Banks have registered the highest growth in customer satisfaction scores this year and have become the leader regarding customer satisfaction and experience in Romania, dethroning grocery retail, last year’s leading industry. Similar to the conclusions from 2021, Romanian companies still don’t differentiate visibly from the perspective of experience offered to their customers, according to the second edition of The McKinsey Customer Experience Romania Survey.
Banking, utilities and telecom are the industries where we see the industry leader getting detached from the rest of the market players, suggesting a potential emergence of industry leaders as well as a clear nomination of the industry laggards, which are slow improve their customer experience, the survey shows.
The McKinsey Customer Experience Romania Survey is an annual survey launched in 2021 that looks at the experience of Romanian customers across six industries: grocery retail, telecommunications, utilities, banking, insurance, and healthcare. Approximately 3,000 respondents were asked to rate their Customer Satisfaction Score (CSAT) this year.
Customer satisfaction leads to increased willingness to spend and higher market shares
“For two consecutive years, the Customer Satisfaction Score across six core Romanian industries are within a 10 percent range of each other. This shows a lack of distinctive leaders, despite the reconfirmation of the clear link between customer experience, the willingness to spend, and higher market shares. Clearly, making improvements regarding customer experience should be a top priority for Romanian business leaders”, says Alexandru Filip, Managing Partner McKinsey & Company Bucharest.
The 2022 survey also analyzed how Romanian consumers feel about companies acting in their interest for the past three years. Consumers perceive that Romanian companies don’t act in their interests, with the highest percentage of consumers naming insurance and utilities (64% for each) as the industries that never serve in their customers’ interests. On the other end, healthcare is perceived as the industry most willing to work in its customers’ interests (44% of the respondents).
Thoughtful digitization can highly increase customer satisfaction
Although digital usage in Romania has increased across all industries in the last years – except for banks, higher levels of digital engagement haven’t resulted in improved customer experience, according to this year’s study.
In grocery retail, interactions with customers are still mainly non-digital, however the industry has a higher customer satisfaction score (8.8) compared to utilities (7.7), a more digitized sector.
The survey also identified distinct preferences, such as switching smoothly between different channels (online versus in person) depending on the customer journey. For example, in-person interactions are preferred for resolving issues, whereas online is preferred for everyday use.
“This trend is likely driven by rudimentary and noncustomer-centric digitization, in which cumbersome digital interactions are more likely to decrease than to increase customer satisfaction. Companies should invest in differentiated digitization, adapted to the specific needs of their customers, using each channel, whether physical or digital, to provide customers with the expected experience. A McKinsey study found that when a one-size-fits-all sales approach is replaced by offers tailored to individual customer profiles, it can generate a revenue increase of up to 30 percent or more”, says Alexandru Filip.
Price, a better product and customer service – the main factors to change a provider
The survey analyzed the contribution of four different customer experience drivers—brand, price, customer service, and product. Brand is the most important contributor in all industries except for banking, in which product and price are more important.
On the other hand, price, a better product, and customer service are considered the main factors to determine a consumer to change a provider, the survey indicates. Price is more important in switching providers in industries as utilities, insurance, grocery retail, and the least important in banking.
This can be explained by the ease of changing providers in industries such as grocery retail, with low switching costs. The cyclicity of choosing a provider in insurance, as well as the new regulations in the Romanian energy market for utilities, gave Romanian consumers the opportunity to make price comparisons and switch providers. Moreover, in utilities and insurance, prices increased significantly in 2021 due to a supply-driven global energy crisis in utilities and due to the bankruptcy of City Insurance (the biggest player in the market for RCA, third-party liability auto insurance), which historically was the cheapest player in the market. Such significant price increases made consumers even more sensitive to this factor.
”Across these industries, customer experience will be a crucial and much-needed axis for growth and an area where clear leaders have yet to emerge. Romanian companies can improve the customer experience by thoughtfully digitizing their products and services. Although in most industries customers are interacting with companies more and more via digital channels, there is limited to no improvement in customer satisfaction, showing rudimentary or noncustomer-focused digitization. Furthermore, higher customer satisfaction levels can be achieved by increasing customer trust in the brand, derived from choice, fairness, and product performance. The pursuit of better customer experience should have a positive impact not only on individual companies’ commercial success but also on the overall well-being and living standards of Romanian consumers”, explains Alexandru Filip.