Tim Cook: It’s Time To Secure Apple’s Future

Apple just announced terrific results for Q4, but I’m not sure it’s setup for long-term success. Apple hasn’t explicitly defined customer loyalty as an asset, at least not when it comes to a key structure like its board of directors. So, in light of Apple’s wonderful success, I penned this note to Tim Cook (which I am not sending, but feel free to pass it along to him):

Obviously Apple is not the only large organization that isn’t setup to improve or sustain its relationships with customers, it’s true of most companies. So this letter could have been addressed to just about any CEO, but I knew that a note to Apple would get more people’s attention.

The bottom line: Customer loyalty is a sustainable asset

Data Snapshot: Social Media And Mobile Adoption

Purchase data snapshot for $195

We just published a new Temkin Group Data Snapshot: Social Media and Mobile Adoption that provides details of how often US consumers do a number of social media and mobile activities. Here’s the description of the research:

As part of Temkin Group’s Q4 2011 Consumer Benchmark Survey, we asked 5,000 U.S. consumers about their social media and mobile activities. This data snapshot looks at how many consumers perform activities such as update their status on Facebook, send a tweet, read an online product review, or invite someone to join their LinkedIn network. The data also shows how frequently they do these activities and the differences across seven age groups of consumers.

The data snapshot if full of facts and figures. Here are a handful of factoids that I pulled together from the report:

The data snapshot has 13 data-rich graphics. Here’s a partial view from two of the figures:

Purchase data snapshot for $195

The bottom line: Social medial and mobile adoption differs widely across age.

Report: 2012 Temkin Experience Ratings UK

I’m excited to announce the launch of Temkin Group’s newest offering….

We introduced the Temkin Ratings site in the US last year. The site provides free access to all of our ratings, making it easy to see how consumers rate large companies across a number of dimensions. We decided to extend the Temkin Ratings into the UK with four of our ratings: Experience, Loyalty, Trust, and Forgiveness. You can review all of those ratings from the Temkin Ratings UK site.

As you can see below, we’re also providing the Temkin Experience Ratings report free of charge. We will providing some details around the other ratings in future posts. And, of course, we will be releasing the 2012 ratings in the US later this year — with even more industries.

The report can be downloaded for free

We just published a new Temkin Group report, 2012 Temkin Experience Ratings UK. Congratulations to the top six companies (out of 66 in the ratings):

1) John Lewis
1) Waitrose
3) Amazon.co.uk
4) Farmfoods
4) Iceland
4) Morrisons

Here is the executive summary from the report:

John Lewis and Waitrose tied for first in the 2012 Temkin Experience Rankings UK, with several other grocery stores and Amazon.com rounding out the top ten. We asked 3,000 British consumers to rate their recent interactions with companies across three dimensions of their experience: functional, accessible, and emotional. These data allowed us to rate 66 companies across seven industries. Only two of those companies received an “excellent” rating, while 26% fell in the “good” category. The results show that retailers and grocery stores deliver the best experience while personal computer manufacturers and insurance companies provide the worst.

The Temkin Experience Ratings UK are based on evaluating three elements of experience:

1. Functional: How well do experiences meet consumers’ needs?
2. Accessible: How easy is it for consumers to do what they want to do?
3. Emotional: How do consumers feel about the experiences?

Here are the ratings for all 66 companies:

The report can be downloaded for FREE

Are you interested in getting a deeper look at the data? Or do you want to see the differences in industries across age? Then you should visit Temkin Ratings at www.temkinratings.co.uk.

The bottom line: Customer experience excellence is in short supply.

How Companies Use Customer Experience Metrics

In a recent report, State of Customer Experience Metrics, 2012, we examined how large companies use CX metrics. To get a better sense of what’s going on, we segmented the companies in our study along two dimensions:  frequency of metrics usage by executives and integration of CX metrics into key decisions. The results defined four segments of companies:

• CX Metrics Ignorers (45%): These companies don’t use CX metrics in any substantial way.
• CX Metrics Reviewers (16%): These companies review metrics but don’t do too much with the information.
• CX Metrics Toe Dippers (14%): These companies make some decisions using CX metrics, but the metrics aren’t part of the ongoing operations.
• CX Metrics Decision Makers (25%): These companies use CX metrics to guide how they run their business.

The bottom line: How do YOU use CX metrics?

