1. Institute of Customer Service Customer service – best practice The Hospitality Exchange 19 October 2010 Jo Causon – chief executive

2. introducing the Institute of Customer Service We are: independent, not-for-profit membership organisation over 300 organisational members 70% from private, 30% from public and third sectors more than 7,000 individual memberships We aim: to lead customer performance and professionalism to be the first port of call for all issues around customer service We provide: advice, research, professional networks, products and services, awards, national occupational standards, continual professional development and conferences including National Customer Service Week

3. the renaissance of customer service customer service a critical element of business performance a key driver of profit changing relationship between organisations and their customers –customers now hold the power future of customer service –changing attitudes of we, the consumer –challenges brought by technology

4. why does service matter? £15.3 bn - the cost of poor customer service to UK economy annually business abandoned and lost to entire industry - £5.2bn customer churn and defections - £ 10.1bn £248 average annual value of each customer relationship lost 73% of consumers have ended a relationship due to poor customer service consumers aged 27-43 most likely to switch one in four people have left a financial services company or utility provider in the last year following poor customer service Source: Genesys – The Cost of Poor Customer Service: September 2009

5. shift from transactions to relationships move away from one-way mass marketing to customer personalisation, narrow segmentation two-way communications - what products customer would value most at any given time - focus on maximising value of long-term relationship, not sales about building relationships

6. we have all become more demanding customers/clients/people more willing to complain - 2001 - 50% people were willing to complain about poor service -2006 - that figure had risen to 60% -2010 – now 75% consumers prepared to complain more sceptical reputations hard-won but easily lost ‘generation Y’ discerning, influential consumers – people power challenge/opportunity of using new technology Principal source: ICS National complaints culture survey 2006

7. more willing to complain- more able to do so more disposed to tell others about bad experiences - 81% - 2001 -89 % - 2006 -90% - 2010 more able to do so growth of social media -as consumers we can draw down information more easily -seek tailored solutions both offline and online tell the world when something goes wrong – not just our friends need to look beyond traditional measures of customer satisfaction

8. as American Airlines discovered

9. why does service really matter now? economic climate UK a service economy renaissance for customer service – feedback is immediate and visible clear ROI benefits DNA - Impact on culture people and processes shortage of skills - keeping the best clear link between performance of individuals, organisations and UK Plc - service is the differentiator changing business models

10. UK customer satisfaction levels

11. UKCSI: the top performers John Lewis (88) Waitrose (88) Lloyds Pharmacy (86) SAGA Holidays (86) Virgin Holidays (85) Marriott (85) Marks & Spencer (food) (85) Boots (84) First Direct (84) Marks & Spencer (84)

12. loyalty index

13. complaints index

14. bottom line impact of good customer service top box customer satisfaction 2x likely to renew/stay 3x likely to recommend 24% higher net profit margin 71% higher profit per employee

15. characteristics of organisations that deliver excellent service deal with problems and queries a guest complaint well handled can increase brand loyalty deliver on the promise make sure the reality matches the marketing make it easy to do business with can customers contact me or change their arrangements easily? go the extra mile find out what customers really value and do a little more continually looking at ways to innovate customer expectations don’t stand still learn from other sectors create customer strategy, service delivery and the right culture about building your business around your customer and your people

16. lessons learned customer management is fast becoming a strategic boardroom issue only sustainable competitive advantage customer feedback is immediate and highly visible consumers have the power to shape image as never before strong service leadership is crucial greater empowerment and support for staff

17. Thank you Jo Causon Institute of Customer Service