[Singapore, 26 June 2014 (Thursday)] – The Institute of Service Excellence at the Singapore Management University (ISES) (卓越服务研究院) today released the 2014 first quarter (Q1) Customer Satisfaction Index of Singapore (CSISG) results for the Retail and Info-communications sectors.

In face-to-face interviews with 9,250 resident and tourist respondents  between January and March 2014, the latest findings revealed customer satisfaction for the Retail sector fell by 2.5-points (-3.5%) year-on-year to 69.6-points (on a 0 to 100 scale). The Info-communications sector also registered a decline, albeit smaller. The sector dipped 0.9-points (-1.3%) year-on-year to 66.8-points.

For the Retail sector, the CSISG measured eight sub-sectors. Of these, seven recorded year-on-year declines: Departmental stores (-6.9-points/-9.1%), Petrol service stations (-1.4-points/-1.9%), Motor vehicles (-2.5-points/-3.4%), Fashion apparels (-2.3-points/-3.2%), Furniture stores (-8.2-points/-11.0%), Jewellery stores (2.0-points/-2.8%), and Clocks & Watches (-4.4-points/-6.0%). The bright spot for the Retail sector came from the Supermarkets sub-sector, improving by 1.1-points (+1.6%) and registering its sixth year-on-year increase to reach a record 71.1-points in 2014.

In examining the possible reasons for the fall in Retail customer satisfaction, it was noteworthy that all four of the sub-sectors that took into account tourist responses, namely Departmental stores, Fashion apparels, Jewellery stores, and Clocks & Watches, indicated these tourist respondents were significantly less satisfied this year, compared to last year.

Ms Caroline Lim (林晓玲), ISES Director (总监) said, “While both local and tourist respondents were less satisfied with these four sub-sectors compared to 2013, the difference in magnitude of the changes for each group was quite stark, with tourist satisfaction falling 9.7-points (-12.2%) while local satisfaction dipped 1.4 points (-1.9%).”

Further analysis showed that all three drivers of satisfaction, namely customer expectations, perceived quality, and perceived value, fell significantly year-on-year for tourist respondents. However, in contrast to tourists’ declining perceptions of value in these four sub-sectors, perceived value for local respondents improved significantly year-on-year. Locals’ expectations and perceptions of quality did not change significantly.

Ms Lim added, “Satisfaction levels will fluctuate year to year, but company leadership should maintain a long-term outlook to progressively raise customer satisfaction. Using this quarter’s Departmental stores data for example, a highly satisfied customer would have spent 23.3% more at the store over a one year period than a less satisfied customer. This link between improved satisfaction and increased spending is compelling and worth tracking.”

Within the Info-communications sector, the Mobile Telecoms sub-sector dipped 0.85-points (-1.3%) to 67.2-points, while the Broadband sub-sector fell more significantly by 2.2-points (-3.3%) to 65.3-points. The CSISG also added two new sub-sectors this year: Pay TV, scoring 66.5-points, and Wireless@SG, scoring 61.5-points.

A key observation in the Mobile Telecoms, Broadband, and Pay TV sub-sectors was the difference in satisfaction and loyalty levels between new customers (i.e., less than two years with the telco) and re-contract customers (i.e., two or more years with the telco).

In all three Info-communications sub-sectors, re-contract customers had greater levels of customer satisfaction and loyalty as compared to the new customers. Re-contract customers also had much smaller gaps between their levels of expectations and the perceived quality of their telco, compared to new customers. 

Assistant Professor of Marketing (Practice) Marcus Lee (李德发), Academic Director (学术总监) of ISES said, “It is important for service providers to try and meet the ever changing expectations of their customers. Our analysis shows that satisfaction goes down when the perceived quality of the product or service does not live up to the expectations of the customer.

“And for the most part, our telcos seem to be doing a good job of this with their longer tenured customers. In fact, the latest findings show that although expectations of re-contract customers were significantly higher than new customers in the Broadband and Pay TV sub-sectors, the telcos were also seen to be delivering an equally high level of quality,” he remarked.

Analysis of this quality-expectations gap in both the Retail and Info-communications sectors also revealed a peculiar finding: there was a positive gap between service quality and expectations, i.e., the service provider was able to meet or exceed expectations. On the other hand, service providers failed to meet expectations of product quality.

Commented Ms Lim, “This finding is a useful reminder for our businesses to look beyond customer service and frontline employees as the sole measure of customer satisfaction.

“Rather, organisations could approach customer satisfaction more holistically by re-examining their offerings, policies, and business processes that will affect the customer experience. These may include service re-design, service innovations, new product mixes, or an improved value proposition,” she concluded.

For media queries, please contact:

Mr Tim Zhuang

Manager, Marketing and Research

Institute of Service Excellence at SMU (ISES)

DID: (65) 6808 5258

Mobile: (65) 9748 9389

Email: timzhuang [at] smu.edu.sg

Mr Teo Chang Ching

Assistant Director, Corporate Communications

Office of Corporate Communications and Marketing

DID: (65) 6828 0451

Mobile: (65) 9431 8353

Email: ccteo [at] smu.edu.sg