Customer Experience Generation Gap October 7, 2009
Posted by Bruce Temkin in Customer Experience Index, Customer experience, Gen Y.1 comment so far
As I prepare to gather consumer data for the 2009 Customer Experience Index (CxPi), I went back and ran another analysis on the 2008 CxPi dataset. In a report called The Customer Experience Generation Gap, I looked at the difference in feedback in 12 industries across 5 generations of US consumers. Here are some of the findings:
- Seniors give the highest ratings. For all 12 industries, Seniors gave their providers the highest average ratings of any generation. The scores from this older group ranged from 86% for retailers to 61% for TV service providers.
- Gen Y give the lowest ratings. For 11 of the 12 industries, Gen Y gave the the lowest scores. What was the only exception? Older Boomers were the low mark for PC manufacturers. The scores from Gen Y ranged from 78% for retailers to 38% for health plans.
- Health plans have the largest generation gap. When we compared the scores from Seniors with those from Gen Y, health plans had the largest gap, 38%. Seven other industries had gaps of at least 20%: ISPs, airlines, credit card providers, investment firms, wireless carriers, tv service providers, and insurance providers.
- Health plans and TV service providers widely disappoint. For all five generations of consumers, health plans and TV service providers get the two lowest scores.
- Retailers and hotels are the most enjoyable. I also examined the underlying components of the CxPi. It turns out that all five generations gave retailers and hotels enjoyability rankings of 70% or more, but no other industry ended up with even a single score that high.
The bottom line: Firms need a Gen Y experience plan.
TV Service Providers Actually Got Worse June 14, 2009
Posted by Bruce Temkin in Customer Experience Index, Customer experience.Tags: Bright House, Charter Communications, Comcast, Cox Communications, DirecTV, DISH Network/EchoStar, Time Warner Cable
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In Forrester’s 2008 Customer Experience Index (CxPi), we ranked 113 companies across 12 industries. I recently published a snapshot of the results for TV service providers (Bright House, Charter Communications, Comcast, Cox Communications, DirecTV, DISH Network/EchoStar, Time Warner Cable, and “other cable TV provider”). Here are some highlights of the eight TV service providers on the list:
- Experiences are “very poor” and falling fast. As a group, TV service providers ended up with a “very poor” rating of 52%; the next to lowest score for any industry we examined. But it’s the trend that’s most concerning. The industry experienced an eighth point drop from its 2007 CxPi results, which more than doubled the decline of any other industry.
- DirecTV, Bright House, and “other” are the least bad. With “poor” scores of 63%, DirecTV, Bright House, and “other cable TV provider” came out with the top scores of the group. On the other end of the list, Comcast, Time Warner, and Charter Communications all fell below 45%; representing three of the five worst ratings across all 113 firms in the CxPi.
- None of the firms improved. The providers that we also rated in 2007 didn’t show any improvement. Only “other cable TV providers” stayed the same, while all of the others got worse. Time Warner and Comcast experienced the sharpest decline.
The bottom line: TV service providers need a severe customer experience makeover
USAA Tops Insurers In Customer Experience June 1, 2009
Posted by Bruce Temkin in Customer Experience Index, Customer experience.Tags: Allstate, Geico, Liberty Mutual, Progressive, State Farm, USAA
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In Forrester’s 2008 Customer Experience Index (CxPi), we ranked 113 companies across 12 industries. I recently published a snapshot of the insurance industry results. Here are some highlights of the 10 insurers on the list:
- Experiences are “okay.” As a group, the 10 insurers ended up with an “okay” rating of 73%, a two percentage point increase over the 2007 CxPi results.
- USAA leads the pack. With a score of 83%, USAA led two other firms that ended up with ”good” ratings: Progressive and State Farm.
- Liberty Mutual lags. With the only “poor” rating, Liberty Mutual came out at the bottom of the list.
- USAA leads all categories. USAA came out on top in all three components of the CxPi, with the largest lead in enjoyability. Progressive earned “excellent” ratings for meeting user needs and being easy to work with and State Farm earned an ”excellent” rating for meeting user needs.
