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.

5 Rules To Stop Employees From Gaming Your Feedback System

When an employee asks a customer to “give me a 10 on a survey or I’ll get fired,” can you really count on the accuracy of that customer’s rating? This may be an extreme example of “gaming feedback,” but many versions of this behavior occur all the time.

To keep gaming feedback in check, it’s important to be explicit with employees about what the company considers to be unacceptable behaviors. Here are five rules that you should strictly enforce with employees:

  1. Don’t mention or refer to a score. You can not ask a customer to give you a score or mention any possible option on the survey.
    • Example of bad behavior: “Let me know if you can’t give me an excellent on any of the questions.”
  2. Don’t mention specific survey questions. You can not tell a customer about a specific question that they will be asked as part of the survey.
    • Example of bad behavior: “You will be asked to rate me on my knowledge.”
  3. Don’t mention any consequences. You can’t tell a customer about the positive or negative consequences that you or the organization will have based on the feedback that the customer gives.
    • Example of bad behavior: “If you give us a low score, then we will not make our bonus.”
  4. Don’t say or imply that you will see their responses. You can’t let the customer know that you will see the specific information that they put in their feedback.
    • Example of bad behavior: “I look forward to reading your responses.”
  5. Don’t intimidate customers in any way. Any attempt to affect how customers will respond in their feedback, or keep them from completing the survey, whether implicitly or explicitly, is not allowed.
    • Example of bad behavior: “Let’s grab a Cubs game after you fill out the survey.”
    • Example of bad behavior: “Don’t bother filling out the survey, the company doesn’t look at them.”

Of course, keeping this bad behavior in check also requires the company to behave appropriately. The biggest mistake I see is tying too much compensation to a score. When you heavily incent a specific metric, employees will do whatever it takes to improve that metric,  including “gaming” the system. Think about it, the heavier the compensation, the more you are implicitly asking the employee to improve the score at any cost (see why Staples employees stopped selling computers).

So make sure that your incentives are focused on driving the behaviors that you want from employees, not specific outcomes like scores.

The bottom line: Use feedback primarily to improve, not to keep score.

Report: Text Analytics Reshapes VoC Programs

1405_TextAnalyticsReshapesVoC_COVERWe just published a Temkin Group report, Text Analytics Reshapes VoC Programs. The research shows how analysis of unstructured data will disrupt how companies collect and use customer insights. Here’s the executive summary:

Although companies today are investing more resources in their voice of the customer (VoC) programs, a majority of these efforts continue to linger in the early stages of maturity. Unlike many of the less mature VoC programs, which primarily concentrate on reporting metrics from multiple-choice surveys, the more advanced VoC programs focus instead on finding valuable insights to drive business improvements. To get these valuable insights, our research shows that mature VoC programs are actively using text analytics to efficiently process their massive volumes of customer feedback. As its use becomes more widespread, we expect to see companies infuse text analytics across what we call the 6 Ds of VoC Programs: Detect, Disseminate, Diagnose, Discuss, Design, and Deploy. This report identifies 33 best practices enabled by text analytics tools. And as companies can’t revamp their VoC programs with text analytics overnight, we outline the four stages of text analytics evolution: Deploy, Explore, Explain, and Predict.

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The report identifies best practices for using text analytics across the 6 Ds of a VoC Program:

  • Detect: Companies will shift from primarily focusing on “the score” to concentrating more on unstructured feedback.
  • Disseminate: Companies will distribute more informative data to both front-line and top-level managers in real time, which in turn will drive more meaningful actions.
  • Diagnose: Companies will shift from analyzing only one or two top activities to focusing on a continuous web of experience improvements and training.
  • Discuss: VoC insights discussions will evolve from VoC teams only communicating reports one-way to an active discussion of insights and action planning.
  • Design: Customer insights will become more accessible, more reliable, and more comprehensive, which means that designers will rely more heavily upon customer insights during the design phases.
  • Deploy: Deployment of new offerings will involve a rapid refinement process driven by customer insights.

1405_TAVoCPractices

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The bottom line: Text analytics will reshape leading VoC programs

Five Questions That Drive Customer Journey Thinking

Customer journey maps (CJM) are one of the most popular CX tools and a frequent topic that people ask me about. Temkin Group even offers CJM workshops.

