Large scale research of US and UK consumers uncovers high degree of correlation between customer experience and loyalty and shows that companies can gain $100s of millions.

Mobile Drives Daily Facebook Use

Earlier this week, I tapped into a recent research report—Data Snapshot: Communications and Media Benchmark— to write posts about Facebook usage by age, gender, and ethnicity. Well, my Facebook analysis continues…

There has been some concern raised about Facebook’s revenue projections because of the growth of mobile, which does not provide Facebook with the same revenue streams. Given the hubbub, I decided to look at the mobile usage of Facebook.

It turns out that a large percentage of daily Facebook users, who are mostly younger consumers, are reading Facebook on their phones.

The bottom line: Mobile drives daily Facebook usage

Top 8 Reasons to Join Us in San Diego at the CXPA Event in June

There are many customer experience events, and several of them are very good. But I want to make the case for joining us at the Customer Experience Professionals Association (CXPA.org) Members Insight Exchange on June 19 & 20 in San Diego at the Del Coronado.

In case you don’t know about the CXPA, it’s a non-profit organization dedicated to the long-term success of customer experience professionals. Here are my top 8 reasons for joining us:

• Learning. Hear best practices from great speakers and during highly interactive sessions.
• Networking. Meet customer experience professionals from different industries and regions.
• Sharing. Let other people know about your successes and challenges, helping to improve the entire profession.
• Experiencing. Participate in an exciting agenda that’s filled with educational sessions, networking events, an “unconference” session and some other surprises.
• Building. Help shape the CXPA’s agenda and make it a powerful asset for you and the entire profession.
• Innovating. Learn about the CXPA’s first annual CX Innovation Award winners and see presentations from a specially selected group of innovative vendors.
• Beaching. Enjoy the beautiful setting of the Del Coronado on the beach in San Diego.
• Belonging. Join your peers in the CXPA who are investing their time to make you and other customer experience professionals successful.

The bottom line: Don’t miss this great event!

Facebook’s Popularity Crosses Over Ethnic Groups

My post-IPO look at Facebook continues. In yesterday’s post, I examined Facebook and Twitter usage across age groups which was part of the analysis in the Temkin Group report Data Snapshot: Communications and Media Benchmark.

Today, I examine the difference in daily Facebook usage by age across Caucasians, Hispanics, and Blacks. It turns out that that there’s very little difference across ethnic groups of the same age. The largest differences are with the heavy usage by 35- to 44-year-old Hispanics and the low usage of 55- to 64-year-old Blacks.

Just a note about survey bias. Since this survey was only deployed in English, it very likely under-represents Hispanics that are primarily Spanish-speaking and definitely under-represents Hispanics that don’t speak English at all.

The Bottom Line: Facebook is pervasive in all English speaking segments of U.S. consumers younger than 45.

Who’s Using Facebook and Twitter?

In a recent report we examined the media usage of US consumers, which included how often they use social media sites. Given Facebook’s IPO, I decided to post a bit of information about the users of the newly public company compared with Twitter. My analysis of 10,000 U.S. consumers showed that 77% have used Facebook and 29% have used Twitter. Digging a bit deeper into the actual usage patterns, it turns out that 45% use Facebook daily and 12% use Twitter daily.

We found that Facebook is significantly more pervasive than Twitter across every age group. Also, females tend to use Facebook more than males, but males tend to use Twitter more than females. The largest gender gap for Facebook is 45- to 54-year-olds while the larger gender gap for Twitter is with 25- to 34-year-olds.

The bottom line: Facebook is used regularly by most consumers younger than 45.

Assess Your Four Customer Experience Competencies

In the recent research report The State of CX Management, 2012, we examined how large companies are progressing along their journeys towards becoming customer-centric organizations. We found that only 7% of companies have reached that level of CX maturity.

What does it take to become a customer-centric organization? Our research shows that leading companies master four customer experience core competencies:

• Purposeful Leadership: Do your leaders operate consistently with a clear, well-articulated set of values?
• Compelling Brand Values: Are your brand attributes driving decisions about how you treat customers?
• Employee Engagement: Are employees fully committed to the goals of your organization?
• Customer Connectedness: Is customer feedback and insight integrated throughout your organization?

