Facebook’s Popularity Crosses Over Ethnic Groups

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

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

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

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

Who’s Using Facebook and Twitter?

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

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

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

Assess Your Four Customer Experience Competencies

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

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

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

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

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

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

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

Net Promoter Score and Market Share For 60 Tech Vendors

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

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

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

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

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

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

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

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

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

Data Snapshot: Communications and Media Benchmark

The report can be downloaded for $195

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

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

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

Here are some of the key insights from the report:

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

Download report for $195

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

2012 Temkin Forgiveness Ratings

Temkin Group has just released the 2012
Every company makes mistakes now and then, but how willing are customers to forgive the company when it happens? Forgiveness is a valuable asset that companies earn by consistently meeting customers’ needs.

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

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

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

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

We also analyzed changes from the 2011 Temkin Forgiveness Ratings. The research shows that consumers are more forgiving this year than they were last year. Led by banks and insurance carriers, all 12 industries that were in both the 2011 and 2012 Temkin Forgiveness Ratings showed improvement.
Sixty-eight of the 139 companies that were in the 2011 and 2012 Temkin Forgiveness Ratings earned double-digit improvements and four companies improved by more than 25 percentage points: TD Ameritrade, Lenovo, USAA, and credit unions. Ten companies lost ground over the last year with the biggest drops coming for Citigroup, Continental Airlines, Travelers, Sears, Holiday Inn Express, and The Hartford.

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

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

Women Are More Loyal Than Men

We recently published the 2012 Temkin Loyalty Ratings that examines the loyalty of 10,000 U.S. consumers to 206 companies across 18 industries. I examined the difference in loyalty scores between men and women and it turns out that…

Women, as a group, are more loyal than men in all 18 industries

As you can see from the chart below, there are four industries where women have a double digit gap with men: rental car agencies, airlines, hotel chains, and grocery chains. In only three industries do women have less than a three point loyalty gap: TV service providers, Internet service providers, and credit card issuers.

The bottom line: Female customers may be even more valuable than you thought

CX Mistake #4: Treating All Customers The Same

In this series of posts, we examine some of the top mistakes companies make in their customer experience management efforts. This post examines mistake #4: Treating All Customers The Same. Customers have different needs, interests, and familiarity with offerings, but companies often turn their back on these differences.While it may sound appealing to deliver a great experience to everyone, it’s an impractical goal for most companies.

When a traveller wrote a complaint to Southwest Airlines about how flight attendants were fooling around during the safety briefing and said that she would never fly Southwest Airlines again, Herb Kelleher (founder and then CEO) wrote back a simple note: “We’ll miss you.” What Kelleher understood is that the airline’s value proposition wasn’t for everyone and that it would fail if it tried to cater to everyone.

Here are some tips for avoiding this mistake:

• Identify key customer segments. The first step is to identify the different customer segments that your company serves. While you may start with demographic breakdowns like age or income, some of the most telling segments come from psychographics. Nike, for instance, may have a strong customer segment called running enthusiasts. Once you have a list of segments, it is critical that you prioritize them. Every CX project should identify a primary segment as the audience.
• Track needs across the customer lifecycle. Customer segments represent one slice of how to look at customers; the other is lifecycle. Customers have different needs as they flow through different stages of their relationship. You need to understand how each target segment wants to do things like: Research using your products/services, make a purchase, start using your products and services, have ongoing communications with you after becoming a customer, get help when there’s a problem, etc.
• Walk away from some customers.In order to prioritize some customer segments, you will need to de-prioritize others. It’s critical that you are clear about which segments you are not going to try and serve. If you don’t create that clarity, then people across the organization will continue to push for investments and changes to improve things for those (purposely) underserved customers, taking focus away from your more important customers.
• Get to know customers, qualitatively. It’s easy to fall into the trap of thinking customers are the same if you just look at data about them. To truly understand the nuances across your customer segments, it’s critical that you use qualitative techniques like focus groups, contextual inquiries and shadowing. It’s also valuable to have executives regularly interact with customers from key segments.
• Listen to customers strategically. Voice of the customer “experts” often talk about getting a 360-degree view of all your customers. While that might make sense in an ideal world, the reality is that companies are forced to make trade-offs. It’s expensive to get feedback, both in terms of out-of-pocket expenses and the opportunity cost of having customers answer questions (there’s a limit to how often you can ask customers questions). So you need to be more strategic about where you focus your listening, a process that we call “Detect” (see the 6 Ds For Voice Of The Customer Programs).
• Design segment-specific experiences.Sometimes your target customer segments will have different enough needs and desires that you’ll want to design different experience paths for them. We often find three areas of difference across segments that can require multiple experience paths: knowledge of the domain, level of willingness to engage in a process, and channel preferences.

