Report: Tech Vendor NPS Benchmark, 2014

1407_IT_NPSBenchmark_COVERWe just published a Temkin Group report, Tech Vendor NPS Benchmark, 2014, The research examines Net Promoter Scores and the link to loyalty for 63 tech vendors based on feedback from IT decision makers. We also compared overall results to our 2013 NPS benchmark and our 2012 NPS benchmark. Here’s the executive summary:

We surveyed IT decision-makers from more than 800 large North American firms to learn about their relationships with their tech vendors. We asked them a series of questions regarding their experiences as the clients of different tech vendors, and one of the questions we posed generated Net Promoter Scores® (NPS®) for the companies. Of the 63 companies we looked at, EDS and VMware earned the highest NPS, while Autodesk and Cognizant received the lowest. The overall industry average NPS dropped for the second year in a row. Our analysis also delved into the correlation between NPS and loyalty, revealing that, compared to severe detractors, promoters are much more likely to spend more money with their tech vendors in 2014, try new products and services when they are announced, and forgive the vendor for a mistake. We compared the loyalty levels for each vendor, and we found that SunGard and IBM software have the most customers planning on increasing their purchases in 2014, while Satyam and EDS customers are the most willing to try new offerings, and Satyam has the most forgiving customers. Our research also shows that promoters are more concerned than detractors about getting lower prices.

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This is the third year that Temkin Group has completed the NPS study. Over that time, the average NPS in the tech industry has been dropping. NPS in for tech vendors was 33.6 in 2012 and 24.7 in 2013, falling to 23.1 in 2014.

With an NPS of 48, EDS came out with the top score followed closely by VMware with 45. Six other tech vendors received NPS of 35 or more: EMC, Microsoft servers, Oracle outsourcing, Pitney Bowes, Microsoft business applications, and Cisco.

At the other end of the spectrum, three tech vendors have negative NPS: Autodesk, Cognizant, and Wipro. Six other vendors fell below 10: Capgemini, Intuit, ADP outsourcing, CA, Infosys, and HP outsourcing.

1407_ITNPS_Companies

The report also examines the link between NPS and loyalty. Our analysis shows that promoters are more than six times likely to forgive a tech vendor if they deliver a bad experience, about seven times as likely to try a new offering from the company, and almost three times as likely to purchase more from them in 2014 than they did in 2013.

In addition to benchmarking NPS, the research measures the loyalty that large companies have for their tech vendors. Respondents have the most plans to increase spending with SunGard, IBM software, Alcatel-Lucent, and ACS. They are most likely to try new offerings from Satyam, EDS, and EMC. And if the tech vendors make a mistake, IT decision makers are most likely to forgive Satyam, EDS, Ericsson, and Alcatel-Lucent. NPS characterizes respondents as Promoters when they are very likely to recommend and Detractors when they are very unlikely to recommend.

Report details: The report includes graphics with data for NPS, 2014 purchase intentions, likelihood to forgive, likelihood to try a new offering, and areas of improvement for the 63 tech vendors that had at least 40 pieces of feedback. The excel spreadsheet includes this data (in more detail) for the 63 companies as well as for 22 other tech vendors with less than 40 pieces of feedback. It also includes the summary NPS scores from 2013. If you want to know more about the data file, download this excel spreadsheet without the data.

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The bottom line: When it comes to NPS, large tech vendors are heading in the wrong direction

Note: See our 2013 NPS benchmark and 2012 NPS benchmark for tech vendors as well as our page full of NPS resources.

P.S. Net Promoter Score, Net Promoter, and NPS are registered trademarks of Bain & Company, Satmetrix Systems, and Fred Reichheld.

Resources for Net Promoter Score (NPS) Programs

Temkin Group works with many companies on their Net Promoter® Score (NPS®) programs and has researched 100s of other organizations. Take a look at our services on the Temkin Group website. I’ve assembled some research and blog posts to help you make the most out of these efforts:

NPS Research Reports:

NPS Blog Posts:

View all of our NPS content

Relevant VoC Resources:

NPS programs are really just one type of a Voice of the Customer (VoC) program. Here is a selection of related VoC resources:

VoC Program Assessment:

Download our free VoC program assessment tool and you can identify the maturity level of your VoC program and identify strengths and weaknesses of the program across our Six Ds of a closed-loop VoC program. If you want to compare your results against the VoC programs at 192 large companies, then download the Temkin Group report State of VoC Programs, 2013 which includes detailed benchmarking data from large firms.

VoC Research and Posts:

View all of our VoC content

Additional content that you may find valuable:

Sign up for our monthly CX Matters Journal

Net Promoter Score, Net Promoter, and NPS are registered trademarks of Bain & Company, Satmetrix Systems, and Fred Reichheld.

Report: Tech Vendor NPS Benchmark, 2013

1306_IT_NPSBenchmark_COVERWe just published a Temkin Group report, Tech Vendor NPS Benchmark, 2013, The research examines Net Promoter Scores and the link to loyalty for 54 tech vendors based on feedback from IT decision makers. We also compared results to the NPS data we published last year. Here’s the executive summary:

We surveyed IT decision makers from more than 800 large North American firms to understand how they view their tech vendors. One of the questions we asked provides Net Promoter Scores® (NPS®) for 54 of those companies. VMWare and SAP analytics earned the highest NPS while CSC IT services and Infosys IT services earned the lowest. The overall industry average NPS dropped nine points from last year. Our analysis also examined the link between NPS and loyalty, finding that compared with detractors, promoters are more than six times as likely to forgive a tech vendor if they deliver a bad experience, almost six times as likely to try a new offering from the vendor, and more than three times as likely to purchase more from them this year. When examining the loyalty levels for each vendor, we found that Oracle consulting and VMWare clients have the strongest purchase intentions, SAP analytics and Sybase have earned the most forgiveness, and VMWare and SAP analytics have the most innovation equity.

