Wells Fargo: A Lesson in Leadership & Culture Gone Awry

In case you missed this in the news, Wells Fargo is under investigation for opening fraudulent accounts for its customers. During a period between 2011 and 2015, it is estimated that there were as many as 1.5 million deposit accounts and more than half a million credit card accounts opened inappropriately on behalf of customers.

As part of a hearing of the Senate Banking Committee, U.S. Senator Elizabeth Warren grills Wells Fargo CEO John Stumpf and makes a few very important points. Stumpf heavily, heavily pushed his organization to cross-sell products, setting a long-term goal of 8 products per household, while the industry average was around three. He regularly touted the increase in products per household (over 6.1) to investment analysts and pushed his organization for the growth to continue.

My Take: Stumpf should resign (or be fired). That sounds abrupt, but let me explain…

In this blog, I often discuss the power of culture. It’s one of the most critical drivers of the behaviors of employees across large organizations. As a matter of fact, Peter Drucker has been credited as saying, “Culture eats strategy for lunch.”

Whenever there is a consistent set of widespread actions (good or bad), then the first place you should look to explain them is the culture. One of our Six Laws of Customer Experience is that employees do what is measured, incented, and celebrated. Clearly at Wells Fargo, cross-selling new accounts to customers was measured, incented, and celebrated.

So Wells Fargo employees acted in ways that were consistent with their environment.  They acted in accordance with the company’s culture. Does that mean that the individuals who did the wrong things should be absolved of their errors? Absolutely not. They were wrong and should face the consequences for their actions. But the acts of individuals are symptoms, while the culture that encouraged those behaviors is the systemic issue.

That gets me back to Stumpf. He created (or at least nurtured) the culture across Wells Fargo, and should therefore be held accountable for the consequences. Let me put it this way, should Victor Frankenstein be held accountable for the damage caused by the monster he created? Of course!

Stumpf was rewarded handsomely for the cross-sell results of the culture he created. It’s now time for him to pay the price for the problems caused by that culture.

The bottom line: Leaders must be more mindful of the culture they create.

 

2016 Temkin Emotion Ratings (Publix, Chick-fil-A, and Residence Inn Are the Leaders)

For the previous five years, we’ve measured emotion as part of the Temkin Experience Ratings (TxR). This year, we examined 294 companies across 20 industries based on a survey of 10,000 U.S. consumers (see methodology section below). The TxR examines the three elements of customer experience: success, effort, and emotion. In this post, I examine the results for the Temkin Emotion Ratings.

Emotion is the component of customer experience that is the most significant driver of customer loyalty. And we showed the connection between emotion and loyalty in a recent post. To find out more about how you can tap into the power of customer emotions, visit the Intensify Emotion Movement.

Publix, Chick-fil-A, and Residence Inn earned the only “good” scores for delivering the most positive emotional experiences, followed closely by H-E-B, True Value, Kroger, Save-a-Lot, Wawa Food Market, QVC, and Amazon.

At the other end of the emotional spectrum, the companies with the lowest Ratings are Comcast (for both Internet service and TV service), Fujitsu, Health Net, Blue Shield of CA, Anthem, Time Warner Cable, Commonwealth Edison, Medicaid, Charter Communications, and AT&T.

1609_temotr_leaderslaggards

Do you want to the data from the 2016 Temkin Effort Ratings? It’s included in the Temkin Experience Ratings spreadsheet that you can purchase for $395.
Here’s a sample of the spreadsheet (.xls)

Here are some additional insights from the 2016 Temkin Emotion Ratings:

  • The supermarket and fast food industries earned the highest average Temkin Emotion Ratings (at “okay” level), while health plans, TV service providers, and Internet providers were at the bottom with “very poor” ratings.
  • The following companies earned ratings that are the most above their industry averages: Amazon, Residence Inn, Florida Power & Light, TXU Energy, National Car Rental, and Alabama Power Company.
  • The following companies earned ratings that are the farthest below their industry averages: Fujitsu, Motel 6, Super 8, Chrysler, Volkswagen, Commonwealth Edison, and Citibank.
  • The following companies earned the largest improvement between the 2015 and 2016 Ratings: Coventry Health Care, True Value, Con Edison of NY, Consumers Energy Company, Dominion Virginia Power, and Fox Rent A Car.
  • The following companies declined the most between 2015 and 2016: Volkswagen, Fujitsu, Commonwealth Edison, BMW, GM, Health Net, and JetBlue.