To gauge how effective companies are in mastering these competencies, Temkin Group created a 20 question assessment. As part of the research in The State of CX Management, 2012, we asked 255 large companies to complete the assessment. As you can see from the overall results, nearly 60% of companies are in two lowest stages of CX maturity.

And when it comes to the Four Competencies, companies struggle with all four areas but have a particularly hard time with compelling brand values and employee engagement.

In case you’re interested, here’s how I describe the four competencies…

The bottom line: Are you building your customer experience competencies?

Net Promoter Score and Market Share For 60 Tech Vendors

Temkin Group recently surveyed 800 IT professionals from large companies and asked them a series of questions about tech vendors. This research has fueled some of our previous posts: Temkin Experience Ratings for Tech Vendors, How IT Professionals Share Feedback About Vendors, and Tech Vendors: Benchmarking Product and Relationship Satisfaction of IT Clients.

We also asked the IT professionals to rate each tech vendor on the Net Promoter Score (NPS) scale.* NPS is based on one question: How likely are you to recommend the tech vendor to a friend or colleague? IT professionals choose an answer on a scale from 0 (not at all likely) to 10 (extremely likely). Responses are put into one of three categories:

• Promoters (score 9 or 10)
• Passives (score 7 or 8)
• Detractors (score 0 to 6)

NPS is calculated as the percentage of promoters minus the percentage of detractors. (If you’re interested in best practices for using NPS, read my post 9 Recommendations for NPS which is also part of our VoC resource page).

Here is the NPS for 60 tech vendors, ranging from Intel, Microsoft and Cisco in the 50s down to Compuware, Unisys, Cognizant, and Capgemini below 10.

We also asked the IT professionals how much their company was planning to spend in 2012 compared with 2011 and mapped this data with NPS. It turns out that we found four bands of performance in this market based on NPS scores:

• More than 40: These companies have much higher purchase momentum and are poised to grab a lot of market share
• Between 28 and 40: These companies have above average purchase momentum and are poised to gain market share
• Between 23 and 28: These companies have below average purchase momentum and are poised to lose market share
• Less than 23: These companies have much lower purchase momentum and are poised to give up a lot of market share

You can purchase the data in an excel spreadsheet for $195. The file includes details on the 60 tech vendors shown in this blog post as well as 28 other tech vendors with sample sizes too small to be included in our published research. The data includes sample sizes for the companies, percentages for promoters, detractors, and NPS score, as well as the percentage of companies with increasing spending plans and those with decreasing spending plans.

*Note: Net Promoter, NPS, and Net Promoter Score are trademarks of Satmetrix Systems, Bain & Company, and Fred Reichheld

Temkin Experience Ratings Spotlight: Charles Schwab

Charles Schwab earned the highest score for investment firms in the 2012 Temkin Experience Ratings.

To understand how the company made it to the top of the ratings, we spoke with Troy Stevenson, Vice President, Client Loyalty & Consumer Insight.

According to Stevenson “Our strategy is to operate our business through the clients’ eyes. Make every decision through the lens of how it influences clients and the client experience. That helps us avoid the temptation of short-term profits from things like junk fees that might result in long-term harm to the brand.“

A key element of Schwab’s CX efforts is its Net Promoter Score program that it calls “Client Promoter Score” or CPS.  Stevenson told me that “It’s not about a specific question, but a system where we are constantly seeking feedback and setting aggressive metrics. And use the insight to find patterns, gaps, and opportunities for improvement” (see post: 9 Recommendations For NPS).

Schwab definitely takes CPS seriously. In a recent letter from CEO Walt Bettinger to shareholders, Bettinger included a discussion of CPS. Here’s an excerpt:

CPS is a simple measure of how well we’re doing at earning that level of loyalty and advocacy from our clients. When CPS is strong, we know our clients are recommending Schwab to their friends, family, and acquaintances — and that is the most direct measure of whether our client-focused strategy is working successfully.