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Here are some of the findings from the research:

  • With an NPS of 47, VMware came out on top followed closely by SAP analytics with 45. At the other end of the spectrum, four tech vendors have negative NPS: CSC IT services, Infosys IT services, Alcatel-Lucent, and Deloitte consulting.
  • The average NPS in the tech industry went from 33.6 in 2012 to 24.7 in 2013. The percentage of promoters dropped seven points.
  • Compared with detractors, we found that promoters are more than six times likely to forgive a tech vendor if they deliver a bad experience, almost six times as likely to try a new offering from the company, and more than three times as likely to purchase more from them in 2013.
  • Forgiveness and willingness to try increase steadily starting at 3 while increased purchases begins steady growth at 5.
  • Promoters most frequently wanted lower prices and better support, while passives and detractors were looking for better support.
  • Oracle outsourcing has the strongest purchase intentions while Trend Micro has the weakest.
  • SAP analytics and Sybase have earned the most forgiveness while Trend Micro has earned the least.
  • VMware has the most innovation equity while Accenture consulting and Intuit have the least.

1306_ITNPS2

1305_ITNPS_Economics

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The bottom line: When it comes to NPS, large tech vendors are heading in the wrong directions

Note: See our 2012 NPS ratings for tech vendors and the post 9 Recommendations For Net Promoter Score along with all of my other posts about NPS.

P.S. Net Promoter Score, Net Promoter, and NPS are registered trademarks of Bain & Company, Satmetrix Systems, and Fred Reichheld.

What Drives Net Promoter Scores (NPS) in IT?

A previous post examined Net Promoter Scores (NPS) for tech vendors and the relationship between NPS and market share based on feedback from IT decision makers within large firms. Since I’ve had questions about that post, I decided to examine a common question: What’s driving those NPS scores? It turns out that the answer (no surprise) is customer experience.

We examined a number of metrics and their relationship with NPS in two areas:

  • Correlation (R). This looks at how connected one metric is to another, ranging from -1.0 to 1.0. A correlation above 0.5 is strongly positive and above 0.7 is very strongly positive.
  • Slope. This looks at the change in NPS that relates to a one-point change in the metric. A higher slope means a change in the metric has a higher change in NPS.

Our first analysis examined NPS scores versus the Temkin Experience Ratings for Tech Vendors. It turns out that there was a very strong correlation (R= 0.77) and the slope is 1.13.

We then examined the correlation and slope between NPS and components of the Temkin Experience Ratings as well as with product and relationship satisfaction scores.

Here are some observations from the analysis:

  • Customer experience is critical. Temkin Experience Ratings has the highest impact on NPS, with the highest overall correlation and slope.
  • You have to be easy to do business with. The highest individual correlation (.75) and slope (1.11) is with the accessible element of the Temkin Experience Ratings, which looks at how easy the company is to work with.
  • Relationship trumps product. It turns out that the correlations are about the same for relationship satisfaction and product satisfaction, but the slope is much higher for relationship satisfaction.
  • Cost of ownership stands out. When it comes to the slopes, cost of ownership (.99) stands out amongst the satisfaction items. Support of account team (.86) is also relatively high.

The bottom line: To improve NPS, improve customer experience.

You can purchase this data for $295. The Excel spreadsheet contains NPS, Temkin Experience Ratings, relationship satisfaction, and product satisfaction data for 60 tech vendors in the analysis as well as for 28 others with sample sizes of less than 60 respondents.

9 Recommendations For Net Promoter Score (NPS)

This week is the Net Promoter Conference in London. Since these events often spur a ton of questions about Net Promoter Score (NPS), I put together one of my periodic posts about NPS. If you’re not familiar with NPS, it’s based on asking customers a question like this:

How likely are you to recommend <COMPANY> to a friend or colleague?

Respondents are categorized as “Promoters,” “Detractors,” or “Passives” based on their answers. The Net Promoter Score (NPS) is calculated by subtracting the percentage of Detractors from the percentage of Promoters (Passives are ignored).

My take: Let me start looking at NPS with some data points from the report, The State Of Customer Experience Management, 2011:

  • 48% of large companies (more than $500M in revenues) are using NPS
  • 67% of those using NPS report positive results (15% say it’s too early to tell)
  • 84% of large firms with voice of the customer programs (including those that use NPS), report success from those efforts

NPS can be a valuable metric, but only when incorporated within a strong voice of the customer (VoC) program. Here are a handful of overall recommendations about NPS:

  1. Stop dreaming about an “ultimate question.” Having worked with dozens of organizations on their NPS efforts, I can tell you that the NPS question is not nirvana. Even the most successful users of NPS ask customers a series of questions and get feedback through a portfolio of mechanisms.
  2. Look for magic in the “why.” To some degree, it’s useless to know if someone is likely or unlikely to recommend you if you don’t also understand why they feel that way. So you need to make sure customer feedback helps you understand why customers feel the way that they do. Which leads to my next recommendation…
  3. Focus on improvements, not questions. Feedback is cheap, but customer-insightful actions are precious. The goal for any feedback mechanism (like NPS) is to drive improvements in your business. Successful NPS programs have strong closed-loop VoC programs that go from detection of customer perceptions to deployment of improvements (see my post about the 6 Ds of a voice of the customer program).
  4. Don’t lose sight of segments. An overall NPS score across your customers may be a good metric for aligning focus across the company, but it’s not very diagnostic. A good VoC program needs to track this type of data across key customer segments and understand which interactions (“moments of truth”) are driving those scores.
  5. Understand the elements of experience. When it comes to making improvements, you need to understand the three core elements of any experience: Functional, Accessible, and Emotional. A good program needs to provides insights into how customers perceive each of these elements.
  6. De-emphasize the “N” in NPS. NPS improves by eliminating Detractors or by increasing Promoters. but those changes can also offset each other. So the “netting” of the scores removes important clarity. Companies need to look at the rise and fall of Promoters and Detractors independently, since the changes needed to affect these areas are often quite different.
  7. Tap into the power of the language. There’s a lot of data to suggest that other measures such as the ACSI’s satisfaction index are as good as NPS (many people argue that it’s better, but I don’t want to enter that debate). What sets NPS apart is the wonderfully clear language around “Promoters” and “Detractors.” Make sure that the education across the company focuses heavily on those terms.
  8. Build a strong VoC program, with or without NPS. The overall program is more important than the choice of a metric like NPS. So make sure you focus on building a strong VoC program whether or not you use NPS (check out our VoC resource page).
  9. Remember, this is a long-term journey. Companies can make short-term improvements with superficial changes, but long-term success requires institutional capabilities. Start by understanding the 6 laws of customer experience and create a roadmap for building four customer experience core competencies: Purposeful Leadership, Compelling Brand Values, Employee Engagement, and Customer Connectedness.

The bottom line: Successful NPS implementations require strong VoC programs

Report: Net Promoter Score Benchmark Study, 2014

1410_NPSBenchmarkStudy_COVERWe published a Temkin Group report, Net Promoter Score Benchmark Study, 2014. This is the third year of this study that includes Net Promoter® Scores (NPS®) on 283 companies across 20 industries based on a study of 10,000 U.S. consumers. Here’s the executive summary:

We measured the Net Promoter Score of 283 companies across 20 industries. USAA and JetBlue took the top two spots, each with an NPS of more than 60. USAA’s banking, credit card, and insurance businesses outpaced their industries’ averages by more than any other company. At the bottom of the list, HSBC and Citibank received the two lowest scores, and Super 8 and Motel 6 fell the farthest below their industry averages. On an industry level, auto dealers earned the highest average NPS, while TV service providers earned the lowest. Eleven of the 19 industries increased their average NPS from last year, with car rentals and credit cards enjoying the biggest score boosts. Out of all the companies, US Airways and Highmark BCBS improved the most, while Quality Inn and Baskin-Robbins declined the most. For most industries, the average NPS is highest with older consumers and is lowest with younger consumers. Investment firms have the largest generation gap.

Here’s a list of companies included in this study (.pdf).

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Here are the NPS scores across 20 industries:

1410_industryNPS

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If you want to know what data is included in this report and dataset, download this sample Excel dataset file.Screen Shot 2014-10-17 at 4.05.17 PM

P.S. Net Promoter Score, Net Promoter, and NPS are registered trademarks of Bain & Company, Satmetrix Systems, and Fred Reichheld.

2014 Customer Experience Excellence Award

Congratulations to the following companies that are winners of the 2014 Temkin Group Customer Experience Excellence (CxE) Award:

Dell, EMC, and Touchpoint Support Services 

In addition to the winners, we congratulate the other finalists: Aetna, Activision, Crowe Horwath, The Results Company, and Texas.gov.

Here are some highlights from their nominations:

  • Activision Customer Care. Activision demonstrates its commitment to creating great game player experiences in a multitude of ways, such as emphasizing the use of player feedback to identify improvement opportunities. Activision combines this dedication to listening to its players with a willingness to redesign significant interactions. For example, it revamped its “Contact Us” page to include ambassador chat and callback scheduling, which resulted in higher satisfaction and lower effort for customers.
  • Aetna. Despite being in an industry undergoing tremendous change, Aetna is focusing on its 2020 vision to make the company 100% customer-centric. It has implemented many changes to help achieve this goal, including providing service over the phone and investing in text and speech analytics to better identify customer pain points and improve the behaviors and skillsets of its call representatives. The latter effort has already resulted in reduced repeat calls, improved accuracy, and a higher Net Promoter Score (NPS).
  • Crowe Horwath. With a client engagement score towering 33 points above the accounting industry average, Crowe Horwath is seeing the pay-off of its efforts to deliver an exceptional client experience. These efforts include establishing a firm-wide governance model and measurement scorecard, implementing a closed-loop voice of the customer program, incorporating customer journey mapping to uncover moments of truth, and engaging employees through training, client-driven CX recognition programs, and an employee ambassador program.
  • Dell. Dell’s CX efforts start with an emphasis on listening to and engaging with customers and employees. Dell enlists different groups from across the company—including engineering, marketing, sales, support, and digital—to make improvements to the entire customer journey. As a result of this work, Dell has opened 16 solution centers—which gives customers a place to experience solutions—and has provided proactive support over a wide variety of social channels, simplified Dell.com for consumer and business users, and implemented more than 540 customer innovation ideas.
  • EMC Corporation. The Total Customer Experience (TCE) program at EMC works across the enterprise to enhance the company’s customer experience by listening to customer feedback, analyzing data, and taking directed action based on that feedback and data. The program also raises awareness of how every person at the company impacts customer experience. As its CX efforts have matured, the TCE team has evolved to take on more challenging tasks; its projects now include predictive CX analytics, measuring its partner experience quality, and optimizing the experience across many different customer segments and solutions.
  • The Results Companies. To support its work as a business process outsourcing provider, The Results Companies uses its own unique operating model called CX360, which allows for continuous business process refinements that improve the customer experience. Built on three pillars—people, knowledge, empowerment—CX360 has helped the company ensure that its 8,500 employees around the globe remain focused on CX. The operating model has also contributed to Results’ strong growth in new clients and year-over-year revenue.
  • Texas NICUSA/Texas.gov. Texas NICUSA provides support for Texas.gov and implements technology solutions for Texas governmental agencies. It serves over 50,000 monthly site visitors and 300 state and local governments. Its three-tiered multi-channel customer service approach includes a general customer service Help Desk (phone and online), a Service Desk to support governmental agency needs, and a group of Technology Subject Matter Experts who can provide escalated assistance to either citizens or agency employees.
  • TouchPoint Support Services. TouchPoint Support Services streamlines support services within healthcare facilities. The company’s business goals, known as Top of Mind Objectives, guide the work of its 6,800 associates, helping them to find inefficiencies and improve patient satisfaction, associate engagement, safety, unity, and budget compliance. Touchpoint uses many methods for aligning employees with these objectives, including special training for managers and frontline employees, coaching from dedicated customer experience managers (who visit sites regularly), and associate recognition programs.

