For two consecutive years, the Customer Satisfaction Score (CSAT) across six core Romanian industries are within a 10 percent range of each other, showing a lack of distinctive leaders; more than 90 percent of companies have a customer satisfaction score between 8 and 9, similar with last year.
This limited improvement could be explained by a mix of a lack of focus on improving customer experience along with a lack of speed and agility in adapting products and services, as no player managed to significantly improve its position within one year. The banking and retail industries were rated best this year, with a CSAT score of 8.8, while utilities landed last at 7.7.
Overall, Romanian consumers don’t perceive any one company as standing out from the crowd regarding customer experience, but in 2022 emerging leaders and laggards are apparent, particularly in utilities, healthcare, and banking.
This article, based on the most recent McKinsey Customer Experience in Romania (see sidebar, “Survey methodology”), as well as the 2021 edition of the survey, seeks to understand the customer-experience landscape of Romanian companies in six major industries. This new piece of research highlights significant opportunities for companies that aspire to differentiate themselves on the Romanian market and offers good case practices on how to begin to stand out from the crowd.
Last year’s insights confirmed in 2022
Better customer experience leads to increased customer spend and higher market shares
Customer experience can be understood as the full delivery of a company’s brand promise via its products, price, service, and communication. Superior customer experience enables deep customer trust and loyalty, while also having a positive impact on costs (for example, a 20–50 percent decrease in service costs by lowering the volume of complaints), revenues (a 15–20 percent increase in sales conversion) and customer satisfaction (a 10–20 percent increase).1 Superior customer experience has also been shown to help companies deal with past financial crises: customer-experience champions suffer less and recover faster than customer-experience underperformers do.2
The McKinsey survey of Romanian consumers confirms for two consecutive years many of these previous findings. It identifies a clear link between customer experience and willingness to spend: for a customer satisfaction score higher than 87, every point increase in CSAT score is likely to drive an additional 32–34 percentage points of increased spending. It also shows that market share and customer experience are closely correlated, with top-quartile companies by market share also displaying the highest CSAT scores (Exhibit 1). Clearly, an opportunity exists for Romanian companies to differentiate themselves from their peers through the customer experience they offer, and making improvements in this area should be a top priority for Romanian business leaders.
Thoughtful digitization is key to achieving higher CSAT scores
This year’s survey confirmed that, with the notable exception of banks, higher levels of digital engagement haven’t resulted in improved customer experience in Romania. For instance, interactions with customers in retail are still predominantly nondigital, yet the industry has a high CSAT score (8.8), whereas the reverse is true for utilities (7.7). This trend is likely driven by rudimentary and noncustomer-centric digitization, in which cumbersome, mandatory digital interactions are more likely to decrease than to increase customer satisfaction. This finding also highlights the importance of a thoughtful, integrated approach to digitizing customer experience, such as a consistent omnichannel approach.
This recommendation is particularly relevant as the survey identified distinct preferences among Romanian consumers, such as the ability to switch smoothly between different channels (online versus in person) depending on the customer journey. Thus, in-person interactions are preferred for resolving issues, whereas online is preferred for everyday use. Preferences also differ by customer age group: younger consumers are less satisfied on average than older ones, with the largest gaps in insurance (a CSAT score of 8.1 versus 8.6) and utilities (7.8 versus 8.3). This may also be an area in which companies would wish to make targeted improvements in their offerings or services.
Tailoring customer experiences to reflect their preferences regarding interaction type and preferred channels should move up on the agenda of Romanian companies. Progress could be achieved, for instance, by improving customer relationship management (CRM) capabilities and developing microcampaigns tailored to different customer groups. An earlier 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.3
Higher customer satisfaction levels can be achieved by increasing customer trust in the brand, derived from choice, fairness, and product performance
The survey analyzed the contribution of four different customer experience drivers—brand, price, customer service, and product. Brand emerged as the most important contributor in all industries except for banking (in which product and price are more important).
For each of the four drivers, their contributing elements were ranked by their importance to customers. Romanian companies may wish to develop targeted actions that address each of these high-impact elements specifically for their industry. For instance, to improve product, banks could work on ensuring that their products meet all customer needs, while insurance companies could ensure their products are perceived as secure and reliable.
For banks, that might translate into spending more time with customers trying to understand whether their products really meet their needs; insurance companies might want to highlight the extent and benefits of their coverage in their communication with consumers.
Similarly, to improve customer service, healthcare, and utilities companies could invest in helping customers get support and resolve seamlessly their issues, while telecommunications companies could ensure that services for everyday use (such as checking balances) are in line with customer expectations. This might involve mapping out each customer journey step-by-step and testing new features with customers.
What’s new in 2022?
A focus (or lack thereof) on customer experience leads to the emergence of potential leaders/laggards
The 2022 survey showed that despite the relatively flat Romanian landscape, banks have managed to have the highest growth in customer satisfaction scores, and they have become the leading industry in Romania in terms of CSAT, dethroning last year’s leading industry, retail, which has remained flat.
Moreover, within banking and utilities, certain players have grown their CSAT scores by almost one percentage point compared with 2021. In these industries, as well as telecom, 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 to invest and improve their customer experience (Exhibit 2).
Romanian consumers feel that companies don’t act in their interest
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 interest, with the highest percentage of consumers naming insurance and utilities (64 percent for each) as the industries that never act in their customers’ interests (Exhibit 3). At the other end, healthcare is perceived as the industry that is most willing to act in their customers’ interest (44 percent of respondents).
Companies across sectors can improve the perceived level of commitment toward customers’ interests by focusing on seamless resolutions of customer complaints, simplifying customer claims processes, and improving staff goodwill.
Price is the main factor that would trigger customers to change their provider
In 2022, price has been nominated as the main factor to trigger a change of providers, followed by a better product and customer service. The weight of price in switching providers is higher in utilities, insurance, and retail, and the lowest in banking. This can be explained by the ease of changing providers in industries such as retail, with low opportunity 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.
Another reason for the price being the main factor for switching providers is the fact that price is the most visible driver of customer satisfaction to consumers. Customer awareness of superior product performance and customer service is lower, and thus presents an opportunity to be capitalized on, to allow companies to achieve price differentiation in the future.
Next steps
The Romanian economy is expected to undergo significant changes in the coming years, with the industries studied in the survey at the forefront of this transformation. Moreover, the macroeconomic environment is putting additional pressure on disposable income, making Romanian consumers savvier and more cautious with how they spend their money, increasing willingness to shop around before making a buying decision.
Banks and insurance companies would be well advised to focus, among other things, on improving customer loyalty and increasing the adoption of financial products. Telecommunications companies could look at how to best use new technology, such as 5G, to serve emerging or unmet customer needs. Retailers can respond to the growth of digital channels, while utilities will want to address the recent market liberalization, and healthcare providers may want to address the growing needs of an aging population and the limitations of the public system.
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. 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.
While some companies have improved the experience offered to their customers, there is no clear leader emerging in the six industries that were analyzed on the Romanian market. Improving in this area should be high priority for any company, as better customer experience leads to increased customer spend and higher market shares. Romanian companies can start by thoughtfully digitizing their products and services to achieve higher CSAT scores. 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 a 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.
