Singapore, 9 February 2011 (Wednesday) The Institute of Service Excellence at the Singapore Management University (ISES) (卓越服务研究所) announces Singapore's customer satisfaction score for 2010 that measures customer satisfaction across eight key economic sectors. In spite of improvements in perceived service quality, Singapore's national customer satisfaction score for 2010 stands at 67.2 out of 100, down from 68.0 in the last study in 2009. Beyond service quality, other drivers of customer satisfaction that companies can focus their efforts on include product quality, customer expectations and perceived value. Our analysis shows that improvements in service quality alone do not always lead to improvements in customer satisfaction.
Satisfaction with the Retail, and Tourism 1 sectors improved significantly from last year. However, sectors including Education, Finance & Insurance, and Info-Communications declined from 2009. The year-on-year change in the satisfaction scores of the Healthcare and F&B sectors were not statistically significant. The performance of the Transportation & Logistics sector has stayed constant for two consecutive years. 2
However, the significant increase in the Retail and Tourism sectors was not enough to lift the overall national customer satisfaction score that is an aggregate of all the sectors' scores weighted by their respective contribution to the national GDP. Finance & Insurance contributed 41.9% to the computation of the national score. In the latest study, the satisfaction score of Finance & Insurance sector fell from 68.2 to 66.6 (-1.6). Under it, the Commercial Banks subsector saw a sharp fall of 2.4 points to 66.7, while Motor & Other Insurance rose 2.3 points to 67.1.
23,447 face-to-face interviews were conducted for the national study, out of which 4,301 (27.9%) were foreign tourists. CSISG 2010 marks the 4 th year of this national study. Between 2007 and 2010, the economy has expanded significantly and demand for service has grown, evidenced by record levels of tourist arrivals. Customer expectations are also changing. The satisfaction scores for the Retail and Tourism sectors record significant improvement year-on-year despite evolving customer expectations and increasing demand for service. Nevertheless, there are challenges to be addressed for some sectors like Finance & Insurance and Info-Communications.
The following are valuable findings drawn from the study:
CSISG 2010 finding: Spending on Frontline Training Alone is Not Enough
While service quality has been experiencing an upward trend since 2008 to 71.3 in 2010, this has not been the case for customer satisfaction, which decreased by 0.8 points to 67.2 in 2010. This means that improvements in service quality alone do not always lead to improvements in customer satisfaction. Customer satisfaction encompasses, among other things, improving both product and service quality, shaping the expectations of customers through branding and positioning, as well as offering value to customers. Companies will need to undertake a holistic approach which considers all these factors while at the same time take into account how different functions within the company can work together to deliver value to customers. This might involve improving internal processes or company policies which might ultimately be felt by customers during the consumption process.
CSISG 2010 finding: Engage your Customers, Especially Complainants
Based on the full year results, customers who only made direct complaints to companies have fallen from 2009 to 2.2% of all surveyed. However, the proportion of customers who said that they complained to their friends or families have risen year-on-year to 2.9%. This could be an indication that complaint or feedback channels as well as complaint-handling capabilities are ineffective. Reiterating an earlier finding in the first quarter of 2010 that well-handled complaints is associated with higher customer loyalty scores, one way to improve customer loyalty is by enhancing complaint-handling capabilities. This proactive engagement is far more effective than merely tracking the complaint rate.
CSISG 2010 finding: Think Long-Term to Boost Customer Satisfaction and Profits
CSISG data accumulated over the past four years demonstrates that customer satisfaction is one of the major drivers behind customer loyalty. Increased customer satisfaction and loyalty also comes with a host of other benefits, such as higher price tolerance. Using CSISG 2010 data for the Commercial Banks sub-sector as an example, a one-point increase in customer loyalty is associated with a 0.5% increase in price tolerance on average. This means that in general, loyal customers are more receptive to price increases.
Assistant Professor of Marketing (Practice) Marcus Lee (李德发), Academic Director ( 学术总监 ), ISES said: Against this backdrop of falling satisfaction and rising service quality, it is all the more important for companies to engage their customers. The evidence is clear an over-emphasis on raising service quality without truly understanding what customers want will not increase satisfaction.
Ms Caroline Lim ( 林晓玲), Director ( 总监 ), ISES said: The CSISG is a robust analysis of customer satisfaction for Singapore business. It provides companies an independent measure of satisfaction from their customers' vantage point. There are valuable insights from the study that businesses can tap on to raise customer satisfaction and enhance overall performance.
CSISG is a benchmark for Singapore's key economic sectors to track their 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.
1 The Tourism, Hotels and Accommodation Services sector has been renamed the Tourism sector.
2 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 between April and October 2010.
Please refer to the following Annexes for details:
About the Institute of Service Excellence at SMU
he 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