A Cultural Shift: How to Regulate to Improve Customer Service
“A Cultural Shift: How to Regulate to Improve Customer Service,” has been released by our partners at the Institute of Customer Service.
While its findings primarily focus on regulated sectors, such as energy, water, telecommunications, financial services, rail, and social housing, the insights are highly relevant across all industries. The document provides valuable guidance on how regulation can play a pivotal role in enhancing customer service, ensuring that the customer perspective is central to business practices.
The research explores how regulators can drive higher standards of customer service by ensuring the customer perspective is embedded in decisionmaking. Based on surveys with consumers, managers, and interviews with senior executives, the report offers insights applicable across multiple sectors.
Key Themes to takeaway:
- Raising Standards: Emphasising the importance of improving customer service and protecting consumers, regulators are encouraged to set a clear vision of excellence.
- Organisational Culture: Effective customer service is deeply linked to an organisation’s culture, which should be shaped positively by regulatory frameworks.
- Transparency: Setting benchmarks and publishing performance data can drive competition, encouraging organisations to strive for excellence.
- Adaptation to Market Dynamics: Regulation should be adaptable, reflecting the specific characteristics of each sector, such as market competition and product complexity.
What did the research think had gone well?
- Consumer Duty: Introduced by the FCA, this initiative requires companies to prioritise positive customer outcomes, representing a shift from mere compliance to a broader understanding of customer needs.
- Performance Targets and Incentives: Clear performance targets, often linked to financial incentives, have been effective in sectors with limited competition, though their overall impact continues to be debated.
- Focus on Vulnerable Customers: Guidelines have been developed to ensure companies address the needs of vulnerable customers, including proactive identification and tailored support.
What is challenging Regulators:
- Balancing Compliance with Innovation: Overly prescriptive regulation may hinder innovation, leading companies to focus on meeting minimum standards rather than pursuing overall service improvement.
- Transparency and Measurement: Consistent frameworks for measuring customer satisfaction are vital to track performance effectively, with cross-sector benchmarking offering additional benefits.
- Collaboration: Greater collaboration among regulators is needed to define consistent standards and share best practices, particularly to support vulnerable customers.
What Customers Think
A significant proportion of consumers (around 70%) believe that regulation plays a crucial role in raising service standards. Many favour stronger, more assertive actions by regulators to ensure companies prioritise customer interests, with transparency, fair pricing, and accountability being key drivers of trust.
How do we improve:
- Consistent Standards: Regulators should set clear, adaptable standards for customer service and promote consistency across sectors.
- Enhancing Expertise: Building expertise in customer experience and insights within regulatory bodies will better address service challenges.
- Encouraging Innovation: Regulators should create an environment that balances regulation with opportunities for companies to experiment and innovate
The research underscores the need for a shift in regulatory focus towards fostering a culture of customer-centric service, supported by transparent and consistent measures, to raise standards across all sectors.
For our teams, this report, along with many other insightful documents, is available on our Folder icon Integrated Management System.
By Rob Upton-Moir
Rob Upton-Moir is chief of staff at Skewb. To speak with him about this topic in more detail, you can connect with him on LinkedIn.