CJMs are a representation of the steps and emotional states that a customer goes through during a period of time that includes (but is not limited to) interactions with an organization. CJMs are valuable because they help identify how a customer views an organization by putting company interactions in the context of the customer’s broader activities, goals, and objectives. Keep in mind that the ultimate goal is not a map, but the understanding that is developed through the process that allows organizations to design better experiences and measurements.

While customer journey maps can be incredibly valuable, it’s not practical (or even possible) for large organizations to undergo full-scale CJM efforts for all of their customers’ journeys. That’s why we developed the Customer Journey Mapping Pyramid, which identifies three levels of effort through which organizations can capture the benefit of CJMs:

  • Level 3: Customer Journey Mapping Projects. Build journey maps for a few critical customer journeys using significant customer research. These projects require governance, structure, expertise, and dedicated resources committed to this effort which will span over a period of time. The goal: Develop deep customer journey maps that drive critical design and measurement decisions.
  • Level 2: Customer Journey Mapping Sessions. Build journey maps for customer journeys using facilitated sessions with subject matter experts (SMEs) and existing customer insights. These sessions can happen during a single meeting as long as the attendees have sufficient knowledge of target customers. The goal: Enable impromptu meetings that examine customer journeys.
  • Level 1: Customer Journey Thinking. Embed thinking about customer journeys into day-to-day decisions across the organization. Teach employees to actively consider why customers are interacting with the organization and think about how those interactions fit within the customers’ broader set of objectives and activities. The goal: Encourage every employee to think about customers’ journeys.

1405_CJMPyramid

The Essence of Customer Journey Thinking

The power of CJMs is their ability to help companies design interactions and measurements based on an understanding of the customer’s perspective. This insight, however, does not always require the creation of a map or any extensive research. Organizations can get a great deal of the value of CJMs if employees actively consider customers’ journeys in everything they do.

To propel Customer Journey Thinking, we recommend that organizations teach employees to consistently think about these five questions:

  1. Who is the customer? Start by recognizing that different customers have different needs. So it’s important to understand who the person is before we think about their specific journey. This is a great place to use personas as a mechanism for describing the customer.
  2. What is the customer’s real goal? Customers aren’t usually contacting your company because they want to, they’re doing it because of a deeper need. To understand how customers will view an interaction and what’s shaping their expectations, you need to think about what they are really trying to accomplish.
  3. What did the customer do right before? (repeat three times) When customers interact with your company, it’s almost always part of a longer journey. So you need to think about where they’ve been prior to the interaction in order to understand how they will respond to an interaction with your company. In many cases, these previous interactions will include people and organizations outside of your company. After you’ve answered this question, ask and answer it at least two more times.
  4. What will the customer do right afterwards? (repeat three times) When customers interact with your company, it’s almost never the last step on their journey. So you need to think about what they will do next to understand how you can best help them. In many cases, these subsequent interactions will include people and organizations outside of your company. After you’ve answered this question, ask and answer it at least two more times.
  5. What will make the customer happy? Rather than just aiming to satisfy customers’ basic needs, think about what it will take to provide each customer with the most positive experience–given what employees know about customers’ real goals and their entire journeys. The focus on customers’ emotional state will help employees stay mindful of customers’ holistic needs and raise overall organizational empathy.

The bottom line: Help your employees embrace customer journey thinking.

Report: The State of Customer Experience Management, 2014

1404_TheStateOfCX2014_COVERWe just published a Temkin Group report, The State of CX Management, 2014. It examines the CX efforts within more than 200 large companies. Here’s the executive summary:

We surveyed more than 200 large companies and found an abundance of Customer Experience (CX) ambition and activity. Most companies have a CX executive leading the charge, a central team coordinating significant CX activities, and a staff of six to 10 full-time CX professionals. Using Temkin Group’s CX competency assessment, we found that only 10% of companies have reached the highest two levels of customer experience, although this does represent a slight increase from last year. Most firms struggle most to master Employee Engagement and Compelling Brand Values. When compared with CX laggards, CX leaders have stronger financial results, enjoy better CX leadership, and implement more successful employee engagement efforts. Executives in companies with stronger CX competencies also tend to focus more on delighting customers and less on cutting costs.