- Allstate improved the most. Allstate’s CxPi improved by six percentage points, just ahead of Geico’s five point increase. At the other end of the spectrum, Liberty Mutual’s CxPi dropped the most – losing 10 points.
The bottom line: Once again, there’s a lot to learn from USAA
Southwest Airlines Soars Above Its Peers March 24, 2009
Posted by Bruce Temkin in Customer Experience Index, Customer experience, Executive leadership.Tags: American Airlines, Continental Airlines, Delta Airlines, JetBlue, Northwest Airlines, Southwest Airlines, United Airlines, US Airways, Virgin America
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I’m writing this post as I’m flying to Puerto Rico on America Airlines. Seems like an appropriate time to discuss my new report: Customer Experience Index (CxPi) 2008 Snapshot: Airlines. The research examined the results of the seven airlines in the 2008 CxPi: American Airlines, Continental Airlines, Delta Airlines, Northwest Airlines, Southwest Airlines, United Airlines, and US Airways.
The results are probably not surprising:
- Airline experiences are mostly poor. The average CxPi score for the airlines was 65; on the cusp between an ”okay” and “poor” rating. But six of the seven airlines received “poor” or “very poor” ratings.
- Southwest stands out from the pack. The top scoring airline, Southwest received a CxPi score of 81%; a “good” rating. The next airline on the list, Continental, was a whopping 14 points behind.
- US Airways dissapoints the most. Coming in at the bottom of the list is US Airways, with a “very poor” rating of 50%. That score earned the airline the 103rd spot out of the 113 firms in the CxPi. Northwest was the next to last airline with a 56% score.
It might have been a closer race if we had data for some other airlines like JetBlue and Virgin America. But there’s no doubt that Southwest does things differently than most airlines. The differences start at the top. I often refer to this quote from Herb Kelleher, founder of Southwest Airlines:
If you create an environment where the people truly participate, you don’t need control. They know what needs to be done and they do it. And the more that people will devote themselves to your cause on a voluntary basis, a willing basis, the fewer hierarchies and control mechanisms you need.
The bottom line: The airline industry could use more leaders like Kelleher
Customer Experience Correlates To Loyalty February 18, 2009
Posted by Bruce Temkin in Customer Experience Index, Customer experience, Managing in a recession.35 comments
I just published a report called Customer Experience Correlates To Loyalty that examines the connection between customer experience and three components of loyalty:
- Reluctance to switch business from a company
- Willingness to buy another product from a company
- Likelihood to recommend a company to a friend or colleague
The analysis is based on a survey of nearly 4,700 US consumers in October 2008. The results are compelling. Across all 12 industries we examined, there was at least a medium level of correlation between customer experience and loyalty; in most cases the correlation was much higher.
This chart shows the level of correlation between customer experience (as defined by Forrester’s 2008 Customer Experience Index) and the three elements of loyalty:
I also did the same analysis with consumer data from Q3 2007 on nine of these industries (we added airlines, hotels, and PC manufacturers this year). It turns out that the correlation between customer experience and loyalty has increased in every industry.
I wasn’t surprised to find the link between customer experience and loyalty; I’ve worked with — and studied — enough firms to know that there’s a strong correlation. But I wasn’t sure how the economic downturn had altered this relationship. So it was very interesting to find out that the connection has become stronger in the recession.
The bottom line: Don’t neglect customer experience during the downturn.
Amazon.Com, Barnes & Noble Top Hispanic Customer Experience Index January 7, 2009
Posted by Bruce Temkin in Customer Experience Index, Customer experience.Tags: Amazon.com, Barnes & Noble, Hispanic
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We recently published the 2008 US Hispanic Customer Experience Index (thanks to Tamara Barber who researches Hispanic consumers). Unlike the overall US Customer Experience Index (CxPi) that examined 114 firms across 12 industries, the Hispanic CxPi ranked 37 US firms across three industries (retailers, retail banks, and credit card providers) based on a survey of 3,370 US Hispanics. Here are the rankings:
The bottom line: Financial institutions don’t satisfy Hispanic consumers.