Background on the CxE Awards

Across all industries and sectors, organizations are findings ways to improve customer experience in a sustainable manner. The CxE Awards are meant to highlight those transformational efforts. Since customer experience is a journey, not a program, nominees will not need to have fully completed their journey to be eligible for this award.

Last year’s winners were AIG Asia Pacific, Cisco, EMC, Intuit, and Oracle. You can find best practices from across all 11 finalists and see their nomination forms in the Temkin Group report, Lessons in CX Excellence.

The awards are based on the following criteria:

  • Transformation. What improvements have been and are being made in the four customer experience core competencies?
    • Purposeful leadership: Leaders operate consistently with a clear, well-articulated set of values.
    • Compelling brand values: Brand attributes are driving decisions about how you treat customers.
    • Employee engagement: Employees are fully committed to the goals of your organization.
    • Customer connectedness: Customer feedback and insight is integrated throughout your organization.
  • Results. How is the effort creating value for customers and for the company?
  • Sustainability. How well is the company setup for ongoing success?

We assembled an expert panel of judges who really understand what it takes for an organization to become more customer-centric:

  • Ginger Conlon is editor-in-chief of Direct Marketing NewsShe develops and directs its editorial vision and content strategy across all communications platforms. She was cited as one of the “Top 100 Most Social Customer Service Pros on Twitter,” by Huffington Post contributor Vala Afshar.
  • Shep Hyken is the Chief Amazement Officer at Shepard Presentations.  He is a customer service expert, speaker and author of New York Times and Wall Street Journal bestselling books including The Cult of the Customer and The Amazement Revolution.
  • Ingrid Lindberg is Customer Experience Officer of Prime Therapeutics. She is a proven change management and customer strategy executive whose previous roles include Customer Experience Officer at CIGNA and Chief Marketing Officer at Ceridian Benefits Services.
  • Aimee Lucas is CX Transformist & Vice President of Temkin Group. She has over 15 years of experience improving service delivery and transforming the customer experience through people development and process improvement initiatives.
  • Bruce Temkin is CX Transformist & Managing Partner of Temkin Group. He is widely recognized as a customer experience thought leader and chairman of the Customer Experience Professionals Association (CXPA.org).
  • Bob Thompson is CEO and Editor-in-Chief of CustomerThink, a global online community of business leaders striving to create profitable customer-centric enterprises. He has over three decades of experience in customer-facing management and consulting roles.

Frequently Asked Questions (FAQs)

Answers to questions that came up:

  • We want to include confidential information, will it be shared? Do not submit any confidential information. If you are selected as a finalist, then we will share your entire nomination form in a published report. We do not share any information about companies that are not selected as finalists.
  • Is there any fee for applying? No. There are no fees of any sort for applying and no hidden fees that will affect the judging of applicants.
  • Can vendors submit applications on behalf of their clients? No. They can help prepare submissions for their clients, but the nominations must come directly from the company being nominated.
  • Can non-profit organizations apply? Absolutely. The CxE Award is meant to recognize any organization that is making significant and sustainable improvements in its customer experience, whether its a for-profit company, non-profit organization, or a government agency.
  • Is this award only for consumer-based businesses? No. The CxE Award is not only for business-to-consumer businesses, we also expect many business-to-business applicants.
  • If we are one of the winners, will we be able to put out a press release? Yes. All of the finalists and award winners will be able to refer to this award in any communications.
  • We don’t have the best customer experience in our industry, is it worth entering? Maybe. We are looking for customer experience efforts that are having a positive effect. So it is worth entering if you are making progress.
  • Will there be more than one winner? Probably. We expect that their will be multiple winners, but we will determine the number based on the nominations.
  • Can we enter if we are not in the U.S.? Yes. This award is open for entrants from around the world. The only requirement is that the nomination form must be completed in English.
  • We are doing some great things in a part of our company, but not everywhere. Is it worth applying? Yes, as long as your efforts aren’t just in one narrow area. Transformation often starts within areas of a company.
  • Can we send in more than one nomination for a company? Maybe. Since this award looks across several aspects of your CX efforts, it probably only makes sense to submit more than one if there are different efforts underway within different operating groups.

Customer Effort, Net Promoter, And Thoughts About CX Metrics

There’s been a recent uptick in people asking me about Customer Effort Score (CES), so I thought I’d share my thoughts in this post.

As I’ve written in the past, no metric is the ultimate question (not even Net Promoter Score). So CES isn’t a panacea. Even the Temkin Experience Ratings isn’t the answer to your customer experience (CX) prayers.