Stevenson stressed the value of listening to client verbatims, saying that “There’s no subsitute for employees reading through unadulterated client comments. They explain what needs to change and how they need to change.”

While Stevenson’s team of 22 people (8 are focused on the CPS program) does analysis of cross-organization topics (like affluent consumers), a critical goal is to put the information in the hands of the people that understand different parts of the business (see post: Market Research Needs An Overhaul). Stevenson’s team organizes verbatims by themes and topics and then puts them in the hands of the appropriate people across the company. He estimates that thousands of people read the verbatims including every branch and call center team.

According to Stevenson, Schwab  leadership consistently communicates about client experience and makes decisions that are aligned through clients’ eyes. That creates a culture where employees are empowered to treat clients well. The company also uses a “healthy dose of client experience improvement within its compensation.” The four or five major businesses within Schwab each have their own CPS score that is used for employee goals.

According to Stevenson, Schwab’s client experience efforts are: “Not just about making the website snazzier, but we want to make Schwab easier to do business with, find ways for clients to be more effective investors, and get phone agents and branch employees to act with more empathy and caring.”

That’s a great goal for just about anyone’s CX efforts.

The bottom line: Looking through your clients’ eyes can be enlightening

Report: The State of CX Management, 2012

The report can be downloaded for $195

We just published a new Temkin Group report, The State of Customer Experience Management, 2012. The report examines where large companies are on their CX journeys based on a survey of 255 companies. Here is the executive summary:

We surveyed more than 200 large companies and found an abundance of Customer Experience (CX) ambition and activity. Most companies have a CX executive leading the charge, significant CX activities being coordinated by a central team, and a staff of six to eight full-time CX professionals. Using Temkin Group’s CX competency assessment, we found that only seven percent of companies are truly customer-centric as firms struggle the most to master Employee Engagement and Compelling Brand Values. When compared with CX Laggards, CX Leaders have more ambition, more CX leadership, are better at using VoC programs and NPS, and they focus more on employees and less on cutting costs. Comparing results over the previous three years we found more analysis of email and chat conversations, improvements in VoC governance, and a wider gap between companies that are good at CX versus those that are not.

The research shows that only 7% are very strong at customer experience today. We found this exact same percentage in what respondents said about their companies and in results from the Temkin Group CX competency assessment which shows that 35% of companies are in the lowest stage of CX maturity. But companies have high ambitions; 59% of respondents state that their company’s goal is to be the industry leader in CX within three years.

Here’s one of 27 figures in the report:

Here are some other findings from the research:

• The weakest CX competencies are employee engagement and compelling brand values. Only about one-third of companies scored highly in these areas.
• Nearly six out of 10 respondents have a senior executive leading customer experience efforts across the company.
• On average, companies have six to eight employees focused on customer experience; 28% have more than 20 employees in this area.
• Nearly 80% of companies with voice of the customer programs report that they are already delivering positive business results.
• Voice of the customer programs run into the most obstacles when it comes to integrating CRM data and analyzing social media conversations.
• The percentage of companies using NPS increased from 49% last year to 56% this year.
• Companies with higher levels of customer experience maturity focus more on employees and culture and less on cutting costs.

Download report for $195

The bottom line: Customer experience management is maturing.

Help A Charity For Temkin Group’s 2nd Anniversary

Temkin Group is excited to celebrate our 2nd anniversary. Thanks to our wonderful clients, partners, and all CX enthusiasts, it’s been a fantastic two years. As we did for our 1st anniversary, we want to mark this occasion with a donation to a worthy cause. We’ve decided to let you determine the charity and amount.

We will make a donation of $5 per vote (up to $2,500) to the charity with the highest number of votes. Even if your charity does not win, you’ll still be helping another worthy cause.

Choose one of the following charities and get your friends to vote as well. We will keep the voting open until the end of May. Every vote counts!

Click the logos below for more information about each charity…

The bottom line: Thank you for helping us celebrate!

2012 Temkin Trust Ratings

Temkin Group has just released the 2012

We introduced the Temkin Trust Ratings last year to gauge which companies are earning this important element of loyalty. The 2012 Temkin Trust Ratings include 206 companies from 18 industries and is based on a survey of 10,000 U.S. consumers.

