Customer satisfaction scores in the UK have taken the biggest hit since 2015. But not all is lost – today’s guest shares her thoughts on how to get it back up.
Organizations are taking longer than expected to solve complaints, problems remain unsolved, and more customers complain that issues are met with excuses or indifference. That is the sobering picture of the state of customer service in the UK as of July 2023.
The latest UK Customer Satisfaction Index, the UK’s national benchmark of customer satisfaction developed by the Institute of Customer Service in 2008, is a reflection of how customers rated 281 organizations across 13 sectors and 26 metrics, and all sectors – from retail and tourism to insurance and banks – have had lower customer satisfaction rates than the year before. It’s the biggest fall since they started the index. And it means, on average, it’s taking about 20% of our time to rectify problems we have created.
For Jo Causon, CEO of The Institute of Customer Service and today’s guest, this alarming drop in satisfaction levels is a wake-up call to refocus on the essentials. When it comes to customer service, you really do reap what you sow. Companies often treat the customer experience as an afterthought, focusing most efforts and resources on product development or sales structures instead. The outcome is clear – a journey riddled with pain points, high volumes of complaints, frustrated employees, and unsustainable turnover rates, all of which significantly contribute to a mediocre customer experience. It’s the organizations that prioritize their service experience that drive loyalty and win customers’ business. But what sets them apart?
In today’s episode, we caught up with Jo Causon to talk about how implementing a service culture across every department of the company can pave the way for a customer-centric transformation that elevates the customer experience to new heights.
Here are some of the key takeaways:
- Hurdles in recruitment and resource management, together with a tech that isn’t delivering everything we hoped just yet helps explain the drop in customer satisfaction.
- A supportive, meaningful environment where people have purpose and a voice helps beyond employee engagement – for every 1% rise, you get almost a 0.5% rise in customer satisfaction.
- It’s all about balance. AI tech can eliminate the more transactional aspects of support, empowering the agent to develop different skills and work on more engaging tasks.
- Top performers excel by obsessively driving a service culture throughout the organization, understanding the customer journey, and continuously measuring and improving it.
- Organizations often focus on addressing complaints rather than proactively preventing issues. Eliminate inefficiencies by addressing customers’ pain points from the root.
If you enjoy our discussion, check out more episodes of our podcast. You can follow on Apple Podcasts, Spotify, YouTube or grab the RSS feed in your player of choice. What follows is a lightly edited transcript of the episode.
A perfect storm
Liam Geraghty: Hello and welcome to Inside Intercom. I’m Liam Geraghty. On today’s show, we’re joined by Jo Causon, CEO of the Institute of Customer Service, which is the independent professional membership body for customer service in the UK, working across all sectors and driving business performance through service excellence. Jo, thank you so much for joining me today.
Jo Causon: Thank you, Liam. It’s an absolute pleasure, especially on a wet and windy day. It’s really nice to have a good conversation.
Liam: Exactly. You recently mentioned the concerning decline in customer satisfaction in the UK. I was wondering if you could share some insights into the factors contributing to this decline and what it means for businesses out there.
“We’re now seeing customer satisfaction at the same level it was at in 2015, and it’s the biggest fall since we started the index”
Jo: Okay, good point. Your listeners may or may not know, but we do something called the UK Customer Satisfaction Index, and we’ve been doing that since 2008/9, and that tracks customer satisfaction across the whole of the UK across 13 different industry sectors. Customer satisfaction goes up and down. However, with the latest results across all 13 sectors – and the responses come from almost 50,000 individuals – we’ve seen a significant decline in overall customer satisfaction. We’re now seeing customer satisfaction at the same level it was at in 2015, and it’s the biggest fall since we started the index.
To answer your question, the reason why we have seen that is twofold. One, in the UK, and perhaps even globally, we’ve had a major issue in terms of resourcing, recruiting, and retaining good people. For every organization and CEO I talk to, one of the things that’s keeping them awake at night is making sure they’ve got the right resources and capability. The resources we’ve got are under great pressure, probably more than it has ever been. So, we’ve definitely got an issue in terms of that and our ability to respond.