The choice of a metric isn’t the cornerstone to great CX. Instead, how companies use this type of information is what separates CX leaders from their underperforming peers. In our report, the State of CX Metrics, we identify four characteristics that make CX metrics efforts successful:  Consistent, Impactful, Integrated, and Continuous. When we used these elements to evaluate 200 large companies, only 12% had strong CX metrics programs.

Should we use CES and how does it relate to NPS? I hear this type of question all the time. Let me start my answer by examining the four types of things that CX metrics measure: interactions, perceptions, attitudes, and behaviors.

1408_CXMetrics

CES is a perception measure while NPS is an attitudinal measure. In general, perception measurements are better for evaluating individual interactions. So CES might be better suited for a transactional survey while NPS may be better suited for a relationship survey. You can read a lot that I’ve written about NPS on our NPS resource page.

Now, on to CES. I like the concept, but not the execution. As part of our Temkin Experience Ratings, we examine all three aspects of experience—functional, accessible, and emotional. The accessible element examines how easy a company is to work with. I highly encourage companies to dedicate significant resources to becoming easier to work with and removing obstacles that make customers struggle.

But CES uses an oddly worded question: How much effort did you personally have to put forth to handle your request? (Note: In newer versions of the methodology, they have improved the language and scaling of the question). This version of the question goes against a couple of my criteria for good survey design:

  • It doesn’t sound human. Can you imagine a real person asking that question? One key to good survey design is that questions should sound natural.
  • It can be interpreted in multiple ways. If a customer tries to do something online, but can’t, did they put forth a lot of effort? How much effort does it take to move a mouse and push some keys?!? Another key to good survey design is to have questions that can only be interpreted in one way.

If you like the notion of CES (measuring how easy or hard something is to do), then I suggest that you ask a more straight forward question? How about: How easy did you find it to <FILL IN THING>? And let customers pick a response on a scale between “very easy” and “very difficult.”

My last thought is not about CES, but more about where the world of metrics is heading. In the future, organizations will collect data from interactions and correlate them with future behaviors (like loyalty), using predictive analytics to bypass all of these intermediary metrics. Don’t throw away all of your metrics today, but consider this direction in your long-term plans.

The bottom line: There is no such thing as a perfect metric.

My Manifesto: Great Customer Experience Is Free

Here’s a replay of a post from July 2012 that was a replay of a post from September 2007 with a few updates. I thought it was still relevant and worthy of a re-replay…

Here’s my new quest: To dramatically increase the focus on customer experience within companies by getting everyone to understand that great customer experience is really good business. Great customer experience is not only free, it is an honest-to-everything profit maker. In these days of “who knows what is going to happen to our business tomorrow” there aren’t many ways left to make a profit improvement. If you concentrate on improving customer experience, you can very likely increase your profits. Good customer experience is an achievable, measureable, profitable entity that can be installed once you have commitment and understanding, and are prepared for hard work. But I’ve had a great many talks with sincere people who were clear that there was no way to attain great customer experience: “The engineers won’t cooperate.” “The salesman are untrainable as well as too shifty.” “Top management cannot be reached with such concepts.” So how do I plan on igniting the great customer experience is free movement? First, it is necessary to get top management, and therefore lower management, to consider customer experience a leading part of the operation, a part equal in importance to every other part. Second, I have to find a way to explain what customer experience is all about so that anyone can understand it and enthusiastically support it. And third, I have to get myself in a position where I have a platform to take on the world in behalf of customer experience. That’s really what I believe, but I must confess that those aren’t all my words. Just about everything written after the first paragraph came directly from the book Quality Is Free: The Art of Making Quality Certain by Philip B. Crosby. I’ve made minor edits and changed references from “quality” to “customer experience,” but those are Crosby’s words from his book that was initially published in 1979. Why did I “borrow” Crosby’s words? Because I see a lot of similarities between today’s need for customer experience improvements and the 1980′s quest for quality in the US. I was actually involved in the quality movement in the late 80′s and early 90′s — running quality circles, developing process maps, running workout sessions at GE, using fishbone diagrams, etc. Here are 7 critical areas in which the great customer experience is free movement can learn from the quality is free movement:

