New research suggests customers want more than just low prices

New research suggests that 6 out of 10 consumers think that low prices will become more important to them when choosing where to shop and what to buy in the next two years. But according to the Institute of Customer Service (who carried out the research) companies need to offer more than just discounts in order to keep their customers. In their survey of 10,000 people, a third of those asked said that they were prepared to pay more for good customer service.

The research also concluded that businesses need to be understanding of the financial pressures their customers face and offer a range of payment options. They should also consider giving advice on budgeting and getting the most value out of products. Companies should also gauge whether technology was the best solution to problems, and when a discussion with a real person was a better option.

The Institute questioned consumers as part of a regular review of customer service, at a time when prices are rising at their fastest rate for 40 years and the costs of energy, fuel and food continue to climb.


What does the research reveal?

More than 17% of those surveyed were experiencing a product or service problem, the highest overall level since records began in 2008. In particular, the quality and reliability of goods and services was a growing problem according to the survey.

The cost of dealing with poor service added to ongoing expenses for businesses. The institute estimated the collective cost to be £9.24bn a month in staff hours.

A year ago, the Institute warned that customers were fed-up of companies using Covid as an excuse for long waits on the telephone or late deliveries - but that issue had now clearly been overtaken by the issues relating to the cost of living.

The research also found that some consumers have been violent and abusive towards staff in shops. An incredible 44% of frontline service staff say they have experienced hostility from customers in the past six months - a rise from 35% during the previous six months.

A quarter of staff that have faced increased hostility said they believed the increase was partly down to the sharp rise in the cost of living and the stress this had placed on customers.


Other research from Citizens Advice

The Institute’s survey follows a critical report from Citizens Advice on customer service performance from energy firms. Citizens Advice (which ranks suppliers using a star rating system) said that standards had "plummeted" to a record low since June 2021 when several suppliers went bust due to high global gas prices. According to their research, the average waiting time on the phone to speak to a firm was now about six-and-a-half minutes, compared with just under four minutes the year before.


What do the experts say?

Jo Causon, Chief Executive of the Institute of Customer Service said that customers did not want products and services that were "just cheap". So therefore businesses need to be flexible and transparent about what they are offering their customers. This could include being upfront about products and when they would become available if the supply was held up.

According to Causon: "Organisations can’t avoid these issues. They will need to develop service strategies that are responsive to evolving customer needs but also protect short and long-term business performance.” She added that UK companies had got better at dealing with, and resolving, complaints, but more work was required to prevent the problems in the first place.

Darren Bugg, Editor of The Customer Service Blog said: “This new research doesn’t surprise me at all. From my own research, I’d suggest that the situation is actually even worse than suggested. For example, the research by Citizens Advice suggests that customers have to wait on average six-and-a-half minutes to speak to someone on the phone. But for many customers, it often takes far longer to speak to someone in customer services.”

“For example, only today I’ve had to wait 45 minutes on hold to speak to someone at British Airways, and then another 20 minutes on hold waiting to speak to someone at Northern Trains! Waiting on hold for 30 minutes or more seems to be typical with many companies.”

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