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Service matters most in retail, F&B sectors

FINDINGS from the past three Customer Satisfaction Index of Singapore (CSISG) surveys show that customer satisfaction in the retail and food and beverage sectors here is increasingly affected more by perceived service quality than perceived product quality.

'Between 2007 and 2009, we see a shift in importance from product quality to service quality within the F&B and retail sectors,' said Marcus Lee, academic director at the Institute of Service Excellence at the Singapore Management University (ISES), which conducts the annual CSISG survey.

In the CSISG model, three drivers influence customer satisfaction: customer expectations, perceived quality of products and services, and perceived value - that is, value for money. A fall or rise in the customer satisfaction score of a company can be traced back to one of the three factors.

And for the retail and F&B sectors here, it seems that service is becoming more important than products.

The latest study found that in eight of 12 sub-sectors under retail and F&B, service quality is a dominant contributor to overall quality - an increase from only four sub-sectors in the 2007 study.

For example, in the restaurants sub-sector and cafes, coffee houses and snack bars sub-sector, the perceived quality of the products was ranked to be more important than the perceived quality of service in the 2007 and 2008 surveys. But in the 2009 survey, in both sub-sectors, service quality trumped product quality.

'This underscores the importance for F&B and retail companies to improve their service quality,' said Dr Lee.

But this does not mean that product quality is unimportant, he added. Rather, customers, thinking product quality has improved over the past few years, could have turned their attention to wanting a better quality service instead.

The CSISG findings also show that 40 per cent of tourists give tips in Singapore, compared with 23 per cent of locals.

And respondents who declared that they never tip were about four points less satisfied than those who tip.

Those who tip have a different mindset from the start, compared with those who do not tip, Dr Lee said: 'They are likely to be more forgiving and exhibit greater empathy, contributing to greater levels of satisfaction and therefore the inclination to tip.'

So customers have a role to play in their own satisfaction levels, he said, adding: 'This is a reminder that when it comes to service excellence and satisfaction, customers are a big part of the equation and have a role to play.'

There are good and bad customers, and not much can be achieved if customers are not receptive or appreciative of service efforts, he added.