Advantage Rent A Car and USAA Lead in 2013 Temkin Forgiveness Ratings

All companies, even customer experience leaders, make mistakes. But how much goodwill have companies built up for consumers to forgive them after those miscues? To answer this question, Temkin Group surveyed 10,000 U.S. consumers about companies with whom they’ve recently interacted. We used this data for the third annual Temkin Forgiveness Ratings of 246 companies across 19 industries.

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Company Results

Here are the highlights of the 246 companies in the 2013 Temkin Forgiveness Ratings:

• Advantage earns top spot. With an excellent score of 61%, Advantage earned the highest rating.
• USAA dominates forgiveness. USAA grabbed the next three spots for its banking, insurance, and credit card businesses.
• The rest of the top 10. H.E.B., Blackboard, Aldi, Alaska Airlines, credit unions and Publix round out the top 10
• No industry owns the top. The top 25 companies in the ratings comes form a variety of industries: Four grocery chains, three airlines, three retailers, two banks, two hotel chains, two investment firms, two software firms, one appliance maker, one auto dealer, one credit card issuer, one fast food chain, one health plan, one insurance carrier, and one rental car agency.
• HSBC dominates the bottom. HSBC earned the bottom two spots in the ratings for its credit card and banking businesses.
• Many TV service providers are at the bottom. Six of the bottom 12 companies are TV service providers: Cox Communications, Time Warner Cable, Comcast, Verizon, Charter Communications, and Optimum (iO)/Cablevision.
• USAA most outperforms its peers. We compared company ratings with their industry averages and USAA came in the top three spots, 36 points above in banking, 31 points ahead in credit cards, and 28 points ahead in insurance. Three other companies are more than 20 points above their industry averages: Advantage (car rentals), credit unions (banking), and TriCare (health plans).
• HSBC most underperforms. HSBC fell the farthest below its industry average in two areas, 23 points behind its peers in banking and credit cards. Five other companies had scores that were 15 points and more below their industry: US Airways (airlines), Motel 6 (hotels), McAfee (software), Kia (auto dealers), and Hertz (rental cars).

We also examined year-over-year results for 204 companies that were in both the 2012 and 2013 Temkin Forgiveness Ratings. Here are some highlights of that analysis:

• Chrysler improves the most. With a jump of 29 percentage points, Chrysler is the most improved company.  Six other companies gained 20 points or more: Continental Airlines, Citigroup, Avis, EarthLink, Ameriprise Financial, and Alaska Airlines.
• US Cellular declines the most. With a drop of nearly 20 percentage points, US Cellular dropped the most in 2013.  Nine other companies fell by more than 10 points: Bright House Networks, HSBC, Cox Communications, Hertz, PNC, SunTrust Bank, Dollar Rental Car, Hyatt, and TD Ameritrade.

Industry Results

Here are the highlights of the 19 industries in the 2013 Temkin Forgiveness Ratings:

• TV service providers are unforgivable. TV service providers, as an industry, earned the lowest Temkin Forgiveness Rating of 12%. It was five points below Internet service providers and seven points below wireless carriers.
• Grocery chains are the most forgivable.  With an average rating of 39%, grocery chains are the highest scoring industry. Three industries are just four points behind: hotel chains, auto dealers, and rental car agencies.
• Credit cards make the most improvements. Credit cards made the largest improvement, nine percentage points, over the previous year.  Auto dealers, rental car agencies, and airlines also improved by more than five points.
• TV service providers head in the wrong direction. Led by TV service providers that dropped three points between 2012 and 2013, three industries earned lower scores in 2012. The other industries are retailers and appliance makers.

Calculating the Temkin Forgiveness Ratings

During January 2013, Temkin Group asked consumers to identify companies that they have interacted with during the previous 60 days.  For a random subset of those companies, consumers are asked to rate companies as follows:

How likely are you to forgive these companies if they deliver a bad experience?
Responses from 1= “extremely unlikely” to 7= “extremely likely”

For all companies with 100 or more consumer responses, we calculated the “net forgiveness” score. The Temkin Forgiveness Ratings are calculated by taking the percentage of consumers that selected either “6” or “7” and subtracting the percentage of consumers that selected either “1,” “2,” or “3.”

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To see all of the companies in the Temkin Forgiveness Ratings as ell as all of our other Temkin Ratings and sort through the results, visit the Temkin Ratings website

The bottom line: Forgiveness is an asset that you accumulate by consistently meeting customer needs.

Toyota Leads Auto Dealers in 2013 Temkin Experience Ratings

We recently released the 2013 Temkin Experience Ratings that ranks the customer experience of 246 companies across 19 industries based on a survey of 10,000 U.S. consumers. Here are highlights from the parcel delivery industry:

• The average rating for airlines places it at number nine out of 19 industries. The industry’s average rating remains steady at 64% in 2013. Last year’s average was 63%.
• The highest-ranked auto dealer is Toyota, earned a 71% rating, five points ahead of Ford and Honda.
• Toyota earned the highest ratings for all three components of the ratings: functional, accessible, and emotional.
• Kia is the lowest rated auto dealer for the second straight year, with a rating of 58%. It was also the lowest scoring in the emotional component.
• Hyundai had the highest increase over 2012, with a nine percentage point gain.
• BMW had the worst decline over last year, with a seven percentage point loss between 2012 and 2013. It was also the lowest scoring in the accessible component.
• Chevrolet was the only other auto dealer to experience a decline, falling out if it’s first place position last year.
• Here’s a link to industry results from the 2012 ratings.