Secondly, technology is such an important part of the customer experience, and it will be even more so as we go forward, but currently, and this tends to be a real truism, we overestimate what tech can do for us in the short term and underestimate what it will do in the long term. And actually, some of the tech is not quite there yet. So, we’ve got a bit of a perfect storm. Some aspects of the technology are not delivering everything we want it to, and we also have resourcing issues. On average, it’s taking about 20% of our time to rectify problems we have created, which is a terrible inefficiency and impacts our productivity hugely.
“Sometimes organizations tend to treat the complaint rather than think about the whole customer’s journey and eradicating the issue before it actually starts”
Liam: And the cost of poor customer service is staggering – an estimated nine billion pounds lost each month. What would you say to companies looking to reduce that cost and improve customer service? What can they do?
Jo: Absolutely. It’s such a waste of money, and it really impacts how productive we are. Sometimes organizations tend to treat the outcome of the issue, and so they treat the complaint rather than think about the whole customer’s journey and eradicating the issue before it actually starts. Now that sounds obvious, doesn’t it? Thinking across the organization, “If I’m a customer, what are those pain points? What are those touch points? And where can we improve?” Making sure they reduce the friction I have as a customer through your processes.
Customer service is not an operational function or a department – it’s actually the lifeblood, your service culture inside that organization. You have to ensure that everybody, whether they work in IT or in finance, really understands the customers and the pain points of that journey. If we can eradicate some of those issues, you’ll significantly decrease that 20% you’re spending. Basically understanding your customer. This is a service culture. This is about driving the right behaviors and focusing on the right outcomes.
Happy employees, satisfied customers
Liam: It’s interesting that you highlight the relationship between employee engagement and customer satisfaction. What can companies do to foster that culture of employee engagement that, as you say, directly impacts customer service quality?
Jo: Yeah, it does, Liam. We’ve done quite a lot of research around this, and for every 1% increase in employee engagement, you get almost a 0.5% increase in customer satisfaction. And that’s obvious, isn’t it? If we’re engaged and understand the purpose of our organizations and the value propositions we’re trying to deliver to our customers, and we feel like we’ve got a voice and a say, we’re more likely to go the extra mile. Our discretionary attitude and approach towards it tends to be much higher.
“Purpose is really important. I want to feel that I belong to something that is bigger than just what I am doing”
So, how do you do that? Before we started the actual podcast, we were talking about the types of environments we can create for our people to get the best outcome. When I look at all of our studies and data around employee engagement, it’s about having meaningful work, feeling like I’ve got a voice and my opinion genuinely matters, and being really clear about what my role is and the impact I can have. None of us go to work thinking, “Oh, I’ll just turn up.” Most of us go to work ’cause we want to make a difference and want to be to recognize and celebrate that difference.
For me, this is about management; this is about trying to ensure that our people feel included and connected to the purpose of the organization. Purpose is really important. I want to feel that I belong to something that is bigger than just what I am doing. That whole sense of creating purpose and connection makes a really big difference. And showing the outcome, too. If I’ve recommended something that’s gone back up through the organization and you can see the outcome, that makes such a big difference to me.
“Being really mindful about the pressure that they are on, making sure we rotate, making sure that counseling is available if needed, and being there for each other”
Liam: The purpose thing is so interesting because, if you look at this year, we’ve seen increased pressure on frontline service agents, and a lot of businesses are struggling to support these agents and prevent burnout while trying to maintain a high level of customer service. What advice would you give for looking after the team and trying to avoid burnout?
