It is fitting that the Prime Minister should call a General Election for this summer, less than a week after I wrote my piece setting out the first of The Institute’s asks of the next Government.
Politicians from all sides are now readying themselves for a busy election season. But no matter what happens in July, The Institute remains committed to driving home the fact that service will be a significant source of business and economic growth for this country.
Service as a strategic imperative
With the election in mind, I wanted to delve into the second pillar of our recently launched Manifesto for Building a Service Nation, which positions service as a driver of sustainable business growth and performance.
As many readers will know, this is something we have campaigned on for a long time. Just last year, we published our governance-focused research that yielded (among other things) two main recommendations for businesses:
- Report more comprehensively on customer satisfaction scores to determine long-term salient trends
- Train non-executives in corporate governance so they can hold executives accountable, particularly on service performance
With progress still required on realising these recommendations, we’re now calling on the next Government to review corporate governance codes to address the seismic changes in business and the economy that have occurred since the pandemic. To me, the long-term growth incentive is clear.
Service, business performance, and long-term growth
There is a proven case that demonstrates a real financial and productivity opportunity if we prioritise service – as our research shows time and again, customer service and business returns are inextricably linked.
By better incorporating service metrics into governance reporting as both a measure of performance and an indicator of success, we can encourage organisations to re-evaluate their commitment to the service proposition. Such metrics should be independent, trackable and benchmarkable, giving a consistent and reliable picture of a business’s standing in the eyes of its customers.
This will, in turn, enable companies to adopt a more long-term perspective and leverage the lifetime value of customers in relation to their bottom line.
Service and reputation
Beyond the bottom line, customer service is now an essential component of any organisation’s reputation, which in today’s environment can be vital for success or failure. In fact, our governance research revealed that over a third of customers have stopped using a company because of its reputation. Consider too, the pressure investors are bringing to bear on businesses to ensure the long-term reputation of their assets is not jeopardised by AI, cyber risks or short-termism.
Organisations must not, therefore, overlook the fact that customers care about service too. The latest UK Customer Satisfaction Index revealed that 31.3% of customers choose excellent service even if it costs more, while 41% would avoid using an organisation again following a poor service experience.
With that, prioritising service within corporate governance has the potential to prompt boards to recognise the value of the service agenda and, in time, establish service as a cornerstone of their reputation. In turn, businesses will see greater customer trust, retention, and recommendation, which will help foster innovation, drive returns, and encourage investment.
The winds of change for Government and business
A review of the Companies Act may be a helpful step. It is time to re-evaluate the emphasis placed on customer service, both within corporate governance frameworks and as a strategic driver – something that would benefit not just individual businesses, but the economy as a whole.
And as I said last week, The Institute will always push for the change we believe will benefit the UK – including the four asks laid out in our Service Manifesto, to ensure the service agenda is front and centre of the business agenda for any future Government.
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