We noticed you're blocking ads.

Keep supporting great journalism by turning off your ad blocker.

Questions about why you are seeing this? Contact us

Font Size

- Aa +

Tue 3 Mar 2020 12:03 PM

Font Size

- Aa +

Ten lessons on service excellence from ten years of tracking it

Kuwait-based Service Hero has been measuring cusotmer service levels in Kuwait and the UAE for ten years

Ten lessons on service excellence from ten years of tracking it

Faten Abu-Ghazaleh

I would like to share the 10 lessons we have learned in the last 10 years of measuring customer satisfaction.

Since 2010 we have been collecting thousands of consumer assessments in the Customer Satisfaction Index we run. So, I know that we are in a unique position to be able to review a huge dataset based on these assessments and compare service dimensions across 15 categories, two countries and 300 plus brands in each.

1. Rethinking the market paradigm

When we started, our aim was to create a credible benchmark for companies to learn where they stand compared to their peers. We hoped the independently collected index data could help them make service improvement decisions.

But we soon realized that there was a prevailing market mindset about uncommissioned third-party research. Most companies only cared when the results were favourable to them. So, we had to become agile and rethink how we could make them listen. We quickly reoriented our focus on the ultimate beneficiaries of our index – people.

Consumers are the backbone of the index becuase it is based 100 percent on their authenticated feedback. If we could get more people to rate brands, we felt that we would be able to reshape the prevailing mindset and companies would have to listen.

Today, we feel we are halfway there – we started with 10,040 assessments in 2010 and finished 2019, a decade later, with 39,700 for the year. That’s an increase of 295percent. Across the years, we have collected over 300,000 assessments.

2. People want to give feedback when they feel their voice is heard and brands listen – so empower people

Our reorientation to empower consumers took the following forms. In 2010, ratings were for only 3 months, only online, had opaque results, and the impact was unclear. Today, ratings are 24 x7, happen on multi-channels, have published transparent results, and the assessment enables building a positive impact on service delivery. We opened the index to allow peoples’ voices to grow and for the impact to be transparent. With that we shifted the paradigm.

I now want to transition to what the index has taught us when it comes to service excellence. We took a deep dive into a decade of data from thousands of records to uncover some insight for developing excellence within organisations.

The legend we use to interpret the results based on CSI scores classifies over 90 points as heroic on one extreme (constantly exceeding customer expectations), while those on the other end in the 50s are unheroic (not doing the bare minimum to meet customer expectations). And in the middle, we have the BOG – Bland 60s (doing the bare minimum to meet customer expectations), Ordinary 70s (average service) and Good 80s (service the customer desires).

3. Heroic service is rare

Most brands try to serve customers as best as they can. Logically, they know they must. But when we look at 10-years’ worth of data and graph it, we see that a very small group of brands were able to consistently offer the best service to their customers.

In the chart only 4 percent of brands had a 10-year CSI average that was in the high 80s. Most brands, 57 percent, scored in the 70s, with what we consider as Ordinary scores. We found that while some brands achieved Heroic scores (over 90 points) in a single year, no brand was able to maintain it over the decade or even more than a few years in a row.

4. Consistency in service leads to better quality

We looked at the standard deviation for brand customer satisfaction scores to learn how consistency impacts how healthy the scores are. We discovered that across the decade, brands with stable CSI scores tend to have higher satisfaction than brands that had erratic satisfaction scores.

Using standard deviation for brand CSI scores, a variance that is less than 2 for example meant the brand scored Good scores in the 80s while a standard deviation of 6 or more meant the brand scored what we consider Bland or Ordinary scores in the 70s and 60s.

5. It’s not easy to maintain scores, but it’s even harder to improve

Using the 10-year cumulative average growth rate (CAGR), a third of brands consistently dropped in customer satisfaction. On the other hand, 41 percent increased less than 1 percent per year, and only a lucky 12 percent increased more significantly with over 2 percent annual improvement. So that 12 percent group must be doing something differently than the others.

We saw that some industries have seen dramatic growth such as Car Service, Fast Food and Health Clubs all three growing over 11 percent in 10-years. While three categories fell dramatically: ISPs -10 percent, Furniture -6 percent, and Supermarkets -5 percent.

6. Connection between high satisfaction and repeat visits

We find that satisfaction is highest the more frequently consumers interact with a brand. In other words, people stay away from brands that do not satisfy them – which suggests loss of business. And they come again when satisfaction is strong.

Categories with the highest weekly satisfaction scores include Islamic Banks, Casual Dining, Fast Food, Retail Banks and Health Clubs. The next most frequent visit is monthly, and the highest scoring here are Local Brands, Clothes, Fine dining and Cafes.

7. Damage control is key

Companies that are good at resolving complaints tend to score higher on average than those who don’t.

When the variance between the CSI score for a brand and complaint resolution is more than 5 points, brands tend to have the lowest satisfaction scores. And the opposite is true – a better job in handling complaints leads to higher satisfaction.

Categories that handle complaints the best relative to their satisfaction scores are Supermarkets, Cafes and Furniture. The ones who have a difference of -10 points between their CSI and complaints scores are ISP’s, Mobile Operators and Car Service – perhaps explaining why they are among the lowest categories in the index.

8. Consumer expectations continue to grow

The challenge for brands is to ensure they understand how to meet them. Variances are less evident on a national level as satisfaction scores have averaged 75.4 across the 10 years with a 3 percent increase since 2010. But Expectations have grown by 12 percent as consumers continue to expect more while brands are unable to deliver at the same pace. Expectations are grown the highest for Airlines, Banks, Car Service and Electronics. But where we see the most gaps – or brands are unable to meet customer expectations, are in ISPs, Mobile Operators, and Hospitals as well as Car Service.

9. Online interaction is increasingly the choice for consumers

For most brands the place of interaction continues to be instore with 70 percent of the volume while the second biggest is online with 25 percent and the remaining 5 percent is on the phone. But, there’s a 27 percent growth in online transactions and a 4 percent drop for instore interactions. And this is good news as satisfaction with online service is stronger than in-person and over the phone.

Some industries have over 49 percent of their interactions taking place online: ISPs, Airlines, Mobile Operators, and banks (Islamic and Retail) yet the danger for these industries is that consumer satisfaction, when the interaction was online, fell for all of them since last year.

10. Only a comprehensive framework allows excellence

Good and heroic brands don’t come about it by accident. They consistently build a culture of excellence by always focusing on what is good for their customers. The Trinity of Excellence and all its components allows companies to build a comprehensive framework that allows excellence to become part of their cultural DNA.

Dysfunctional cultures are rife with conflicting messages, targets and silos, so the best of intentions get derailed. They end up in low and erratic CSI scores. Cultures that are aligned around excellence not only have strong satisfaction, but they maintain that position. We have seen that as we run our customized internally focused Culture of Excellence Index. Brands with high internal alignment scores are market leaders and those with low culture scores are either erratic or lagging.

Conclusion

2000 years ago, Aristotle said: Excellence is not an act but a habit. At the risk of being accused of plagiarism, I would edit it as follows: Excellence is not an act or an accident but a habit and a culture. And that is our last lesson and our purpose.

* Faten Abu-Ghazaleh is the President of Servicehero.com

Arabian Business: why we're going behind a paywall