Discussing 13 Customer Experience Megatrends

In 2010, I wrote a report called 8 Customer Experience Megatrends and it’s now time to update the list of megatrends. I’m planning to publish a report in early 2012 with a new set of CX megatrends. As part of the process, I’m sharing a draft of the megatrends in order to get feedback. So please leave comments with your thoughts!

To prepare the updated list of megatrends, we’ve been doing a bunch of research which includes reading through responses from more than 300 CX professionals who recently answered our survey question: What trends do you think will have a significant effect on customer experience over the next few years? 

Here’s the initial draft of 13 CX Megatrends. As you’ll see, there are a few carryovers from the previous list. I’ve also taken some creative license to introduce new words.

Is there something missing? Do these make sense? How do you think the future of CX will play out?

The bottom line: We want to hear from you

Data Snapshot: Who Prefers Service Over Price?

The report is available for FREE

We just published a new piece of research, Who Prefers Service Over Price?

This report uses a new format for Temkin Group that we call a “Data Snapshot.” While many of our reports have a lot of data, these reports will be even more data intense and can serve as reference materials for looking up data points. Since this is the first report in the new format, we decided to make it available for free.

Here’s the executive summary:

We asked 5,000 U.S. consumers whether they would prefer low prices or good service when doing business with 14 types of companies. It turns out that consumers prefer low prices in every industry except for banks and computers. Our analysis looked at differences across age, income, ethnic, and educational levels of consumers. Some of our findings: life insurance is the most age-dependent, low income leads to price preference, blacks have the most preference for good service, and higher education leads to a preference for service.

This Data Snapshot has five graphics that look at the following data (which is the first figure in the snapshot) across age, income, ethnic, and educational demographics.

The report is available for FREE

The bottom line: Low prices are important, but many people prefer good service

CX Metrics Don’t Stack Up To Financial Metrics

In the recent Temkin Group report State of CX Metrics, 2011, we examined many aspects of CX metrics programs. As part of that research, we asked respondents from large companies to rate their effectiveness at certain aspects of a CX metrics program. Here’s a summarized version of their responses.

My take: As you can see, only about half of respondents think they’re doing a good job collecting and communicating CX metrics — and that’s the most effective thing that they’re doing. Less than one out of five think they’re good at making trade-offs between financial and CX metrics.

What does that mean? Even companies that are measuring their customer experience aren’t able to use this information effectively to sway decisions. So short-term financial metrics continue to set the course for most companies.

It doesn’t make sense to ignore financial metrics, but companies need to do a better job of balancing them with CX metrics. While financial metrics often look at historical performance, CX metrics can give a better sense of the future. So companies should build up their confidence in CX metrics so that decisions are made based on an explicit analysis of short-term and long-term goals.

The bottom line: CX metrics need to guide business decisions

IBM’s Success Highlights Four Questions For All Execs

In case you’ve missed it, IBM is a hot commodity; during 2011 its stock rose from $147/share to $184/share.

A lot of the credit has to go to Samuel J. Palmisano, who just stepped down as IBM’s CEO after nearly decade of leading the IT behemoth.

Mr. Palmisano led the company using a framework based on four questions. According to Palmisiano, these four questions were a way to focus thinking and prod the company beyond its comfort zone and to make I.B.M. pre-eminent again:

1. Why would someone spend their money with you — so what is unique about you?
2. Why would somebody work for you?
3. Why would society allow you to operate in their defined geography — their country?
4. And why would somebody invest their money with you?

Palmisiano used this approach to redefine IBM as a smaller, more profitable company by divesting businesses like PC and disk drives and acquiring PricewaterhouseCoopers Consulting among others.

My take: I like Palmisano’s questions; they point to an overarching theme: Value creation. I find that too many executives forget to ask themselves and their people about how they really create value. Even if they had a good idea of the answers to Palmisiano’s questions at one point in time, the world changes and they need to continue to ask — and answer — those four questions.

But there’s another key component to this type of framework: honesty. It’s tempting to view the world through the eyes of optimisim, but this gets in the way of good decision making. That’s why I often refer to a key lesson that I learned from Jack Welch during my days at GE:

“Deal with the world as it is, not how you’d like it to be“

The bottom line: Be honest: how will your company create value in the future?