Wireless Carriers Fail (Again) On Customer Experience December 28, 2008
Posted by Bruce Temkin in Customer Experience Index, Customer experience.Tags: Alltel, AT&T, Sprint, TracFone, Verizon Wireless, Wireless carriers
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In Forrester’s Customer Experience Index (CxPi), we ranked 114 companies across 12 industries. I recently published a snapshot of the wireless industry results. The carriers, as a group, ended up tied for 8th (with PC manufacturers) out of the 12 industries. Here are some highlights of the results:
- Wireless carriers got worse. In last year’s CxPi, wirless carriers ended up with a not so good 66% rating. But in this year’s CxPi, the wireless carriers dropped to 64% (a rating of “poor”).
- Alltel takes the top spot. With an “okay” rating of 72%, Alltel topped the list of wireless carriers in the 2008 CxPi. Alltel also came out on top of all three categories of the CxPi, with the largest lead in enjoyability. Verizon Wireless, TracFone, and AT&T all scored well in usefulness.
- Sprint holds on to the bottom spot. Sprint’s score of 45% put the firm at the bottom of the list of carriers, the same spot it held last year. The low score left the carrier well below its closest competitor and 108th out of all 114 companies in the 2008 CxPi. Making matters worse, Sprint also had the largest drop from last year.
- AT&T makes the only gains. With a small 1% increase between 2007 and 2008, AT&T was the only carrier that improved its CxPi score. Alltel remained at the same level as last year, but all of the other carriers’ scores declined.
The bottom line: Wireless carriers are heading in the wrong direction.
Surprise! Banks Got Better At Customer Experience December 22, 2008
Posted by Bruce Temkin in Customer Experience Index, Customer experience.Tags: Capital One, Citibank, credit unions, JPMorgan Chase, National City Bank, SunTrust Bank, Wachovia, Washington Mutual, Wells Fargo
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In Forrester’s Customer Experience Index (CxPi), we ranked 114 companies across 12 different industries. As part of that research stream, I am publishing reports on each of the industries. The first one published is a snapshot of the banking industry results. It turns out that banks, as a group, made the largest improvement of any of the 12 industries. And they needed it!
In June 2007, I write a report called Banks Prepare For Customer Experience Wars. After a decade of focusing on mergers and acquisition as their strategy for growth, big banks were beginning to concentrate on organic growth. To succeed, they needed to improve the experiences they deliver to existing customers. Why? My research uncovered a very strong correlation between customer experience and loyalty.
Here are some of the highlights of the banking results:
- Banks really improved. In last year’s CxPi, banks ended in 6th place out of nine industries. This year, banks had the highest increase in average score (+7%) and ended up in 4th place out of 12 industries — only falling behind retailers, hotels, and insurers.
- Credit unions lead. With the only overall “excellent” rating, credit unions easily topped the list of banks in the CxPi – taking the top spot for the second year in a row. Next in line was National City which was the only bank to receive a “good” rating.
- JPMorgan Chase lags. JP Morgan Chase ended at the bottom of the list with a rating of “poor” – taking over the bottom spot from last year’s cellar dweller Citibank.
- SunTrust and National City shine in some areas. Credit unions were at the top of the list for all three components of the CxPi. For usefulness, SunTrust received the second highest score and Washington Mutual fell to the bottom. For ease of use, National City and Wells Fargo were ranked second and third, while JPMorgan was ranked last. For enjoyability, Citibank, Capital One, and JPMorgan Chase all received “very poor” ratings.
- U.S. Bancorp leads the improvement bandwagon. U.S. Bancorp made the most headway of any bank (+18%). SunTrust Bank and Citibank also had double-digit improvements in CxPi. Wachovia Bank, on the other hand, was the only bank with an overall decline in its CxPi.
The bottom line: Kudos to banks for improving; hopefull they’ll keep it up.
