Creating a sustainable future: The relationship economy

By Jo Causon, CEO, The Institute of Customer Service

As we move towards the end of the summer I thought it was a good time to reflect on the environment we are working within and what the Institute is focusing on to help our members improve their customer service experience and standards.

As many of you will have already seen the July 2014 UKCSI shows a third consecutive fall in customer satisfaction. Almost half the organisations included in the index have seen a drop in their customer satisfaction by at least one point compared to a year ago. At a time when the economy is beginning to grow, this should be a major concern for organisations and UK Plc.

So, what is affecting customer satisfaction? There are a number of factors which may account for the falling trend in customer satisfaction. Customer expectations are certainly continuing to rise and their needs are evolving more rapidly, with convenience, ease of doing business and speed seen as particularly important.

As demand and confidence grow, organisations may be tempted to shift their priority away from retaining customers through focusing on the whole customer experience, towards simply driving up customer numbers and short term revenue growth. However, evidence from the UKCSI continues to point to clear and consistent linkages between high levels of customer satisfaction and trust, loyalty, likelihood to remain a customer, and in the Retail food sector in particular, higher sales growth and market share.

The world has changed and is continuing to change; increasingly consumers have more complex buying behaviours however we are seeing that they prioritise value over price, sustainable over disposable in goods, in services and in relationships. It is my belief that those organisations that have incentives that encourage customer service quality over sales quantity across the whole value change and start to understand the need to move their investment horizons from the short term to long haul are the ones that will survive and prosper.

The relationship economy

Those organisations that are truly getting to grips with the Relationship Economy are beginning to prioritise collaboration over competition and responding to the increased need to demonstrate high levels of trust by being authentic, inclusive, responsible, consistent and genuinely demonstrating behaviour that is open, engaged and transparent (not closed, remote and opaque). In this new economy customers are regarded as part of (not separate to) the organisation and considered to be partners, peers and people (not numbers, groups or classifications).

Consequently communication becomes conversation and marketing changes from one-to-many campaigning to constant one-to-one interaction.

So what has the Institute been doing to help our members navigate this new brave world?

During the last few months we have significantly increased our research and insight output, publishing three new reports since April. Structures for Success: How models of business ownership influence customer service, Citizens and Customers: Further Building the Case for Customer Service in the Public Sector, The Power of Service: How Utilities can improve customer focus and business performance) as well as the latest UKCSI.

As we move into the Autumn we will be producing three more pieces of research as well as a series of workshops and further events. Our research and insight agenda is designed to support our members navigate some of the challenges and opportunities that the new world is presenting to us all and above all we hope to stretch thinking but support with  practical tools and outputs. As you know we now have bespoke research capabilities so do contact us to explore this further. The battle for greater insight into our  customers is an increasing challenge and the Institute has a unique role to play in helping organisations understand this across sectors and business and to be able to respond to specific contexts as well as the wider picture.

In addition, we have significantly increased our engagement with our members through 13 numbers of events and at our AGM we had two notable but very different speakers Jamie McDonald who is Customer Experience Director for the Domestic Energy business within Carillion plc and Jo Moran from Marks & Spencer.

For me both of the presentations, although from very different business sectors, demonstrated how they are getting to grips in very tangible ways with their whole customer service proposition. We are delighted to be the secretariat of the APPG on Customer Service; the purpose of the group is to raise awareness and understanding of customer service amongst parliamentarian’s and stakeholders, demonstrating the impact of customer service on economic growth, to improving public services, business performance and to improving employability through customer service skills training, which in turn drives an improved outcome for customers and citizens.

As 80% of the UK’s GDP is service related there is a growing recognition from parliamentarians of the economic advantages that customer service can bring. Work continues apace on our Annual Conference and we have secured a number of great speakers from a range of industry backgrounds, we always seek to provide relevant and insightful speakers who will offer practical advice as well as stretch all our thinking and this conference I hope will continue to do this.

Internally we are not resting on our laurels and have appointed a new operations director who is looking at how we ensure we are easy to do business with from our members’ perspective, more to follow on this later in the year as well as us improving the way we communicate and engage with you.

I am always interested in your views so please do let me know topics that you would like me to consider and I will certainly try to cover these in my future posts.