Jo: It’s a really important point. At the institute, we have a campaign called Service with Respect because we have seen a significant increase in abusive behavior towards customer-facing staff. There are two things going on here. There’s workload and the ability to get through quite a lot of workload, but we’ve also got a customer base in some situations that is more frustrated and easily riled. So, how do we do that? Well, some of the best organizations are making sure they’re checking in regularly with their operatives and having good conversations if that’s been a particularly emotional or difficult conversation. If you think about it, some people dealing with customers have similar issues to those customers in a cost-of-living situation. So, being really mindful about the pressure that they are on, making sure we rotate, making sure that counseling is available if needed, and being there for each other. You create that environment where people are not on their own trying to deal with an issue – there’s a group of us that are going to be supportive of one another. And again, it sounds obvious, but that’s a really important part. If I’m worried about something, I can say it; if I feel under pressure, there’s help.
I’ve got absolute awe of the people who work in contact centers. The number of calls they have to pick up and go through… So, proper training, proper support, and the ability to raise issues if you’re worried about something are all the things that really, really matter. And a really attuned leader that has a high level of emotional intelligence.
A balanced approach
Liam: How do you see the future of customer service evolving? You mentioned tech earlier, especially in terms of technology and customer expectations, and of course, we’re awash with AI at the minute.
“Those skill sets are what a COO or CEO is going to need in the future. High empathy, high intelligence, problem-solving, and connections across the organization”
Jo: I think there are a couple of interesting things. From the profession point of view, Liam, it’s a really exciting time because a lot of what I call transactional or process elements of a customer experience will be eradicated by the tech. The tech will be able to take so much more of that, which leaves the much more interesting aspects of the job we’ve been talking about – problem-solving and building that across the business. Being good at data is going to be absolutely critical to ensure we can analyze it as customer service professionals and personalize that journey with the best outcome for the customer.
On the one hand, the profession starts to become even more important because all those skill sets are what a COO or CEO is going to need in the future. High empathy, high intelligence, problem-solving, and connections across the organization. That will be good. In terms of the actual balance, we talk a lot about a blended approach at the institute, Liam. There needs to be a blended approach to customer experience and an understanding of when human intervention is better and when the tech can take the strain.
“I don’t think the future is going to be just tech but rather blended approaches that use tech effectively to help me, as an agent, get better at my job”
As AI develops and evolves, we need to think about what that means for the profession and the skills and capabilities we’re going to have to grow. If we don’t have good data or ask the right questions of our AI, we’re not going to get the right outcomes. There’s a really big bit for me around how you integrate that effectively because I don’t think it’s either/or. We started this podcast by talking about the customer journey throughout the whole organization. And that’s going to be really, really important.
But I also have a word of warning. If you think about what we’ve seen in the latest customer satisfaction results, that drags down everything. Therefore, what you’re going to see is certain organizations really pull away. In recent months, we’ve started to see a number of organizations talk about their service experience and why that differentiates them. And actually, they’re talking about it in a very human form. I don’t think the future is going to be just tech but rather blended approaches that use tech effectively to help me, as an agent, get better at my job and be able to do away with some of the processing stuff. That really isn’t a servicing role, is it? We need organizations to lead this from the very top, from the boardroom, and not leave that to a department or a function.
A culture of obsession
Liam: Yeah, I think that’s spot on. I think the future is humans and bots and knowing when, as you say, to switch to the human – let the bot do the kind of work that can speed things up, but when you need a human, we need to pass to a human. In your experience, did you ever come across any particular success stories or examples of organizations that have made significant improvements to their customer service, and what kind of lessons could we take away from them?
“Customer service isn’t a project or initiative”
Jo: Yeah, absolutely. We started the conversation about the UK CSI, and it is interesting that you consistently see a number of organizations in the top 10. We’ve got people like First Direct and Amazon that are consistently in the top 10. Nationwide, some of the retailers are in the top 10. When you look at what they do, I think they do two or three things really well. First Direct is obsessive about the customer experience and really drives the customer experience throughout the organization. Their finance team is as obsessed with the customer outcome as their contact center. Service culture, measuring the right things, paying attention to every part, and understanding how you can consistently and continually improve.
