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

Report: 2012 Temkin Loyalty Ratings

Access the data from all Temkin Ratings research at the Temkin Ratings website.

We just published a new Temkin Group report, 2012 Temkin Loyalty Ratings. The report analyzes feedback from 10,000 U.S. consumers to rate their loyalty to 206 organizations across 18 industries. Congratulations to the top firms in this year’s ratings: Sam’s ClubAldi, USAA, Publix, credit unions, and Amazon.com.

We added six industries (fast food chains, grocery chains, major appliances, car rental agencies, auto dealers, and parcel delivery services) and 63 companies compared with the 2011 Temkin Loyalty Ratings.

Here is the executive summary from the report:

Sam’s Club, Aldi, and USAA earned the top spots in the 2012 Temkin Loyalty Ratings while Citigroup (banking and credit cards) and Charter Communications (TV service and Internet service) each show up twice in the bottom four. We asked 10,000 U.S. consumers to rate their loyalty to companies across three dimensions: likely to recommend, reluctant to switch, and willing to repurchase. Their responses allowed us to rate the loyalty of customers to 206 companies across 18 industries. One-quarter of companies have “strong” or “very strong” ratings while 50% have “weak” or “very weak” ratings. At an industry level, grocery chains and retailers have the most loyal customers while internet service providers and TV service providers have the least loyal customers. USAA has the most loyal customers across three industries, banking, insurance, and credit cards. When comparing the results from the 2011 and 2012 Temkin Loyalty Ratings, we find that PNC and USAA improved the most and Kohl’s and Hyatt declined the most.

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The Temkin Loyalty Ratings are based on evaluating three components of loyalty:

  1. Recommending: How likely are consumers to recommend the company to friends and colleagues?
  2. Switching: How reluctant are consumers to switch business away from the company?
  3. Repurchasing: How willing are customers to purchase additional products and services from the company?

Here are the ratings for all 206 companies:

Here’s how the industries compare with each other:

Here are some other highlights from the research:

  • USAA (in their banking and credit card divisions) as well as credit unions (banking) outpaced their industry peers by more than 25 percentage points.
  • DHL and RadioShack are the furthest behind their peers, falling more than 20 percentage points below their industry averages.
  • Across the 12 industries we examined in both years, nine earned higher loyalty scores in 2012 and three showed a decline. Computer makers are at the top of the list of gainers while retailers had the largest decline.
  • Of the 139 companies that are included in both the 2011 and 2012 Temkin Loyalty Ratings, 84 firms made at least a small improvement in their scores. Led by PNC and USAA, 19 companies earned double-digit improvements over the last year.
  • Kohl’s and Hyatt are the only companies that declined by more than 10 percentage points over the previous year.

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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: Consumer loyalty remains up for grabs across most industries.

Report: 2012 Temkin Experience Ratings

Access the data from all Temkin Ratings research at the Temkin Ratings website.

We just published a new report, 2012 Temkin Experience Ratings. The report analyzes feedback from 10,000 U.S. consumers to rate 206 organizations across 18 industries. Congratulations to the top firms in this year’s ratings: Sam’s ClubPublix, Starbucks, Subway, Chick-fil-A, Aldi, Winn-Dixie, H.E.B, and credit unions.

We added six industries (fast food chains, grocery chains, major appliances, car rental agencies, auto dealers, and parcel delivery services) and 63 companies compared with the 2011 Temkin Experience Ratings.

Here is the executive summary from the report:

Sam’s Club and Publix earned the top two spots in the 2012 Temkin Experience Rankings, with three fast food chains rounding out the top five. We asked 10,000 U.S. consumers to rate their recent interactions with companies across three dimensions of their experience: functional, accessible, and emotional. Their responses allowed us to rate 206 companies across 18 industries. Only 28% of those companies received at least a “good” rating. Grocery chains earned the highest average scores and health plans dominated the bottom of the ratings. Kaiser Permanente and credit unions most outperformed their industries while DHL and RadioShack fell the farthest behind their peers. None of the companies earned an “excellent” rating for the emotional component, while Charter Communications and Earthlink lead 10 companies falling below the “very poor” threshold in that area. Compared with last year’s ratings, most industries improved, led by a 5.3 point average increase by insurance carriers. When it comes to changes over the past year by individual firms, PNC and Lenovo improved the most while Regions Bank had the sharpest decline.

