Speech by Mr Lee Yi Shyan, Minister of State for Trade & Industry and Manpower at the Announcement of the Customer Satisfaction Index of Singapore (CSISG) 2009 Rankings on Monday, 25 January 2010 at 10.40 am at the Singapore Management University

Professor Rajendra K Srivastava

Provost & Deputy President (Academic Affairs), SMU

Mr Tan Suee Chieh

Co-Chair, Governing Council of ISES

Ladies and Gentlemen

Introduction

It gives me great pleasure to join you at the announcement of the 2009 rankings for the Customer Satisfaction Index of Singapore.

The Services Sector

The services sector is a significant part of the Singapore economy. It accounts for more than 2/3 our GDP and employs close to 2 million[1] workers. Today, Singapore is leading provider of services such as international banking, trade finance, maritime finance, insurance within the region. Even in the Food & Beverage, Hotel and Retail sector, employment has risen to 334,000[2]employees in 2008 from 309,000[3] in the previous year.

Clearly, for sustained economic growth, our services sectors must be able to achieve higher sales and profitability without the proportionate increase in labor input. In other words, our services sector must embrace business innovations, process improvements, raising service level and customer satisfaction to raise productivity.

Initiatives to improve customer satisfaction

To drive service excellence and customer satisfaction, the government launched the “Go the Extra Mile for Service” (GEMS) movement in 2005.Last year, we launched GEMS Up - Phase 2 of the GEMS. Our goal remains unchanged - we want to help firms achieve service excellence and higher level of customer satisfaction over the next three years.

One important initiative under GEMS Up is the Customer-Centric Initiative (CCI). Under the CCI programme, 208 companies (representing 5,645 establishments and 153,258 workers) received co-funding on their customer service-improvement projects.

Among them are Ritz-Carlton and Swissotel-The Stamford, two hotels well known for their service excellence. Their relentless pursuit of service excellence has not been in vain. Ritz Carlton and Swissotel achieved customer satisfaction scores of 78 and 77 respectively, far exceeding the industry average of 68.9. They are great role models for other hotels and service establishments to emulate.

The importance of Customer satisfaction

What leads to higher customer satisfaction? As we research and learn more about the subject, we realize that there are a number of factors contributing to customer satisfaction. Simply put, customer satisfaction depends on three drivers: customer expectation, perceived quality and perceived value. Perceived quality in turn depends on service delivery.

The launch of Singapore’s Customer Satisfaction Index two years ago by the Institute of Service Excellence at the SMU (ISES) has enabled us to compile CSI data for our service industries as a whole and as well as individual companies when authorized. It also enables us to make comparisons with other countries who measure their customer satisfaction in similar ways, and as well as to find out our progress over time.

I am pleased to note that for 2009, against a rather difficult year in terms of operating environment, Singapore’s overall customer satisfaction score increased slightly from 2008’s 67.8 to 2009’s 68.0. Drilling down to service level, 2009 saw the overall level increased to 70.8[4], an improvement over 2008’s 69.4 and 2007’s 70.4. Businesses must do more than raising service level to drive customer satisfaction.

Singapore’s customer satisfaction score is a composite of 8 service sectors. Our overall gain was led by Healthcare (+1.3) and Finance & Insurance (+1.2) sectors. The gains however, were dragged down by reduced satisfaction in other sectors: Tourism & Hotel (-1.4), Education (-1.4) and Retail (-2.3). Clearly, the survey shows that increasing service level alone is not enough to raise customer satisfaction as it can be offset by rising customer expectation and reducing perceived product quality or value. I will leave it to ISES to elaborate.

Conclusion

Moving forward, the services sector will continue to be a key driver of growth. In the tourism sector alone, opportunities abound. Our two Integrated Resorts- Marina Bay Sands and Resorts World at Sentosa are opening in phases this year. The new International Cruise Terminal at Marina South will be completed by end 2011. Further downstream we will see the completion of Gardens by the Bay and the River Safari. These new tourism infrastructure investments must be complemented by excellent service delivery and higher productivity to create the greatest economic benefits for all.

I therefore urge all services sector’s companies, employers and workers to step up your efforts to innovate, raise productivity and embrace service excellence. How competitive our services sector will be depends on what we do to raise customer satisfaction. There is no room for complacency lest we will be left behind by competition.

Thank you.