Report: What Happens After a Good or Bad Experience, 2015

1502_WhatHappensAfterGoodBadExper_COVERWe just published a Temkin Group report, What Happens After a Good or Bad Experience, 2015. This is our annual analysis of which companies deliver the most and least bad experiences, how consumers respond after those experience (in terms of sharing those experiences and changing their purchase behaviors), and the effect of service recovery (see last year’s report).

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 283 companies across 20 industries. Internet service providers and TV service providers deliver bad experiences more frequently than any other industries, as exemplified by Comcast and Charter Communications, each of which delivers a bad experience to about one in four customers, the most of any companies. Retailers, on the other hand, are least likely to deliver a negative experience. Out of all the industries, customers are most likely to stop spending completely after a bad experience with a computer and tablet maker, and they are most likely to reduce spending after a bad experience with a fast food chain. The economics of service recovery are compelling. Compared with companies that deliver a very poor response after a bad experience, companies that deliver a very good response have 41% fewer consumers cutting back on their spending and 31% more increasing their spending. Led by investment firms and major appliance makers, all industries improved or maintained their service recovery performance from last year. After a very bad or very good experience, consumers are more likely to give feedback back directly to the company than they are to post on Facebook, Twitter, or third party rating sites. These social sites, however, are still an important channel for consumers under the age of 45. When it comes to sharing bad experiences on social media, customers of Advantage Rent A Car and Alabama Power Company are the most likely to post about it on Facebook, while customers of Ameren Missouri Company and Fujitsu are the most likely to post about it on Twitter. The companies most likely to receive negatively biased feedback from their customers are Consolidated Edison of NY and Southern California Edison.

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Here’s the first figure in the report:

1502_BadExperiences

Here are some highlights from the report:

  • Nineteen percent of consumers who have interacted with TV service providers and Internet service providers report having a bad experience during the previous six months, the highest levels of any industry. Comcast (25%) and Charter Communications (24%) have the highest levels of consumers reporting bad experiences. The next three companies on the list are Motel 6, Time Warner Cable, and 21st Century insurance (all at 23%).
  • At the other end of the spectrum, only 4% of consumers report having a bad experience with a retailer, and six retailers are at 1%: True Value, Costco, Bed Bath & Beyond, Ace Hardware, Gap, and Staples.
  • The research examines the impact of bad experiences on consumer spending. Fifty-seven percent of consumers who had a bad experience with a fast food chain have decreased their spending with those stores and 32% of consumers who have had a bad experience with a computer company have completely stopped spending with the company. When it comes to health plans and utilities, two industries where consumers have a hard time switching, only 22% of consumers lower their spending after a bad experience.
  • The research shows that companies can increase their revenues when they respond very effectively after a bad experience. The difference in spending between a consumer who experiences a very poor response by a company and one who experiences a very good response is dramatic; the better response leads to 41% fewer consumers decreasing their spending with the company and 31% more increasing their spending.
  • The highest percent of consumers say that investment firms (48%) and major appliance makers (45%) have delivered a good response after a bad experience, while less than 20% of consumers feel that way about TV service providers and Internet service providers.
  • While 32% of consumers told the company about a very bad experience, only 25% shared their very good experiences. The percentage of consumers who communicated after a good experience increased for every channel except telling friends via traditional channels, which stayed even this year.
  • Across all age groups, consumers are most likely to give feedback about bad experiences directly to companies. With good experiences, the same is true with consumers who are at least 45 years old.
  • We examined how many customers of each company had shared negative feedback (to any company) on Facebook over the previous six months. At the top of the list are Advantage Rent A Car, Alabama Power Company, Ameren Illinois Company, AirTram Airways, Audi dealers, Fujitsu, Ameren Missouri Company, and CellularOne.

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The bottom line: Bad experiences are a real problem, especially if you don’t recover well.