The bottom line: Experiences built to meet everyone’s needs often meet meets no one’s

Data Snapshot: Social Media And Mobile Adoption

Purchase data snapshot for $195

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

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

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

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

Purchase data snapshot for $195

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

How Companies Use Customer Experience Metrics

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

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

The bottom line: How do YOU use CX metrics?

CX Metrics Don’t Stack Up To Financial Metrics

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

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

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

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

The bottom line: CX metrics need to guide business decisions

Michael’s Stores Links CX And Marketing

Last month I met Paula Puleo, CMO of Michael’s Stores, at a SAS event in Orlando. She gave a presentation that I really enjoyed, describing activities at the arts and crafts retailer that blends marketing with customer experience.

The importance of customer experience comes out loud and clear in what Puleo presented as the three elements of Michael’s corporate mission:

• Inspires and enables consumers to experience creativity
• Leads industry growth and innovation
• Creates a fun and rewarding place to work that fosters meaningful connections with our communities

I was really impressed with Puleo’s presentation, so I caught up with her after the event. In her presentation, Puleo listed her six marketing priorities. Here are some of the additional details that she provided for each of them:

• Live The Brand: Puleo talked about trying to foster connections with customers and associates. The company runs events like craft cruises and craft days at baseball stadiums (they’ve had them at Arizona Diamondbacks and Texas Rangers games and expect to expand to other sporting venues). Puleo also pointed to Michael’s participation in the Festival of the Masters at the Walt Disney World. The goal is to bring crafts to venues that are more family oriented. She said that these activities bring a level of inspiration to all of their messages.
• Real Time/Face Time = The New Prime Time. Puleo talked about having a dialogue with customers. Michael’s uses a dedicated Social media team to keep Twitter and Facebook alive. Each store has dedicated customer experience managers that aren’t focused on other store operations. Puleo says that these employees make the environment happy, friendly, and fresh and she called them “our people-people.”
• Make the private brand not so private. Michael’s has a large private brand business, which provides strong financial benefits. Rather than positioning these store brands as boring alternatives, Michael’s wants to celebrate them and make them a strong value proposition. So the company introduced its product designers to customers. Influential bloggers, for instance, are periodically invited to spend the day with product designers. Connecting customers and influential crafts bloggers with product designers make the private brands come to life and creates what Puleo called a “playground for customer co-creation.”
• Compete in the trenches. Puleo said that they need to compete at a local level. So corporate marketing helps the stores understand who their customers are and any local competitive threats.The company is investing in deeper data insights to better understand customers and provide the stores with even more insights. The corporate marketing team also creates experiential events and demos that can be used in the stores.
• Remove the angst. Puleo talked about finding what’s in the belly of your customers. if you remove that angst then you will eventually sell them something. She understands that shoppers are anxious about spending, so they lead with value. She also recognizes that Michaels customers have angst about having quality family time. That’s why Michael’s came up with the idea for The Knack, which is a site with simple ideas for family crafts projects.
• What works. Puleo discusses the importance of measurement and having good KPIs in place. She works closely with her finance partners to understand what’s working and what’s not, to measure the ROI of the marketing spend.

Puleo also discussed Michael’s loyalty program.They’ve just started offering experiential benefits for Gold customers (that spend $250+ per year). In about 275 of its stores, Michael’s invites its top customers to events with stores designers and celebrities in the crafts world. In St. Louis they had an event with The Crochet Dude and in Dallas they had a contest where customers pitched their projects to Puleo, Michael’s chief designer Joe Pearson, and “rock stars” like the Double Stitch Twins. Puleo says that “access” is the currency that they try to give to good clients; it’s all about surprise and delight.

I asked Puleo about what’s next. She recognizes that many of their customers come to a Michael’s store because they have to come – to get materials for a kids project or to buy a widget. She wants to inspire customers into coming into the stores because they want to. Her goal is to get everyone, even non-customers, to realize that they have some talent and creativity and have them think about coming to Michael’s to express it.