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The Temkin Experience Ratings are based on evaluating three elements of experience:

  1. Functional: How well do experiences meet customers’ needs?
  2. Accessible: How easy is it for customers to do what they want to do?
  3. Emotional: How do customers feel about the experiences?

Here are the ratings for all 206 companies:

Here’s how the industries compare with each other:

Here are the companies that are leaders across the 18 industries:

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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: Customer experience is improving, but there’s a long way to go

Amazon.com, Costco, and USAA Are The Most Recommended Companies

In the 2011 Temkin Loyalty Ratings, we examined three elements of loyalty that includes the likelihood of consumers to recommend U.S. companies to their friends and relatives. I decided to take a closer look at the companies with the most, and the least, percentage of consumers that are likely to recommend them.

Here are some observations of the results across the 143 companies we examined:

  • Amazon.com, Costco, and USAA are on top. No surprise; these companies do well in just about every measure of loyalty.
  • Southwest Airlines and Vanguard stand out. Besides USAA, Southwest Airlines and Vanguard are the only companies that aren’t retailers or hotel chains on the top 20 list.
  • Anthem, Blue Shield Of CA, and Charter Communications are on the bottom. Led by Anthem, Blue Shield Of California, and Charter Communications, 15 companies had less than 50% of consumers willing to recommend them.

We also looked at the level of consumer recommendations compared with industry averages. This analysis showed that:

  • USAA and Regions outperform the most. Led by USAA (credit cards and insurers) and Regions (banks), seven firms have 10 percentage points more consumers willing to recommend them compared with their industry average. The others: Southwest (airlines), Amazon.com (retailers), TriCare (health plans), and USAA (banks).
  • Gap and Radio Shack underperform the most. Led by Gap (retail) and Radio Shack (retailers), five companies fall at least 10 percentage points their industry average level of recommendations. The others: US Airways (airlines), Super 8 (hotels), and Anthem (health plans).

The bottom line: Recommendations are an asset that companies must cultivate.

Report: 2011 Temkin Loyalty Ratings

We just published a new Temkin Group report, 2011 Temkin Loyalty Ratings.

The report identifies the level of loyalty that US consumers have for 143 organizations across 12 industries.

Here’s the executive summary:

Amazon.com, Kohl’s, and Costco took the top spots in the 2011 Temkin Loyalty Ratings. We asked 6,000 US consumers to rate their level of loyalty to companies across three components: purchasing additional products and services, reluctance to switch business away, and likelihood to recommend the company to friends and relatives. This data allowed us to rate 143 companies across 12 industries. Only 17% of those companies received a “strong” or “very strong” loyalty rating. The results show that retailers have the highest level of loyalty while TV service providers and health plans have the lowest.

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First of all, let me give a shoutout to the five companies with the highest ratings, indicating that they have the most loyal customers:

  • 1. Amazon.com
  • 2. Kohl’s
  • 3. Costco
  • 4. (tie) Lowe’s
  • 4. (tie) Sam’s Club

Here’s a list of the top 20 companies in the ratings. Click on the graphic below or click right here if you want to see the results for all 143 companies.

The Temkin Loyalty Ratings are calculated by examining three levels of loyalty that companies have earned from consumers: willingness to buy more products, reluctance to switch business away from, and likelihood to recommend those companies.

Overall, consumers don’t have a strong degree of loyalty across many industries. Retailers, by far, earn the highest levels of loyalty. TV Service providers and Internet Service providers, on the other hand, have earned woefully little loyalty with consumers.

