Forrester’s 2008 Customer Experience Rankings

This is our second year publishing the CxPi. The 2008 CxPi ranks 114 firms across 12 industries: Airlines, Banks, Credit Card Providers, Health Plans, Hotels, Insurance Firms, Internet Service Providers, Investment Firms, PC Manufacturers, Retailers, TV Service Providers, and Wireless Phone Carriers.

The CxPi is based on consumer evaluations during October 2008 across three areas: 1) usefulness; 2) ease of use; and 3) enjoyability (see the methodology section below).

Here are the full 2008 CxPi rankings

Forrester's 2008 Customer Experience Rankings

Barnes & Noble took the top spot in the CxPi rankings, just barely beating out USAA’s credit card business. Borders, Amazon, and last year’s leader Costco round out the top five. At the other end of the spectrum, Charter Communications landed at the bottom of the CxPi rankings for the second year in a row. Here are some additional insights about the overall results:

  • Retailers take seven out of the top 10 spots. Last year, nine out of the top 10 firms were retailers. While retailers still dominate the top of the CxPi, three non retailers have cracked the top 10: USAA, Hampton Inn, and credit unions.
  • Healthcare and TVs dominate the bottom. The bottom 10 companies came from only four industries: four medical insurers (Medicaid, Blue Shield of California, Aetna, and Cigna), three TV service providers (Charter Communications, Time Warner, and Comcast), two ISPs (Charter Communications and Comcast), and one wireless carrier (Sprint). Charter Communications, Medicaid, Aetna, and Sprint were also on last year’s bottom 10 list.
  • Several banks made significant improvements. When we compared firms’ 2008 CxPi with last year’s results, we found that a number of companies that had improved. The three firms with double digit improvements were all banks (US Bancorp, SunTrust Bank, and Citibank) and six out of the top seven improvements were made by banks as well.

CxPi Results Across Industries

We also looked at the overall results for the 12 industries included in the CxPi.

Forrester's 2008 Customer Experience Index Results

The industry CxPi data shows that:

  • Retailers and hotels dominate. Two industries at the top of this year’s ratings, retailers and hotels, were the only industries to receive “good” average ratings. The two industries at the bottom of the list ended up with “very poor” CxPi ratings: health insurance plans and TV service providers.
  • Banks improved and TV service providers got worse. Comparing this year’s data with last year’s results, we found that four industries have improved while five had gotten worse. Banks made the largest improvement; increasing their average CxPi scores by 7%. The average CxPi scores for TV service providers, on the other hand, dropped by 7%.

The CxPi Methodology

This analysis was based on responses from 4,564 US consumers during October 2008. The Customer Experience Index (CxPi) was calculated as an average of the indices that came from consumer responses to the following three questions from an online survey:

  1. Thinking about your recent interactions with these firms, how effective were they at meeting your needs? (“Usefulness” rating)
  2. Thinking about your recent interactions with these firms, how easy was it to work with these firms? (“Ease Of Use” rating)
  3. Thinking about your recent interactions with these firms, how enjoyable were the interactions? (“Enjoyability” rating)

Consumers selected responses along a five-point scale – ranging from a very negative experience (1) to a very positive one (5). The individual indexes were calculated by taking the percentage of consumers who selected one of the top two boxes (4 or 5) and subtracting the percentage of consumers who selected the bottom two boxes (1 or 2).

In order to limit consumer feedback to organizations that consumers are familiar with, we only asked consumers about organizations that they’ve interacted with during the previous 90 days.

While we received feedback on many firms, the CxPi  only includes the 114 organizations that had at least 100 consumer responses.

The bottom line: There’s plenty of room to improve customer experience which will increase customer loyalty.

About Bruce Temkin
I am a customer experience transformist, helping large organizations improve business results by changing how they deal with customers. As part of this focus, I examine strategy, marketing, interaction design, customer service, and leadership practices. I am also a fanatical student of business, so this blog provides an outlet for sharing insights from my ongoing educational journey. Simply put, I am passionate about spotting emerging best practices and helping companies master them. And, as many people know, I love to speak about these topics in almost any forum. My “title” is Managing Partner of the Temkin Group, a customer experience research and consulting firm that helps organizations become more customer-centric. Our goal is simple: accelerate the path to delighting customers. I am also the co-founder and chair of the Customer Experience Professionals Association (CXPA.org), a non-profit organization dedicated to the success of CX professionals.