Report: Employee Engagement Benchmark Study

The report is on sale for $195

We just published a new Temkin Group report, Employee Engagement Benchmark Study. The analysis uncovers a strong connection between employee engagement and customer experience as well as between employee engagement and productivity.

Here’s the executive summary:

Employee engagement is one of the four customer experience core competencies and it’s the one that companies tend to struggle with the most. To examine this critical area, we surveyed more than 2,400 U.S. employees. Here are some highlights of the findings: only 40% of employees are fully committed to helping their companies succeed, 54% will do something good for the company even if it’s not expected, and 26% are likely to look for a new job within six months. We also introduced the Temkin Employee Engagement Index (TEEI) based on how employees feel about three areas: understanding the company mission, feeling that their feedback is valued, and having the required training and tools. Using the TEEI, we found that only 31% of employees are highly engaged. These highly engaged employees are a real asset; they’re 5.8 times more committed to helping their companies succeed and 4.7 times more likely to recommend that someone apply for a job at their company. It turns out that companies with good customer experience have 2.5 times more engaged employees than companies with poor customer experience.

To gauge the level of employee engagement across respondents, we used the Temkin Employee Engagement Index (TEEI), which is based on how much employees agree with three statements:

1. I understand the overall mission of my company
2. My company asks for my feedback and acts upon my input
3. My company provides me with the training and the tools that I need to be successful

Using the TEEI results from the 2,435 respondents, our analysis uncovered a number of interesting items. Here’s a graphic I put together to summarize some of the key data in the report:

The report highlights four recommendations:

• Make employee engagement an executive priority.
• Measure employee engagement.
• Create employee engagement task force.
• Embed employee engagement into the HR fabric.

The report is on sale for $195

The bottom line: Employee engagement is critical for long-term (and short-term) success

10 Customer Experience Resolutions For 2012

For the past four years (2008, 2009, 2010, and 2011), I’ve published customer experience resolutions and it’s time to do it again. In memory of Steve Jobs, I’m using his quotes to provide a foreword to the 2012 resolutions:

“Passion can be an extremely powerful transformational force”
“Design [and CX] isn’t something you can just layer on to a product, it needs to be integrated throughout the process”

Some of the resolutions are new while others are repeated from last year. They are meant for CX professionals within companies that are making progress on customer experience. With that in mind, here are my 2012 CX resolutions:

1. We shall actively engage our employees, relentlessly communicating and celebrating customer-centric behavior. Employee engagement remains the lowest scoring CX competency. We need to keep in mind the 4th Law Of Customer Experience: Unengaged Employees Don’t Create Engaged Customers and embed customer-centricity into how we hire, train, and promote employees.
2. We shall make more customer-insightful decisions, embedding insights from voice of the customer (VoC) data in the day-to-day activities af many, many more people. It’s not good enough to collect feedback; we need to help our organization incorporate the insights into its ongoing operations. How? Master the 6 Ds of a VoC program: Detect, Disseminate, Diagnose, Discuss, Design, and Deploy. To succeed, we will need our organization to abandon its obsolete beliefs about market research.
3. We shall stop ignoring new customers, ensuring that they don’t get lost during — and beyond — the on-ramping processes. We can no longer think of the point of sale as the finish line of success. Instead, we need to measure our effectiveness at leading customers to the point of value where they experience that value they are expecting. Remember, new customers want to love you but they are willing to hate you. So we need to consider doing a CX redesign of our on-ramping processes to lock in customer delight.
4. We shall put CX metrics on the scorecard, helping our leaders understand trade-offs between CX and business metrics. Since only 19% of large companies are good at making trade-offs between financial and CX metrics, we need to raise the visibility of CX metrics so that our executives discuss them in the same light as other business drivers like sales, profits and market share. We don’t expect our company to prioritize CX over all other metrics, but we need to keep our company focussed on the long-term value of good CX.
5. We shall anticipate customer needs, using text and predictive analytics to spot trends and discover latent desires. Our company has an immense volume of unstructured customer feedback data from sources like comments on surveys, inbound emails, call center conversations, and social media conversations. We need to analyze this unstructured data together with other structured data to predict what customers will want and to discover and respond more quickly to trends that we spot. Our contact centers are a rich environment to work on this resolution.
6. We shall energize our brand promoters; going beyond just fixing problems of unhappy customers. While we must keep working to eliminate detractors, we also need to find ways to make more customers love us and encourage our promoters to spread the word. Once we identify our promoters, why don’t we target them for word-of-mouth campaigns.
7. We shall disseminate good experience design, getting our organization to focus on all touch points that affect our customers’ experience. We need to make sure that we understand how customers view their interactions with us, including things like instructions and monthly statements, so we can spot even the little things that make it easy for customers to work with us. We need to invest in making improvements after launching new customer-facing efforts like Websites, retail outlets, and call center scripts; hunting for and eliminating the things that make customers struggle.
   