  1. Nobody owns it (or the corollary, everybody owns it). In the early stages of the quality movement, companies put in place quality officers. Many of these execs failed because they were held accountable for quality metrics and, therefore, tried to push quality improvements across the company. The successful execs saw their role more as change facilitators – engaging the entire company in the quality movement. Today’s chief customer officers need to see transformation as their primary objective — and not take personal ownership for improvement in metrics like satisfaction and NetPromoter.  
  2. It requires cultural change. Many US companies in the 1980′s put quality circles in place to replicate what they saw happening in Japan. But the culture in many firms was dramatically different than within Japanese firms. So companies did not get much from these efforts, because they didn’t have the ingrained mechanisms for taking action based on recommendations from the quality circles. Discrete efforts need to be part of a larger, longer-term process for engraining the principles of good customer experience in the DNA of the company.
  3. It requires process change. Quality efforts of the 1980′s grew into the process reengineering fad of the 1990′s. As business guru and author Michael Hammer showcased in his 1994 book Reengineering the Corporation: A Manifesto for Business Revolution, large-scale improvements within a company requires a change to its processes. That perspective remains as valid today as it was back then. Customer experience efforts, therefore, need to incorporate process reengineering techniques. That’s why these efforts must be directly connected to any Six Sigma or process change initiatives within the company.
  4. It requires discipline. Ad-hoc approaches can solve isolated problems, but systemic change requires a much more disciplined approach. That’s why the quality movement created tools and techniques — many of which are still used in corporate Six Sigma efforts. These new approaches were necessary to establish effective, repeatable, and scalable methods. A key portion of the effort was around training employees on how to use these new techniques. Customer experience efforts will also require training around new techniques. Here are a few posts that describe this type of discipline: Four Customer Experience Core Competencies, Customer Journey Mapping, and The Six Ds of a closed-loop VoC Program.
  5. Upstream issues cause downstream problems. This is a key understanding. The place where a problem is identified (a defective product, or a bad experience) is often not the place where systemic solutions need to occur. For instance, a problem with a computer may be caused by a faulty battery supplier and not the PC manufacturer. A bad experience at an airline ticket counter may be caused by ticketing business rules and not by the agent. So improvements need to encompass more than just front-line employees and customer-facing processes. Attacking upstream issues is part of moving from fluff to tough in your CX efforts.
  6. Employees are a key asset in the battle. The quality movement recognized that people involved with a process had a unique perspective for spotting problems and identifying potential solutions. So the many of the tools and techniques created during the quality movement tap into this important asset: Employees. Customer experience efforts need to systematically incorporate what front-line employees know about customer behavior, preferences, and problems as well as what other people in the organization know about processes that they are involved with. That’s why we’ve assembled a page of employee engagement resources.
  7. Executive involvement is essential. For all of the items listed above, improvements (in quality then and in customer experience now) require a concerted effort by the senior executive team. It can not be a secondary item on the list of priorities. Change is not easy. To ensure the corporate resolve and commitment to make the required changes, customer experience efforts need to be one of the company’s top efforts. Senior executives can’t just be “supportive,” they need to be truly committed to and involved with the effort. It may help to share our Executive’s Guide to Customer Experience with your leaders.

Corporations removed major quality defects in the 80′s, re-engineered business processes in the 90′s, and now it’s time to take on the next big challenge for corporate America:  Customer experience. It’s critically important, it’s broken, and fixing it can be very profitable. So don’t settle for the status quo! It’s up to you. As Crosby said in his book:

You can do it too. All you have to do is take the time to understand the concepts, teach them to others, and keep the pressure on.

The bottom line: The great customer experience is free movement is underway. Join me!

Where’s All The B2B CX Data?

Readers of this blog see a lot of consumer data which we use to rate and benchmark companies. This data shows up in research such as Net Promoter Score Benchmarks, Temkin Experience Ratings, Temkin Forgiveness Ratings, Temkin Customer Service Ratings, and Temkin Trust Ratings.

B2BDataAlmost every time we publish one of these consumer-based studies, I receive some form of the questions: What about B2B (business-to-business)? When will you have that type of data for B2B? Since these questions always seem to come up, I figured it was worthwhile to write a post with my answer.

First of all, we do have B2B data. For the tech sector, we have an NPS benchmark, the Temkin Experience Ratings, and the satisfaction of products and relationships to name a few. This research is based on feedback from a key customer group:  IT decisions makers within large North American organizations. Our data about what companies are doing, such as The State of CX Management, includes a large sampling of B2B (along with B2C and many that have both B2B and B2C). We sometimes break out the B2B data in reports like Best Practices in B2B Customer Experience and posts such as B2B Versus B2C in VoC.

However, there is certainly a lot more data available for B2C than there is for B2B, especially with customer-driven feedback. This does not reflect the lack of CX effort in B2B companies; as a matter of fact, a large portion of Temkin Group’s client work is in B2B. So why is there such little data in this area? Because of some basic structural constraints of B2B CX:

  • B2B requires specific respondents. While you can ask a consumer about a bunch of things from hotels to retailers to fast food restaurants, you can’t do the same in B2B. It would make no sense to ask an accountant about the performance of an infrastructure tech vendor or to ask an IT professional about the quality of a bank’s treasury services. As a result, studies must be targeted at individual sectors, one at a time.
  • B2B data is more expensive. If you want to survey a B2B customer group (such as IT decision-makers), then you will likely have to purchase the sample from a vendor who manages B2B panels. Since Temkin Group does a lot of research, we are able to receive pretty competitive pricing for our studies. Yet, the cost of a single B2B respondent costs us about 10-times what it costs for a consumer respondent.
  • B2B serves a variety of roles. When selling to a large company, there are often many people involved in the relationship, fulfilling roles such as decision-makers, influencers, end users, and economic buyers. The results from any study can vary widely based on which of those customer audiences you survey. A complete B2B study often needs to cover multiple audiences within each client company.

The bottom line: The lack of B2B data does not mean a lack of B2B interest or activity

See The Most Popular Customer Experience Content

It’s always interesting to see what people are reading. Here are this blog’s 15 most-read posts over the previous 90 days:

  1. Report: Net Promoter Score Benchmark Study, 2013 
  2. 2014 Temkin Experience Ratings: 19 Industry Results
  3. Seven Steps for Developing Customer Journey Maps*
  4. 14 Customer Experience Trends for 2014 (The Year of Empathy)
  5. LEGO’s Building Block For Good Experiences*
  6. USAA Tops 2014 Temkin Trust Ratings
  7. Report: What Happens After a Good or Bad Experience, 2014
  8. Free eBook: People-Centric Experience Design
  9. Net Promoter Score and Market Share For 60 Tech Vendors*
  10. Five Questions That Drive Customer Journey Thinking
  11. Free eBook: The 6 Laws Of Customer Experience*
  12. Customer Experience Reading List for Execs*
  13. Infographic: The Six Laws of Customer Experience
  14. 9 Recommendations For Net Promoter Score (NPS)*
  15. What Is The Perfect Customer Experience?*

*These posts are more than one year old.

The bottom line: Some CX content is ageless!