73 Responses to Forrester’s 2008 Customer Experience Rankings

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  2. Why aren’t service industry’s like law firms included ?

    • Bruce Temkin says:

      Tom: There are some limits to the number of companies that we can ask consumers about during a single survey. This year we were able to add hotels, airlines, and PC manufacturers. Do you have a recommendation for a particular service industry for us to include next year?

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  6. Paige Nunn says:

    I share some of the same questions posted to your blog…the report is great, but what about utilities? We are in full swing with customer experience…I guess we’re trailblazers. Do you know if utilities are using CxPi measures? Dominion Viriginia Power is a regulated utility so competition isn’t our issue, but improving the experience for our customers and CSAT has huge financial, regulatory, and legislative implications for our business. In future white papers you may want to consider how CxPi impacts non-competitive businesses that aren’t so focused on market penetration. Any others in the same boat as me?

    • Bruce Temkin says:

      Paige: Utilities were definitely on the list of industries we considered. As I mentioned above, there’s a limit to the number of industries we can ask about in our survey — so we couldn;t do everything that we wanted to do. One of the issues is that many of the utilities are regional, so we’d only a handful would provide us with a large enough sample size in our survey. We’ll definitely consider including utilities again next year. Thanks for commenting!

      • Abi Stern says:

        Paige and Bruce, I head up the research for a cross industry Customer Experience event that although is predimnantly European, this year for example we had a handful of representatives from the US. Following the success of the events (Bruce, this is the event I emailed you about not too long ago) I am researching the possibility of runnnig Customer Experience for Utilities.

        The problem I’m finding – and this is where I’m hoping you can help – is because board members in many utility firms are awaiting further mandates on smart metering, there are too many unknowns fir them to be investing in customer experience. That’s not to say they’re doing nothing as there are some leading UK and European companies who I know have some pretty forward thinking customer experience initiatives. However, it seems to be questionable as to whether there is company wide buy-in (top down and bottom up) for customer experience, and this could prevent people from attending an event on it.

        In addition, I hear that Utilities are much less willing to share best practice with eachother than say finance, telco and retail.

        Do either of you have any thoughts on this?

  7. Joey says:

    The release says: “Consumers selected responses along a five-point scale – ranging from a very negative experience (1) to a very positive one (5).” What were the scale point anchors? “Very Negative” to “Very Positive”?

    Thanks!

    • Bruce Temkin says:

      Hi Joey: Good question. We keep the methodology description at a high level to keep from boring most people. But since you asked…

      We actually have a different 5 point scale for each of the 3 underlying questions in the CxPi:

      1) Thinking about your recent interactions with these firms, how effective were they at meeting your needs? (1= Didn’t meet any of my needs; 5= Met all of my needs)
      2)Thinking about your recent interactions with these firms, how easy was it to work with them? (1= Very difficult; 5= Very easy)
      3) Thinking about your recent interactions with these firms, how enjoyable were the interactions? (1= Not at all enjoyable; 5= Very enjoyable)

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  10. @Bruce:
    I thought you’d guess one from the message :-)

  11. Bruce Temkin says:

    Tom: I got the “law firms” but were you thinking about other types of firms as well? Unfortunately, there’s no way that we’d get a large enough sample of customers for any single law firm.

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  15. Tracey Green says:

    Interesting to see the changes in ranking for Banks in the lastest customer experience index results.
    Do you have a view of any initiatives/circumstances may have driven the changes in performance for those banks where ratings either improved significantly or declined?

    I would also be interested to know, out of the 3 criteria ease of use, usefulness and enjoyability – in the minds of customers are each of the criteria of equal value in driving advocacy and loyalty or is there a hierachy in terms of level of importance? To put this question into context….if there were significant improvements required within each criteria, is there one area where we should focus first to achieve some visible, short term results that will help generate engagement and motivation across our management team?

    • Bruce Temkin says:

      Hi Tracey: I work with many of the banks in the index — and I think the improvements come from their multi-year focus on organic growth and customer experience. The big drop in Wachovia came from its turmoil around the credit problems and resulting acquisition. As far as which elemtns of the CxPi are most important, I think they are in this order: 1) Meets needs, 2) Easy to work with; and 3) Enjoyability. I’ll be looking at how these items correlate to loyalty across industries in my research later this year. Thanks for the great question.

