A study by the Institute of Service Excellence (ISES) at Singapore Management University reveals a drop in customer satisfaction within Singapore’s retail and info-communications sectors.

The 2014 Q1 Customer Satisfaction Index of Singapore (CSISG) indicates a 2.5 point (3.5%) decrease to 69.6 points for retail and a 0.9 point (1.3%) decrease to 66.8 points for info-communications, both compared to the previous year.

Eight retail aspects were evaluated, with supermarkets as the only sector showing improvement:

• Department stores: -6.9 points (9.1%)
• Petrol stations: -1.4 points (1.9%)
• Motor vehicles: -2.5 points (3.4%)
• Fashion apparel: -2.3 points (3.2%)
• Furniture stores: -8.2 points (11%)
• Jewellery stores: -2 points (2.8%)
• Clocks & Watches: -4.4 points (6.0%)
• Supermarkets: +1.1 points (1.6%) - marking six consecutive years of improvement, achieving a record high of 71.1 points.

Puma store window display in a mall in Singapore.

The ISES highlights a significant decrease in tourist satisfaction compared to the previous year, particularly in sectors like department stores, fashion, jewelry, and watches.

Caroline Lim, ISES Director, points out, “While both local and tourist respondents indicated lower satisfaction within these four subsectors compared to 2013, the degree of change differed significantly. Tourist satisfaction plummeted by 9.7 points (12.2%), whereas local satisfaction only dipped by 1.4 points (1.9%).”

Further examination reveals a considerable year-over-year decrease in all three satisfaction drivers for tourists: customer expectations, perceived quality, and perceived value. Conversely, local respondents reported a notable improvement in perceived value for these sectors, while expectations and perceived quality remained relatively stable.

Lim emphasizes, “Despite the natural fluctuations in satisfaction levels year to year, maintaining a long-term perspective on improving customer satisfaction is crucial for company leadership. Take, for instance, this quarter’s data on department stores: a highly satisfied customer tends to spend 23.3% more annually than a less satisfied one. This correlation between heightened satisfaction and increased spending is noteworthy and worth monitoring.”

Within info-communications, mobile dipped by 0.85 points (1.3%) to 67.2 points, and broadband fell by 2.2 points (3.3%) to 65.3 points. Two new subsectors were included this year: pay TV (66.5 points) and Wireless@SG, the free national wireless network (61.5 points).

A considerable gap in satisfaction and loyalty was observed between new customers (those with less than two years with a provider) and re-contract customers (those who renewed after their two-year contract).

The ISES highlights higher satisfaction and loyalty among re-contract customers compared to new customers. These loyal customers also reported a smaller discrepancy between their expectations and the perceived quality of their telecom provider.

Assistant Professor Marcus Lee, Academic Director of ISES, emphasizes, “Adapting to the constantly evolving expectations of customers is crucial for service providers. Our analysis reveals that satisfaction dwindles when the perceived quality of a product or service falls short of customer expectations.”

“For the most part, our telcos seem to be effectively meeting the needs of their long-term customers. In fact, our latest findings show that despite re-contract customers having significantly higher expectations than new customers in the broadband and pay TV sectors, the telcos demonstrated an ability to deliver a correspondingly high level of quality,” he concludes.

*Data based on face-to-face interviews with 9,250 residents and tourists conducted from January to March 2014.