Poor customer service costing UK businesses £7.3 billion per month

Chris Price Business tips
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A new report by The Institute of Customer Service (ICS) reveals a significant disconnect between customer expectations and the reality of service delivery in the UK.

The UKCSI finds that 64% of employees surveyed indicated that they spend part of their time resolving issues caused by service failings, spending an average of 4 days per month dealing with service failures or problems, an increase from 3.3 days in July 2024.

Extrapolated across full-time employees in the UK economy, this suggests a monthly cost to UK organisations of £7.3 billion.

For individual company performance, Timpson once again scored the highest average satisfaction rating for January 2025, repeating its leading performance in the July 2024 Index, while M&S (food) is the highest-rated food retailer. The grocer has reported growing food volume and share value for four consecutive years, evidencing a strong return on investment from good customer service.

Four banks or building societies were ranked in the top 10, with Starling Bank, Nationwide, First Direct and Monzo all featuring. However, telecommunications, media, and transport sectors saw the biggest drops in customer spending due to poor service.

Just four mobile and broadband (telecommunications) providers made it into the table of the country’s top 50 organisations: Tesco Mobile (16th), Utility Warehouse (28th), Sky Mobile (41st) and giffgaff (47th).

Key findings of the report include:
  • Customer satisfaction remains low: The UK Customer Satisfaction Index (UKCSI) sits at 76.1, near its lowest point since 2015.
  • Service failures cost businesses dearly: Customer service issues cost UK organizations an estimated £7.3 billion per month due to employee time spent resolving problems.
  • Customers value good service: Nearly a third of customers (31%) are willing to pay more for excellent service.

“Customer service is not a luxury, it’s an economic necessity,” said Jo Causon, CEO of ICS. The report emphasizes that businesses which consistently deliver strong customer service are better positioned to build customer loyalty and drive revenue growth.

The ICS report underscores the importance of customer service in the UK economy. By prioritizing customer satisfaction and addressing service failures, businesses can unlock significant opportunities for growth and profitability.

Jan-25 Rank Organisation Sector Jan-25
Score
1 Timpson Services 87.2
2 Starling Bank Banks & Building Societies 86.5
3 Nationwide Banks & Building Societies 86.0
4 M & S (food) Retail (Food) 85.8
5 John Lewis Retail (Non-food) 85.5
6 first direct Banks & Building Societies 84.5
7 Holland & Barrett Retail (Non-food) 84.1
7 Monzo Bank Banks & Building Societies 84.1
9 Amazon.co.uk Retail (Non-food) 83.7
10 Costco Retail (Non-food) 83.6
10 Ocado Retail (Food) 83.6
10 Toby Carvery Leisure 83.6

 

 

Chris Price