May has so far been a mixed month in terms of economic news. The latest forecast from the Organisation for Economic Co-operation and Development (OECD) makes for stark reading, predicting the UK will have the lowest growth of all the G7 nations next year.
Although not all bad, having just exited a recession with the fastest economic growth in three years, and on Tuesday The FT reported that UK construction activity is growing at the fastest pace for more than a year. Interest rates were held this week, with future cuts likely to help stimulate growth.
There’s no denying that the challenges for UK businesses will stick around for a while yet, and there will be more bad news mixed in with these hopeful signs of economic recovery. It should be said, though, that despite adversity, the UK economy has shown remarkable resilience.
As we look at what must happen to spur some form of economic revival, it’s hard to shake the feeling that we, as a nation, have at times been our own worst enemy.
Take, for instance, the funding challenges across the public sector – a topic I touched upon last week – which has led to cascading productivity issues.
Private sector investment hasn’t been much better. The term “doom loop”, coined by The Institute for Public Policy Research, aptly describes the decades of weak private sector investment that have held back UK economic growth. The current investment rate hovers around 17% – a stark contrast to the late 1980s, and well below the G7 average of 20-25%.
But with the need for greater investment abundantly clear, where should we look to put our cash?
The role of service in Britain’s economic success
Investment isn’t merely about financial injections. Rather, to do so properly, is to recognise and leverage our national strengths. David Smith’s recent economic outlook piece in The Times resonated with me, highlighting the importance of service in our economy.
While our universities and research institutions, for example, can be pillars of growth, our identity as a service-driven economy is undeniable. Service industries make up 81% of our economic output, provide 83% of employment, and contribute 56% to exports.
It’s disheartening, then, to witness customer satisfaction plummet to its lowest since January 2015, per the latest UK Customer Satisfaction Index.
The value of service investment to the economy
A great deal of the value to be found in the UK’s organisations lies in the services they render. Our research has consistently shown the benefits of prioritising customer service in the boardroom.
Companies outperforming their sector’s average for customer satisfaction see a 7% increase in revenue and 10% higher EBITDA. What’s more, an executive focus on service translates to enhanced staff training, better protection against customer hostility, and ultimately, double the productivity for firms scoring higher in satisfaction.
However, the impact of customer service extends far beyond the organisation itself. Investing in service excellence has the potential to catalyse financial performance and productivity for our service-centric businesses, making them magnets for investment.
This, in turn, can initiate a virtuous cycle of economic growth, powered by service excellence. So, let’s embrace our strengths, bolster our service economy, and propel economic growth using one of our most valuable assets: exceptional customer service.
Together, we can transform the service landscape and reignite Britain’s economic engine.
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