Prudential SAGA Insurance Sainsbury s Sheila s Wheels Tesco The Co-operative Insurance Virgin Money Zurich Leisure: Burger King Caffe Nero Cineworld Costa Coffee Domino s Pizza Greggs/Baker s Oven Harvester JD Wetherspoon KFC LOVEfilm McDonalds Odeon Pizza Express Pizza Hut Pret A Manger Starbucks Subway Toby Carvery Vue Cinema Your local fish & chip shop Your local restaurant Public Services (Local): GP surgery / health centre Your housing association Your local Ambulance Service Your local council Your local Fire Service Your local Police Service Public Services (National): DVLA HM Passport Office HMRC (Inland Revenue) Jobcentre Plus NHS / hospital service Post office Retail (Food): Aldi Asda The Co-operative (food) Iceland Lidl Marks & Spencer (food) Morrisons Sainsbury s Tesco Waitrose Retail (Non-food): Amazon Argos B&Q Boots Currys/Dixons/PC World Debenhams ebay H&M Homebase Ikea John Lewis Marks & Spencer Matalan New Look Next Poundland Primark Specsavers Sports Direct Superdrug WH Smith Wilkinson Services: AA Autoglass City Link DHL Enterprise Rent-A-Car Green Flag Hertz Homeserve RAC Royal Mail / Parcelforce Timpson Your local builder Your local dry cleaner Your local electrician Your local estate agent Your local hairdresser Your local painter & decorator Your local plumber Your local solicitor Telecommunications & Media: 3 BT EE (Everything Everywhere) Giffgaff O2 Sky Talk Talk Tesco mobile T-Mobile Virgin Media Vodafone Tourism: Butlins Center Parcs Expedia Haven Holidays Hilton Holiday Inn Lastminute.com Marriott P&O Cruises Pontins Premier Inn SAGA Holidays Thomas Cook Thomson Travelodge Virgin Holidays Transport: Arriva - Bus group British Airways East Coast East Midlands Trains easyjet Eurotunnel First Capital Connect First Great Western First Group - bus companies First ScotRail First TransPennine Express Flybe London Midland London Underground Monarch Airlines National Express Northern Rail P&O Ferries Ryanair South West Trains Southeastern Trains Stagecoach The Trainline.com Virgin Atlantic Virgin Trains Utilities: Anglian Water British Gas Dwr Cymru (Welsh Water) E.ON EDF Energy first utility Northern Ireland Electricity (NIE) Northumbrian Water npower Scottish and Southern Energy (SSE) Scottish Power Scottish Water Severn Trent Water South West Water Southern Water Thames Water United Utilities Wessex Water Yorkshire Water 28 Institute of Customer Service

about UKCSI UKCSI (UK Customer Satisfaction Index) is the Institute of Customer Service s national measure of customer satisfaction. It provides insights into the state and direction of customer satisfaction at a national level, across 13 key sectors and for individual organisations. UKCSI was launched by the Institute of Customer Service in 2008. It provides a unique way of measuring the current customer satisfaction of UK customers, as well as trends over time. Methodology To create UKCSI, the Institute of Customer Service runs a large online survey of consumers twice a year: The July 2014 UKCSI results included in this report are based on 40,842 survey responses. Each response is a completed online questionnaire relating to the customer experience with a specific organisation These responses are provided by 9,522 individual customers. The respondents are representative of the UK adult population, according to region, age and gender. UKCSI survey focuses on customers actual experiences of organisations. Respondents are asked to rate their experience of individual organisations they have dealt with in the previous three months. To do this they score a series of metrics on a scale from 1 to 10. These metrics relate to professionalism, quality and efficiency, ease of doing business, timeliness, problem solving and complaint handling. The metrics reflect the priorities that consumers rate as the most important elements of the customer experience, according to Institute of Customer Service research. The UKCSI score for each organisation is the average of all of its customers satisfaction scores. Overall scores for each sector and for the UK as a whole are mean averages of all responses. Each published set of UKCSI results incorporates the data from the previous two surveys, which creates a rolling measure of the state of satisfaction. In the July 2014 results, therefore, the responses included are those from the UKCSI surveys completed in November 2013 and May 2014. Institute of Customer Service 29