The bottom line: Michael’s sells products, but it markets the love of arts & crafts

A Glimpse At Social Media And Mobile Adoption Rates

As you prepare for 2012, it’s likely that social media and mobile are making their way on to your agenda. And they should. These channels are growing and are particularly important if you are targeting a young audience.

We’re working on a report for early 2012 that examines adoption levels and frequency rates of use for numerous social media and mobile activities. The analysis will dig into differences across consumer demographic segments. Here’s an early glimpse at some of the high-level data:

Here’s that same analysis done for just 18 to 24 year-olds:

As you can see, there’s a dramatic difference in adoption rates, especially when looking at mobile activities.

The bottom line: You need to look at social media and mobile if you want to reach younger consumers

Which Channels Do US Consumers Prefer Using?

We’re working on a report for early next year that examines channel preferences. We asked 5,000 US consumers to pick their preferred channel for completing a wide variety of activities. Given that many people are planning their 2012 strategies, I thought it might be useful to share an overview of the data.

The report will examine this data by age group, which will be helpful when looking at your target audiences.

The bottom line: The phone and Web self-service are the key channels

People Are Key To Predictive Analytics

I recently wrote about remarks from General Colin Powell, Scott Hudgins from Disney and Orlando Magic’s Alex Martins who spoke at The Premier Business Leadership Series sponsored by SAS. Here are some additional tidbits that I found interesting throughout the event:

• Paula Puleo, SVP and CMO of Michaels Stores, talked about how the retailer is “living its brand” and “putting Michaels’ brand into the hands of its customers.” She describes that the company used to “shout at customers” with Sunday circulars but have been building more of a dialogue with customers and employees over the previous 18 months. When she discussed the redesign of the frame section in the stores, she described the goal as: We help preserve the cherished moments of our clients. I am planning to interview Puleo and provide more details on the work that she’s doing in a future blog post.
• Tim Belk, Chairman and CEO of Belk, shared these comments: “If you’re going to build your brand, you need to invest in your people” and “You need to make associates happy if you want your customers to be happy.”
• Matt Cappio, SVP of Marketing Strategies at Bank of America, explained how the bank is using analytics to understand what’s most relevant to the customer and beneficial to the bank. It can identify offers that meet certain goals in ares like revenues and credit risk. It’s not just about having the technology spit out an offer. Cappio said: “We need to win our associate over as to the value of the offer or we will have a crisis of confidence.”
• Jim Goodnight, CEO of SAS, discussed how massively parallel in-memory processing allows companies to do analysis on ALL of their data, quickly. Jim Davis, SVP and CMO of SAS, discussed a scenario where SAS reduced the time to complete a marketing optimization for a European telco from 8 hours to 2 minutes and 17 seconds.
• Halina Karachuk, VP of Innovation, Research and Analytics at AXA Equitable, talked about “mining for diamonds” which is a process where they analyze their advisors’ book of business (client and product information) and identify the “next-best offer” for each household.
• Eric Webster, VP of Marketing at State Farm Insurance, explained that the most important question for a life insurance underwriter is “are you a smoker?” It’s so important that insurers insist on a medical exam to validate this answer. State Farm is starting to use predictive models to reduce the number of medical exams; only using this expensive and time-consuming step when it’s most required.
• Best selling author Jim Collins also spoke at the event. His core message was that great leaders wrap three attributes around their ambition: Fanatic discipline, empirical creativity, and productive paranoia. Collins’ analysis showed that great leaders and companies aren’t just lucky. He researched more than 200 “luck events,” which are situations that: are independent of your actions, have significant consequences, and are unpredictable.  It turns out that great companies aren’t differentiated by their good luck, but by their ability to deal with all of the luck events they run into — good or bad. Collins described this as their return on luck.

There’s a lot of different stuff going on in this post. Is there anything that connects all of these elements besides a conference center in Orlando? I’ll give a shot at wrapping it all together:

Predictive analytics will increasingly put deep insights into the hands of people at the point in time when they make decisions. But this won’t have a significant impact on companies unless they use the insights to identify value for customers and engage employees in designing new processes. This combination of left brain analysis and right brain human engagement will help companies more nimbly respond to rapidly changing environments full of both good and bad luck.

The bottom line: Powerful analytics is necessary but not sufficient for successful analytics