Building a Strong Voice of the Customer Program (Video)

Customer connectedness is one of Temkin Group’s four CX core competencies. A key capability in this area is a strong voice of the customer (VoC) program. This video highlights our model for creating a VoC program, called the 6D’s: Detect, Disseminate, Diagnose, Discuss, Design, and Deploy. Also, check out our VoC/NPS Program Resources.

The bottom line: Great companies learn from, and act upon, the voice of their customers.

Report: Lessons in CX Excellence, 2015

1501_LessonsInCXExcellence_COVERWe just published a Temkin Group report, Lessons in CX Excellence, 2015. The report provides insights from 8 finalists in the Temkin Group’s 2014 CX Excellence Awards. The report, which is 98 pages long, includes an appendix with the finalists’ nomination forms. This report has rich insights about both B2B and B2C customer experience.

Here’s the executive summary:

This year, we chose eight organizations as finalists for Temkin Group’s 2014 Customer Experience Excellence Award. Finalists are Activision Customer Care, Aetna, Crowe Horwath LLP, Dell Inc., EMC Corporation, Texas NICUSA, The Results Companies, and TouchPoint Support Services. This report provides specific examples of how these companies’ CX efforts have created value for both their customers and for their businesses. We also highlight their best practices across the four customer experience competencies—purposeful leadership, compelling brand values, employee engagement, and customer connectedness. At the end of this report, we have included all of the finalists’ detailed nomination forms to help you collect examples and ideas to apply to your own CX efforts.

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Watch Temkin Group webinar about this research.

Here are some highlights from the finalists:

  • Activision Customer Care. Activision demonstrates its commitment to creating great game player experiences in a multitude of ways, such as emphasizing the use of player feedback to identify improvement opportunities. Activision combines this dedication to listening to its players with a willingness to redesign significant interactions. For example, it revamped its “Contact Us” page to include ambassador chat and callback scheduling, which resulted in higher satisfaction and lower effort for customers.
  • Aetna. Despite being in an industry undergoing tremendous change, Aetna is focusing on its 2020 vision to make the company 100% customer-centric. It has implemented many changes to help achieve this goal, including providing service over the phone and investing in text and speech analytics to better identify customer pain points and improve the behaviors and skillsets of its call representatives. The latter effort has already resulted in reduced repeat calls, improved accuracy, and a higher Net Promoter Score (NPS).
  • Crowe Horwath. With a client engagement score towering 33 points above the accounting industry average, Crowe Horwath is seeing the pay-off of its efforts to deliver an exceptional client experience. These efforts include establishing a firm-wide governance model and measurement scorecard, implementing a closed-loop voice of the customer program, incorporating customer journey mapping to uncover moments of truth, and engaging employees through training, client-driven CX recognition programs, and an employee ambassador program.
  • Dell. Dell’s CX efforts start with an emphasis on listening to and engaging with customers and employees. Dell enlists different groups from across the company—including engineering, marketing, sales, support, and digital—to make improvements to the entire customer journey. As a result of this work, Dell has opened 16 solution centers—which gives customers a place to experience solutions—and has provided proactive support over a wide variety of social channels, simplified Dell.com for consumer and business users, and implemented more than 540 customer innovation ideas.
  • EMC Corporation. The Total Customer Experience (TCE) program at EMC works across the enterprise to enhance the company’s customer experience by listening to customer feedback, analyzing data, and taking directed action based on that feedback and data. The program also raises awareness of how every person at the company impacts customer experience. As its CX efforts have matured, the TCE team has evolved to take on more challenging tasks; its projects now include predictive CX analytics, measuring its partner experience quality, and optimizing the experience across many different customer segments and solutions.
  • The Results Companies. To support its work as a business process outsourcing provider, The Results Companies uses its own unique operating model called CX360, which allows for continuous business process refinements that improve the customer experience. Built on three pillars—people, knowledge, empowerment—CX360 has helped the company ensure that its 8,500 employees around the globe remain focused on CX. The operating model has also contributed to Results’ strong growth in new clients and year-over-year revenue.
  • Texas NICUSA/Texas.gov. Texas NICUSA provides support for Texas.gov and implements technology solutions for Texas governmental agencies. It serves over 50,000 monthly site visitors and 300 state and local governments. Its three-tiered multi-channel customer service approach includes a general customer service Help Desk (phone and online), a Service Desk to support governmental agency needs, and a group of Technology Subject Matter Experts who can provide escalated assistance to either citizens or agency employees.
  • TouchPoint Support Services. TouchPoint Support Services streamlines support services within healthcare facilities. The company’s business goals, known as Top of Mind Objectives, guide the work of its 6,800 associates, helping them to find inefficiencies and improve patient satisfaction, associate engagement, safety, unity, and budget compliance. Touchpoint uses many methods for aligning employees with these objectives, including special training for managers and frontline employees, coaching from dedicated customer experience managers (who visit sites regularly), and associate recognition programs.