Here are some of the other findings from the research:

  • Results versus industry averagesLed by USAA (insurance and credit cards), TriCare (health plans), credit unions (banks), and Southwest Airlines, 12 companies had double-digit advantages in loyalty over their industry. At the other end of the spectrum, Radio Shack (retailers), Super 8 (hotel chains), and Gap (retailers) led 18 companies with loyalty scores at least 10 points below their industry averages.
  • “Recommending” leaders and laggardsLed by Costco and Amazon.com, 36 companies have “very strong” ratings for consumers that are likely to recommend them to friends and colleagues. At the other end of the spectrum, Charter Communications, Anthem, and Comcast are the only firms with a “very weak” rating in this area.
  • “Switching” leaders and laggards. While no companies have very strong ratings for customers that are reluctant to switch, TriCare and USAA lead the five companies that have a “strong” rating in this area. Blue Shield Of California and Lenovo are at the low-end of the spectrum along with 12 other companies that have negative ratings in this area.
  • “Repurchasing” leaders and laggards. When it comes to having customers who are likely to purchase something else from them, Amazon.com and Old Navy lead 21 companies with “very strong” loyalty ratings in this area. HSBC and Charter Communications are two of the seven companies that didn’t even cross the 20% mark in this area.

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For access to more data, you can visit Temkin Ratings Website.

Now that we’ve published the Temkin Loyalty Ratings and the Temkin Experience Ratings, we’re analyzing the correlation between the two datasets. Look for out upcoming report: Customer Experience And Loyalty: Connecting The Dots

The bottom line: Loyalty is up for grabs!

Health Plans Fail On Customer Experience

Forrester’s 2010 Customer Experience Index (CxPi) ranks 133 firms across 14 industries. I recently analyzed the results of the nine health plans in the CxPi. Here are the overall results:

Some interesting tidbits from the research:

  • Health plans were the worst scoring industry for the third straight year.
  • The average score across health plans was the same as it was in 2008, a “very poor” 51%.
  • Kaiser was in top place again, although it dropped a bit from 2008.
  • The public plans, Medicare and Medicaid, had the largest improvement.
  • Anthem (BCBS) and United Healthcare dropped the most since 2008.

The bottom line: Health plan customer experience needs resuscitation.

Forrester’s 2010 Customer Experience Rankings

This is our third year publishing the CxPi. The 2007 CxPi and the 2008 CxPi rankings were published in Q4. We decided to publish this year’s CxPi in Q1 2010, so we don’t have a 2009 CxPi.

The 2010 CxPi ranks 133 organizations across 14 industries: Airlines, Banks, Credit Card Providers, Health Plans, Hotels, Insurance Firms, Internet Service Providers, Investment Firms, Parcel Shipping Services (new this year), PC Manufacturers, Retailers, TV Service Providers, Utilities (new this year), and Wireless Carriers.

The CxPi is based on consumer evaluations during November 2009 across three areas: 1) meeting needs; 2) being easy to work with; and 3) enjoyability (see the methodology section below).

Here are the full 2010 CxPi rankings

Barnes & Noble took the top spot in the CxPi rankings for the second year in a row. Marriot Hotels, Hampton Inn, Amazon.com, and Holiday Inn Express round out the top 5. At the other end of the spectrum, Charter Communications landed at the bottom of the CxPi rankings for the third year in a row. Here are some additional insights about the overall results:

  • Retailers take 12 out of the top 20 spots. Most of the top rated companies on the list are retailers. Hotels also grabbed three of the top 20 spots. Interestingly, three financial services firms also cracked the top 20: credit unions, SunTrust Bank, and Vanguard.
  • Healthcare, Internet and TV services dominate the bottom. The bottom 11 companies on the list came from only four industries: five health insurance plans (United Healthcare, Medicaid, Anthem, and CIGNA), three ISPs (Charter Communications, Comcast, and Qwest), two TV service providers (Charter Communications and Comcast), and one credit card provider (HSBC).
  • There was very little excellence. Only 13 firms ended up with an “excellent,” and 35 received a “good” rating. 40 companies fell in the middle with “okay” ratings. At the bottom of the list, 45 received either a “poor” or “very poor” rating.
  • Liberty Mutual improved the most. When we compared firms’ 2010 CxPi with last year’s results, we found that 22 companies had improved by at least five percentage points. Led by Liberty Mutual’s 15 percentage point increase, five firms even had double-digit improvements (Comfort Inn, Sprint, and Time Warner Cable).

CxPi Results Across Industries

We also looked at the overall results for the 14 industries included in the CxPi.

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