Most leading service sector brands preach that offering great customer service is the Holy Grail to long term profitability, and how they handle dissatisfaction is essential for generating loyalty (well handled complaints today are a great method of recruiting a strong advocate tomorrow, they say). All marketeers know that customer retention is so much less costly than acquisition. How have these issues and priorities changed in the tough landscape of recession hit 2009 Britain, as marketeers struggle to juggle a range of initiatives on a slimmer budget?

To help understand what consumers are thinking and doing, ASR’s annual Service in Britain survey has been tracking attitudes to customer service for 5 years. Each May the survey polls 1,000 UK adults online, with fieldwork from online panel company Research Now. Our data also monitors satisfaction and complaints patterns across all main service industries. The survey provides a broad picture of the mindset in Britain today, and allows us to compare this picture with evidence available elsewhere. Here are the recent trends.

Changing behaviour in recession hit Britain

The impact of the recession on household purchase behaviour and planning is starkly apparent in our 2009 survey. Well over half of all consumers admit to having used cheaper brands and shops more often in recent months. This increases to two-thirds of women - no doubt linked to their frequent role as the main household shopper. This confirms what we have witnessed with the success of cut-price supermarkets, and the move to a value range by Waitrose, for example, earlier this year. Over half of adults in all age brackets tell us they have visited price comparison websites more frequently than they did a year ago, whereas very few indeed use them less often.

Tight budgets also ensure that email and direct mail adverts promoting good deals are gaining increased attention from over a third of consumers. A large majority also confirm that there is high interest in promotional packages that bundle extra benefits at lower prices. Both findings underline the opportunities that are now likely to be all the more relevant for strong value-led promotions in today's climate.

So are we now completely focussed on saving money? Surprisingly not, it seems. Despite the pressures of recession, our May 2009 survey confirms that Brits are strongly determined not to accept second best when it comes to customer service, even to save money. Indeed, a 2:1 majority agree with the notion ‘I’m prepared to pay more for better service’. Further, an overwhelming majority stubbornly reject the notion of mediocrity when it comes to being served. Indeed, it’s likely that decent service is now seen as a basic right. Long gone are the days when customers put up and shut up if service is poor. A 3:1 majority also reject waiting longer to be served in return for a lower price. In summary, it appears that cash strapped Britain still expects top rate service. This is usually expected as standard, but when necessary people will still pay a premium for excellence.

How do we show disaffection?

Consistent with our 2008 survey, half of all consumers think that customer service standards generally in Britain are declining. Only 1 in 6 think standards are improving. Those in their 40s and 50s are most negative, and in the South East adults in the Home Counties have worse perceptions on many measures than do those in London.

A clear majority agree with the view that corner-cutting by companies is inevitable in the current economic climate. This may help to explain why a large majority perceive service standards to be in decline, and why 4 in 10 think that longer term they are complaining more now about service than in the past.

However, in contrast to this perception, for the forth successive survey the proportion of people complaining about service at all has in fact slightly reduced, although still standing at 2 in 3 adults over the course of a year. The main reduction is in the proportion of serial complainers: those who make over 10 complaints a year has fallen from 18% to 11% over the last two years. We are less likely to complain up to our mid-thirties, whereas those aged 35-65 are the most active!

The total volume of complaints made has also fallen year on year for 3 years. Of the service industries we monitor, the vast majority of reported complaints are directed towards our banks, the major utilities and the supermarkets, whilst ISPs/TV service providers, holiday companies and airlines have seen the largest percentage reduction in complaints this year.

So paradoxically, our survey has been logging fewer complaints, and yet attitudes towards service delivery standards remain very negative and we have the perception that we will complain if necessary. The likelihood is that we are becoming more likely to vote with our feet rather than be bothered to make a fuss, and that online developments have been a major factor in this mind shift.

Indeed, further survey evidence suggests that we are increasingly cynical about the impact of formal complaints, and have found more effective ways of registering disquiet. The drop in actual complaints is accompanied by a consistently high level of frustration with service standards and the ability to get address. Half the population say they would now rather take their business elsewhere than complain, and a similar proportion say they wanted to complain but didn’t, because it involved too much effort.  This suggests that increasingly the first sound of discontent a company hears is their customers’ footsteps as they walk away.

The phenomenal growth in social networking sites and websites that encourage/exist for customer feedback and advice (witness Trip Advisor) must be a large part of the explanation for this shift. We have also seen a substantial increase in the popularity of TV and radio consumer and watchdog programmes. All reflect the way that complaining has moved from lonely frustration to a sharing phenomenon in recent years. This healthy democratisation of feedback is bound to worry failing organisations: there is no place to hide when service goes wrong, and very little time before an organisation is found out and talked about.

Satisfaction

Satisfaction with value for money and customer service is clearly linked. This year the sectors most obviously hit with poorer satisfaction ratings, no doubt because of major price hikes arriving during stressful times, are the supermarkets and power companies. This has given rise to an increase in trialling new brands – such as the cut-price supermarkets for part of the weekly shop.

In contrast, the biggest satisfaction improvements have been experienced by local councils and broadband service providers. The financial crisis has in fact had a muted impact on satisfaction and loyalty towards the main banks. Although sentiments are not as positive as a year ago, satisfaction levels with service and value are very similar, and the proportion considering a change of supplier has increased only slightly. This is probably best explained in terms of apathy, the perceived complexity of moving accounts, and perhaps the feeling that problems are industry wide and better deals don’t exist by simply moving an account.

What are the major service issues?

Service in Britain also tracks the big frustrations with customer service. Poor treatment whilst on the telephone consistently accounts for our most highly ranked mentions. The top customer service gripe remains being left too long on hold on the phone, followed by being passed around and around voice-activated systems and coping with incompetent telephone staff. The savvy service organisations have been aware of these issues for some time, and invest and promote quality of handling, talking to a real person, and a lower level of call routing.

Problems of increased prominence this year are poor attitudes shown by customer service staff (especially towards female and younger customers) and the volume of junk email/spam - now ranked higher than the problem of ‘junk post’ for the first time. Poor staff attitude could also be a reflection of cost cutting in terms of hiring and training, in an industry that often fails to recruit good talent.

In summary, great telephone customer service continues to stand out as a deal breaker for many consumers. Whilst many companies successfully migrate customer servicing online, they often under-invest in telephone resourcing to their considerable detriment.