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The percentage of large organizations that have reached the two highest levels of customer experience maturity has grown from 6% in 2013 to 10% this year. During the same period, the percentage of companies in the lowest level of maturity has dropped from 40% to 31%.

1404_CXMaturity

Here are some additional findings from the research:

  • Companies with good or very good ratings in Purposeful Leadership rose from 39% to 45%, the largest improvement for any customer experience competency.
  • The research also revealed a significant focus on improvement. While only 6% of companies believe that their organization currently delivers industry-leading customer experience, 58% have a goal to be an industry-leader within three years.
  • Sixty-five percent of companies have a senior executive in charge of customer experience.
  • More than half of companies have at least six full-time customer experience professionals.
  • Almost two-thirds of respondents rate customer experience with phone agent as good or very good, the highest rated interaction. Less than 30% rate mobile phone and cross-channel experiences at that level.
  • The top obstacle to customer experience is the same as it has been for four years, “other competing priorities.”
  • We compared companies that have strong customer experience maturity with those that are weaker and found that customer experience leaders have better financial results, have more senior executive commitment, and focus more on their organization’s culture.

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The bottom line: Most companies are in early stages of CX maturity, but are getting better

A Reminder About the Design of Little Things

At the Qualtrics Insight Summit in Salt Lake CIty last week, I was able to see Dan Ariely’s keynote speech. I’m a huge fan. Ariely is one of the leading researchers in behavioral economics, which is a field that influences a lot of the thinking that shows up in my blog.

Ariely shared a version of this graphic (that I borrowed from Ariely’s blog) that shows the percentage of people who sign up to be organ donors across different companies and asked the audience this question: Why do some of these countries have such high participation rates while others are so low?

Organ DonorsThe audience guessed that the differences were due to political, religious, or cultural norms. Everyone was wrong. It turns out that the differences can be traced to a simple thing: the design of the forms for becoming an organ donor. In the countries with high participation rates, the form provides a check mark for opting-out while the low participation rate countries use an opt-in form.

In other words,people demonstrated the same behavior across all countries—they did nothing. It just turns out that this common behavior had radically different results based on how the forms were developed.

Here are three key lessons from this example:

  1. People aren’t as thoughtful as we think. We generally believe that people make informed, logical decisions. But in many cases, especially when faced with complex decisions, they choose to do nothing.
  2. Forms can trump strategy. The people who develop the strategy for a company often make huge salaries and have big corner offices. But what about the people who design the forms? Do we even know who they are? But the best strategy can fall flat because of decisions about how a form is designed.
  3. Don’t forget the little things. A few years ago I introduced a concept called the Design of Little Things (DoLT), defined as “the small changes that can dramatically improve the customer experience of much larger investments.” Don’t think that deploying an experience is the end-point. Assume that you’re going to get it wrong and keep resources in place to learn and evolve.

The bottom line: Design experiences based on how people actually behave

Report: What Happens After a Good or Bad Experience, 2014

1402_WhatHappensAfterGoodBadExperiences_COVERWe just published a Temkin Group report, What Happens After a Good or Bad Experience, 2014. The report, which includes 19 data charts, examines which companies and industries provide the most bad experiences, what impact those experiences have on spending, and how the negative impacts of bad experiences can be mitigated by good service recovery. The report also examines how consumers share their good and bad experiences with companies as well as with other people. Here’s the executive summary:

To understand the effect of good and bad experiences, we asked 10,000 U.S. consumers about their recent interactions with 268 companies across 19 industries. Results show that Internet services and TV services are the industries most likely to deliver a bad experience to their customers, while grocery chains are the least likely to. At the company level, Scottrade had the smallest percentage of customers reporting a recent bad experience with the company and Time Warner Cable had the highest. More than half of the customers who encountered a bad experience at a fast food chain, credit card issuer, grocery store, or hotel either decreased their spending with the company or stopped altogether. However, our data shows that a good service recovery effort can help mitigate a bad experience. Unfortunately, many firms—especially in the banking, Internet services, and TV services sectors—aren’t very good at service recovery. In addition to the consequences of bad interactions, we also examined which channels customers use to share their good and bad experiences and how these changed across age groups. We then compared these results to survey responses from the past two years. We also uncovered a negative bias inherent in how customers provide feedback. ING Direct, Residence Inn, and Fairfield Inn have the most negative bias in the feedback they receive directly from customers, while Hy-Vee and Hyundai have the most negative bias on Facebook. 