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If you enjoyed this report, check out Lessons in CX Excellence, 2014 and Lessons in CX Excellence, 2013.

The bottom line: There’s a lot to learn from these CX Excellence Finalists.

Report: The State of Customer Experience Metrics, 2014

1501_StateOfCXMetrics2014_COVERWe published a Temkin Group report, The State of Customer Experience Metrics, 2014. This is the fourth year that we’ve published this report on how companies are using CX metrics. Use our CX Metrics Assessment, along with data from large companies, to benchmark your organization’s CX metrics efforts. Here’s the executive summary:

We asked over 200 large companies about how they use customer experience (CX) metrics, and then we compared their answers with similar studies we conducted in 2011, 2012, and 2013. The most commonly used metric is likelihood-to-recommend, which has been steadily rising in popularity over the past few years. While more than half of the respondents described themselves as “good” at collecting CX metrics, less than 20% described themselves as “good” at making trade-offs between financial metrics and CX metrics. Companies are best at measuring customer service and phone-based experiences and worst at measuring the experiences of prospects and customers who defect. In addition to answering survey questions, we had companies complete Temkin Group’s CX metrics competency assessment, which examines four areas: consistent (does the company use common CX metrics across the organization?), impactful (do the CX metrics inform important decisions?), integrated (are trade-offs made between CX and financial metrics?), and continuous (do leaders regularly examine the CX metrics?). Only 11% of respondents received at least a “good” overall rating, and companies earned the lowest rating in impactful. Companies with stronger CX metrics programs are more likely to outperform other companies in both CX efforts and overall business results.

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Here are the results from companies that completed Temkin Group’s CX Metrics Assessment:

1412_CXMetricsAssessmentResults

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The bottom line: CX metrics are critical, but must be used correctly.

Report: The Future of Customer Experience Insights

1412_FutureofCXInsights_COVERWe published a Temkin Group report, The Future of Customer Experience Insights. The report identifies five trends that will redefine the value and role of customer feedback and insights. Here’s the executive summary:

Although most organizations describe their voice of the customer program as a success, we’ve found that companies do not get nearly the value they should out of these efforts. VoC programs currently suffer from bloated surveys, isolated datasets, and outdated technology. Our research into leading practices uncovered five trends that will redefine how customer insights teams operate: 1) Deep empathy, not stacks of metrics, 2) Continuous insights, not periodic studies, 3) Customer journeys, not isolated interactions, 4) Useful prescriptions, not past descriptions, and 5) Enterprise intelligence, not customer feedback. As companies embrace these new capabilities, insights teams will need to build new skills. The report includes a readiness checklist for companies to assess their current customer insights efforts.

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Here’s an overview of the five customer insights trends:

5InsighteTrens

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The bottom line: It’s time to revamp your customer insights efforts.