8. We shall join the CXPA.org; helping to propel the customer experience profession. The Customer Experience Professionals Association (CXPA) is a global non-profit organization dedicated to the advancement of customer experience management practices. We need to join in order to learn from and share with other CX professionals and ensure that our profession will thrive.
9. We shall celebrate our progress in 2011, taking time to recognize all of the great things that we’ve accomplished and acknowledging all of the people who have helped make it happen. We need to continuously look for and applaud successes so that people contributing to our customer experience transformation feel good about their efforts.
10. We shall take another step in 2012, overcoming whatever hurdles get in the  way of advancing our evolution towards becoming a customer-centric organization. Since the number one obstacle to customer experience success is “other competing priorities,” we need to keep our executive team focused on keeping this multi-year journey a top priority.

The bottom line: Good luck on propelling your organization’s CX journey in 2012!

Happy New Year, Anyway You Say It

Gelukkige nuwejaar, Gëzuar vitin e ri, e glëckliches nëies, aam saiid, shnorhavor nor tari, yeni iliniz mubarek, bonne année, urte berri on, Зновым годам, subho nababarsho, asgwas amegas, mbembe mbu, bonne année, sretna nova godina, bloavezh mat, честита нова година, hnit thit ku mingalar pa, kung hé fat tsoi, bon any nou, xin nian kuai le, pace e salute, sretna nova godina, šťastný nový rok, godt nytår, gelukkig Nieuwjaar, felicxan novan jaron, head uut aastat, gott nýggjár, onnellista uutta vuotta, gelukkig Nieuwjaar, bonne année, lokkich neijier, bon an, feliz aninovo, gilotsavt aral tsels, ein gutes neues Jahr, kali chronia, rogüerohory año nuévo-re, sal mubarak, bònn ané, hauoli makahiki hou, shana tova, nav varsh ki subhkamna, nyob zoo xyoo tshiab, boldog új évet, farsælt komandi ár, selamat tahun baru, ath bhliain faoi mhaise, felice anno nuovo, akemashite omedetô, asseguèsse-ameguèsse, hosa varshada shubhaashayagalu, zhana zhiliniz kutti bolsin, sur sdei chhnam thmei, umwaka mwiza, seh heh bok mani bat uh seyo, sala we ya nû pîroz be, sabai di pi mai, felix sit annus novus, Happy New Year, laimīgu Jauno gadu, feliçe annu nœvu, bonana, laimingų Naujųjų Metų, gelükkig nyjaar, e gudd neit Joër, srekna nova godina, arahaba tratry ny taona, selamat tahun baru, is-sena t-tajba, kia hari te tau hou, shine jiliin bayariin mend hurgeye, wênd na kô-d yuum-songo, godt nytt år, bon annada, sâle no mobârak, szczęśliwego nowego roku, feliz ano novo, bun di bun onn, bangi vasilica baxt, un an nou fericit, С Новым Годом, ia manuia le tausaga fou, nzoni fini ngou, bonu annu nou, bliadhna mhath ur, srećna nova godina, mwaha mwema, goredzwa rakanaka, nain saal joon wadhayoon, suba aluth avuruddak vewa, stastlivy novy rok, srečno novo leto, dobir leto, feliz año nuevo, wan bun nyun yari, mwaka mzuri, gott nytt år, es guets Nöis, manigong bagong taon, ia orana i te matahiti api, iniya puthandu nalVazhthukkal, yaña yıl belän, nuthana samvathsara subhakankshalu, สวัสดีปีใหม่, tashi délek, yeni yiliniz kutlu olsun, Vyľ Aren, Z novym rokom, naya saal mubarik, yangi yilingiz qutlug’ bo’lsin, Chúc Mừng Nǎm Mới, bone annéye, blwyddyn newydd dda, bon lanné, dewenati!!!!

