Brands bet on AI as UK customer satisfaction levels slide in 2023

Cost cutting behind significant drop in satisfaction levels in 2023

Cost cutting behind significant drop in satisfaction levels in 2023

The UK’s biggest brands are turning to artificial intelligence (AI) to develop better customer and colleague experiences, according to KPMG’s latest Customer Experience Excellence Report, now in its 14th year. This is allowing some UK businesses to reverse declines in customer satisfaction, caused by previous cost cutting.

The global study, which asked over 13,000 UK consumers for their views on 376 brands in this year’s report, ranks brands based on how well they score across six areas. This includes empathy, integrity and personalisation. A new AI adoption index looks at which businesses are implementing the latest technology effectively, safely and ethically.

The majority (64%) of brands included in the report saw their scores across each area decline compared to last year, amid a challenging economic landscape for businesses and consumers. Customer satisfaction levels have dropped to pre-COVID-19 levels, falling by 3.8 percent in the last year.

Financial services and non-grocery retail brands have a strong presence in this year's overall top five for customer experience:

  1. first direct
  2. Lush
  3. American Express
  4. John Lewis & Partners
  5. Nationwide

first direct has consistently placed in the top three of the index for 12 of the last 13 years while the top five have all been in the top 10 at least once in the last five years.

AI adoption key to staying ahead of the pack

Brands with the highest levels of customer experience are also successfully experimenting and scaling their use of AI to improve customer and colleague experiences, whilst improving business performance. Examples of AI adoption include content generators, language translators, and smart knowledge management assistants, as well AI’s ability to analyse data, detect patterns and identify anomalies in areas such as fraud detection.

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Financial Services lead the AI Adoption index where the technology is helping to create both business and customer value from the vast amount of data held and managed by financial firms.

The top five sectors for AI adoption are:

  1. Financial Services
  2. Travel & Hotels
  3. Telecoms
  4. Public Sector
  5. Logistics

Commenting on the findings, Tim Knight, UK Head of Customer & Operations at KPMG UK, said:

“In the last year, UK customers have suffered, as businesses have cut costs, often implementing older technology to inconsistently automate their service. Whilst these brands may deliver lower costs this year, it’s likely they will lose customer spend over time.

The latest artificial intelligence platforms are helping early adopters in the UK to address this, delivering both improved service and enhanced business performance. These brands are using AI to empower colleagues to achieve more, or to directly deliver empathetic and personalised customer experiences.

By looking at over 2500 brands worldwide, including 376 in the UK, we’ve been able to see what the best early adopters of AI are doing, as well as the pitfalls. Perhaps most important is how they are starting to re-wire their whole businesses to unlock the advantages of AI, treating it more like the advent of the internet or the steam engine, rather than a new form of computing. This is clearly a lot more than an IT problem to be bolted on to legacy ways of working; at the world’s brands, CEOs are re-imagining the ways businesses are structured and how they perform.”

Marty Herbert, Director, Head of Experience Transformation at KPMG UK, added:

“Given the ongoing cost-of-living crisis, retaining customers has become an even greater challenge for brands, as consumers are compelled to cut back on spending. The clear winners in this year’s report are financial services and non-grocery retailers who have offered customers support and reliability during these challenging times. Many of these retailers were also early adopters of AI and have been proactive in carving out a new approach to driving customer satisfaction.

All sectors can harness the power of AI to enhance their customer and colleague experience, while successful deployment of the new virtual AI colleague needs to be assessed through an economic lens to ensure that it is being judiciously applied to use cases that will genuinely create value, both for the organisation, and for customers and colleagues.

Too often, AI deployment is erroneously seen as the remit of solely the IT function. If used properly, AI offers a clear path to increasing customer loyalty in these challenging economic times.”

Sector deep dive

  • All the sectors included in the survey observed an average decline in loyalty compared to the previous year, with the entertainment and leisure sector experiencing the most significant drop.
  • Non-grocery retail is the leading sector for customer experience performance, while financial services leads the way in AI adoption.
  • Travel and hotel brands come a close second in AI adoption where airlines are becoming significant users of AI to aid scheduling, maintenance, and customer service. Hotels are using AI to personalise interactions with guests and use dynamic pricing to optimise site yield.
  • Grocery retail, whilst one of the leaders for experience, lags other sectors with their technology focus being on rapidly expanding home delivery in response to the pandemic – but are now exploring Generative AI.
  • Utilities underperform on both experience and AI adoption, suggesting an opportunity to employ new technology to radically reduce costs and improve the perceived value of the experience.
  • Across all sectors talent and skills are felt to be the most significant inhibitors to progress.
  • The public sector leads in terms of responsible and ethical use of AI.

The report forms part of a global study that looks at 2500+ organisations in 21 markets.


Notes to editors:

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Link to the report


Research Methodology:

The 2023 UK Customer Experience Excellence research was conducted online between 8th June and 3rd July 2023, exploring experiences with organisations over the previous six months. 13,143 UK consumers were interviewed, and 376 brands were included in the final ranking.

The Customer Experience Excellence (CEE) score is a weighted average of each brand’s score, as mapped against The Six Pillars that drive brand advocacy and loyalty. The Six Pillars of Experience comprise of the following:

  • Personalisation –Using individualised attention to drive an emotional connection
  • Integrity – Being trustworthy and engendering trust
  • Expectations – Managing, meeting and exceeding customer expectations
  • Resolution – Turning a poor experience into a great one
  • Time & Effort – Minimising customer effort and creating frictionless processes
  • Empathy – Achieving an understanding of the customer’s circumstances to drive a deep rapport

Top-5 UK brands in the 2023 UK Customer Experience Excellence analysis:

2023 Ranking Brand Industry Rank movement vs previous year
1 first direct Financial Services +1
2 Lush Non-Grocery Retail +2
3 American Express Financial Services +27
4 John Lewis & Partners Non-Grocery Retail +4
5 Nationwide Financial Services +22


UK overall customer experience performance over time:

Year Overall Customer Experience Excellence (CEE) Score
2013 7.21
2014 7.25
2015 7.25
2016 7.33
2017 7.08
2018 7.13
2019 7.21
2020 7.45
2021 7.36
2022 7.37
2023 7.09


Sector performance ranking and comparison to previous year:

Industry  CEE Score vs. previous year (%) 2023 sector ranking
Non-Grocery Retail -2% 1
Financial Services -2% 2
Grocery Retail -4% 3
Restaurant & Fast Food -5% 4
Telecoms -5% 5
Entertainment & Leisure -7% 6
Travel & Hotels -3% 7
Utilities -7% 8
Logistics -8% 9
Public Sector -5% 10


About KPMG in the UK:

KPMG LLP, a UK limited liability partnership, operates from 20 offices across the UK with approximately 17,000 partners and staff. The UK firm recorded a revenue of £2.72 billion in the year ended 30 September 2022.

KPMG is a global organisation of independent professional services firms providing Audit, Legal, Tax and Advisory services. It operates in 143 countries and territories with more than 265,000 partners and employees working in member firms around the world. Each KPMG firm is a legally distinct and separate entity and describes itself as such. KPMG International Limited is a private English company limited by guarantee. KPMG International Limited and its related entities do not provide services to clients.

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