Report: Evaluating Mobile eGift Card Purchasing Experiences

1411- SLICE-B COVERWe published a Temkin Group report, Evaluating Mobile eGift Card Purchasing Experiences. The report uses Temkin Group’s SLICE-B experience review methodology to assess the mobile sites of 10 retailers. Here’s the executive summary:

Although smartphones are a convenient interaction channel, their small screens pose serious design challenges for companies. To evaluate the customer experience of mobile websites, we used Temkin Group’s SLICE-B experience review methodology to assess the experience of buying an eGift Card from ten large retailers: Home Depot, Lowe’s, Walmart, Target, Walgreens, CVS, Starbucks, Dunkin’ Donuts, Best Buy, and RadioShack. Home Depot earned the top score for its functionality and minimalist processes, while the user could not complete the full purchasing goal at Lowe’s, Walmart, Target, Walgreens, CVS, Best Buy, or RadioShack.

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The report includes the scores for all 10 companies across each of the six SLICE-B categories, strengths and weaknesses of each retailer, and some best practices across all of the mobile sites. Here is a description of the user and her overall goal that we tested:

Our user was a middle-aged woman looking to send her niece a $25 electronic gift card to help her get settled into her new apartment. While she is reasonably proficient at operating a smartphone, she finds entering a lot of information to be difficult on the small keyboard. She has an iPhone 4s. She does not have an app for any of the companies being evaluated and does not know whether they sell $25 eGift Cards.

Here are the overall results:

1411_GiftCardResults

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The bottom line: Gift cards should be easier to buy via mobile phones.

Simple Lessons From Great Clips’ Success

As I mentioned in my post about Amazon’s relentless customer advocacy, I recently attended the Arizona State University, Center for Services Leadership (CSL) Compete Through Service Symposium.

One of the speakers was Ray Barton, Chairman of Great Clips. He had a great story, explaining how he led the company from a little four salon outfit in 1983 to a behemoth operation with 3,300 salons and 30,000 stylists. It’s the largest and fastest growing hair care brand. Supercuts, by comparison, has 2,300 locations.

Barton was clear about what was important in his business: clarity and simplicity. He made a number of points that are valuable for many others to follow. Here’s my take on some of what he presented:

Focus on the Customer
The hair care industry was fragmented and organized around the stylist, not the customer. By focusing on customers, the company did innovative things such as opening during evenings and all day on Saturday, offering $6 haircuts, and not requiring reservations. He was clear about what his customers want: quality, convenience, and value.

  • My take: Most organizations make decisions based on internal needs. It’s powerful when you take a look at things through your customers’ eyes. Think about adopting customer journey thinking.

Four Simple Steps
Barton said that he ran the business based on four simple things: (1) Ask customers what they want, (2) Give it to them, (3) Ask them if they got what they wanted, and (4) Thank them.

  • My take: The only thing I can say is… these are the best four steps that I’ve ever seen.

Everyone is the Brand
Barton said “everyone in our organization can draw a line from them to how they affect the customer, or we don’t need them.”

  • My take: This should be true for every employee at every company. Great companies have employees that understand and embrace their role in delivering on brand promises. This is also the essence of one of our four CX core competencies, “compelling brand values.”

Growth is an Outcome
Barton believed in the rifle, versus shotgun approach to expansion. Rather than following other franchises such as Krispy Kreme and Boston Market that expanded into many different markets, he focused on building density in a few areas at a time. This provided the marketing clout and brand awareness in those areas. It also allowed the company to focus on good real-estate decisions and make sure that staff was adequately trained.

  • My take: Growth should come from successfully delivering on your brand promises. If not, then your organization may get bigger, but it will certainly lose its focus and values along the way. That’s a lesson that even Starbucks needed to learn.

Simple, Powerful Metrics
Barton described how at one point during its growth, the company lost its focus and simplicity. They simplified their brand measures from 33 columns down to 5 measures that now all fit on one page. He actually said that only two measures are really important, what he calls 30/30: 30% of stylist hours occur during weekends and 30% of new customers come back. Since then, the company has had 40 consecutive quarters of same solon sales growth.

  • My take: When it comes to metrics, less is often better. A simple set of metrics that everyone understands is a powerful way to align everyone in the organization around what’s important.

The bottom line: Simply stay focused on your customers and your brand.

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