[25 January 2010]
National customer satisfaction score for Singapore goes up
An improved overall customer satisfaction score signals a good start in 2010 for service excellence in Singapore.
Singapore, 25 January 2010 (Monday) – The Institute of Service Excellence at the Singapore Management University (ISES) (?????? ?) releases today the overall national score for the third Customer Satisfaction Index of Singapore (CSISG). Singapore scored 68.0 out of 100 for customer satisfaction across eight key economic sectors, up from 67.8 in the last study in 2008. Singapore's improved national customer satisfaction score mirrors the upward trend observed in the United States 1 where their corresponding American Customer Satisfaction Index (on which CSISG is based) also recorded a better national satisfaction score of 76.0 in 2009, up from 75.7 in 2008. In contrast, national satisfaction scores fell for the United Kingdom 2 (72.8 down from 73.0) and South Korea (70.9 down from 71.3), two other countries who adopt a similar national index.
CSISG 2009 finding: Increase in national satisfaction led by improvements in Finance & Insurance, and Healthcare sectors
The CSISG 2009 study reports significant improvements in customer satisfaction for Finance & Insurance, and Healthcare – the only two out of eight sectors that achieved higher satisfaction scores than in 2008 3. Customer satisfaction for Healthcare sector moved up from 67.6 to 68.9 while Finance & Insurance sector moved up from 67.0 to 68.2.
CSISG 2009 finding: More important to keep your promise
The study found a strong positive correlation between meeting the expectations of customers and customer loyalty. This means that if companies and businesses are able to meet the increased expectations of their customers, they would have achieved customer delight leading to increased customer retention and loyalty.
The study, however, observed that the incremental benefit of customer delight is much smaller than the incremental damage of customer disappointment. The impact on customer loyalty is severe when companies disappoint their customers. The danger of too much focus on exceeding expectations as a service strategy is that delighting one customer at the expense of failing the expectations of another will result in a net loss in loyalty. The better priority for companies is to first ensure they deliver their promises consistently to all their customers before attempting to delight any customers.
CSISG 2009 finding: Customer satisfaction is more than just service quality
In the CSISG structural model (please refer to Figure 1 in Annex A), customer satisfaction is driven by the three lever namely, customer expectations, perceived overall quality (both product and service), and perceived value. The study found that different sectors have different leading drivers of satisfaction. Hence, companies should consider a holistic approach to raise customer satisfaction and not focus on any one driver alone such as service quality.
Findings from this study support ISES' definition of customer satisfaction in the light of the present business climate. Customer satisfaction encompasses (1) understanding your target customers, (2) setting clear expectations of the needs you are addressing as well as the value you have promised, (3) consistently delivering the level of quality you promise, and (4) effectively addressing customer feedback and complaints. It is a misconception that customer satisfaction is about striving to exceed customer expectations by delivering exceptional service.
CSISG 2009 finding : Focus on reducing customer dissatisfaction
Findings from this study confirm that customers who are more satisfied with the company are more likely to complain directly to the company. On the other hand, less satisfied customers are more inclined to complain to friends and family. Direct complaints to companies are an indication of the strength of the relationship and the willingness to offer the company a chance to repair the relationship. Negative word-of-mouth, however, is detrimental to business as it affects take-up rate on products and services. More satisfied customers are also more likely to become repeat customers and recommend the company to other consumers. Companies should channel resources towards reducing customer dissatisfaction, complaint handling and service recovery, instead of trying to eradicate complaints.
Said Assistant Professor Marcus Lee (???), Academic Director, ISES: “CSISG 2009 has shown an improved national score for Singapore with Healthcare, and Finance & Insurance sectors doing significantly better in customer satisfaction compared to 2008. It also echoes a similar uptrend trend in customer satisfaction observed in the United States. This marks a good start in 2010 for Singapore in service excellence, as an encouragement for companies and businesses in the other sectors to acquire the right service strategies and do better.”
Said Ms Caroline Lim (???), Director, ISES: “There are some very useful insights in our latest CSISG results which could represent paradigm shifts for some in the business community. We found that it is far more important and cost-efficient for companies to ensure they keep their promises consistently to all their customers before attempting to wow or delight any customers. Customer satisfaction is also more than just service quality. It encompasses knowing your customers, setting clear expectations, consistently delivering your promise and addressing complaints effectively.”
CSISG 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. Companies can tap on CSISG – through corporate subscription and custom research – as a strategic business tool to gain valuable insights about customer satisfaction, benchmark against competitors and make better business decisions.
Please refer to Annex B and Annex C for details on the scores and further analysis.
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
1 The country satisfaction score for United States was based on results from the third quarter of 2009.
2 The country satisfaction score for United Kingdom was based on results from the third quarter of 2009.
3 Scores for the other six economic sectors: (i) Retail, (ii) Food & Beverage, (iii) Info-Communications, (iv) Education, (v) Transportation & Logistics, and (vi) Tourism, Hotels & Accommodation Services were earlier released by ISES in October 2009.