Sam’s Club and Amazon.com Lead Retail Industry 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 retail industry:

• The average industry rating increased from 71% in 2012 to 74% in 2013.
• Sixteen of the 24 retailers that were in both the 2012 and 2013 ratings showed improvement.
• Three of the top 10 companies across all industries are retailers: Amazon.com and Sam’s Club (tied for #5 overall), and Ace Hardware (#7 overall). Sam’s Club was the leader in 2012 Temkin Experience Ratings and Amazon.com led in 2011.
• Radio Shack is the lowest-rated retailer for the third consecutive year and 191^st overall in 2013. The retailer is also the lowest scoring across all three underlying components, functional, accessible, and emotional.
• Amazon.com and Costco are the top rated in the functional component, Ace Hardware is the top rated in the accessible component, and Nordstrom is the top in the emotional component.
• Office Depot (increase of 11 percentage points) and Barnes & Noble (increase of eight percentage points) made the largest improvements in the industry from 2012.
• JCPenney (decrease of six percentage points), Sam’s Club (decrease of four percentage points), and Lowe’s (decrease of four percentage points) had the largest declines from 2012.
• 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

Report: Net Promoter Score Benchmark Study, 2012

We just published a Temkin Group report, Net Promoter Score Benchmark Study, 2012. It provides NPS data on 180 U.S. companies across 19 industries. Here’s the executive summary:

USAA took the top two spots for its banking and insurance businesses while HSBC came in at the bottom for banking and credit cards. Our analysis of differences across consumer demographic segments showed that NPS tends to go up with age, doesn’t vary much by income levels, and is often highest with Asians. We also asked consumers what would make them more likely to recommend the companies and found that promoters are more likely to select lower prices and detractors are more likely to select better customer service. While there is some debate about the efficacy of NPS, our analysis shows that promoters are much more likely than detractors to purchase more in the future across all industries. 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.

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(includes the data)

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.

The report contains the following components:

• NPS for 180 companies across 19 industries
• NPS differences based on age, income, and ethnicity of consumers
• Improvement areas selected by promoters and detractors by industry
• Connection between NPS and future purchases by industry
• Eight tips for implementing a successful NPS program

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(Includes the data)

The bottom line:  Companies need to give customers a reason to recommend them

2012 Temkin Web Experience Ratings

Temkin Group has just released the 2012
We introduced the Temkin Web Experience Ratings last year. The 2012 Web Experience Ratings include 159 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: Amazon, credit unions, USAA, PNC, Southwest Airlines, eBay, Sam’s Club, ShopRite, JCPenney, and ING Direct. Of course, not every company has earned good web experience, especially the companies at the bottom of the 2012 ratings:  Charter Communications, Humana, Qwest, Cigna, Time Warner Cable, Anthem, Road Runner, Medicare, Blue Shield of CA, and TracFone.

We also  examined industry averages and found that banks and investment firms have earned the highest Temkin Web Experience Ratings followed by hotel chains and retailers. But consumers gave very low ratings to Internet service providers, health plans, and TV service providers.

The research also examines how individual companies are rated relative to their industry peers. The following 11 firms outscored their industry average Temkin Web Experience Ratings by 10 percentage points or more: Kaiser Permanente, Amazon, ShopRite, Southwest Airlines, USAA, Starbucks, H.E.B., Publix, credit unions, Marriott, and Apple.

The following 15 companies fell 10 percentage points or more below their industry averages: Wells Fargo Advisors, AAA, Charter Communications, Delta Airlines, Citibank, Bank of America, Humana, TracFone, Qwest, Old Navy, U.S. Airways, Rite Aid, Kohl’s, Kmart, and Charter Communications.

Temkin Group also analyzed changes from the 2011 Temkin Web Experience Ratings. Led by TV service providers and insurance carriers 11 of the 12 industries that were in both the 2011 and 2012 ratings improved since last year.

Seventy-two percent of companies that were in the 2011 and 2012 Temkin Web Experience Ratings showed improvement. Led by Comcast (Internet and TV service), Allstate, AOL, Charter Communications, Toshiba, and Sam’s Club, 20 companies improved by 10 percentage points or more between 2011 and 2012. Only three companies­— Kohl’s, TracFone, and Rite Aid—declined by 10 percentage points or more during that timeframe.