2014 Temkin Group CX Vendor Excellence Award Winners

Watch this blog and my Twitter feed for an announcement about the 2015 CX Vendor Excellence Awards in January


CEVendorAward_logoToday we announced the results of the 2014 Temkin Group CX Vendor Excellence Awards. Once again we had a great group of nominees, making the scoring difficult for the judges. Congratulations to this year’s winners:

Allegiance

Clarabridge

Verint

Also, congratulations to the finalists: Confirmit, Enghouse Interactive, Mindshare Technologies, Qualtrics, and Walker.

In its second year, these awards recognize companies that provide products and services that help companies improve the customer experience they deliver. Nominees are rated based on their capabilities, results, and client feedback.

The CxVE Awards were judged by five noted customer experience experts: Mila D’Antonio (Editor-in-Chief at 1to1 Media), Denise Bahil (CX Transformist at Temkin Group), Desirree Madison-Biggs (Director of Customer Experience Insights & Advocacy at Symantec), Rick Meyreles (VP – Global Voice of Customer, World Service at American Express), and Bruce Temkin (Managing Partner & CX Transformist at Temkin Group).

I’ve included the first two section of the nomination forms submitted by the eight winners and finalists. Read more of this post

Why Net Promoter Score May Not Align With Business Results

I just received a great question: “Why do companies have a very healthy growth although their NPS is low and vice versa why can growth be decreasing although the NPS is very high?” I get asked versions of this question all the time, so I decided to capture my typical answers in this blog post (check out our Net Promoter Score (NPS) Resource Page).

My take: We’ve found a high correlation between NPS and customer loyalty across a large number of industries. But that does not mean that NPS will provide a clear understanding of a company’s business results. There are many reasons why a company’s business might perform differently than its NPS might suggest. Here are some of the common reasons that I’ve seen:

  • NPS is not the ultimate question. In many situations, the amounts of promoters and detractors are roughly correlated with customer loyalty and business success, but that’s not always the case. It’s not a universally good metric as it’s not correlated to business success in all situations. For example, NPS may not be at all indicative of business success if customers are trapped because of a high switching cost, limited competition or monopolistic power of the company, unique product or service offerings, etc.
  • Comparison NPS trumps absolute NPS. In general, health plans have low NPS scores yet many of them do well financially. Customers may not be likely to recommend their health plan, but if they don’t believe that there are any better options then it will not affect their loyalty.
  • B2B roles are under-appreciated. There are different dynamics in B2B situations. If we ask treasury assistants in large companies to provide an NPS for commercial banks, we might believe that it should represent the health of a bank’s business. But what happens if CFOs, who control the banking decisions, give banks  a completely different NPS?
  • Non-customers are often overlooked. A retailer may have a high NPS, but still lose share if its products and services start appealing to a narrower audience. This type of situation is often missed, because companies tend to get considerably more feedback from existing customers than from prospective non-customers.
  • Segmentation can alter the analysis. When an organization looks at its overall NPS, it might miss important trends in different customer groups. What happens if NPS is getting lower for high value customers and getting higher for low value customers? The overall NPS could stay the same or even improve while the company’s results decline.
  • Survey design affects results. Many companies have a mismatch between the way they deploy NPS surveys and the insights they attempt to glean from the data. Companies ask the NPS questions at different times and frequencies, which can affect the overall results. If we ask NPS after a customer service event, then the results will likely be different then if we ask it periodically to a random sampling of customers.

The bottom line: NPS can be an effective metric in many situations, but only if used correctly

Customer Experience in Review, 50+ CX Data Bits from 2013

CXDataBits100hWe had a busy research year in 2013, publishing 22 research reports in addition to a large number of datasets and research-based blog posts. That’s a lot of data!

We looked through all of our published analyses and pulled out some interesting data points from last year (and mixed in a few from 2012) . So here’s a data retrospective on CX in 2013 across a number of categories (including our four CX core competencies):

CX Industry:

ROI of Customer Experience:

Temkin Group Ratings:

  • Only 37% of companies earned “good” or “excellent” scores in the 2013 Temkin Experience Ratings, while 28% received “poor” or “very poor” scores. However, companies with at least a “good” rating increased from 28% in 2012 and 16% in 2011 (2013 Temkin Experience Ratings Report).
  • 57% firms included in both the 2012 and 2013 Temkin Experience Ratings increased their scores (2013 Temkin Experience Ratings Report).
  • Grocery chains, retailers, and fast food chains earned the highest average Temkin Customer Service Ratings, while TV service providers, Internet service providers, wireless carriers and health plans earned the lowest ratings (2013 Temkin Customer Service Ratings).
  • Only 6% of companies earned “strong” or “very strong” ratings in Temkin Group’s Web Experience Ratings, while 63% earned “weak” or “very weak” ratings (2013 Temkin Web Experience Ratings).
  • Banks earned the highest average Temkin Web Experience Ratings, followed by investment firms, retailers, credit card issuers, and hotel chains (2013 Temkin Web Experience Ratings).
  • Grocery chains earned the most trust in Temkin Group’s Trust Ratings, while TV service providers earned the least trust (2013 Temkin Trust Ratings).
  • Grocery chains are the most forgivable companies according to Temkin Group’s Forgiveness Ratings with an average rating of 39%, while TV service providers are the least forgivable with a rating of 12% (2013 Temkin Forgiveness Ratings).
  • The average Temkin Experience Rating for Tech Vendors dropped from 58% in 2013 to 52% in 2013 (2013 Temkin Experience Ratings For Tech Vendors Report).

CX Organizations:

Employee Engagement (CX Core Competency): 

Purposeful Leadership (CX Core Competency):

Compelling Brand Values  (CX Core Competency): 

Customer Connectedness (CX Core Competency):

The bottom line: 2013 was a busy year for customer experience, bring on 2014!