Congratulations to the top firms in this year’s ratings: USAA, credit unions, H.E.B., Publix, Chick-fil-A, Sam’s Club, Hy-Vee and BMW. Of course, not every company has earned such a high degree of trust with their customers, especially the companies at the bottom of the 2012 ratings: Charter Communications, Citigroup, Bank of America, HSBC, Time Warner Cable, Comcast, and Qwest.

We also examined industry averages and found that grocery chains have earned the most trust from consumers followed by investment firms, retailers, and parcel delivery services. But consumers do not trust TV service providers, Internet service providers, or credit card issuers.

We examined how individual companies are rated relative to their industry peers. Twenty-one companies are 10 or more percentage points above their industry averages. The ones that are farthest out in front: USAA (34 above credit cards), credit unions (30 above banks), USAA (28 above banks), USAA (22 above insurers), and PNC (21 above banks).

Twenty-nine companies are at least 10 percentage points behind their industry averages. Here are the ones that fall the farthest behind: Bank of America (23 behind banks), Citibank (22 behind banks), Super 8 (19 behind hotels), Charter Communications (18 behind TV service providers),  Days Inn (18 behind hotels), and Citigroup (18 behind credit card issuers).

We also analyzed changes from the 2011 Temkin Trust Ratings. The research shows that consumers are more trusting this year than they were last year. Led by computer makers and insurance carriers, all 12 industries that were in both the 2011 and 2012 Temkin Trust Ratings showed improvement.

Fifty-two of the 139 companies that were in the 2011 and 2012 Temkin Trust Ratings earned double-digit improvements and six companies improved by more than 20 percentage points: USAA, PNC, Lenovo, credit unions, U.S. Bank, and HSBC. Seventeen companies lost ground over the last year with the biggest drops coming for Cox Communications, Bank of America, Citigroup, Edward Jones, TriCare, and Costco.

Do you want to see the data? Go to the Temkin Ratings website where you can sort through all of the results for free. You can even purchase the underlying data if you want to get more access.

The bottom line: It’s hard to succeed without your customers’ trust

Temkin Experience Ratings Spotlight: Sam’s Club

Sam’s Club may not jump in your mind when you think about excellent customer experience… but it should. The retailer earned the highest score in the 2012 Temkin Experience Ratings.

To understand how Sam’s Club made it to the top of the ratings, we spoke with Bala Subramanian, VP of Global Customer Insights.

According to Subramanian ”We are a membership organization. Our members pay to belong and pay for the privilege of shopping in our club. It behooves us to understand their needs and be proactive in delivering against those needs and creating a streamlined, positive shopping experience.”

It turns out that this is not a story about designing “wow” experiences or building a dedicated customer experience team, but Sam’s Club focused on customer experience in a way that was consistent with its DNA: embedding it into its ongoing operations. As I discussed a few years ago in the post Customer Experience And The Zen Of Brands, customer experience success does not come from creating Disney-esque events. Great customer experience comes from consistently delivering on brand promises that resonate with customers.

Sam’s Club started a customer experience measurement system two years ago when it decided to measure the customer with the same rigor that it measured financial performance. Subramanian said: “We have a culture of caring about what’s in the mind of the members and a maniacal focus on measurement.”

The measurement framework is fairly simple. Each of Sam’s Club’s 600+ stores gets a monthly score they call the “Member Experience Track” (MET) which covers three areas: In-club operations, Merchandising, and Membership. Underneath those three areas are more than 150 individual attributes that the company tracks. Each store has an overall rating of red (bad), yellow (“okay”), or green (“good”) based on surveys completed by members.

At monthly meetings, the executive team reviews a dashboard that highlights the number of stores in each category (red, yellow, green), looks at key issues driving problems across stores, and also looks at the top 20 and bottom 20 stores. This is a powerful tool for motivating store managers, as Subramanian says: “You don’t want to be called out on the bottom as a member of the ‘Red Club.’”