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: Web experience is not good enough for how important it is

Sam’s Club and Amazon Deliver Best Customer Experience in Retail

This post examines the 24 retailers included in the 2012 Temkin Experience Ratings.

Sam’s Club was the top rated company across all industries and only one of eight organizations with an “excellent” rating. Five other retailers were in the top 20 positions in the overall rankings: Amazon.com (#10), Target (#14), Walgreens (#14), BJs Wholesale Club (#18), and Lowe’s (#18).

The retail industry received the third highest average customer experience rating, falling only behind grocery chains and fast food restaurants. Despite the strong performance of the industry, one retailer, RadioShack, earned a “poor” rating while seven other retailers at the bottom of the list received “okay” ratings: Office Depot, eBay, Barnes & Noble, Sears, Kmart, Best Buy, and Macy’s. The remaining retailers earned “good” ratings.

While most industries showed improvement between 2011 and 2012, retailers were one of four industries that registered a slight decline. Sam’s Club and Toys “R” Us are the only two retailers with more than a five-point increase in their ratings between 2011 and 2012. Kohl’s and Costco are the only two retailers with more than a five-point decrease in their ratings between 2011 and 2012.

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: There’s a wide gap between good and bad in retail CX

Will Retailers Deliver Holiday CX Cheer?

Earlier this year, we published the 2011 Temkin Experience Ratings (TER) that evaluates the customer experience (CX) of 143 large US organizations based on consumer ratings across three elements of experience: functional, accessible, and emotional.

Since many consumers are flocking to retailers at this time of year, I decided to share some details of the 27 retailers in the 2011 TER. The chart below shows the overall TER (across all 143 companies) as well as where the retailers rank compared to each other in the functional, accessible, and emotional elements of experience.

As you can see, Amazon.com, Kohl’s and Costco are on top while RadioShack, Gap, and Toys ‘R’ Us are at the bottom of the overall TER. It’s also interesting to look at the difference across components of the TER. Here are the retailers with the largest inconsistency across their rankings:

• OfficeMax: functional (#15) and emotional (#24)
• eBay: functional (#17) and accessible (#24)
• Best Buy: accessible (#18) and functional (#25)
• BJs Wholesale: emotional (#3) and accessible (#9)
• WalMart: functional (#8) and accessible, emotional (#14)
• Macy’s: accessible (#9) and emotional (#15)

The bottom line: Hopefully, ’tis the season to be CX jolly!

Amazon.com Leads, RadioShack Lags Retail Customer Experience

In the 2011 Temkin Experience Ratings, we examined the customer experience across 12 industries. Retail is the highest rated industry with an average rating of “good.” Here are the results for all 27 retailers that we rated…

As you can see, Amazon.com and Kohl’s are the only retailers with “excellent” ratings. At the other end of the spectrum, RadioShack is the only retailer with a “poor” rating. There are some interesting differences on the list:

• Gap can learn from its much higher scoring “sister brand” Old Navy
• Costco, Sam’s Club, and BJs Wholesale all score highly
• Walgreens outpaces Rite Aid and CVS
• Kohl’s has a five point gap over Target
• Lowe’s has a six point gap over Home Depot 
• Wal-Mart has a six point gap over Kmart

Let’s take a look at the three components of the Temkin Experience Ratings…

Costco and Amazon.com are the top retailers when it comes to the functional element of experience while Kohl’s  is the top-performing retailer when it comes to accessible experience. Best Buy falls below the good line for “functional” experience while Gap and Radio Shack fall below the good line for “functional” and “accessible” experience. All three of those laggards also score poorly when it comes to “emotional” experience.

The bottom line: Not all retailers are created equal

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 averages. Led 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 laggards. Led 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!

The 2011 Temkin Experience Ratings

We just published a new Temkin Group report, 2011 Temkin Experience Ratings. Congratulations to the top five companies (out of 143 in the ratings):

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

The ratings evaluate 143 large organizations across 12 industries based on feedback from 6,000 US consumers.