also available UKCSI sector reports Sector reports are available for all 13 sectors covered in UKCSI at www.instituteofcustomerservice.com/ukcsi Use the sector reports to: Benchmark your organisation against others in the sector, using the detailed data on customer satisfaction, complaints and each of the customer priorities Identify the organisations rated highest for customer satisfaction in the sector and understand their service strengths, as viewed by their customers Compare the sector to others in the UK economy Identify which channels customers in this sector use and how satisfaction varies by sector Business Benchmarking UKCSI Members of the Institute of Customer Service are able to benchmark themselves against the results of the UKCSI survey, using the Institute s Business Benchmarking service. This provides detailed insights into an organisation s service performance and comparisons against the highest scoring organisations in their sector. ServiceMark ServiceMark is a national standard which demonstrates an organisation s commitment to customer service. ServiceMark provides an independent validation of an organisation s achievement in customer service, identifies opportunities for improvement and learning and helps motivate and engage your employees. ServiceMark consists of three elements: Business Benchmarking UKCSI ServCheck Assessment Assesses how your customers rate your organisation against more than 25 priority measures of satisfaction A unique assessment tool which provides insights into your employees engagement with your customer service strategy Independent assessment including a report with recommendations for action planning Find out more at: www.instituteofcustomerservice/servicemark Members of the Institute also have the option to benchmark themselves against business-tobusiness sector averages, where this is relevant to their business model and target market. 30 Institute of Customer Service

other institute research The power of service How Utilities can improve customer focus and business performance. Shows how Utilities can address the challenges and opportunities of a changing market by placing a renewed focus on the customer. Includes frameworks and recommendations for improving customer satisfaction and enhancing trust and reputation. Customers and citizens Further Building the Case for Customer Service in the Public Sector. This research examines the key challenges in delivering excellent customer service in the public sector. It provides organisations, including government, with recommendations for developing customer focus and delivering better outcomes for citizens. Are you being engaged? 2014 Employee engagement and its influence on customer satisfaction and buying behaviour. This research demonstrates the importance of employee engagement as a driver of positive customer experiences and improved business performance. It updates research the Institute published in 2012 on this topic. Visit: www.instituteofcustomerservice/research for more information and to access Institute research. Structures for success How models of business ownership can influence customer service. Examines whether some business models are better at delivering customer service than others. Highlights ways in which organisations can learn from other business model types in order to improve service, be they mutuals, PLCs, private companies, partnerships or franchises. Institute of Customer Service 31

Institute of Customer Service The Institute of Customer Service is the UK s independent, professional body for customer service, with over 400 organisational members and over 5,000 individual members. Our purpose is to enable organisations to achieve tangible business benefits through excellent customer service aligned to their business goals; helping individuals to maximise their career potential and employability by developing their customer service skills. We provide a framework for our members to share and learn from each others service delivery experiences and offer wide-ranging support for continuous customer service improvement. As the professional body we are independent setting standards so that our customers can improve their customers experiences and their business performance. Key activities undertaken by the Institute include: Research and reports on the latest customer service trends and thinking Publication of the UK Customer Satisfaction Index (UKCSI) twice a year Benchmarking and diagnostic tools to identify areas for improvement by surveying customers and employees Training and accreditation programmes for customer service professionals Professional qualifications for individuals at all stages of their career Public policy development. For further information please visit www.instituteofcustomerservice.com 32 Institute of Customer Service

UKCSI Sector Reports Get the latest insights on the state of customer satisfaction based on the experiences of customers in your sector Use the UKCSI sector reports to: Benchmark the customer satisfaction performance of leading organisations on a range of key metrics Identify the highest rated and most improved organisations for customer satisfaction See the link between customer service and business priorities including loyalty and trust Identify which channels customers use and how satisfaction varies by channel Compare the customer satisfaction performance of 13 sectors UKCSI sector reports are available for: Automotive Banks & Building Socities Insurance Leisure Public Services (Local) Public Services (National) Retail (Food) Retail (Non-food) Services Telecommunications & Media Tourism Transport Utilities Carnival House 5 Gainsford Street London SE1 2NE T: 0207 260 2620 E: enquiries@icsmail.co.uk instituteofcustomerservice.com