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  20. kadavy says:

    I am *shocked* to see Barnes & Noble on top of the list. I went to one for the first time in awhile a few days ago. The selection was very poor, and I was peeved by the fact that their book search kiosks were signed with “Please ask a service representative for assistance.” Why not let me search for a book myself? I left within 3 minutes and went to Borders – where I had a much better experience, and spent $50.

    My one issue with Borders was that they actually had *alarms* on some of their books – they were “locked” shut. I realize it’s not a library, but there has to be a less passive-aggressive way.

    • Bruce Temkin says:

      David: Thanks for sharing your feedback. It does seem like book search kiosks should be “self-serve.” I haven’t run into the “locked” books at Borders; it must be unsettling to hear an alarm when you try to open one! All large firms regularly deliver both good and bad experiences; firms that do well in our rankings just deliver fewer “bad” experiences. That’s why we get feedback from nearly 5,000 consumers.

  21. kadavy says:

    Bruce: I’m sure it’s a very accurate report, and I hope I get the budget to read it one day. I remembered Barnes & Noble providing a great experience in my previous visits – maybe this wasn’t one of their strongest locations. The book kiosk thing still annoys me though :P

    Here’s a pic I took of one of the book “locks” I’m talking about: http://twitpic.com/1iej3

    I was very surprised by this, and it seemed stand-offish. It brings to mind your comparison of the book industries fate to that of the music industry. This tactic seems very “RIAA” to me. One of the only advantages a physical book store has over Amazon is that you can browse the books easily, and this kills that. If they really don’t want people to browse a book, I’m sure shrinkwrap would serve as an effective deterrent, and wouldn’t give off such an untrusting vibe.

    • Bruce Temkin says:

      David: Thanks for the picture of the locked book; it’s truly kludgy. And you’re right, if you take browsing out of the bookstore experience then there’s not much left.

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  23. kadavy says:

    BTW, I finally read the report (didn’t notice you were giving it away free before – duh (and thanks!)). Do you have any insight on what happened to Dell? In “The Ultimate Question” they sound like they really had Customer Experience mastered across the organization, and in your report, they are a “poor” rating.

    I also wonder how much of a poor customer experience with a PC manufacturer is actually the fault of Microsoft’s software :P

    • Bruce Temkin says:

      David: I haven’t studied Dell, but here’s my observation: Dell got so focused on operational efficiency that it lost site of customer experience (from the product and service side). The issue was attenuated by the Mac’s resurrection, since Apple gave consumers a higher set of expectations. And I do think Microsoft’s software has a bit to do with it; consumers don’t distinguish problems with the operating system from problems with the PC manufacturer.

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  35. denim says:

    How refreshing to be called a customer by a research team!

    I don’t consume everything I buy. Sometimes I rent it. Sometimes I add value and resell it. Sometimes it is knowledge that is passed along. But always, I am the customer, not a “consumer”. Marketing a product or service to me as a customer is at least a complement. But to treat me as a “consumer”, I feel I am about to be a sucker.

    • Bruce Temkin says:

      Denim: Although I frequently use the term “customer experience,” I also use the term “consumer” when talking about “business to consumer” type of interactions; distinguishing them from “business to business” interactions. As you mention, the term is not always accurate because individuals may not be “consumers.” But, unfortunately, “customers” doesn’t always work either, because some discussions are about people who may not actually be customers. It gets even more complicated when dealing with other types of organizations that have “members” or “citizens” instead of “customers.”

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  37. denim says:

    Bruce: I would still prefer stretching “customer” to fit rather than using “consumer”. For example, a company where I worked had its corporate culture quality slogan say “focus on the customer”. Then every employee had a customer for his own work output. Even if it was “only” a report to the design team on ones analysis, that team was the employee’s customer. It really gives the mind a better focus on what is interactively expected and appreciated. I my mind customers buy and consumers consume but may not have bought.

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  58. The graph showed a big improvement for Internet Service Providers. From 32% to 71%…that’s a WOW! Though they still didn’t top, at least they improved and they’re not the lowest in 2008.

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