Are your customers genuinely satisfied?
According to the latest South African Consumer Satisfaction Index (SA-csi), South Africans are increasingly raising their voices when they are dissatisfied with a product or a service.
Establishing context
The 2018 version of the SA-csi is the fifth of its kind and profiles the satisfaction of 307 000 consumers across 24 industries and 97 brands. The research is carried out by consultancy firm Consulta who admits that not every brand in South Africa is profiled in the index, only brands that hold an 80% market share in their specific industry are considered.
Professor Adré Schreuder, Founder and CEO of Consulta, pointed out that to determine customer satisfaction, the index takes the following factors into account:
- customer expectations;
- perceived overall quality of the product that is purchased or service that is provided; and
- perceived value of what is received (product or service) relative to what is paid for.
These factors determine customer satisfaction. Beyond this, the index then profiles the number of complaints that are made by customers and the loyalty that customers show towards specific brands.
The battered engine
Prof Schreuder points out that it is important to note that there is a very specific trend that is growing in South Africa.
“The expectations of the South African consumer are very high and are increasing daily. This is being driven by technology which is making the world a smaller place. South Africans are aware of the quality of products that are offered in international markets and how the South African equivalent of that product or service is increasingly falling behind,” said Prof Schreuder.
Does that mean that South Africans are receiving an inferior product? Consumers feels that it is inferior because the same product or service is being offered while the price for that product or service is being increased by inflation (CPI).
“This is unfortunately very evident in the medical schemes industry where price increases are far above CPI for the same product. Because of this, we are seeing a lot of cases where companies that used to dominate the industry in terms of market share are starting to lose traction,” said Prof Schreuder.
Raised voices
The index points out that because of this, consumers are raising their voices and complaining.
However, these complaints are not setting off alarm bells within the companies. “We are not seeing any major improvements when it comes to trying to decrease the number of complaints that companies are receiving,” said Prof Schreuder.
He added that South African companies are doing well to solve and handle complaints, not resolving the root cause of them.
If we focus on the financial services industry, are companies resolving complaints effectively? While the number of complaints to the industry Ombudsmen relative to the number of policies that are sold in the industry are low, there are still a number of complaints that the Ombuds must deal with daily.
However, this is not a true reflection of the true state of the industry.
Not everybody complains to Ombuds and Prof Schreuder even pointed out that there is a certain insurer within the industry (the insurer was not named) who has specialised agents working within their call centre that are specifically trained to divert complaints away from the Ombuds to other online platforms such as Hello Peter.
A workable solution?
Obviously, the industry would like to work towards a situation where there are fewer complaints. Is there a workable solution in sight?
Government has been pushing hard for financial inclusion and higher levels of financial literacy. When asked about whether this would translate into a higher level of consumer satisfaction, Prof Schreuder agreed that higher levels of education would eventually cause higher levels of satisfaction.
However, there is a caveat to this. Satisfaction would only increase if insurers improve the quality of products or services relative to the higher level of education that they are working towards.
“There is another factor that needs to be taken into consideration,” said Eldon Phukuile, Head of Customer Experience at Consulta.
“We need to get to a stage where financial literacy means the same thing to everybody in the industry. Some insurers can educate their clients around the new Policy Protection Rules and improve their policy wording and then say that they played a role in financial literacy. We need standardisation when it comes to this,” said Phukuile. He added that if this does not happen, we will not address the consumer satisfaction issue.
Editor’s Thoughts:
The financial services industry is getting better at treating the customer fairly. Whether this is because of legislation (force) or a genuine desire to do this of their own accord, the industry is getting better at it. What do we need to do to resolve the root cause of complaints rather than just manage them? Please comment below, interact with us on Twitter at @fanews_online or email me your thoughts [email protected].
