NCSI-UK Commentary Second Quarter 2008
Results for Full and Limited Service Restaurants, Car Manufacturers, E-Business
Commentary by Patrick Barwise,
Emeritus Professor of Management and Marketing, London Business School
September 17, 2008
NCSI-UK: Full Service Restaurants
Note: All scores are on the 0-100 Customer Satisfaction Index (CSI) scale and measure customer experience with the Full Service Restaurant where the respondent ate most often in the last 6 months.
Restaurants are measured at the industry level (overall sample size of 500) due to a high level of fragmentation within the industry. Results include the five largest restaurant groups: Whitbread Group (owners of Brewers Fayre and Beefeater), Gondola Holdings (among their brands are Pizza Express, ASK and Zizzi), Restaurant Group (their brands include Frankie & Benny's, Chiquito's, Garfunkel's, Edwinns Brasserie and Blubeckers), Tragus Holding (with Café Rouge, Bella Italia and Strada among others) and Nando’s Chickenland Ltd, as well as the ‘All Other’ category.
With many alternatives available for eating out, including the emergence of new concepts spanning both Fast Food and Full Service and stiffer competition from more health conscious Fast Food chains, it is crucial for Full Service Restaurants to keep customers satisfied and loyal. Indeed, overall customer satisfaction for this industry is quite high at 81 – one point above the equivalent American Customer Satisfaction Index for Full Service Restaurants. As is the case with many service-based industries, the larger chains register somewhat lower customer satisfaction compared to the smaller independent restaurants. The weighted average for the big five chains is only 73 vs 82 for the ‘All Other’ category.
Complaint levels are very low with only 4% of all customers registering a complaint with their restaurant in the past year; however, this may be as much a consequence of the British reluctance to make a fuss as of high satisfaction. Nevertheless, one quarter of those surveyed spend 80% of their eating out budget at the same restaurant suggesting real loyalty or habit.
Despite a recent downward economic trend, eating out remains an important part of everyday culture. The majority of respondents surveyed (60%) spend less than £20 per person at a Full Service Restaurant on each occasion, and a further 35% spend between £21 and £40. However, 44% expect that that their spending on eating out will decrease in the next year, and 53% expect it to remain the same, with only a small proportion (3%) planning to spend more.
NCSI-UK: Limited Service Restaurants
Note: All scores are on the 0-100 Customer Satisfaction Index (CSI) scale and measure customer experience at the Limited Service Restaurant where the respondent purchased food or drinks most often in the last 3 months.
Results represent the five largest chains: McDonald’s, Yum! Brands (Pizza Hut and KFC), Greggs (including Baker’s Oven), Burger King and Starbucks Coffee. Other Limited Service Restaurants, cafes, sandwich and coffee shops, fast food and take away outlets are grouped in the ‘All Other’ category. This industry is highly fragmented with the largest chains accounting for about 30% market.
Customer satisfaction with Limited Service Restaurants is markedly lower than with Full Service Restaurants, scoring 73 compared to the Full Service score of 81, and is considerably lower than the equivalent ACSI score of 78 for the Limited Service Restaurant industry. Consequently, the gap between fast food and full service is much larger for the UK (8 points) than for the US (only 2 points).
McDonald’s, the largest fast food chain in the UK, the US and indeed the world, scores at the bottom of the list both in the US (69) and UK (lower still at 65), despite its introduction of healthier alternatives and re-branding. Burger King ranks well ahead of McDonald’s at 70, though still below the industry average. This is equal to satisfaction with Yum! Brands where, like the experience in the US, Pizza Hut fares slightly better than KFC.
Greggs, the UK’s leading bakery retailer, tops the list with a customer satisfaction score of 76, whereas Starbucks – the ACSI industry leader – scores in the middle of the pack at 72. Despite Starbucks’ healthy satisfaction lead over bottom performer McDonald’s, the two share the lowest rating for value for money due to the relatively higher prices for Starbucks’ products.