The MET is very visible throughout Sam’s Club. The scores are embedded into the bonus plans across the company. And if you walk into break rooms or associate training rooms within individual stores, you’ll find a chart showing whether the store is red, yellow, or green on all of the attributes. Stores are sent verbatims about any negative experiences on a daily basis and local stores are expected to contact those members (if they’ve given their permission) within 24 hours.

What’s coming up next for Sam’s Club efforts? Text analytics.

The bottom line: Sam’s Club embeds customer experience measurement into its every day operations

Data Snapshot: Communications and Media Benchmark

The report can be downloaded for $195

We just published a new Temkin Group report, Data Snapshot: Communications and Media Benchmark, that examines the media consumption and communications patterns of 10,000 U.S. consumers.

The report contains 23 data charts that cover topics such as the hours per day consumers spend on TV, radio, and the Internet, their use of social media sites Facebook, Twitter, and LinkedIn, their use of mobile websites and mobile apps, and their preferred ways to contact friends. This data snapshot also examines the differences in these media and communications patterns across age groups of consumers.

The first section of the report looks at the hours per day that consumers spend consuming media. As you can see, TV watching and going on the Internet take up a large portion of consumers’ lives.

Here are some of the key insights from the report:

• Consumers younger than 44 listen to the radio 2.3 hours per day, but there’s a sharp drop off for older consumers.
• Across online and offline formats, consumers younger than 35 spend about three hours per day reading books, which is twice the rate of those older than 64. This ratio is about the same for reading news as well.
• While daily use of paper books is ahead of e-book use by 38 percentage points, the number of consumers that read at least three hours per day is roughly the same online and offline.
• A quarter of consumers read or update Facebook several times per day and more than half of consumers younger than 45 use Facebook daily.
• About one-fifth of consumers younger than 35 use Twitter daily but use falls off dramatically in higher age groups.
• Those who use LinkedIn are more likely to use it weekly or monthly compared to daily or yearly. The most active users of LinkedIn are 25- to 34-year olds.
• Nearly one-third of consumers use mobile apps daily; usage ranges from 54% of consumers in their twenties to 3% of consumers that are 75 or older.
• The three most preferred communications channels for reaching friends are calling on a cell phone (33%), sending a text message (24%), and calling on a home phone (21%).
• Across all age groups, women have a higher propensity for texting and men have a higher propensity for calling on a cell phone.

Download report for $195

The bottom line: You need to understand your customers’ media and communications patterns

CX Mistake #3: Neglecting Experience Design

In this series of posts, we examine some of the top mistakes companies make in their customer experience management efforts. This post examines mistake #3: Neglecting Experience Design. Companies focus on the basic requirements of an interaction but ignore the elements of design that can make the difference between customer anger and customer delight.

The lack of good design can be see in this quote by Adam Greenfield, a former head of design direction at Nokia:

“The engineers at Nokia brag about the number of megapixels a new phone has. But they don’t understand that if you can’t find the button to use the camera on the phone, it doesn’t matter how many megapixels it is.”

In a recent study, we found that 74% of customer experience professionals think that customer experience design is important or critical for their company, but only 34% think that their firm is good at it.

Why is design deficiency so widespread? Because companies convince themselves that they’re taking care of customers when they painstakingly define and measure themselves against meeting functional requirements. What this left brain centric approach misses is that functional needs represent only one of three components of an experience. Experiences are also made up of three components, so accessible and emotional components are often ignored.

Here are some tips for avoiding this mistake:

• Identify key moments. Even though most companies can’t replicate the design skills of Apple across everything they do, they still need to apply good design for important interactions. Companies should identify the key moments that influence customers and commit themselves to applying good design principles to those moments.
• Get design help. Good design is not accidental, it requires the right skills. Recognize your limitations and bring in a design team to help in critical areas if you don’t have those skills on your team.
• Plan to test and iterate. It’s often impossible to predict exactly how people will respond to a new experience—whether it’s a call center script, website design, or retail display—so you need to allot time and money for making incremental changes on key moments. Make sure to factor this into your budget and schedule.
• Set accessible and emotional goals. Every key moment should have defined requirements for how easy it is for customers and how those customers feel about it afterwards. Don’t consider the design of the experience complete until you’ve reached those goals, even if you’ve delivered on all of the functional requirements.
• Find the little things. When Marquis Marriott in NYC spent more than $10 million to change how its elevators operated, consumers were regularly confused. It didn’t need another massive overhaul, just a small investment in signage. That’s why companies should constantly look to apply what I call the Design Of Little Things— the small changes that can dramatically improve the customer experience of much larger investments.