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Report: 2013 Temkin Experience Ratings

We published the 2013 Temkin Experience Ratings. The report analyzes feedback from 10,000 U.S. consumers to rate 246 organizations across 19 industries. Congratulations to the top firms in this year’s ratings: Publix, Trader Joe’s, Aldi, Chick-fil-A, Amazon.com, and Sam’s Club.

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You can also download the data for $395.

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 top and bottom companies in the ratings:

Here’s how the industries compare with each other:

(NOTE: We have published posts on the detailed results for all 19 industries)

Here are the companies that are leaders and laggards across the 19 industries:

In this year’s ratings, 37% of companies earned “good” or “excellent” scores, while 28% are rated as “poor” or ”very poor.” Companies with at least a “good” rating grew by nine-percentage points since 2012 and by 21-points since 2011. Of the 203 companies that are included in both the 2012 and 2013 Temkin Experience Ratings, 57% firms had at least a modest increase. The companies that made the largest improvement over 2012 are Citibank, TriCare, TD Ameritrade, Office Depot, EarthLink, Hardees, and Regions Bank.

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Get the Data

Do you want to see all of the data? You can purchase an excel spreadsheet for $395…

To view all of our ratings (experience, loyalty, trust, forgiveness, customer service, and web experience), visit the Temkin Ratings website…

The bottom line: Customer experience is improving, but there’s still a long way to go

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

Chevy Dealers Deliver Best Customer Experience in Auto Industry

This post examines the 1o auto dealers included in the 2012 Temkin Experience Ratings.

Chevrolet was the top rated auto dealer and the only one to receive a “good” customer experience rating, and 57th overall out of the 206 companies in the ratings. Three auto dealers were next in line with “okay” ratings: Toyota, BMW, and Honda. The remaining six auto dealers earned “poor” ratings with Kia falling to the bottom of the list.

The average rating for the overall auto industry placed it 14^th among 18 industries, only outpacing health plans, Internet service providers, TV service providers, and computer makers.

Looking across the three components of the Temkin Experience Ratings, Toyota leads in functional experience and Dodge is at the bottom; Chevy and BMW lead in accessible experience and Hyundai is at the bottom; and Chevy leads in emotional experience and Kia is at the bottom.

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: Chevy dealers are setting the CX pace in the auto industry

The US Auto Industry Needs More Customer Focus

Given the current struggles in the auto industry, I revisited at a post called GMs customer experience woes. It referenced an article written by HBS professor John Quelch that outlined eight reasons why GM failed as a marketer. The number one item on his list was GM’s focus on products, not customers. For regular readers of this blog, you’ll recognize that this directly conflicts with the first principle of Experience-Based Differentiation: Obsess about customer needs, not product features.

The post also referenced some data from the 2008 American Customer Satisfaction Index (ACSI). I examined the data again and developed this chart which shows how US car brands rate in terms of their customer satisfaction and the change in satisfaction levels between 2007 and 2008.

Some things pop out quickly on this chart:

• The top four brands are all foreign; and three of them are from Japan.
• The bottom five brands are all American; and three of them are from Chrysler.
• GM owns the top three US brands; and four out of the top five US brands.
• Saturn is the top US brand; and it is also the brand that improved the most since last year.
• Eleven brands improved over 2007; and only four of them were from the US.
• Seven brands declined from 2007; and six of them were from the US.

The bottom line: The US needs a more customer-centric car industry.

Top Execs Share Their (Sad) Thoughts On The Economy

BusinessWeek interviewed eight corporate execs about the their thoughts on the economy. It’s really interesting to hear their perspectives. Here are excerpts from their comments:

• FRED SMITH, FedEx: It is by far the worst I’ve seen in the 35 years I’ve been in business… The only good thing is that if anything turns this around, it’ll be pretty quick, since inventories are at such incredibly low levels. But I’d be very surprised if anything started to turn around before the middle of next year.
• ROBERT NARDELLI, Chrysler: …our 6.5% unemployment rate… could go to 10%-plus. Even with aggressive resizing, we can’t keep up with it because we haven’t seen the bottom.
• RALPH DE LA TORRE, Caritas Christi Health Care: We live and die on the tax-free bond market, and right now we’re dying… I think there’s going to be a pretty substantial consolidation in health care. As many as 20% of hospitals could close. There’s going to be no capital spending for at least the next year or two.
• MILES WHITE, Abbott Laboratories: If you’re on a drug that’s reasonably discretionary, you might cut back as a patient. But if you’re on a drug for a chronic problem, you’re not cutting back… I wouldn’t call [our situation] severe.
• LEWIS HAY, FPL Group: Probably 25% of our customers are past due. Normally, it’s more like 15%… With such a shortage of access to capital, how are we going to get all these alternative energy projects going?
• DENNIS DAMMERMAN, former GE vice-chairman:  And while I don’t agree with much of what Barack Obama wants to do, I think that for a great chunk of our consuming public, he has improved that confidence. I hope this enthusiasm doesn’t die.
• TIMOTHY MANGANELLO, BorgWarner: We’re preparing for nothing good until mid-2010… it’s possible it won’t improve by then… the cost structure in the U.S. has to improve. Health-care costs are too high. Tort reform is too difficult. And business taxes are too high.
• FRED HASSAN, Schering-Plough: The key is inflation. If inflation stays under control and confidence returns, we’ll come back early. If inflation starts to roar in mid-2009 and thereafter, we have a problem. It might start to look like the mid-1970s.

My take: Overall, this doesn’t sound too encouraging for 2009. The only positive notes are that inventories are already pretty low and that President-Elect Obama may be able to bolster consumer confidence.

I’m hopeful that Obama will remain as inspirational and as non-partisan as he appeared to be during his acceptance speech.  I’ve also posted a couple of pieces of advice to the new administration: Appoint a Citizen Experience Officer and Revive “Brand USA.” 

For senior executives, I think the basic decision remains: Are you going to manage your way through the recession or lead your company out of it?

 The bottom line: I’ll keep offering advice on how to manage in a recession.

The Satisfaction Quarterly Report, Q2 2008

The American Customer Satisfaction Index (ACSI) just released its Q2 2008 report that covers the following sectors: Internet news & information, portals & search engines, automotive, electronics, major appliances, and personal computers. As I mentioned in a previous post about the ACSI, it’s a great research effort that doesn’t gets enough visibility.

Here are some highlights of the new data:

Ratings Of Firms

• Top rated: Toyota and BMW
• Top rated relative to industry average: Apple and Google
• Largest improvement (since last year): Google and Apple
• Lowest rated: AOL and HP
• Lowest rated relative to industry average: AOL, Chrysler Jeep, and Ask.com
• Largest decline (since last year): Whirlpool and HP

Ratings Of Industries

• Top rated: Electronics
• Largest improvement (since last year): Internet Portals & Search Engines
• Lowest rated: Personal Computers
• Largest decline (since last year): Major Appliances

While it’s interesting to look at the data, I also like to read the commentary by Professor Claes Fornell who puts the customer satisfaction results in context of the overall economy. Here’s an excerpt from his Q2 2008 comments:

Future consumption growth is impeded by many factors, chief among them house-price deflation (which has trimmed household wealth), tougher credit conditions, a worsening labor market, and continued high fuel and food prices… Under these circumstances, even if customer satisfaction were rising, it would be difficult to offset pocketbook limitations. But since ACSI shows no aggregate growth, the outlook for more aggregate spending growth continues to be bleak… The ACSI forecast suggests a third quarter spending growth of no more than 2.3% and the economy will continue to struggle… But all is not doom and gloom. E-business and technology lead the way. Customer satisfaction for e-business is up by almost 6%.

The bottom line: Satisfaction may be down, but Apple and Google are doing something right

Chrysler Avows New Customer Experience Religion

Yesterday’s USA Today provided a double-header for my blogging. In addition to the ad from AA pilots, there was also a full-page ad from Chrysler that started as follows:

Quality is one of those fluffy words. After you see it or hear it enough times, it doesn’t mean anything anymore

The ad announced that the auto maker had created a Chief Customer Officer position and that it aims to put the customer first, which it described as a “basic rule of corporate etiquette.”

My take: The beginning of the Chrysler ad reminded me of My Manifesto: Great Customer Experience Is Free. In that post, I discussed how customer experience is a lot like quality. So, hopefully, Chrysler execs are reading my blog and/or research.

If they are reading this blog, then I suggest that they also follow my advice about how to successfully implement the role of Chief Customer Officer. That research outlined five broad areas of focus: 1) Make sure that you’ve got the right environment; 2) Prepare to take on a broad change agenda; 3) Establish a strong operating structure; 4) Kick off high-priority activities; 5) Look ahead to the future.

But the presence of a Chief Customer Officer does not immediately convert Chrysler to the customer experience sect. The entire executive team needs to learn, internalize, and dedicate themselves to a new set of sacred rituals. What text can they use for guidance and inspiration? You guessed it: Experience-Based Differentiation (EBD). EBD is a blueprint to customer loyalty that builds upon three principles:

1. Obsess about customer needs, not product features
2. Reinforce the brand with every interaction, not just communications
3. Treat customer experience as a competency, not a function.

As a start to the conversion process, the executive team should take the EBD self-test and use the results as a basis for discussing where to invest their time and energy.

The bottom line: You can’t convert to the customer experience religion by proclamation; you need to dedicate your professional life to it.