Why US brands are crushing the UK on customer experience

The US has always been better at customer experience than the UK, but the gap is getting wider. In order to improve, UK brands must sharpen their focus on employee engagement, organise themselves around the customer and get back to basics.

US UK flag

Despite the best efforts of UK brands to bolster customer experience, they continue to lag behind their US counterparts. In fact, the margin is getting bigger with US brands now 6% ahead of those in the UK compared to just 2% last year, according to KPMG Nunwood’s latest US Customer Experience Excellence report.

The top 100 brands in the US study, which was conducted in March, score an average of 7.75 out of 10, while the leading companies in the equivalent UK study from September score 7.33.

The UK’s average score did climb in 2016, having been a steady 7.25 for the past two years, but brands on this side of the Atlantic are not keeping up with the pace of improvement displayed by US companies.

Some 58 brands scored higher than eight points in the US this year, compared to just four in the UK, meaning consumers are 15 times more likely to have a good experience with a US brand.

To calculate scores and compile the ranking, KPMG Nunwood interviewed 7,695 consumers, asking each to measure brands against six pillars: integrity, personalisation, time and effort, meeting expectations, problem resolution and empathy.

Companies that do well in the US have a number of elements in common – they are structured around the customer, focused on employee engagement, they get the basics right and they understand resolution management.

US brands are very focused on how employees interact with customers, the type of behaviours they use and the service levels they aspire to.

David Conway, KPMG Nunwood

“At the last count, 30% of Fortune 500 companies have organised themselves around customer needs rather than departments or functions,” says David Conway, senior partner and chief strategy officer at KPMG Nunwood. “There is a substantial difference in how those companies are going to market and managing the experience delivery.”

Employee engagement plays a crucial role in this, which is something UK brands “haven’t quite caught hold of”, says Conway.

“US brands are very focused on how employees interact with customers, the type of behaviours they use and the service levels they aspire to. Their target for a great experience is far higher than companies in the UK.”

Two brands that display this extremely well are Intercontinental Hotels & Resorts (IHG) and W Hotels, both of which have made huge improvements in a relatively short space of time. IHG enters the top 10 for the first time at number three, having climbed 64 spots since 2016, while W Hotels, a new entry, jumps straight in at six.

Both have concentrated on their employees and become very adept at getting the most from staff, says Conway. W Hotels, in particular, has instilled a sense of pride in its employees, partly through the development of its terminology.

“It doesn’t call people staff or employees it calls them talent, and it doesn’t refer to the maid as a housekeeper, she is a stylist. It’s got a really interesting set of words it uses that make people think about what they do,” he says.

“W is totally focused on delivering a great experience for employees and then encouraging them to behave in the right way for the customer.”

Energy brands see a boost

Another new entry for 2017 is gas and electricity firm Southern Company, which takes fifth place, no mean feat given utilities as a whole is a historically low performing sector. In fact, it is the first time a utility company has featured in the top 10 of either the US or UK ranking.

The highest performing utility brand in the UK list is Ovo Energy, which came in at 57.

READ MORE: First Direct reclaims customer experience crown from Lush

In addition to having a strong focus on its people – Southern Company scored very highly for empathy – the roll-out of its smart meter technology has changed the relationship customers have with the business.

“Typically, a utility charges you a price for your power, but what Southern has done is ask customers to think about managing their own costs. The smart meter and the apps that go with it show consumers exactly how much power they are using and encourages them to self manage and keep costs where they want them to be,” says Conway.

The technology is also able to identify problems within a user’s household, allowing the brand to be much more proactive at managing the customer relationship.

Conway says there is a “massive amount” UK utility brands could learn from the likes of Southern Company. “The UK energy sector is way behind US companies,” he adds.

US utility brands now outperform UK companies by 11% on average, up from 6% in 2016.

Telecoms companies have also come a long way. Last year it was the only sector where the UK did better that the US – a 1% difference – but this year the tables have turned and US firms now perform 5% better that UK businesses on average.

READ MORE: Telecoms industry told to ‘up its game’ on customer service

Areas for improvement

“If you look at the organisations that are really improving in the US, there are four areas they focus on,” says Conway. “The top performing US organisations aspire to excellence, largely driven by very informed and motivated senior leadership teams.”

READ MORE: Silos and bureaucracy are ‘holding back’ customer experience

They have also got the culture right and understand how to engage employees to ensure they deliver outstanding experience to customers, he says, which is “not a trivial task and they’ve worked hard to get there”.

The top performing brands in the US are also ruthless in their execution, as well as being very informed about the economics of customer experience, whereas in the UK brands tend to “travel hopefully”.

“We do it because we think it is the right thing to do, and that’s true, but in the US they are much more focused on the financial outcomes of an experience and the value it adds,” Conway concludes.

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Comments
  • Ben Maynard 22 May 2017 at 2:17 pm

    Great article Lucy. Interesting to see that whilst technology has a significant role to play both in mediating communications and in analysis of impact – it is the human-centric use of language and stories that work to improve employee and customer satisfaction.

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