(Source of translations: http://www.freelang.net/expressions/newyear.html)

The bottom line: I hope that you and your family have a happy, healthy, and prosperous 2012!

Lessons From Best Buy’s Online Order Fiasco

Best Buy recently announced that it was canceling a number of orders that it took on its website on the weekend after Thanksgiving because of “overwhelming demand of hot product offerings.” This move comes after aggressive promoting and discounting to draw consumers to its online channel.

So what is Best Buy doing besides just canceling orders right before Christmas? According to one of the affected consumers, Best Buy tried to get him to take an older model or a more expensive model, both of which wouldn’t arrive until after Christmas.

According to Susan Busch, senior director of Best Buy’s public relations

“What was wrong is that there was an unacceptable delay between order confirmations and cancellations, and for that we are very sorry. It’s important to note that this was a rare situation based on a high volume of orders over a short period of time.”

My take: Sorry Ms. Busch, there’s much more wrong than that. The problem started at the point when Best Buy actively promoted products that it couldn’t fulfill. Then the problem continued when it took orders for products that it couldn’t deliver. That’s the point where it gets to the problem of an unacceptable delay in notifying customers. But, the Best Buy problems don’t even end there. Best Buy completely failed to recover from the service miscue.

Here’s how I’d rate Best Buy against our C.A.R.E.S. model for service recovery:

• Communication (clearly communicate the process and set expectations): D
• Accountability (take responsibility for fixing the problem or getting an answer): D
• Responsiveness (don’t make the customer wait for your communication or a solution): D
• Empathy (acknowledge the impact that the situation has on the customer): D
• Solution (at the end of the day, make sure to solve the issue or answer the question): D

Here’s how Best Buy could have better handled this situation:

• Put together a plan for each element of the C.A.R.E.S. framework
• Communicate immediately with affected customers
• Give everyone a Best Buy gift certificate (amount based on order size) to acknowledge the inconvenience
• Provide a coupon code for free expedited shipment, so they can order something else and get it on time
• Setup a toll-free number and a special support site (with chat representatives) to deal with any special issues
• Get the CEO (Brian Dunn) to communicate the apology, don’t offload it to PR
• Explain what you are doing to make sure that it doesn’t happen again

The bottom line: Companies need to plan for major problems BEFORE they occur

Top 25 Posts On CX Matters From 2011

I looked back at the popularity of my blog posts last year. Here are the 25 blog posts that had the most readership in 2011:

1. Free eBook: The 6 Laws Of Customer Experience
2. Report: The Customer Experience-Loyalty Connection
3. The 2011 Temkin Experience Ratings
4. The Four Customer Experience Core Competencies
5. 8 Customer Experience Trends For 2011
6. Don’t Confuse Customer Service With Customer Experience
7. Customer Experience Lessons From Steve Jobs
8. New Report: Voice Of The Customer Programs Grow Up
9. 9 Recommendations For Net Promoter Score (NPS)
10. What The Heck Is Customer Experience?
11. 6 C’s Of Customer-Centric DNA
12. 10 Customer Experience Resolutions For 2011
13. NetFlix Ends Email Support; Tries Another Disruptive Strategy
14. What Do Customers Want? Professor Kano Knows
15. Free eBook: The 6 New Management Imperatives
16. New Report: The State Of Customer Experience Management, 2011
17. McDonald’s Showcases Glocal Strategy
18. New Report: How Consumers Give Feedback
19. 6 Ds For Voice Of The Customer Programs
20. The 6 Levels Of Proactive Support
21. New Report: Customer Experience Accelerates In 2011
22. Introducing The 6 Laws Of Customer Experience
23. Amazon’s Jeff Bezos Is Obsessed
24. Are you listening to the voice of the customer?
25. Report: State Of Voice Of The Customer Programs, 2011

The bottom line: I hope you enjoy these popular posts!

Stats On Social Media Activity

Temkin Group and Peppers & Rogers Group teamed up to survey companies about their social media efforts. Check out this Peppers & Rogers article with interesting findings from the research: How Does Your Social Strategy Stack Up?