Click link to see full list of industries and companies covered in this report (.pdf).

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One of the most interesting analyses in the report is the look at how service recovery after a bad experience affects the spending pattern of consumers. Here’s a summary of one of the charts showing just how important it is for a company to recover well after making a mistake:

1402_EconomicsOfServiceRecovery

Here are some other insights from the research:

  • Sixteen percent of consumers who have interacted with TV service and Internet service providers report having a bad experience over the previous six months. Next on the list are wireless carriers, with 12% of their customers reporting a bad experience. At the other end of the spectrum, only 3% of consumers report a bad experience with grocery chains and 4% report having a bad experience with fast food chains.
  • The five companies with the most customers reporting bad experiences are Time Warner Cable (25%), Motel 6 (22%), Coventry Health Care (21%), and Comcast (21%). There were 10 companies with only 1% or less of their customers reporting bad experiences: Scottrade, Chick-fil-A, H.E.B., Whole Foods, ShopRite, ING Direct, Starbucks, Trader Joe’s, Vanguard, and True Value.
  • More than one-quarter of consumers who have a bad experience stop spending with computer makers, car rental agencies, credit card issuers, hotel chains, and software companies. The impact of bad experiences is less costly for parcel delivery services, wireless carriers, health plans, TV service providers, Internet service providers, and grocery chains, as less than 15% of their customers with bad experience stopped spending.
  • The industries that are the best at responding to a bad experience are investment firms, major appliances, retailers, and car rental agencies. The industries that are the worst at responding to a bad experience are TV service providers, wireless carriers, Internet service providers, parcel delivery services, and health plans.
  • Thirty-two percent of consumers give feedback directly to companies after a very bad experience and 23% give feedback after a very good experience.
  • Overall, 25- to 34-year-olds are the most likely to share feedback about their experiences. After a good experience 57% tell a friend directly, 28% share on Facebook, and 18% put a comment or rating on a review site. After a bad experience, 60% tell a friend directly, 31% share on Facebook, and 20% write a review.

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The bottom line: Make sure to recover quickly after a bad experience

Building Organizational Empathy: Perceive-Reflect-Adjust

Most people have an innate ability to be empathetic, but organizations tend to dampen this natural instinct. While a typical customer interaction cuts across many functional groups (a single purchase, for instance, may include contact with decisions by product management, sales, marketing, accounts payable, and legal organizations), companies push employees to stay focused on their functional areas. This myopic view is often reinforced by incentives focused on narrow domains, which creates a perceived chasm between customer empathy and employee success.

After examining much of the academic, medical, and business research on the topic of empathy, we developed a simple model for enhancing empathy that we call Perceive-Reflect-Adjust:

  • Perceive: Understand how someone else feels
  • Reflect: Examine how your actions affect those feelings
  • Adjust: Make changes to improve how someone else feels

P-R-A is a helpful model to follow for triggering individual empathy, but how can organizations apply P-R-A within their operations? By infusing it across the four customer experience core competencies:

Empathy4CompetenciesThe bottom line: Look for opportunities to Perceive, Reflect, and Adjust.

PCxD Principle #3: Design for Memories

I recently introduced a concept for enlisting the support of employees that uncovers and fulfills the needs of customers that we call People-Centric Experience Design (PCxD), defined as:

Fostering an environment that creates positive, memorable human encounters

PCxD

Principle #3: Design for Memories

When it comes to loyalty, customer experience isn’t the driving factor. That’s right, customer experience is not the key driver. What is important? Memories. People make decisions based on how they remember experiences, not on how they actually experienced them. This distinction is important because people don’t remember experiences the way they actually occur. Rather, people construct memories as stories in their mind based on the fragments of their actual experiences. An improved understanding of how people truly remember things helps you focus on designing the most important movements better. When examining the emotional reactions of people throughout an experience, it becomes apparent that five elements disproportionately drive memories:

  1. Negative Spike. A dramatic increase in negative emotion.
  2. Positive Spike. A dramatic increase in positive emotion.
  3. Negative Peak. The lowest moment of the overall experience.
  4. Positive Peak. The highest moment of the experience.
  5. Ending. How the experience is finishes.