The weighted average for the five largest chains stands at 69 – 4 points lower than the industry average that includes the ‘All Other’ category. The well-known popularity of Indian and Chinese take away meals in the UK is confirmed by the highest satisfaction levels for these two collective categories at 78 and 77 respectively, with the traditional Fish and Chips lagging far behind at 72.
Future spending on general eating out is likely to decrease in the next year with 46% of respondents planning to spend less and 48% expecting it to remain the same. Only a small proportion (6%) plan to spend more.
NCSI-UK: Car Manufacturers
Note: All scores are on the 0-100 Customer Satisfaction Index (CSI) scale and relate to a new car the respondent purchased or leased in the last 3 years.
Results include the seven car manufacturers with the largest volume of new cars purchased in the UK: Ford, Vauxhall, Volkswagen, Peugeot, Renault, BMW and Toyota. Other brands are measured in the ‘All Other’ category.
Overall satisfaction with Car Manufacturers is 77 (compared to ACSI’s 82 in the US), with Toyota and BMW topping the list at 80, closely followed by Volkswagen at 79. French manufacturers Peugeot and Renault are both at the bottom with a score of 73, while Vauxhall and Ford are on a par with 75.
Both BMW and Renault have the highest levels of complaints, but the way the two automakers handle these cannot be more different, with BMW’s score for complaint handling 17 points higher than Renault’s. Vauxhall appears to be the worst at handling complaints but Peugeot is also weak.
Toyota offers the best value across the measured brands. Ford is best at exceeding expectations, partly because they are the lowest of all brands at the outset.
The new car market in the UK is currently affected by changes to the road tax: bigger, more powerful cars are being penalised in an attempt by the government to lower carbon emissions. Nevertheless, car owners are not yet reacting to these regulations with a strong likelihood to choose a car with lower emissions in the future – the industry score is 69 out of 100. There are some differences among the brands: the highest score is given by Toyota owners (73). This may reflect the fact that it makes the market leading low emissions Prius; Peugeot owners give the second highest score (72). BMW drivers indicate the least likelihood (score of 65) to be influenced by government measures in their future choices.
Note: All scores are on the 0-100 Customer Satisfaction Index (CSI) scale and relate to the website the respondent uses most often.Results include the five websites most visited by UK Internet users: Google, Yahoo!, MSN, Facebook and BBC. Other websites are grouped as ‘All Other’.
The E-Business category measures predominantly non-transactional websites, among which are information portals, search engines and social networking sites, whose popularity has soared in the recent years. Over 50% of all respondents access their most used website daily, with Facebook and Yahoo! being the most frequently used - 80% of users access them daily.
Customer satisfaction with e-business websites is average with a score of 74, somewhat lower than the ACSI score of 80 for e-business in the US. Websites with most traffic have the highest customer satisfaction: Google is on top with a score of 81 (it also leads the ACSI category), followed by Yahoo! and BBC both at 79. BBC users have the highest expectations of the website compared to other sites. MSN ranks fourth at 77.
Facebook lags well behind at 73 as does the aggregate of all smaller e-business website measured as ‘All Other.’ However, despite its lower CSI, loyalty to Facebook and likelihood to recommend it are extremely high, presumably because of the high value placed on the contents (e.g messages from online friends), as opposed to the site itself. Loyalty to favourite websites is one of the highest across all industries, with Google, BBC and Facebook leading the ranks. Customer satisfaction with Facebook may have been affected by recent negative publicity about how its customer details may be used – Facebook’s score for Privacy and Data Protection is the lowest in the e-business category.
One of the latest trends in website design is the ability to personalise the homepage with items from one’s own website or third party applications, resulting in a highly customised page that can enhance the browsing experience. Thus far, however, the ability to customise the website has not translated into the significant increase in website usage that companies no doubt expected given the development costs involved, with Google, one of the first to offer this experience, scoring lowest among all sites.