Read more of this post

Get Your Industry-Specific Data (and Webinars)

IndustriesIncludedIf you’re looking for data to benchmark your organization, competitors’ performance, or the CX of any group of companies in specific industries, then check out Temkin Group’s Industry-Specific CX Research (IndustryCX.com). We have a lot of data covering the 20 industries shown in the sidebar.

We also have a lot of data on B2B technology vendors, examining the market from the perspective of IT decision-makers.

If you’re looking to get some CX insights on industries, then you should join us for these recorded and upcoming industry-specific webinars:

The bottom line: Check out our industry data.

 

Employee Engagement Primer (Infographic)

One of Temkin Group’s four CX core competencies is Employee Engagement. That’s why Temkin Group put together an Employee Engagement Resource Page and developed this infographic.

You can download the infographic (or poster) below. I hope you enjoy it.

1609_Employee Engagement Infographic

Here are links to download versions of the infographic:

1609_Employee Engagement Poster Poster (18′ x 24″) in .pdf file or in .jpg file

1609_Employee Engagement Infographic Infographic in .pdf file or in .jpg file

The bottom line: Good things happen you engage your employees.

2016 Temkin Effort Ratings (Publix, O’Reilly Auto Parts, True Value, and Save-a-Lot Are The Leaders)

For the previous six years, we’ve measured effort as part of the Temkin Experience Ratings. This year, we examined 294 companies across 20 industries based on a survey of 10,000 U.S. consumers (see methodology section below). In this post, I’m showcasing the results from the effort component of those ratings.

Congratulations to Publix, O’Reilly Auto Parts, True Value, Save-a-Lot, Kohl’s, credit unions, H-E-B, Aldi, and Regions Bank for earning the top scores in the 2016 Temkin Effort Ratings. At the other end of the spectrum, Health Net, Fujitsu, Medicaid, Highmark BCBS, Empire BCBS, Dollar Rent A Car, CareFirstSprit Airlines, and Comcast earned the lowest ratings.1608_TER_LeadersLaggards

Do you want to the data from the 2016 Temkin Effort Ratings? It’s included in the Temkin Experience Ratings spreadsheet that you can purchase for $395.
Here’s a sample of the spreadsheet (.xls)

Here are some additional insights from the 2016 Temkin Effort Ratings: Read more of this post

Temkin Group’s (Exciting) Plans For CX Day 2016


IHC_logo1Last year, Temkin Group had a great time celebrating CX Day. This year, CX Day will be held on October 5th and we’re planning another exciting celebration.

Temkin Group has labelled 2016 The Year of the Emotion for customer experience. As you’ll see below, we’re continuing that theme in our CX Day plans:

  • Thought leadership video: Bruce will interview renowned author and thought leader Barry Schwartz, in a pre-taped webinar entitled “Infusing Humanity Into CX.”
  • Webinar with Jen. Jen Rodstrom will present The Fundamentals of Customer Experience at 9:00 AM ET
  • Webinar with Aimee. Aimee Lucas will present Building a Customer-Centric Culture at 1:00 PM ET.
  • Free research. Anyone who attends either of the two Temkin Group webinars will receive a code for downloading a free copy of the report, Lessons in CX Excellence, 2016.
  • Free eBook. We’ll be publishing a new eBook, “25 Tips for Tapping into Customer Emotion” that will be available to download for free.
  • CX and Emotion video. We plan to unveil an fun new video showing the importance of customer emotions in customer experience.
  • CX Infographic. We’ll publish a new version of “The Ultimate CX Infographic” that’s been very popular over the last few years.
  • Research discount. We’ll provide a discount code via twitter that will give a 15% discount on any research purchased during CX Day (12:01 AM ET to 11:59 PM ET).

The bottom line: Join Temkin Group in celebrating CX Day 2016!

