Korea’s customer satisfaction drops slightly in 2023

Guest Reports

Published: 29 Dec. 2023, 10:27

Korea’s customer satisfaction drops slightly in 2023

The National Customer Satisfaction Index (NCSI) is an indicator that quantifies and displays the level of satisfaction of customers who have had direct experience using certain products and services sold on the market, based on American Customer Satisfaction Index (ACSI) model.

This year, the Korea Productivity Center conducted an NCSI survey targeting 84,992 consumers of 334 companies, including universities, across 82 industries.

Considering that the NCSI shows a strong positive correlation with the stock price index and unemployment rate, the NCSI is a vital indicator for many parties in the market in gauging their economic performance and future.

The 2023 survey shows a decrease in the NCSI to 78.2 points from 78.4 points in 2022. With the exception of the period around the 2008 financial crisis, the index had been steadily increasing since 2010 until last year. Despite companies’ active customer-centered management, challenging economic conditions at home and abroad, with unprecedented high inflation and high interest rates, led customers to seek rational consumption methods.

According to the 2023 NCSI survey, Yonsei Severance Hospital received the highest rating, with 85 points. The top nine companies overall, with customer satisfaction scores of 82 or above, included six hospitals including Yonsei, Daegu Metropolitan Transit Corporation, Lotte Duty Free, and Samsung C&T. Particularly noteworthy is that six of the 13 hospitals surveyed are included in the top nine, providing an indication of the excellence of hospital services in Korea.

By industry, out of the 75 industries that can be compared to the previous year, only 11 industries showed an increase in customer satisfaction, a substantial decrease from the 35 industries that improved in the previous year.

Moreover, there were 13 industries where the top-ranked company changed, and 17 industries where multiple companies tied for the top position, showing the competitive landscape in capturing customers’ attention. While efforts by leading companies are contributing to the overall improvement in customer satisfaction, potentially at the national level, the efforts of lower-ranked companies seem insufficient, leading to a widening gap with the top-ranked companies.

The education services sector, which recorded the highest improvement rate this year, saw significant increases in scores and student satisfaction for national and private universities and vocational colleges compared to the previous year. Concerns are rising about a potential shortage of future students, particularly in regional and vocational colleges, as the number of third-year high school students nationwide sharply declined to 300,000 this year.

On the other hand, the sector that showed the largest decline in 2023 was the accommodation and restaurant industry, recording a 1.6 point, or 2 percent, index decrease. Customer satisfaction in the hotel industry remained stagnant compared to the previous year. This is attributed to the expansion of contactless services such as mobile check-in and check-out and ordering room service through apps, resulting in customers not receiving the same high level of personalized service they would have expected from five star hotels before the pre-Covid-19 era.

The bakery industry saw increased demand for alternative and convenient foods due to Covid-19. However, with recent economic downturns and rising prices, coupled with a growing perception of high prices for domestic bakery products, customers are increasingly feeling the burden when paying for bakery items, leading to the industry’s fall in the 2023 index.

In 2023, the NCSI surpassed the ACSI’s 75.1 points by 3.1 points. In addition, across various industries where the NCSI and ACSI can be compared, NCSI consistently shows higher scores than ACSI.

By industry, in sectors like gas stations, high-speed internet, IPTV and hospitals, NCSI was 9 to 12 points higher than ACSI, indicating the trend in which NCSI consistently beats ACSI in telecommunication and health care services. On the other hand, among comparable sectors such as beverages, beer, restaurants and electric cars, NCSI underperformed compared to ACSI by 3 to 6 points.

Another point worth noting is the decrease in the NCSI and increase in the ACSI in the home appliances and automotive industries. This shift is attributed to significant growth in customer satisfaction, observed not only in companies such as China’s Haier and the United States’ Whirlpool in the home appliance sector but also in companies like Toyota and Honda from Japan in the automotive sector.

When compared with the JCSI, the industry with the largest gap is securities, with the NCSI taking a 7.5-point lead.