Report: Lessons in CX Excellence, 2014

1401_LessonsCX Excellence_COVERWe just published a Temkin Group report, Lessons in CX Excellence, 2014. The report provides insights from 11 finalists in the Temkin Group’s 2013 CX Excellence Awards. The report, which is 144 pages long, includes an appendix with the finalists’ nomination forms. This report has rich insights about both B2B and B2C customer experience.

Here’s the executive summary:

The following 11 organizations are finalists in Temkin Group’s 2013 Customer Experience Excellence Awards: Adobe, AIG Asia Pacific, Cisco, Cox Communications, EMC, Findel Education Resources, Fiserv, Intuit ProTax Group, Oracle, Rackspace, and UMB Bank. This report highlights their customer experience efforts and describes their best practices across the four customer experience competencies: purposeful leadership, compelling brand values, employee engagement, and customer connectedness. Additionally, this report includes an appendix with the finalists’ detailed nomination forms to help you gather ideas and examples to improve your own CX efforts.

Download report for $195
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Here are some highlights from the finalists:

  • When Adobe began its transition from a products-based company to a services company, it recognized the increased importance of providing excellent customer experience and established a central Customer Advocacy team in January 2013. One of this team’s main objectives is to make measurable improvements to top customer issues. Adobe identifies these top issues using numerous VoC listening channels and then, with full transparency, communicates these issues across the entire company. Every leader and employee can access root cause analysis, direct customer comments and feedback, action plans, and more.
  • AIG Asia Pacific uses its FEEL GOOD message to engage customers, employees, and leaders in the company’s service culture transformation efforts. AIG uses a comprehensive Voice of the Customer program—which includes a closed-loop NPS process—to keep the company focused on its customers and agents and implement meaningful changes based on their feedback. In each country, cross-functional teams concentrate on improving responsiveness to customer feedback. Teams create plans for their alert management processes and use a real-time online dashboard to quickly resolve customer issues.
  • Cisco has made Ease of Doing Business (EoDB) a corporate priority; it drives relevant and meaningful solutions that simplify complex issues for its customers. To support its EoDB focus, Cisco analyzes customer feedback and identifies trends in experience pain points, and then delivers tailored reports and suggestions to the appropriate business teams. Cisco reinforces the importance of EoDB by equipping leaders with regular program updates, factoring the success of EoDB targets into the bonus calculations of every employee, and prominently displaying an EoDB dashboard that provides real-time data feed from customer surveys.
  • In an industry notorious for poor customer service, Cox Communications stands out for its dedication to improving its customer experience. Its closed-loop feedback program has been particularly successful at repairing damaged relationships and reducing customer churn. Cox Communications established a centralized Closed-Loop Feedback (CLF) team, which is made up of agents from different functional areas who are tasked with taking ownership of customers’ issues from beginning to end.
  • The dedicated Total Customer Experience (TCE) team at EMC recently enhanced its TCE program by fine-tuning their data-driven approach to improving the company’s customer and partner experience. EMC obtains a complete view of its customers’ perceptions and behaviors by collecting data using customer journey maps and an extensive Voice of Experience (VoX) program. To augment these insights, EMC also evaluates the quality of its products and the TCE team assesses customer and partner infrastructures to ensure that EMC products suit their clients’ needs.
  • Findel Education Resources recently revamped its entire outlook on customer experience and placed the customer at the center of its business. The company started its journey towards customer-centricity by outlining the objectives it sought to achieve and the questions it wanted to ask to ensure that leaders and employees remained customer-focused. Findel instituted Employee Voice and Customer Voice programs to diagnose customer issues and benchmark the company’s progress.
  • Two years ago Fiserv established a new Customer Experience Department tasked with improving customer service and associate engagement. This department began by changing the company’s vision and mission to incorporate its new focus on customers, creating a multi-faceted customer experience roadmap, and outlining a hierarchy of needs. Since the department’s inception, CX has become the highest weighted metric on the balanced scorecards for leaders and employees, and the company has invested a great deal in internal assessment and coaching.
  • Intuit’s ProTax Group (PTG) uses customer feedback to drive changes in the business. Intuit PTG gathers customer feedback through a robust customer listening program, an extensive closed-loop program, and engaged social media communities. After collecting customer insights, the Customer Experience and Customer Market Insights team within Intuit PTG sends weekly, quarterly, and annual reports to the entire company, which broadens awareness of customer issues.
  • At Oracle, customer experience initiatives begin with a 360-degree view of customers. Oracle maintains a Customer Experience Database (CxD), which details the interactions and experiences of every customer based on their behavior on oracle.com and their interactions on social media. Oracle also utilizes its business intelligence product to add survey results to this customer profile, further expanding the company’s attitudinal and behavioral data on each customer.
  • At Rackspace, Fanatical Support forms the backbone of their customer experience efforts. Rackspace combines its customer data into a single listening and analysis hub, and undesirable scores and trends act as a catalyst for the company’s business decisions. For example, after examining this data, the company decided to merge the sales and support teams together to provide a constant customer experience.
  • UMB Bank recently established a Voice of the Customer Steering Team to support their customer-centric focus. This Steering Team uses VoC feedback to assign priority to CX issues and oversees improvements to the customer experience. The team is made up of leaders from all different business areas, such as product and sales, which ensures that all departments are fully engaged in the company’s efforts to improve customer experience.

Download report for $195
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If you enjoyed this report, check out last year’s report, Lessons in CX Excellence.

The bottom line: There’s a lot to learn from these CX Excellence Finalists.

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