Customer satisfaction in the UK broadly improved in 2017, especially in traditionally lower-rated sectors such as transport, utilities and public services.
This was also the case for banking, insurance and building societies. However, there is no room for complacency, with the latest Institute of Customer Service survey in January 2018 showing a definite plateauing of overall satisfaction. Levels of effort required by the customer also rose.
In the longer term, this is not good news for organisations, given the research indicates that customers require providers to be efficient, effective and easy to do business with.
So why does customer service really matter? At the end of last year the institute released a report called ‘The customer service dividend’. It explored how organisations have achieved greater return on investment and productivity, through embedding a customer service strategy.
The research found compelling evidence that organisations with consistently higher customer satisfaction than their sector average have achieved better turnover growth, profit and employee productivity than their peers. Importantly, the levels of increased productivity and profitability were significant, and over an eight-year period were nearly 10 per cent higher.
So what is it that really makes the difference and enables some organisations to rise above their competition? It is clear that where there are strong long-term relationships, genuine engagement and good dialogue between provider and customer, there are stronger levels of customer recommendation and advocacy, and the organisations that benefit from these are those that recognise the value of creating sustainable, rather than short-term, relationships.
In an uncertain, challenging environment, a consistent focus on customer experience and employee engagement is perhaps the most powerful investment that can deliver both short and longer-term financial benefits, sustainable productivity and performance.
With the rise of technology and many service roles becoming automated, it is vital that providers work with new technology to ensure a differentiated and seamless user experience – creating the balance between speed and ease with building deeper understanding and wider service offerings.
With this in mind, what are the critical trends that will shape experience and providers’ relationships with customers in 2018?
Key Points
In 2017, customer satisfaction in the UK broadly improved in financial services
Providers will need to demonstrate even greater transparency and accountability
With the rise of AI, personalisation of service should improve
Greater transparency
Providers will need to demonstrate even greater transparency and accountability in delivering outcomes for all their customers in 2018. When it comes to service, customers expect to easily understand what their provider is communicating to them and, more importantly, the impact of this now and in the longer term, which can often be complex and, in the customers’ mind, worrying.
Simplification of information to ensure individuals can make the right choices will become even more important; particularly when organisations need to gain greater engagement with customers who are often ‘ill-informed’ about such issues as pension transfers or investments.
Making information more digestible and easier to understand will help build up trust between advisers and their clients. In the current marketplace, there is a high amount of distrust in financial service organisations, but providers and advisers can start to claim this trust back by proving their transparency.
Gaining trust
Trust and reputation will be needed more than ever in today’s context, as there is plenty of evidence to suggest that customers’ and individuals’ trust in organisations and businesses is at an all-time low.
However, our research shows that where an organisation scores nine or 10 out of 10 for customer service, their trust and reputation score is more than 40 per cent higher. Our latest UK Customer Service index found that Yorkshire Bank scored the highest in the trust category, and consequently was the third rated organisation for customer service out of 46,500 survey responses across 13 sectors.
In addition, with the rise of artificial intelligence (AI), providers need to demonstrate to customers, and the regulator, that AI deployment is reliable, secure and delivers outcomes that benefit customers.
Personalisation of service
In a complex environment, understanding personal needs is becoming more important. Where intermediaries and providers genuinely provide a more tailored and authentic service for their clients they can build longer-term relationships and enhance trust levels and loyalty. The degree of personalisation and understanding is important, and this requires a greater understanding of both the data and the person.
Personalisation of service should improve as the use of AI increases. Providers will be able to give customers a bespoke service experience that reflects their own preferences in a much more connected way. As AI starts to indicate behavioural preferences as well as data collection, it will be able to provide a greater source of knowledge to the adviser.
Automation
Similar to robo-advice, automation can be seen as a challenge to providers and their role. However, automation should not be seen as a threat, as it has many benefits to offer providers. If we look outside of sector we can see that many organisations are deploying automation and robotics to make customer experiences, quicker and more efficient. These technologies carry the promise of better customer satisfaction and cost savings, enabling employees to spend more time either on valuable customer interactions, where they can really add value, or improving business processes.
Expertise
The application of automation and robotics in the context of customer service for providers requires not just technological expertise, but a focus on training and engaging employees, and a realistic judgement of how automation and advisers will work together.
Providers need to have a wide knowledge of the market, both in short-term and long-term aspects in order to give a high level of expertise to customers and marry both AI and personal services.
The provider’s expertise lies in the understanding of the customer. They can then think more broadly about clients’ needs – not in a transactional way, but by creating more meaningful experiences.
Changing role of customers
In 2018, the customer journey will change, and service needs to reflect these trends. No longer do customers want “things,” but they want “experiences.”
This in turn provides huge opportunities for the provider community to provide greater connected service experiences – taking the hassle away and thinking beyond the traditional view of customer services.
From a one-year, three-year and longer-term perspective, organisations with higher-than-average customer satisfaction in their sector are more likely to achieve stronger turnover growth than those with lower satisfaction.
By adopting these trends – transparency, trust, personalisation, automation and expertise – providers can achieve greater returns on investment.
Jo Causon is chief executive of the Institute of Customer Service
