Institute of Customer Service

Customer service - in a class of its own

Business Systems (UK) Ltd – annual conference 23 November 2010

Jo Causon – chief executive

introducing the Institute of Customer Service We are:• independent, not-for-profit membership organisation• over 300 organisational members• 70% from private, 30% from public and third sectors• more than 7,000 individual memberships

We aim: • to lead customer performance and professionalism• to be the first port of call for all issues around customer service

We provide:

• advice, research, professional networks, products and services, awards, national occupational standards, continual professional development and conferences

• including National Customer Service Week

the renaissance of customer service

• customer service a critical element of business performance

• a key driver of profit

• changing  relationship between organisations and their customers

– customers  now hold the power

• future of customer service 

– changing attitudes of we, the consumer

– challenges brought by technology

– changing business models

– changing employee engagement…

what are the key priorities for customers?• overall quality of product / service provided

• friendliness of staff

• handling problems and complaints

• speed of service

• helpfulness of staff

• handling enquiries

• being treated as a valued customer

• competence of staff

• ease of doing business with

• being kept informed

characteristics of organisations that deliver world class service

• deal with problems and queries

• deliver on the promise

• make it easy to do business with

• go the extra mile

• continually looking at ways to innovate

• create customer strategy, service delivery and the right culture

• product development

• product and service delivery

• customer relationships

- social media

- visible, instant feedback

the role of technology

• shift from transactions to relationships

• move away from one-way mass marketing

• to customer personalisation, narrow segmentation

• two-way communications

- what products customer would value most at any given time

• in B-2-B world

– focus on maximising value of long-term relationship, not sales

about building relationships

the direct impact of an engaged workforce• 70% of engaged employees have a good understanding of

how to meet customer needs as opposed to only 17% of disengaged employees (CIPD)

• engaged employees generate 43% more revenue (Hay Group)

• engaged employees: 2.7 sick days per year. Disengaged employees: 6.2 (Gallup)

• engaged employees are 87% less likely to leave (Corporate Leadership Council)

the direct impact of an engaged workforce• 67% of engaged advocate their organisations; only 3% of

the disengaged do (Gallup)

• 9 out of 10 of key barriers to successful change, people related (PWC)

why does service matter?

• £15.3 bn - the cost of poor customer service to UK economy annually

• business abandoned and lost to entire industry - £5.2bn

• customer churn and defections - £ 10.1bn

• £248 average annual value of each customer relationship lost

• 73% of consumers have ended a relationship due to poor customer service

• consumers aged 27-43 most likely to switch

• one in four people have left a financial services company or utility provider in the last year following poor customer service

Source: Genesys – The Cost of Poor Customer Service: September 2009

we have all become more demanding

• customers/clients/people more willing to complain

- 2001 - 50% people were willing to complain about poor service

- 2006 - that figure had risen to 60%

- 2010 – now 75% consumers prepared to complain

• more sceptical

• reputations hard-won but easily lost

• ‘generation Y’ discerning, influential consumers – people power

• challenge/opportunity of using new technology

Principal source: ICS National complaints culture survey 2006

more willing to complain- more able to do so• more disposed to tell others about bad experiences

- 81% - 2001- 89 % - 2006- 90% - 2010

• more able to do so

• growth of social media

- as consumers we can draw down information more easily

- seek tailored solutions both offline and online

• tell the world when something goes wrong – not just our friends

• need to look beyond traditional measures of customer satisfaction

why does world class service really matter now?

• economic climate

• UK a service economy

• renaissance for customer service – feedback is immediate and visible

• clear ROI benefits

• DNA - Impact on culture people and processes

• shortage of skills - keeping the best

• clear link between performance of individuals, organisations and UK Plc - service is the differentiator

UK customer satisfaction levels

75.6

80.280.280.0

79.377.477.2

76.775.3

72.372.272.1

70.069.6

77.777.276.9

75.3

50 55 60 65 70 75 80 85 90 95 100

UKCSI

Retail (food)Services

Retail (non-food)Tourism

AutomotiveFinance (insurance)

LeisureFinance (banks)

TransportTelecommunications

Public Services (local)Public Services (national)

Utilities

Northern IrelandScotland

WalesEngland

Jul-10

Jan-10

loyalty index

76.2

84.583.9

79.779.1

77.877.2

76.174.4

73.873.072.8

71.766.1

79.678.0

77.175.8

50 55 60 65 70 75 80 85 90 95 100

Overall

Retail (food)Retail (non-food)

LeisureServicesTourism

AutomotivePublic Services (local)

Public Services (national)Finance (insurance)

Finance (banks)Transport

TelecommunicationsUtilities

Northern IrelandScotland

WalesEngland

Jul-10

Jan-10

UKCSI: the top performers

• John Lewis (88)

• Waitrose (88)

• Lloyds Pharmacy (86)

• SAGA Holidays (86)

• Virgin Holidays (85)

• Marriott (85)

• Marks & Spencer (food) (85)

• Boots (84)

• First Direct (84)

• Marks & Spencer (84)

what are they doing to get these results?• professionalism

• commitment to staff

• genuinely empowering

• listening

• building service cultures

• engaging and championing

• creating customer strategy, service delivery and the right culture

bottom line impact of good customer service

• top box customer satisfaction

• 2x likely to renew/stay

• 3x likely to recommend

• 24% higher net profit margin

• 71% higher profit per employee

the challenge is to do more with less • increased demands come against the backdrop of a recession

• greater stress among the public

• falling morale among staff

• important we encourage and build customer focus– led from the top – programmes built with a core focus on service– each customer is an individual and needs to be treated as

such– key is to help staff make the right judgement each time

lessons learned

• customer management is fast becoming a strategic boardroom issue

• only sustainable competitive advantage

• customer feedback is immediate and highly visible

• consumers have the power to shape image as never before

• strong service leadership is crucial

• greater empowerment and support for staff

Thank you

Jo CausonInstitute of Customer Service