[7 April 2008]
ISES@SMU releases findings of Singapore's first national level customer satisfaction study

The Customer Satisfaction Index of Singapore, developed by the Institute of Service Excellence at SMU, scores Singapore 68.7 on a scale of 0 to 100.

Singapore, 7 April 2008 (Monday) – The Institute of Service Excellence (ISES) at the Singapore Management University (SMU) has released the inaugural results for the first Customer Satisfaction Index for Singapore (CSISG). Based on surveys carried out in 2007, Singapore scored a national average of 68.7 out of 100 for customer satisfaction across different economic sectors.

CSISG is a measure of customer satisfaction in the Singapore economy. It marks the first ever comprehensive and institutional measurement to be available in Singapore for service excellence. Developed and implemented by ISES in collaboration with the Singapore Workforce Development Agency (WDA), the CSISG is based on the same robust and established American Customer Satisfaction Index (ACSI) which has widely been used and accepted as the standard indicator of customer service levels in the United States.

CSISG scores customer satisfaction on a scale of 0 to 100, and produces a grand customer satisfaction index at the national level, separate indexes for eight key economic sectors which account for a significant 34.4% of the Singapore GDP as well as 31 sub-sectors in Singapore. They are listed at Annex A. A higher index score represents better performance. CSISG scores are based on data collected from a nationwide survey conducted between May and July 2007 comprising more than 22,000 responses. Please refer to Annex B for background on the CSISG.

In addition to the customer satisfaction scores, CSISG produces scores for the three drivers of customer satisfaction, namely (i) customer expectations, (ii) perceived quality and (iii) perceived value of the goods and services delivered. CSISG also measures the two consequences of customer satisfaction in terms of (a) customer loyalty and (b) customer complaints.

Customer Satisfaction Scores

Singapore scored a healthy 68.7 out of 100 for the national average satisfaction score. This is, however, lower compared to two other developed countries who also adopted the ACSI methodology as their measure of national customer satisfaction: South Korea (score of 72) and the United States (score of 75).

Among the eight key economic sectors, the Tourism sector (71) has the highest customer satisfaction score followed by the Education (70) and Transportation and Logistics (69.1) sectors. Within the Tourism sector, high customer satisfaction with hotels (73.5) and attractions (71.5) are the key drivers in the Tourism sector's good performance. However, respondents indicated much less satisfaction levels with travel agencies, tour operators and ticketing agencies (66.4) in comparison with hotels and attractions.

The study found that tourists, who were surveyed on 15 of the 31 sub-sectors, generally gave higher satisfaction scores compared to Singapore citizens and permanent residents across the 15 sub-sectors.

Customer Complaints

Singapore scored a national average of 6.3% for complaints. This means 6.3% of all respondents indicated that they had complained to a company at least once in the last three or six months.

While the United States scored high on overall customer satisfaction, they also registered a high complaint level of 14% compared to Singapore's 6.3%. Reasons for this include cultural differences in consumer behaviour with US customers being more upfront and less inhibited in voicing out what they perceive as service lapses. There may also be more well-established feedback channels and a quicker service recovery culture in US companies. This encourages consumers to more actively make use of these communication channels.

The study found that the more dissatisfied customers are, the more inclined they are to lodge complaints. 46% of very dissatisfied customers made complaints. The converse, however, is not necessarily true. 10.5% of very satisfied customers continued to complain. The study also found a positive correlation between customer satisfaction and customer rating of complaint handling ability. The more satisfied customers are, the higher they rate an organisation's complaint handling ability. Complainants, therefore, need not necessarily be viewed as adversarial as they can potentially be persuaded into becoming loyal customers. The recommendation is for companies to devote more resources towards improving and implementing service recovery systems to maintain high customer satisfaction levels rather than to try to eliminate complaints.

The CSISG, being a qualitative measure of customer satisfaction, will complement the other traditional forms of measure of the quantity of economic output such as GDP to provide a more holistic picture of the Singapore economy. The CSISG also serves as a strategic diagnostic tool for companies and businesses to deduce the causes and consequences of high or low customer satisfaction levels, and identify areas of intervention to improve their performance.

The survey findings were unveiled for the first time this morning at the launch of the CSISG graced by Acting Minister for Manpower Mr Gan Kim Yong. The event was attended by about 300 Chief Executive Officers, Chief Operating Officers, Managing Directors, General Managers and other industry leaders who attended the presentation of the CSISG findings.

Said Mr Tan Suee Chieh, Co-Chairman of the ISES Governing Council and CEO of NTUC Income: “The launch of the CSISG is a groundbreaking development for the service industry in Singapore. Finally, we have a more detailed and rigorous measure to assess customer satisfaction. It also allows CEOs of Singapore companies a deeper understanding of the factors underlying and affecting customer satisfaction so that they can put in place interventions to improve their service excellence. Ultimately, service excellence requires leadership at the top to demonstrate the commitment to make the necessary changes to their service delivery systems and cultures.”

Said Professor Tan Chin Tiong (???), Deputy President and Provost of SMU: “The development of the CSISG and the completion of the inaugural study of customer satisfaction in Singapore by ISES mark a major step forward for SMU. The findings are significant and valuable contributions to the body of research in the University in the area of service excellence, strategic branding and marketing. SMU is well-positioned to take a leadership role in championing service excellence through ISES, the University's think-tank for carrying out applied research and industry outreach.”

Said Assistant Professor Marcus Lee (???), Academic Director, ISES: “The CSISG presents unique opportunities for the different stakeholders in the Singapore economy. For companies, the CSISG will allow them to benchmark themselves against their direct competitors as well as learn how best-in-class companies outside their industries are managing their customers. For consumers, the CSISG will allow them to make more informed decisions when deciding which companies to engage. For researchers and analysts, this new index, which will be a permanent fixture in Singapore, will be a rich source of objective information on the qualitative aspects of the performance of companies in our economy. The CSISG is an excellent example of SMU's commitment to excel within both the realms of academia as well as industry.”

Going forward, the CSISG will be an annual study carried out by ISES as a regular exercise to measure the level of service excellence for Singapore and track our performance over time. It will serve as a consistent benchmark for our key economic sectors and a barometer on how Singapore fares globally. The CSISG findings will be released every year by ISES. Reports, containing breakdowns by each services sector, will be produced and published with each release. ISES will be organising a series of industry-specific forums and networking events to engage industry leaders and help them interpret the findings with the objective of raising their overall service competitiveness.

Please refer to the Executive Summary.

About the Institute of Service Excellence at SMU

The Institute of Service Excellence (ISES) at the Singapore Management University (SMU) was established in July 2007 to champion service excellence, raise Singapore's service standards and promote a culture of service excellence in Singapore. ISES primarily engages business leaders to help them build capabilities on using service excellence as a business strategy, tapping on their views and business strategies through discussion forums, conferences and dialogues. ISES conducts research to help Singapore-based industries develop new service strategies and approaches. ISES also carries out benchmarking and comparative analysis to measure service levels across different sectors and countries.