In this post, I’m examining data from the 68 respondents from companies with annual revenues of $100 million or more. I put together five slides with data that I felt was interesting. Here are some of the highlights:

• Only 21% of respondents have connected social media into their operations while 26% are doing very little about social media at all.
• The top obstacle they identify is connecting social media efforts to hard-dollar returns.
• Only 6% of respondent think they’ve achieved significant business results from social media and 20% have seen very little benefit.  But many are still hopeful; 38% expect to gain significant benefits within three years.
• The benefit that is most frequently measured is an increase in engagement, using metrics like time on site or number of friends/fans.
• Social media is led by a functional leader in 44% of firms and by a social media leader in 21%.
• Marketing “owns” more than half of the social media efforts. But 62% are using social media for something in customer service.
• The top three social media activities are: providing links to relevant content, providing reactive support when customers complain, and integrating social media marketing with other marketing channels.
• Nearly 60% of  companies encourage some employees to use social media, while 25% encourage all employees to use it. But all of that social media might be problematic; only 60% have social media guidelines and in place and only about 40% provide social media training to employees.

The bottom line: Companies have not yet mastered social media

Temkin Group Research Plans For 2012

It’s been an exciting year for Temkin Group research. As you can see farther down in this post, we’ve published a lot of great reports in 2011. Well, I’m even more excited about what we have planned for 2012!

Our research will continue to focus on five areas: (1) best practices in CX management; (2) tools and data for benchmarking CX performance; (3) emerging trends; (4) consumer activities and behaviors; and (5) Temkin Ratings.

To give you a flavor for what to expect, here are some of the research reports that we already have planned for 2012 (with working titles):

• Who Prefers Service Over Price (see which consumers will trade off price for service across many industries)
• Social Media and Mobile Adoption (analyzing adoption across demographic groups. Great data to understand how many of your customers are using these channels.)
• Consumer Channel Preferences (see what channels consumers want to use for a wide variety of interactions)
• State of CX Management, 2012 (identify trends in CX management with the 3rd year of this study)
• CX Plans for 2012 (review what companies say about their CX efforts in 2011 and what they are planning for 2012)
• The Case for Employee Engagement (study of 2,400+ employees will show link between employee engagement and both CX performance and employee productivity)
• ROI of Customer Experience (updating analysis in the report The CX-Loyalty Connection)
• Temkin IT Experience Ratings (technology companies will be rated based on feedback from enterprise customers)
• Temkin Ratings UK (ranking 60+ companies across 7 industries based on a survey of UK consumers. Look for our temkinratings.co.uk site in early 2012)
• Temkin Ratings US (we’re expanding beyond the 12 industries in the 2011 ratings and will be able to start analyzing trends)

If there’s a topic that you think we should add to our research agenda next year, then leave a comment and let us know about it.

The bottom line: If you liked our research in 2011, then you’ll love it in 2012

*********

Previous Temkin Group Reports

2011 Research Reports

• State of CX Metrics, 2011, November 2011
• 2011 Temkin Trust Ratings, October 2011
• The State Of Voice Of The Customer Programs, 2011, September 2011
• 2011 Temkin Customer Service Ratings, August 2011
• The PC Buying Experience, 2011, July 2011
• 2011 Temkin Web Experience Ratings, June 2011
• Social Media’s Limited Affect On Purchase Decisions, June 2011
• 2011 Temkin Forgiveness Ratings, May 2011
• The State Of Customer Experience Management, 2011, May 2011
• The Customer Experience-Loyalty Connection, May 2011
• 2011 Temkin Loyalty Ratings, April 2011
• Voice Of The Customer Programs Grow Up, April 2011
• 2011 Temkin Experience Ratings, March 2011
• How Consumers Give Feedback, March 2011
• Locating A Store On The Phone Is Not Always Easy, February 2011
• Online Experiences For Buying Gift Cards Need Work, January 2011
• Customer Experience Accelerates In 2011, January 2011

2010 Research Reports

• Eight Customer Experience Megatrends, Updated on December 2010
• Online Store Locators Miss A Key Part Of The Experience, December 2010
• The State Of Voice Of The Customer (VoC) Programs, October 2010
• Assessing The Maturity of Voice Of The Customer Programs, October 2010
• Profiling Customer Experience Leaders, September 2010
• The Evolution Of Voice Of The Customer Programs, September 2010
• The Current State Of Customer Experience, June 2010
• The Four Customer Experience Core Competencies, June 2010