MemoryMoments

To create more positive memories, pay the most attention to those five elements of your customers’ experience. With that in mind, here are some ideas for designing for memories:

  • Make every ending count. The fastest way to increase positive memories is by improving how you end an experience. This includes the very end of a call with an agent, the thank-you screen after someone applies for a new product, or the interaction as someone leaves a store or branch.
  • Educate employees about moments that matter. Memorial Hospital and Health System of South Bend sends employees through what it calls “Chief Moment Officer Training.” This training teaches staff members about the importance of patience experience, what their role is in providing the experience, what influence they have on the experience, and the science behind creating exceptional experiences.
  • Smoothen transitions. When a customer moves from one form of interaction to another (i.e. web to phone, online to agent, agent to agent, etc.), they tend to get concerned about the next step, and this apprehension causes negative spikes. To ease their anxiety, make sure that customers don’t feel like they are repeating themselves with each transition. Sometimes just acknowledging the transition, such as a simple statement by an agent saying, “I see you’ve been online, how can I help you,” can really help.
  • Recover quickly from mistakes. When customers have a bad experience, they often become more upset over time—especially if they expend a lot of energy trying to fix the situation. If companies do not resolve the issue quickly, such experiences often create a very negative peak. On the other hand, a quick and solid recovery can provide a memorable positive spike. You’re usually better off in the long-run (in terms of customer loyalty) resolving problems as soon as possible, even if that approach costs more in the short-term.
  • Dampen bad experiences. Even if a bad experience can’t be eliminated, you can still proactively lower the negative peak and eliminate any negative spikes. For instance, even if a contact-center is experiencing long call-wait times, customers will remember the experience more positively if a company appropriately sets their expectations or provides a call-back option.
  • Create happy surprises. The largest positive spikes often come from unexpectedly good experiences. A thank-you present for a returning customer, a nice note in a package being shipped, or a warm welcome from the branch manager upon entering a bank a bank can go a long way towards creating positive spikes.

The bottom line: Focus your energy on creating positive memories.

Olympic Opening Ceremonies, Who’s the Target Audience?

I watched part of the Olympic opening ceremonies in Sochi on TV, but fell asleep before it was over. After the long parade of athletes, I couldn’t keep my eyes open for very long. I did see some online video clips of the key pieces that I missed.

Overall, I love the concept of opening ceremonies, but often find them to be pretty boring (Beijing 2008 is the only exception in recent memory). According to an article in Forbes, Opening Ceremony At Sochi A Big Bust On TV, my experience was not unique.

My take: I have no doubt that the Olympic opening ceremonies are grand and very impressive if you’re in attendance, but is that the most important audience? Does it make sense to optimize the experience for the tens of thousands of attendees or for the hundreds of millions of people who will be viewing the event on television and online?

Identifying the target audience is a critical decision for the design of any experience. Many of these events, including Sochi, seem to be optimized for the in-person audience. That’s fine, but only if the planning committee made that decision explicitly.

Good design requires making tough decisions. It’s perfectly okay to prioritize one audience and live with a less than optimal experience for other audiences. I often say that an experience built to satisfy everyone’s needs, satisfy’s no one’s.

If I were part of a country’s Olympic committee, I would prioritize the television and online audience. Who cares if things look spectacular to 50,000 people if they are dull and boring to 250,000,000. If that’s the target audience, then you need to think about things such as:

  • Do you want to prioritize your country men and woman (who might recognize more subtle references) or the rest of the world (who may not know much about our country)?
  • What can you design that would look exciting on a screen?
  • Where do you need to put cameras so that the on-screen experience is compelling (maybe even some behind the scenes cameras to see how things are being done)?
  • What commentary do you need to feed the announcers so that they add to the excitement?
  • What online experience can you blend with the live and recorded video to make the experience more dynamic?

