This year will be one in which retailers need to rebuild and re-earn the trust of their customers, according to a review of trends from 2013 and predictions for 2014 from the Institute of Customer Service.
The report predicts that customer service will become a more influential driver of growth for the recovering economy, after a year that saw levels of customer satisfaction plateau for the first time since 2008.
The Institute also predicts that the use of new technology and big data, employees' customer service skills, and measuring customer service as a strategic business initiative will be key focus areas for forward-looking organisations in 2014.
The institute predicts that customer service will become a more influential driver of growth in a recovering economy. New technology will prevail as big data and social media promise to revolutionise and encourage a new and more focused business approach to customer service in 2014. At the same time, trust will grow in importance, placing more emphasis on employees' customer service skills.
Looking back to 2013, the institute noted several trends:
- Customer satisfaction plateaus - a concern in a competitive environment
- Growing evidence of the link between customer satisfaction and business performance
- Trust in the spotlight after horsemeat, PPI, utilities price rises and NHS scandals
- Social media boosts the power of the consumer as never before
- Technology most effective when improving ease of doing business, such as click and collect.
However, looking ahead, the institute suggests seven key trends to come:
- Customer service will be a key growth driver in a recovering economy
- Big data will power greater customer insight and innovation
- Online communities for customer service will become mainstream
- There will be a renewed focus on customer service in the public sector
- Measuring customer service will have more impact on the bottom line
- Customers will drive organisational change
- Demand will increase for customer service skills in the workforce.
For both public and private organisations, 2013 brought a combination of improving trading conditions, revelations about poor business practises and a shift of power toward the consumer as technology provided new and more effective tools for customers to have their say.
During January 2012 to July 2013 the continuous rise in customer satisfaction recorded since 2008 began to plateau for the first time, dipping slightly in July 2013. This posed the question of whether companies have protected their profits during the tough recession years by cutting back on customer service. More organisations in the survey (38%) recorded satisfaction levels falling by more than one point compared to those that recorded satisfaction levels rising by the same amount (26%).
The link between customer satisfaction and business performance was further strengthened by the same research with those performing best on the UKCSI also achieving more market share than the worst performers.
Trends to watch in 2014
In 2014 customer service will be key to growth as the economy recovers. Companies that understand the importance of customer service as a strategic business tool will gain market share at the expense of those that don't.
Technology will continue to transform customer service; the use of big data will provide even deeper knowledge of the customer, paving the way for further innovation but also raising concerns about privacy and the use of analytics. Measuring customer satisfaction in more accurate and sophisticated ways is expected to reveal in more detail how customer service impacts business performance.
Online communities with helpful and knowledgeable members operating alongside employees will provide more help, but also force organisations to relinquish some control over their relationship with customers. Customers will also have more control over organisational change, with social media driving increased responsiveness and personalisation, encouraging organisations to empower frontline staff to make decisions and solve customer issues.
This will also impact the demand for customer focused skills, soft skills and emotional intelligence, qualities that have often been overlooked as well as the need for strong commercial acumen. From the shop floor to the highest levels these skills will be at a premium with more customer service representation on boards and leadership teams and a higher proportion of CEOs with customer-centric experience.