South Africa’s best companies for customer experience

The National South African Customer Satisfaction Index (SAcsi) for 2017, compiled by Consulta, shows a strong correlation between successful customer experience strategies and business outcomes – albeit in only a few selected brands in the local economy.

In South Africa, the definitive industry benchmark has covered 24 industries, mostly in the third tier of the country’s economy: service-related, consumer industries.

This has included 97 brands and has drawn detailed insights from a sample of over 307,000 individuals.

Each year, Consulta publishes the combined National Index where all the industries measured in the previous year are combined into a National Index for South Africa.

The National SAcsi index started at a score of 77.6 when it was first published for 2013, after which it dropped to 74.1 in 2014 – the lowest score in the last five years.

The Index reported that Nando’s (Fast Food), Capitec (Banking), Woolworths (Supermarkets and Clothing), and Apple (Mobile Handsets) are the consumer brands that consistently outperformed their competitors in terms of Customer Satisfaction over the five-year period from 2013 to 2017.

In short-term and long-term insurance sectors, Santam and Metropolitan showed consistent high scores respectively.

“Over the years, the SAcsi has consistently reflected a strong relationship between Customer Satisfaction and sustained business performance,” said Consulta CEO, Professor Adré Schreuder.

“It is interesting to see that the average Perceived Value metric – a perception of value-for-money – across all surveys also closely correlated with movements in key economic indicators such as GDP, inflation and the Rand value relative to major world currencies.”

The worrying aspect of this insight is clear once the poor performing economy is considered, specifically in the Perceived Value metric which has fallen from 79 to 75.9, the professor said.

This is one area where companies can significantly benefit from investment into improved customer centricity and the delivery of great customer experience, Schreuder said.

Over the five-year period, consumer industries such as Fast Food, Mobile Handsets and Life Insurance were the best performing sectors, with SA-csi scores ranging from 79 to 82.

On the other end of the spectrum, Municipalities and Wireless Internet Providers delivered much lower scores (59.3 for main metropolitan municipalities and 67.8 for wireless internet industry).

Industries on the rise that have improved their year-to-year averages include Mobile Handsets, Banking, Fast Food, Life Insurance and Full-Service Restaurants.

Short-Term Insurance, Cellular Networks and Medical Insurance have been stable over the period, while Municipalities and Supermarkets are on the decline.

“The common thread between the best performing brands through every measure has been a clear focus on consistent delivery and Customer Experience. Doing so correlates with positive revenue growth, even in a distressed economy.

“For example, in Clothing, Woolworths and PEP scored similarly across almost every metric, although they target very different markets and employ very different strategies suited to their segments,” Schreuder said.

The following industries showed a visible relationship between Customer Satisfaction and publicly available financial results.


Banking

Capitec has led the industry in the measure, with its SAcsi score rising from 83 in 2013 to its current level of 85 in 2017. Its cumulative annual revenue growth rate rose from 28% in 2013 to 63% in 2017 (using 2012 as a basis).

During the same period Standard Bank’s Customer Satisfaction score lingered around the 75 level, dropping to a low of 72 in 2016.

This was mirrored in the company’s muted cumulative revenue growth rate of 9% in 2013, 5% in 2015 and peak of 16% in 2017 when Standard Bank showed a noted improvement in their SAcsi score that moved them out of 5th position, leaving Absa in the trailing position.


Cellular Networks

The trend was even more evident in Cellular Networks, where Vodacom led the industry with a SAcsi score starting at just under 78 in 2013, improving to 79 in 2017.

Vodacom’s cumulative revenue growth rate rose in line with this improvement, from 8% in 2013 to 18% in 2017, SAcsi said.

MTN, on the other hand, lagged the industry with a score that fell from 78 in 2013 to 74 in 2017. MTN’s cumulative revenue growth rate has languished from a negative growth rate (contraction) of 2% in 2013 to just 1% in 2017 and reaching a low of -6% in 2015 (again using 2012 as a basis), it said.


Short-term Insurance

In Short-Term Insurance, industry leader for several years Santam’s SAcsi score has remained steadily above the 80 mark, while revenue grew from R19.4 billion in 2012 to R29.7 billion in 2017 – this represents 53% revenue growth over five years.

After three consecutive years of being in a leadership position, Santam’s SAcsi score dropped slightly from 81.3 in 2016 to 80.2 in 2017, essentially contributing to the scenario that Discovery Insure, Old Mutual Insure, OUTsurance and Virseker all be classified in the leadership category for 2017.

“Virseker has come out as a top performing brand with the highest SAcsi score of 81.1 in the industry, and is thus eligible and statistically verified to claim the Best-in-Industry accolade in 2017,” said Schreuder.


Customer Experience Strategies

“Company restructuring, change or crisis can reveal the resilience of a brand’s Customer Experience strategy,” said Schreuder.

Absa’s split from Barclays and its subsequent rebranding meant an internal focus that distracted from customers. This was in turn reflected in recent declines in the brand’s SAcsi score, he said.

Capitec, on the other hand, maintained a simple, clear offering that resonated with customers, even overtaking Nedbank in market share.

“Other examples include Liberty’s recent leadership instability as well MMI’s decision to reinvent itself into a retail brand,” Schreuder added.

“Santam, on the other hand, has experienced various internal changes over the years, but managed to stay connected to customer needs, particularly during the high-claim period experienced due to the recent flood disaster in the Western Cape. This is reflected in the company’s consistent leadership position in recent SAcsi measures.”

Similarly, brands or entities that recorded the lowest SAcsi scores over the last few years are now out of business, such as Altech Autopage.


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South Africa’s best companies for customer experience