The bottom line: Make sure to be clear about your target audience.

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

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. 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.

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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.

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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.

Report: The State of CX Metrics, 2013

1312_StateOfCXMetrics2013_COVER_Page_01We just published a Temkin Group report, The State of CX Metrics, 2013. The research shows how large organizations are using CX metrics. Here’s the executive summary:

Companies with stronger CX metrics programs are more likely to be customer experience leaders. We asked over 170 large companies about their use of customer experience (CX) metrics and compared their answers with similar studies from 2011 and 2012. We found that although companies view CX metrics as important, only 12% of respondents received at least “good” ratings in Temkin Group’s assessment. Our self-test examines four areas: consistency (does the company use common CX metrics across the organization?), impact (do the CX metrics inform important decisions?), integration (are trade-offs made between CX and financial metrics?), and continuity (do leaders regularly examine the CX metrics?). The analysis shows that while interaction-satisfaction and likelihood-to-recommend metrics are on the rise, companies do a particularly poor job of measuring non-customers (non-buyers and defectors), the emotional response of customers, and mobile and cross-channel interactions. Customer service remains the best-measured portion of the lifecycle, and it has consistently improved over all three years. Companies rate themselves the lowest in making trade-offs between CX and financial metrics, but this area has still improved since last year. Our research also uncovered that more than eight out of ten NPS users report positive results. Ultimately, to fully measure customer experience, companies need to develop measurements that link behaviors, attitudes, perceptions, and interactions.

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We’ve done similar studies in 2011 and 2012. Here are the results from our CX Metrics Assessment over the previous three years:

figure14

Here are some additional findings from the research:

  • Seventy-three percent of CX metrics leaders have above average customer experience compared with only 45% of CX metrics laggards.
  • The two most widely used CX metrics are interaction satisfaction and likelihood to recommend. More than 80% of respondents use each of these metrics.
  • Customer service is the highest rated area of measurement across the customer lifecycle, an area that companies have steadily improved on since 2011.
  • More than 60% of companies think they do a good job collecting CX metrics on phone calls, but less than 30% feel that way about wireless devices and cross-channel interactions.
  • Only 30% of respondents think they do a good job measuring customer’s emotional response after an interaction, but that’s an increase from 25% in 2011.
  • Less than 30% of respondents think they are good at tying compensation to CX metrics and making trade-offs between financial and CX metrics.
  • Forty percent of companies review CX metrics more frequently than quarterly.

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The bottom line: CX metrics are being used, but not very effectively

A&W Canada Sparks Customer Empathy With Real-Time Feedback

I recently had a discussion with Nancy Wuttunee, Senior Director Operating Excellence at A&W Food Services of Canada, about a new feedback system the company is using in its restaurants. The approach is a great example of Guiding with Empathy, one of the principles of People-Centric Experience Design (PCxD).

A&W Canada uses a vendor named Benbria to help it collect feedback via in-store kiosks and a mobile app, displaying the results in real time to employees behind the counter. Customers are asked to give a thumbs-up or thumbs down to three questions:

  • Was your food hot and tasty?
  • Was the service fast and friendly?
  • Was the restaurant clean?

AWCanadaBenbria

Wuttunee is very encouraged by the results of the system, which was initially piloted at six company-owned stores in Ottawa, and is now in 50 locations and is being rolled out to all of its 800 restaurants. She told me “We’re calling it “Guest Connect,” and that’s what it’s giving to us. The front room employees already have the conversations, but this lets the kitchen stay focused on the guest experience as well.”

One of the surprises that Wuttunee described is that the stores get a lot more thumbs-up than thumbs-down. Unlike normal feedback sources that are often negatively based, this system captures a lot of positive sentiment. So the company built a culture that welcomes a thumbs-down as an opportunity to use the information for improvement.