Modernize Leadership: Learn and Adjust

ML_LearnAdjust2In a previous post, I described how today’s management techniques reflect outdated assumptions of technology-enabled practices, human behavior, and the meaning of success. That’s why organizations must shift to what I’m calling Modernize Leadership.

I’m writing individual posts for each of the eight key changes required to modernize leadership. In this post, I’m examining the shift from:

Strategize and Plan to Learn and Adjust

Here’s some more information to better understand this shift:

Outdated Thinking
Here are some ways in which leaders must change how they view the world:

  • Leaders spend a lot of time with their leadership teams fine-tuning precise strategies and laying out high level plans, hoping that their Powerpoint slides will come to life throughout their organizations. Unfortunately, employees need to make adjustments in order to operationalize elements of any strategy. As a result, many strategies and plans fall apart when those adjustments don’t live up to the original plans. Sometimes leaders can force their organizations to initially come close to delivering on their strategies, but there’s no way to consistently live up to those expectations.
  • Leaders amass a lot of information to develop their strategies and plans. Unfortunately, the information they use to make those decisions can often change between the time that they make decisions and when things get rolled out. The pace of change is accelerating in most industries, which shortens the useful lifecycle of the analysis that leads to decisions.
  • The improving technology for collecting data and doing analysis is making it easier to more frequently understand what’s happening in most organizations. This makes it much easier to make decisions more frequently, instead of waiting until the annual strategy cycle.

As Winston Churchill once said:

“To improve is to change; to be perfect is to change often.”

Modernized Leadership Actions
Here are some ways in which leaders should act based on a modernized perspective:

  • Increase strategic planning frequency. If you make most of your important strategic decisions once a year, then you’re likely losing connection with the marketplace. At least make key strategic decisions on a quarterly basis, and look to get it monthly. The shortened cycles will push you to make learn and adjust a continuous activity.
  • Test, test, test. Instead of blindly executing on a large strategic plan that defines a single direction, you need to be constantly experimenting with multiple, smaller ideas. But don’t start this process unless you are committed to actively learn from them and adjust your activities.
  • Embrace failures. As you become more nimble in your decision making, you’ll be making more decisions which will lead to a larger number of smaller failures. In most cases, there’s a lot that you can learn from things that don’t work out the way you expected. You have to create a thirst for learning from these situations, and keep from looking for blame.
  • Double-down on successes. Part of being better at learning and adjusting is the ability to invest (time, energy, capital, etc) on ideas that appear to have strong potential. You need to be prepared to more aggressively shift resources to activities that show promise, even if it means more quickly closing down some other activities.

The bottom line: You need to learn and adjust more frequently.

Off Topic: Clinton Supporters Are More Financially Secure

Don’t worry, we’re not turning into pollsters. However, we did find that Hillary Clinton has a 19-point lead over Donald Trump…

In Temkin Group’s latest consumer benchmark study of 10,000 U.S. consumers that was just fielded in August, we asked consumers about their plans for the upcoming presidential election. Clinton and Trump supporters are identified as the people who are currently planning to vote for each candidate.

Given all of the other questions that we ask, we now have a fairly comprehensive profile on the presidential candidates’ supporters. But we’re not going to use the data to drive any projections or provide it to political analysts. We’re just going to look for some interesting elements to share.

Temkin Well-Being Index of Candidate Supporters

We publish the Temkin Well-Being Index (TWBi) annually as a gauge of the overall welfare of the U.S. population, examining how happy, healthy, and financially secure they feel. So I thought it would be fun to examine the TWBi of the candidates’ supporters and compare it to our Q1 2016 U.S. results. As you can see in the chart below:

  • TWBi is high for both candidates. Both candidates’ supporters have a higher TWBi than what we found across the U.S. in our Q1 report. Clinton supporters, however, have a 2-point higher TWBi than do Trump supporters.
  • The largest gap is in financial security. Clinton supporters have a 4-point gap with Trump supporters, who are 5-points above the overall Q1 U.S. score.
  • Clinton supporters are healthier. Clinton supporters are 2.5-points healthier than Trump supporters, who are 3-points healthier than the overall Q1 U.S. score.
  • Both groups are happier. Trump supporters are slightly happier than Clinton supporters, but they are both about 3-points higher than the overall Q1 U.S. score.