The bottom line: Companies may not appreciate good design, but customers do

Introducing the CX Innovation Awards

I’m thrilled to announce the…

Is your company doing something innovative in customer experience? Has it had a significant impact on your business? If you answered “yes,” then consider applying for the CX Innovation Awards being given out by the Customer Experience Professionals Association (CXPA.org).

The awards will be announced at the CXPA’s Members Insight Exchange on June 19 & 20 at the Hotel Del Coronado in San Diego. The CXPA plans to give out awards in four areas:

• Voice of the Customer: Generating and acting upon customer insights
• Employee Engagement: Embedding a customer experience mindset throughout an organization
• Business Case/ROI: Developing a compelling connection between CX and business results
• Wild Card: Customer experience work not included in other categories

While these awards are only for practitioners, not for vendors or consultants, feel free to encourage your innovative clients to complete the nomination form.

Nominations must be submitted by May 11. Please visit the CXPA website to find out more information about the CX Innovation Awards.

The bottom line: Let’s celebrate some of the many innovations of CX professionals!

2012 Temkin Forgiveness Ratings

Temkin Group has just released the 2012

Every company makes mistakes now and then, but how willing are customers to forgive the company when it happens? Forgiveness is a valuable asset that companies earn by consistently meeting customers’ needs.

We introduced the Temkin Forgiveness Ratings last year to gauge which companies are earning this important element of loyalty. The 2012 Temkin Forgiveness Ratings include 206 companies from 18 industries and is based on a survey of 10,000 U.S. consumers.

Congratulations to the top firms in this year’s ratings: USAA, Hyatt, credit unions, H.E.B., Hy-Vee, Dollar Rent A Car, Chick-fil-A, Publix, Costco, and Amazon.com. Of course, not every company enjoys such a high degree of forgiveness from their customers, especially the companies at the bottom of the 2012 ratings: Citigroup, Charter Communications, HSBC, Chrysler dealers, EarthLink, Bank of America, Comcast, Quest, and US Airways.

We also examined industry averages and found that grocery chains have earned the most forgiveness from consumers followed by retailers, appliance makers, and parcel delivery services. But consumers are not very likely to forgive mistakes by credit card issuers, Internet service providers, and TV service providers.

We examined how individual companies are rated relative to their industry peers. USAA holds the top two spots, outpacing its credit card and banking peers by more than 30 percentage points. USAA also outpaces the insurance industry by more than 20 percentage points. Credit unions, Hyatt, US Cellular, Dollar Rent A Car, Chick-fil-A, and Bright House Networks are also more than 15 percentage points above their industry averages. Five companies fall 15 or more percentage points below their industry’s average Temkin Forgiveness Ratings: Chrysler dealers, Citigroup, Travelers, Charter Communications, and RadioShack.

We also analyzed changes from the 2011 Temkin Forgiveness Ratings. The research shows that consumers are more forgiving this year than they were last year. Led by banks and insurance carriers, all 12 industries that were in both the 2011 and 2012 Temkin Forgiveness Ratings showed improvement.

Sixty-eight of the 139 companies that were in the 2011 and 2012 Temkin Forgiveness Ratings earned double-digit improvements and four companies improved by more than 25 percentage points: TD Ameritrade, Lenovo, USAA, and credit unions. Ten companies lost ground over the last year with the biggest drops coming for Citigroup, Continental Airlines, Travelers, Sears, Holiday Inn Express, and The Hartford.

Do you want to see the data? Go to the Temkin Ratings website where you can sort through all of the results for free. You can even purchase the underlying data if you want to get more access.

The bottom line: To err is possible, to earn forgiveness is divine