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

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

Here are the top 20 companies in the ratings:

Here are the results for the 12 industries:

Here are some interesting findings from the report:

• 15 of the top 20 firms are retailers. The exceptions are three hotel chains (Marriot, Hyatt, and Courtyard By Marriott), one bank (Regions), and an insurance company (USAA).
• Anthem is at the bottom of the list along with six other health plans that are in the bottom 13. Comcast and Charter Communications each show-up twice in the bottom six spots.
• Only 24 companies ended up with “excellent” or “good” ratings.
• When we compare company ratings with their industry averages, three companies outperformed their peers by at least 10 points: TriCare (health plan), USAA (insurance and credit cards), and Regions (bank).

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Are you interested in getting a deeper look at the data? Or do you want to see the differences across age, ethnicity, education, and income segments? Then you should visit Temkin Ratings at www.temkinratings.com.

The bottom line: Customer experience excellence is in short supply.

Report: Online Gift Card Buying Needs Work

We just published a new report, Online Experiences For Buying Gift Cards Need Work.

The report examines the Websites of 12 companies using Temkin Group’s SLICE-B experience review methodology.

Here’s the executive summary:

Gift cards are a popular choice for consumers, especially around the holidays. Almost all major stores and restaurants sell them online. How user-friendly are those online purchasing processes? To answer this question, we used Temkin Group’s SLICE-B methodology to evaluate the experience of 12 large companies: three grocers (Kroger, Publix, and Safeway), three electronics retailers (Apple, Best Buy, and Radio Shack), three department stores (J.C. Penney, Kohl’s, and Macy’s), and three restaurant chains (Applebee’s, Chili’s, and Outback Steakhouse). Outback Steakhouse and Radio Shack were the only sites to receive an “excellent” rating. At the other end of the spectrum, Safeway, Chili’s, Kroger, and Best Buy were at the bottom with “mediocre” ratings. Many of the sites lacked key functionality such as free shipping, sending the cards at a later date, and sending multiple cards in a single order.

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Here are the overall results:

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The bottom line: Make it easier for people to give you money

“My Macy’s” Engages Employees

A recent article in the Chicago Tribune called Macy’s gets gold star for employee morale discusses how the company’s “My Macy’s” strategy is helping to invigorate employees.

In early 2009, I gave the thumbs-up to My Macy’s strategy of localized merchandising.Here’s how Macy’s CEO Terry Lundgren recently described the My Macy’s strategy:

“…we can adjust sizing, colors, fabric weights, items, categories and brands on a store-by-store basis. At holiday time, that means we have the dexterity in our organization to sell wine country Christmas ornaments in northern California, Elvis ornaments in Tennessee, and Our Lady of Guadalupe ornaments in areas with significant Hispanic populations… It also means we can have the right sweater weights in the right climate zones. And we can be selling larger pots and pans as gifts in Utah, where families are larger, and Scandinavian baking tools in Minnesota.”

It doesn’t take a rocket-scientist to know that different markets want different products.What I didn’t recognize at the time, though, was that this localized merchandising would change the dynamics of employee engagement. And it has — for the better.

Since individual stores have more say in their merchandising, store managers and local merchandising managers have more decisions to make. This gets them to solicit more feedback from employees and spend more time “on the floor.” The ultimate dynamic is to give employees a stronger feeling of ownership and connection with the company. This is another example of the employee experience virtuous cycle.

The bottom line: Get your employees more involved in the business.

McDonald’s Showcases Glocal Strategy

If you’ve dined in both the UK and the US, then you don’t need any focus groups to figure out that Brits and Americans have different culinary palettes. So it’s no surprise that a global food company might need a slightly different strategy in each country.

An article called McDonald’s: The World’s Local Restaurant pointed out how McDonald’s business has grown significantly from introducing products tailored to the specific customer tastes in other parts of the world like Little Chorizo Melt in Britain, McItaly burger in Italy, Maharaja Mac in India, McLobster in Canada and an Ebi Filit-O in Japan.

This is similar to what Macy’s found when it tailored its local merchandising as part of its My Macy’s strategy. In Macy’s case, the local changes affected different parts of the US.