Customer service isn’t a project or initiative. It’s about “Okay, we’ve achieved this level, now how can we improve that?” I was talking to UK Power Networks yesterday, and they were talking about how, in their organization, the customer experience sits in the boardroom. They have somebody on the board who is responsible for it, but not only that, the non-exec directors really talk about the customer experience, and they are talking about it from the perspective of, “How can we improve that a little bit?”
“Be crystal clear about your purpose, and make sure every member of your team understands the purpose of that organization”
This absolute obsession with constant and continuous improvement is something interesting. A service culture where everybody is aligned to that is also another thing that I see. A curious executive who constantly benchmarks themselves outside of the sector. When I talk to CEOs, I very much notice people who say, “Well, what does good look like, Jo? Who’s doing really well at the moment? How can I think about what that future is?” They are externally referenced rather than just totally obsessed with what they are doing in their sector. There are a number of things: service culture, benchmarking outside a sector, understanding the end-to-end journey, discussing it as a key part of your boardroom metrics, reporting on and measuring it, and making sure your execs are rewarded financially for your customer satisfaction.
Liam: Before we wrap up, what advice can you give to small and medium-sized businesses looking to improve their customer service that maybe don’t have extensive resources? And how can they compete effectively on the customer service front?
Jo: Yeah, it’s a really good point. In some ways, Liam, everything I’ve said would be applicable if you’re an FTSE 100 or you are my type of size of organization. There is something around really understanding your value proposition. What’s your purpose as an organization? Whether you’re a huge or a small organization. And sometimes, Liam, that’s easier in a smaller organization.
“In the UK, we’ve seen a big resurgence of small pop-up organizations that are starting to eat some of the bigger organizations’ customer base. If you get great service, you go back”
So, be crystal clear about your purpose, and make sure every member of your team understands the purpose of that organization. And always ask yourself, “Who would miss us if we weren’t around? What would the impact be on our stakeholders, our customers, and our employees if we weren’t here?” And then focus on outcomes.
As organizations, we measure a lot of activity, and that’s important to help us with processes, productivity, and improvement, but you’ve got to know where you want to go, and that’s an outcome-based measure. So, whether you are big or small, think about those things, that customer journey, and that value proposition you offer across all of those elements, from the top of the organization to the frontend of it. This is about service culture, for me. In the UK, we’ve seen a big resurgence of small pop-up organizations that are starting to eat some of the bigger organizations’ customer base. If you get great service, you go back. And funnily enough, Liam, when you have less money, you’re a bit more choosy. So, the organizations that are prioritizing their service experience will get loyalty.
Liam: Love that. What’s next for the Institute? Are there any big plans or projects?
Jo: Always big plans and projects for the institute. Trying to help organizations tackle that decrease in customer satisfaction is going to be really important. And we do a big piece of trends work at the end of every year. I think there’ll be a number of things. One, for me, is about the profession. We’ve got some exciting things we’re looking to try and develop in terms of how we skill for the future and what that means – the types of skills and training. We’ve done a lot of work around governance and the role of the board and how the board is really measuring the customer experience. That’s going to be something we’re going to build on.
“It’s about pace, energy, stepping that up and trying to face the fact that customers are much more challenged. How do we support them?”
And we’re probably most well known for our work on return on investment. So, helping people in the frontline or in the middle of an organization the ability to convince those that might have the budgets as to why you get a decent return on investment of customer service. We’re going to continue to build on that. It’s about pace, energy, stepping that up and trying to face the fact that customers are much more challenged. How do we support them? And, of course, continuing with our Service with Respect campaign. And Liam, if you’ve got any listeners that want to sign up to the campaign, it’s a really important campaign about trying to protect frontline workers from unacceptable levels of abuse. You will find us at www.institutecustomerservice.com.
Liam: Jo, thank you so much for joining me today.
Jo: Liam, it was an absolute pleasure. Thank you very much for inviting me, and if there are ever any questions that your brilliant listeners want or that I can elaborate on, they know how to find me. I’m really happy to do that. Have a brilliant day, and a big thank you.