Forrester’s 2008 Customer Experience Rankings December 15, 2008
Posted by Bruce Temkin in Customer Experience Index, Customer experience.Tags: Aetna, Amazon, Barnes & Noble, Blue Shield of California, Borders, Charter Communications, Cigna, Citibank, Comcast, Costco, credit unions, Hampton Inn, Medicaid, Sprint, SunTrust Bank, Time Warner, US Bancorp, USAA
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Let me start by saying congratulations to the company that received the
#1 ranking in Forrester’s 2008 Customer Experience Index (CxPi)…
Forrester’s 2008 Customer Experience Index
This is our second year publishing the CxPi. The 2008 CxPi ranks 114 firms across 12 industries: Airlines, Banks, Credit Card Providers, Health Plans, Hotels, Insurance Firms, Internet Service Providers, Investment Firms, PC Manufacturers, Retailers, TV Service Providers, and Wireless Phone Carriers.
The CxPi is based on consumer evaluations during October 2008 across three areas: 1) usefulness; 2) ease of use; and 3) enjoyability (see the methodology section below).
Here are the full 2008 CxPi rankings…
Forrester's 2008 Customer Experience Rankings
Barnes & Noble took the top spot in the CxPi rankings, just barely beating out USAA’s credit card business. Borders, Amazon, and last year’s leader Costco round out the top five. At the other end of the spectrum, Charter Communications landed at the bottom of the CxPi rankings for the second year in a row. Here are some additional insights about the overall results:
- Retailers take seven out of the top 10 spots. Last year, nine out of the top 10 firms were retailers. While retailers still dominate the top of the CxPi, three non retailers have cracked the top 10: USAA, Hampton Inn, and credit unions.
- Healthcare and TVs dominate the bottom. The bottom 10 companies came from only four industries: four medical insurers (Medicaid, Blue Shield of California, Aetna, and Cigna), three TV service providers (Charter Communications, Time Warner, and Comcast), two ISPs (Charter Communications and Comcast), and one wireless carrier (Sprint). Charter Communications, Medicaid, Aetna, and Sprint were also on last year’s bottom 10 list.
- Several banks made significant improvements. When we compared firms’ 2008 CxPi with last year’s results, we found that a number of companies that had improved. The three firms with double digit improvements were all banks (US Bancorp, SunTrust Bank, and Citibank) and six out of the top seven improvements were made by banks as well.
CxPi Results Across Industries
We also looked at the overall results for the 12 industries included in the CxPi.
Forrester's 2008 Customer Experience Index Results
The industry CxPi data shows that:
- Retailers and hotels dominate. Two industries at the top of this year’s ratings, retailers and hotels, were the only industries to receive “good” average ratings. The two industries at the bottom of the list ended up with “very poor” CxPi ratings: health insurance plans and TV service providers.
- Banks improved and TV service providers got worse. Comparing this year’s data with last year’s results, we found that four industries have improved while five had gotten worse. Banks made the largest improvement; increasing their average CxPi scores by 7%. The average CxPi scores for TV service providers, on the other hand, dropped by 7%.
The CxPi Methodology
This analysis was based on responses from 4,564 US consumers during October 2008. The Customer Experience Index (CxPi) was calculated as an average of the indices that came from consumer responses to the following three questions from an online survey:
- Thinking about your recent interactions with these firms, how effective were they at meeting your needs? (“Usefulness” rating)
- Thinking about your recent interactions with these firms, how easy was it to work with these firms? (“Ease Of Use” rating)
- Thinking about your recent interactions with these firms, how enjoyable were the interactions? (“Enjoyability” rating)
Consumers selected responses along a five-point scale – ranging from a very negative experience (1) to a very positive one (5). The individual indexes were calculated by taking the percentage of consumers who selected one of the top two boxes (4 or 5) and subtracting the percentage of consumers who selected the bottom two boxes (1 or 2).
In order to limit consumer feedback to organizations that consumers are familiar with, we only asked consumers about organizations that they’ve interacted with during the previous 90 days.
While we received feedback on many firms, the CxPi only includes the 114 organizations that had at least 100 consumer responses.
Download a free copy of the report: Forrester is offering this report for free (all you need to do is register).
The bottom line: There’s plenty of room to improve customer experience which will increase customer loyalty.
