National Customer Satisfaction Index Rises: Mobiles & Utilities Improve, Airlines Drop

Strong Gains for T-Mobile, Virgin Mobile, British Gas, ScottishPower, E.ON

Good News for the Economy?

LONDON--(BUSINESS WIRE)-- After the UK economy shrank by 5% in 2009, there are signs, however small, that better days may lie ahead. In 2010, the National Customer Satisfaction Index trends upwards, up 0.5% to 73.3 on a 0-100 point scale, the largest gain to date. This is the highest level for the NCSI since national scores for the economy were first released, and the uptick coincides with a second straight quarter of small, but positive, GDP growth.

The improvement in the Index is driven by a large gain for the lowest scoring industry in the UK: energy utilities (up 4.8% to 66). Mobile telephone networks improve 1.4% to an NCSI score of 74. Airline passenger satisfaction falls by 2.9% to 67. Overall, gainers outnumber decliners by a strong margin: 59% of companies improve their customer satisfaction, while 18% decline and 23% are unchanged.

"Businesses have responded well to the recession as far as consumers are concerned,” said Claes Fornell, University of Michigan professor and author of The Satisfied Customer. “Customer service has improved and buyer value for money is rising. There have been far more NCSI gainers than losers. The progress in customer satisfaction will also reflect in growing consumer demand—a necessary factor in order to have a sustainable economic recovery.”

Airlines: Virgin Atlantic Soars over a Turbulent Industry

Passenger satisfaction with airlines dips nearly 3% to a score of 67. Because the data were collected in the first quarter, the ash cloud that choked air travel throughout much of Europe from mid-April into May did not impact the findings.

• Virgin Atlantic remains on top with an NCSI score of 74.
• British Midlands (BMI) is the only other airline above the industry average, and the only airline to improve this year.
• British Airways falls the furthest (down 3% to of 67).
• EasyJet follows closely behind BA, unchanged at 66. Customers rate EasyJet’s value for the money second only to Virgin.
• Flybe is included for the first time this quarter in NCSI on the strength of its rapid growth in the domestic short-haul market, debuting at the bottom of the airline industry with a score of 65. While passenger satisfaction with EasyJet and Flybe is below average, their low-cost focus keeps customer loyalty relatively high.
• Eighty-three percent of respondents said that they plan to fly at least as often as last year.
• Satisfied passengers are twice as likely to choose the same airline the next time they fly.

Mobiles: Tesco on Top, but Virgin Coming on Fast

Mobile networks improve customer satisfaction for the first time, up 1.4% to 74.

• Almost all providers improve or hold steady over the past year, reaching or matching all-time highs.
• Tesco’s mobile service tops the category for a third straight year with a score of 83.
• Virgin Mobile improves for the second straight year, gaining 3% to an all-time high score of 80.
• Tesco maintains the lead, but the 3-point gap is the smallest to date between Tesco and the next highest scoring company.
• O2 holds steady at 77, and T-Mobile makes the biggest improvement, rising 4% to tie Orange and Vodafone at 73.
• Customer satisfaction with ‘3’ falls 3% to an all-time industry low of 65 and marks the third straight year at the bottom of the industry. Customer complaints are nearly triple the industry average.
• One in five mobile customers has downloaded an application.

Utilities: Falling Energy Prices = Higher Customer Satisfaction

Five of the six utilities suppliers improve customer satisfaction, and all but one are tightly grouped around the industry average.

• ScottishPower gains 10% to the lead at 69, followed closely by E.ON, which also rises sharply by 8%, and EDF Energy, up 3%, both tied at 68.
• Scottish & Southern Energy (SSE) (at 67) is the only supplier not to improve from a year ago. SSE led the category in 2008 and 2009.
• British Gas (Centrica) gains 6% to a score of 66.
• Npower edges up 2% to a score of 60.
• Satisfied customers are a valuable asset in an industry that receives so much negative publicity – 48% have already told someone about their utility supplier.
• Forty-two percent of dissatisfied customers are thinking about switching utility suppliers this year, but only 7% of satisfied customers would even consider making the switch.

NCSI-UK uses the methodology of the American Customer Satisfaction Index (ACSI), which was developed by the University of Michigan and CFI Group. Academic research shows a strong correlation between customer satisfaction and consumer spending and, because consumer spending is such a large part of the economy, economic growth. This quarter’s rise in the NCSI should bode well for the economy if the gain is joined by improvement in credit markets, wages, and employment rates.

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About NCSI UK

The National Customer Satisfaction Index (NCSI UK) is a national economic indicator of customer evaluations of the quality of products and services available to household consumers in the United Kingdom. It is updated each quarter with new measures for different sectors of the economy replacing data from the prior year. The overall NCSI score for a given quarter factors in scores from all measured companies over the previous four quarters. The results of this release are based on data from 4,580 respondents, collected during Q1 of 2010.

CONTACT:

CFI Group
Alice Fornell, +44 (0) 7787 435553
afornell@cfigroup.com

KEYWORDS:   United Kingdom  United States  Europe  North America  Michigan

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