These efforts are not isolated, but represent a move to a strategy called Glocalisation. While the term was originally used by Japanese businesses in the 1980s (thanks for the reference Deepak), here’s my spin on a definition:

Tailoring products and merchandising to meet local needs while supporting global brands

Here are some differences between Glocalisation and the typical approach of just translating a global strategy into local markets:

• Corporate marketing and merchandising groups will need to rethink their efforts. Rather than just setting strict global standards, they will also need to define parameters for local innovation.
• Local leaders will need to take on more responsibility for innovation, and not just operate in conformance with corporate standards.
• Innovation will need to be funded at both the global and local levels.

The bottom line: Is your strategy Glocal enough?

Barnes & Noble Leads Retailers In Customer Experience

My research plan for Forrester’s 2010 Customer Experience Index (CxPi) includes an analysis of all 14 industries in the rankings. I recently published the retail analysis which examines the 25 retailers (out of 133 total companies) in the CxPi. Here are the overall results: 

As a group, the retailers did quite well; grabbing 12 out of the top 20 spots in the rankings. Retailers also showed a modest improvement over the 2008 CxPi. Here are some insights from looking at the retail results:

• The best retail customer experience. At the top of the list, 7 retailers ended up with “excellent” ratings: Barnes & Noble, Amazon.com, Kohl’s, JCPenney, Macy’s, BJs Wholesale Club, and Costco Wholesale.
• The worst retail customer experience. At the bottom of the list, 2 retailers ended up with “okay” ratings: Office Depot and Marshalls.
• Best Buy & Macy’s got better. When we compared the 2010 results with those of the 2008 CxPi, we found that nine retailers improved. Best Buy and Macy’s made the largest gains. Going in the other direction, Toys “R” Us, Old Navy, Borders, and Staples had the largest declines.
• Wal-Mart and  Office Depot aren’t enjoyable. The CxPi contains three underlying components: 1) meeting needs, 2) being easy to work with, and 3) enjoyability. There were only 2 ratings that fell below “okay” in any of those three areas: Both Wal-Mart and Office Depot received “poor” ratings for “enjoyability.”
• iTunes is most difficult to work with. 24 of the retailers received “good” or “excellent” ratings in the second area, being easy to work with. The lone exception: Apple iTunes received only an “okay” rating.

The bottom line: Retailers are good, but not great in customer experience

My Macy’s Provides Recession Blueprint

Late last year, Macy’s consolidated its divisions and started tailoring in-store merchandising to the needs of different regions, an approach that it calls “My Macy’s.” It turns out that “My Macy’s” has been such a success that it is rolling out the effort across all of it’s stores. According to Karen Hoguet, Macy’s CFO:

For the spring season, the My Macy’s districts outperformed the remaining stores by 2.6 percentage points

My take: These results aren’t surprising. In a previous post, I gave ”My Macy’s” a thumbs-up for following a recession strategy that I called: simplify, target, and align. During a recession, companies have less opportunity for sloppiness so they need to more effectively align their offerings and efforts to the specific need of target customers. Since the needs of customers vary across regions, it makes sense to merchandise in different ways in different regions.

The bottom line: What’s your “My <Your Company>” strategy?

Macy’s Pushes Execs In The Wrong Direction

Macy’s announced that it will be tying executive compensation to the performance of the company’s stock price over the next three years. That’s an interesting approach given this recent advice from Jack Welch:

On the face of it, shareholder value is the dumbest idea in the world. Shareholder value is a result, not a strategy… Your main constituencies are your employees, your customers and your products.

If I were one of Macy’s shareholders, I’d rather have the execs focused a little less on the stock price and a little more on employees and customers. Maybe they should tie executive compensation to Forrester’s Customer Experience Index. Macy’s ended up tied for 15th place out of the 25 retailers we examined; well behind other department stores like Kohl’s and JCPenney.

Rather than following an outdated management approach, I suggest that Macy’s execs download my free book: “The 6 New Management Imperatives: Leadership Skills For A Radically Changed Business Environment.” In it they will find 6 alternative places to focus their energy:

1. Invest in culture as a corporate asset
2. Make listening an enterprisewide skill
3. Turn innovation into a continuous process
4. Provide a clear and compelling purpose
5. Extend and enhance the digital fabric
6. Practice good social citizenship

The bottom line: Isn’t it time for new management thinking?