[20 April 2009]
SMU releases results for second national customer satisfaction study

The Customer Satisfaction Index of Singapore, developed by the Institute of Service Excellence at SMU, has found that businesses must look beyond customer service to raise customer satisfaction.

Singapore, 20 April 2009 (Monday) – The Institute of Service Excellence (ISES) at the Singapore Management University (SMU) has released the findings for the second Customer Satisfaction Index of Singapore (CSISG). Based on face-to-face interviews carried out during end of 2008, Singapore scored 67.8 out of 100 for customer satisfaction across different economic sectors, down from 68.7 in the last study in 2007.

Singapore's performance echoes the trend of other countries who also adopted a similar statistical measurement as CSISG. South Korea, Finland, Hong Kong and Denmark all observed a dip in their national customer satisfaction scores between 2008 and 2007. The exceptions are the United States and Sweden which saw a rise. Please refer to Annex A for the cross-country comparisons.

All eight economic sectors of Singapore covered in CSISG 2008 experienced dips in their satisfaction scores. These include Tourism, Hotels and Accommodation Services (-2.4), Food and Beverage (-2.3) and Finance and Insurance (-1.4). In spite of this, three of the eight sectors still performed above the national average. They are Education (69.8), Transportation and Logistics (68.7), and Tourism, Hotels and Accommodation Services (68.6). The score breakdown can be seen at Annex B.

CSISG 2008 found that tourists, who were surveyed on 18 of the 35 sub-sectors, reported higher levels of satisfaction (72.9) compared to local residents (66.9). Both tourists' and local residents' satisfaction scores have dropped from the last study.

In the CSISG model, customer satisfaction is impacted by three drivers: (i) customer expectations, (ii) perceived quality and (iii) perceived value of the products and services delivered. Please refer to Annex C for details on the methodology.

Customer satisfaction is not customer service. Customer satisfaction is driven by customer expectations, perceived overall quality (including product and service quality) and perceived value. Using the survey data gathered, positive relationships between customer satisfaction and each of the three satisfaction drivers are established. Furthermore, CSISG 2008 discovered that the performance of all three satisfaction drivers have declined in this study. Compared to last year's results, the scores for all three drivers of customer satisfaction have dropped in CSISG 2008. Customer expectations have declined by 0.78%, perceived overall quality by 0.61%, and perceived value by 0.96%. The score for perceived value has dipped the most from last year. The conclusion is that it is more difficult to raise customer satisfaction by focusing on one driver alone.

Therefore, CSISG 2008 recommends that businesses adopt a holistic, organisation-wide approach to raise satisfaction and sustain profitability.

Additionally, the study found that change in perceived value has the largest impact on customer satisfaction. Comparing the change in each of the three drivers of satisfaction this year and last year, one percent drop in perceived value corresponded with a larger decline in customer satisfaction than the same one percent drop in customer expectations and perceived overall quality respectively. In other words, consumers are becoming more discerning, demanding better value for every dollar spent.

CSISG 2008 marks only the second year of measuring national satisfaction levels. ISES will continue to engage the industry to fine-tune the methodology for this national index with the objective of providing more incisive findings.

Said Mr Tan Suee Chieh (???), Co-Chair of the ISES Governing Council and CEO of NTUC Income: “One important finding from CSISG 2008 is that it remains very important for businesses to keep an eye on customer satisfaction even during this current economic downturn. Focusing on service quality alone will not raise customer satisfaction. Businesses will do well by adopting a concerted organization-wide approach to increase customer satisfaction. Ultimately it is customer satisfaction that drives customer loyalty and repeat business.”

Said Ms Jennie Chua (???), Co-Chair of the ISES Governing Council: “Companies are operating in one of the toughest times but the upswing will emerge. Businesses may want to take this window of opportunity to fine-tune their strategies, or even reinvent themselves in order to take best advantage of the future business environment. CSISG 2008 shows that customer satisfaction represents a paradigm shift in that it now goes beyond customer service in evaluating the entire value proposition.”

Said Assistant Professor Marcus Lee (???), Academic Director, ISES: “The methodology of CSISG 2008 has been enhanced since the last study in 2007. Besides a 42% increase in responses, new sub-sectors with relevance and impact on the Singapore economy have also been included for measurement. Moving ahead, we will continue to actively engage the business community in making the study more useful and relevant.”

Said Ms Caroline Lim (???), Director, ISES: “Following the release of CSISG 2008 scores, we look forward to engage the industry with findings that are available at company level. We encourage them to partner ISES in optimising the research findings as a strategic business tool either through the corporate subscription programme or custom research. In addition our inaugural global conference in service excellence from 22 to 24 July 2009 will offer a series of workshops to showcase how businesses can leverage the CSISG diagnostic tool.”

From July 2009, the CSISG scores will be released quarterly by sectors, with the overall CSISG national scores announced in January of each year. It will continue to serve as a consistent benchmark for our key economic sectors to track our performance over time and a barometer on how Singapore fares globally. ISES will be organising a series of leadership forums and networking events to engage industry leaders and help them interpret the findings with the objective of raising their overall service competitiveness.

About the Institute of Service Excellence at SMU

The Institute of Service Excellence at the Singapore Management University (ISES) is the cornerstone of an initiative to raise Singapore's service standards and promote a culture of service excellence. Working in close collaboration with government agencies and business leaders, ISES champions service excellence through an integrated approach that encompasses benchmarking and analysis, research and thought leadership, and industry engagement. www.smu.edu.sg/centres/ises