Here’s what intrigued me about A&W Canada’s approach to sparking customer empathy:

  • A simple real-time scorecard. Customers are asked to rate three things and the number of thumbs ups and thumbs down are listed on the board for employees to see. There’s no trending or advanced analytics, employees can see how customers are viewing their efforts in an ongoing way­­—and use their judgment in making adjustments. The scoreboard is reset at the beginning of each day.
  • No goals or incentives. Companies often jump at the opportunity to slap incentives on every customer measurement, but A&W Canada has resisted the temptation. There are no specific goals attached to these scores, they are just used for employees to understand the experiences of their customers.
  • Behind the scenes management. The daily data feeds aren’t just forgotten, as management receives daily reports. Data and trends are analyzed to spot potential issues at specific stores or during specific shifts as well as to identify successful stores that might have practices worth sharing.
  • Consistency with the overall culture. Wuttunee explained that, “A&W Canada has a climate in the restaurant where employees feel valued and feel like they are members of a team.” So this program is not an isolated “gimmick” to engage employees. The company has an extensive focus on employee engagement, which is demonstrated in its “Climate Goals,” the following seven behaviors that the company believes are required to achieve its mission:

1) I constantly find ways to create an excellent and delightful experience for each of our guests.
2) We listen to understand each other.
3) I invite and share feedback that enables us to improve.
4) I embrace change and actively support innovation.
5) We work together as partners pursuing common goals and shared success.
6) We use our differences as a source of creativity and learning.
7) I recognize and celebrate our big and small wins.

The bottom line: Help employees hear the voice of your customers

Report: Net Promoter Score Benchmark Study, 2013

1311_NPSBenchmarkStudy_COVERWe just published a Temkin Group report Net Promoter Score Benchmark Study, 2013. This study of 10,000 U.S. consumers benchmarks Net Promoter® Score (NPS®) for 269 companies across 19 industries. Click to download list of companies (.pdf).

Here’s the executive summary: We measured the Net Promoter Score for 269 companies across 19 industries. USAA took the top three spots with NPS of 60 or more for its credit card, banking, and insurance businesses. At the other end of the list, HSBC earned the two lowest scores, with NPS below -20 for its banking and credit card units. Auto dealers (38) and groceries (30) have the highest average NPS, while TV service providers, Internet service providers, and health plans are below 10. In 18 of the 19 industries, consumers who are under 25 represent the lowest (or tied for lowest) NPS scores. Compared with detractors, promoters are more likely to want lower prices and less likely to want customer service improvements. To help you implement a successful NPS program, we’ve included eight tips, such as don’t believe in an “ultimate question” and use control charts, not pinpointed goals. The industries included in this report are airlines, auto dealers, banks, computer makers, credit card issuers, fast food chains, grocery chains, health plans, hotel chains, insurance carriers, Internet service providers, investment firms, major appliance makers, parcel delivery services, rental car agencies, retailers, software firms, TV service providers, and wireless carriers.

This is our second annual NPS benchmark. Check out last year’s results.

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Here are the overall results for the 19 industries:

2013NPSResults_TemkinGroup

Here are some other highlights:

  • USAA earned the highest NPS scores on the list for three of its business—66 for insurance and credit cards and 65 for banking. Other companies with NPS above 50 are Amazon.com, H.E.B., Chick-fil-A, Apple, Audi, credit unions, and Nordstrom.
  • HSBC earned the lowest two NPS scores across all companies with a -42 for banking and -24 for credit cards. Other companies with NPS of -10 or below are Time Warner Cable, Citibank, Super 8, Charter Communications, and Motel 6.
  • Auto dealers earned the highest average NPS (38) followed by grocery chains (30), hotel chains (29), and software firms (29).
  • TV service providers (2), Internet service providers (5), and health plans (9) are the only industries with averages below 10.
  • USAA’s three businesses earned NPS levels that are 40 or more points above their industry averages. Three other firms are 30 or more points above their peers: A credit union (banking), Amazon.com (retail), and H.E.B. (groceries).
  • HSBC’s NPS is 55 points below the industry average for banks and Super 8 is 42 points below the hotel industry. Four other firms are 30 or more points below their industry averages: Motel 6 (hotels), HSBC (credit cards), US Airways (airlines), and 7-Eleven (retail).

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The bottom line: Find out why customers do and don’t recommend you.

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

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