The new customer service index from the Institute of Customer Service paints a bleak picture for UK businesses. The UKCSI is a national benchmark of customer satisfaction covering 281 organisations or organisation types across 13 sectors. The UKCSI score is based on how customers rate organisations across 26 measures, covering satisfaction with transactional experiences as well as broader relationship needs, out of 100 points, writes Jonny Campbell, head of customer growth and retention at FM Outsource.
Food retailers in particular have produced concerning results, with a drop in customer satisfaction of -1.2 points from July 2022 to January 2023. The grocery sector was one of the worst performing industries in the last six months, with only the transport and utility sectors experiencing bigger falls in satisfaction. Both of which have seen significant disruption in the past year.
An environment of rising costs and changing customer behaviours has led to a population of frustrated customers. With food inflation hitting a high of 16.7%, UK households are facing a potential average £788 increase on their grocery bill each year. This leaves retailers needing to juggle keeping customers happy and coping with rising produce prices behind the scenes.
Whilst the declining satisfaction can be attributed in part to rising costs putting a strain on their relationships with customers, the new data from the ICS suggests there is certainly more to the story. Satisfaction with complaint handling has gone down by 2.5 points year on year, closely followed by expressing an emotional connection or ethics, which has dropped by 1.0 points.
With affordability being one of the top consumer concerns at present, developing an emotional connection with customers should be a priority. Showing genuine concern for the well-being of the customer and trying to handle their complaints as effectively as possible could be the real difference between a positive or negative customer service interaction.
Unfortunately, it appears that businesses are struggling to cope with the demands of customers, leaving people feeling disconnected and disengaged with the brands. If grocery retailers are to improve their customer satisfaction, they need to act fast and change their service strategy. Without making some meaningful changes, businesses risk poor customer retention and a loss of revenue.
Moving to a 24/7 approach
Switching to 24-hour customer care will be beneficial for grocery businesses. It may seem daunting to implement as there are multiple factors to take into consideration, from staffing and technology to cost, however, when done right, the benefits can outweigh any initial concerns.
With the number of smartphones worldwide estimated to be 6.8 billion, the way people interact with customer service has changed forever. People are accessing customer support at whatever time suits them, from in their lunch break to late at night. This means it’s vital that businesses can accommodate this shift in behaviour and ensure that customer care teams are available whenever customers decide to make contact.
Unsurprisingly, ensuring that customers don’t feel ignored can increase retention. In fact, research from Salesforce suggests that just a 2% increase in customer retention has the same effect as cutting costs by 10%. Clearly, the benefits of providing customers with what they want is undeniable from a satisfaction and revenue standpoint.
Introducing tech-enabled systems
High-quality customer care can be achieved by implementing digital systems to work alongside the existing team. Tools like chat bots can operate outside of traditional working hours, meaning human operators don’t need to expand or alter their hours to make 24/7 communications available.
The rapid growth of OpenAI’s chatbot ChatGPT, alongside other systems, suggests the widespread acceptance of AI-powered tech across various industries. For customer service, ChatGPT offers the opportunity for businesses to reduce their reliance on human operators for simple tasks. ChatGPT can answer customer questions with impressive accuracy, lessening the workload of team members. Provided that a direct route to a human operator is available, should customers need to speak to one, chat bots can certainly be a good initial point of contact.
This is particularly relevant in the case of the grocery sector, as many enquiries will have simple resolutions. Chat bot technology can easily action refunds, returns, and exchanges, while leaving more advanced queries and concerns to human operators.
With affordability being a top issue at present, human operators are still necessary to handle sensitive communications. People need to feel that they can rely on a business to support them through a worrying time. Having operators trained on how to support customers effectively during the cost-of-living crisis could significantly improve the sector’s rating for expressing an emotional connection, something that is currently lacking.
Outsourcing care
If grocery businesses are to improve their customer service, adding to the capabilities of their current team is essential. A team of highly trained representatives can be fully onboarded into an existing team within a few days to quickly increase access to resource.
With businesses facing tighter budgets in line with rising costs and inflation, most organisations are reluctant to employ more advisors. Using an outsourced team is the best way to scale up operations quickly and cost-effectively, with potential savings of £18,000 per annum, based on an average of 5000 contacts a week.
Using an outsourced team is particularly helpful during the peak period for grocery retailers. The team can be quickly scaled up to meet customer demand to ensure that no customer feels neglected during the busiest retail period of the year.
Final thoughts
The grocery sector is facing a challenge. It needs to improve its customer satisfaction as food prices are rising. This may appear daunting, however there are some simple changes retailers can make to improve customer satisfaction to increase business revenue. By moving to more effective 24/7 customer care, with the use of AI-powered technology and a supportive outsourced team, companies can adapt their current offering to cope better with customer communications. Without doing so, they risk losing valuable customers during an already financially difficult period.
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