1608_TWBi_PresidentialCandidates

Other Interesting Tidbits

Here are some additional findings: Read more of this post

What Drives Employee Turnover? Not Compensation

Why do employees leave their companies for another job?

To examine this question, I tapped into our Q3 2015 consumer benchmark study which included more than 5,000 U.S. full-time employees. The analysis compared two groups of employees, those who were likely to look for a new job in the next six months and those who were not.

Compensation does not appear to be a significant driver, if one at all. As you can see below, employees who do not believe that they are fairly compensated are not much more likely to look for a new job than those who feel that they are appropriately paid.

The most significant drivers of an employee looking for a new job is how they feel about the work that they do and their pride in their company.

1608_CompensationAndEmployeeTurnover

The bottom line: Employees want meaning in their work.

The (Large) Connection Between Emotion And Loyalty

In case you missed it, we labeled 2016 as The Year of Emotion in our annual listing of CX trends. To help organizations better understand customer emotions, we created the Intensify Emotion Movement. Why did we put so much of a focus on emotion? Because it drives loyalty.

We tapped into our recent consumer benchmark study to examine the connection between how consumers rate the emotional component of their interactions and their loyalty across 20 industries. [Note: The emotional data is from the emotion component of the Temkin Experience Ratings]

In the graphic below, we examined the average across all 20 industries. Compared with consumers who had negative emotional experience, consumers who had positive emotional experiences are:

  • 15.1 times more likely to recommend the company
  • 8.4 times more likely to trust the company
  • 7.8 times more likely to try new products and services
  • 7.1 times more likely to purchase more from company
  • 6.6 times more likely to forgive company after a mistake

1608_EmotionAndLoyalty

If you’d like to see this data for each of the 20 industries, you can purchase and download the dataset for $195. To see what you’ll be purchasing, download this sample spreadsheet.

BuyDownload3

The bottom line: Want loyal customers? Provide positive emotional experiences.

My Latest 9 Recommendations For NPS

We study 100’s of companies that use Net Promoter® Score (NPS®) and work with dozens of others that are in different stages of NPS deployment. We also publish one of the most comprehensive annual NPS benchmark studies. This gives us a unique view on how organizations use this popular customer experience metric.

Every year or so, after being asked a series of similar questions about NPS, I write a blog post with a collection of my thoughts. Before I get to my current thinking (which has remained relatively consistent over the years), here are some previous posts you might be interested in reading:

As you probably know, there are people who love NPS and people who hate it. I am neither. I’ve seen NPS used as an effective metric to drive change, and I’ve seen it used in ways that are harming organizations. I could also say that about almost every metric that I’ve seen being used.

Having established all of that, here are nine of my current recommendations:

  1. The choice of metric is not as important as people think. We rarely see a company succeed or fail based on the specific metric that it choses. That doesn’t mean that you can chose a ridiculous metric, but most reasonable metrics provide the same potential for success (and failure). In general, NPS is a reasonable metric to chose, as our data shows that it often correlates to customer loyalty. As organizations mature, we try to get them to use metrics that are more closely aligned to their brand promises.
  2. Driving improvements is what’s critical. Instead of obsessing about the specific metric being used, companies need to obsess about the system they put in place to make changes based on what they learn from using the metric. Successful NPS programs systematically take action on insights they uncover. If the program is working well, then the company isn’t debating scores. Instead, they’re continuously making changes to create more promoters and eliminate detractors.
  3. Promoters & detractors need their individual attention. The most important thing you can do with NPS is to understanding what is driving NPS. It turns out that the things that create promoters are not just the opposite side of the issues that create detractors. So you need to separately identify changes to create promoters and decrease detractors. All too often, companies focus just on detractors. This helps to fix problems, but it does not identify opportunities to propel your organization. By focusing on what causes promoters, you will get the opportunity to engage the organization in uplifting discussions—instead of just beating the drum about what’s broken.
  4. Sampling patterns really, really matter. The approach for sampling often has a very significant impact on NPS results (and results from other metrics as well). If you have multiple segments of customers and they each have a different NPS profile (as many do), then your overall NPS can change wildly based on the mix of those customers that are included in the NPS calculation. In B2B, this may come from combining results from enterprise accounts with smaller clients, or mixing responses from executive decision makers and end users of your products. In B2C, the variance may come form mixing data between new customers and repeat customers.
  5. NPS is for relationships, not transactions. Asking people if they would recommend a company isn’t a good question to use after an interaction. If a customer is a detractor on an NPS survey deployed right after a call into the contact center, for instance, then it doesn’t necessarily mean that there was a problem with that interaction. The contact center might have done a great job on the call, but the customer may still dislike something else about the company. If the contact center interaction had been problematic, then the customer’s NPS score might be temporarily lowered and not reflective of the customer’s longer-term view of the company.
  6. NPS is for teams, not individuals. Since NPS asks about the likelihood to recommend a company, it actually reflects the actions of more than one person. So if you want to look for someone to hold responsible for NPS results, think about making it a shared metric across a large group, not an individual KPI. Many companies that fall in love with NPS, start applying it to every part of their business, trying to give everyone their own NPS. While it’s worthwhile to look for improvements across the business based on NPS, you run into problems when you try to create to many levels of NPS.
  7. Compensation can be a real problem. When an organization shares a common metric (like NPS) and its people collectively have some compensation tied to it, then it can help align everyone’s focus on customer experience. But if the compensation gets too significant, then people start focusing too much on the number—questioning its validity and strong-arming customers—instead of looking for ways to make improvements. Remember, the majority of your discussions should be about making improvements, not data.
  8. Target ranges make more sense than single numbers. NPS is an inherently jittery metric; there’s only a porous line keeping passives from becoming promoters or detractors. And the situation is magnified by the sampling issues described above. That’s why we see many customer insights group wasting a lot of time running around trying to explain small movements in their companies’ NPS, as executives overreact to small movements. Instead of setting NPS goals as a specific number, consider defining a range (similar to a process control chart). As a start, think about adopting a 3- to 5-point range. That way you only react to results outside of the range or multiple periods of increases or declines.
  9. There are four loops to close. When people talk about closed loop and NPS, they often mean contacting customers after they answer the NPS question. But that immediate response is just one what we call the four customer insight-driven action loops: Immediate response, corrective action, continuous improvement, and strategic change. Any NPS program should put in places processes to close all four loops.

The bottom line: NPS success comes from the process, not the metric.

Net Promoter Score, Net Promoter, and NPS are registered trademarks of Bain & Company, Satmetrix Systems, and Fred Reichheld.

Driving CX Transformation Workshop in Boston in October

1610_TGWorkshopHeader

Use Customer Insights To Close Four Loops

Companies that have voice of the customer (VoC) programs (including NPS) often put in place a closed-loop process. Those efforts often focus on closing a single loop, immediately responding to a customer after they respond to a survey. But this represents only one of four loops that companies need to close.

In the report, Make Your VoC Action-Oriented, we introduced the concept of four closed loops.

1608_FourActionLoopsHere’s an example of the four loops for a restaurant chain:

  • Immediate Response. Reach out to a restaurant customer who responded on a survey that the bathroom was dirty and help take care of her ongoing concerns.
  • Corrective Action. Get the manager or employee to clean the bathroom in that restaurant.
  • Continuous Improvement. Create new process for restaurants to check and clean bathrooms on a regular basis.
  • Strategic Change. As part of new restaurant formats, design bathrooms so that they don’t require as much time from employees to keep them clean.

The bottom line: Make sure to build out four closed loops.

Sydney Signage Considers Customer Journeys

I’m having a great time in Australia, enjoying the country while (hopefully) sharing some strong CX skills and knowledge during events in Sydney and Melbourne. One of the things that I noticed in Sydney were the road signs. Here’s an example.

IMG_3947

The signage answers the basic question (it’s Yurong Street), and additionally it answers other questions for people who may want to go to Woolloomoolloo, the airport or Bondi.

This is a great example of Customer Journey Thinking. Whoever put together these signs was thinking about what travelers are trying to accomplish, not just focusing on their immediate interaction of getting the name of a street.

Thanks to all of the wonderful people (and creatures) that we’ve had the opportunity to meet (and to introduce to the red iGuy from our logo)! Read more of this post

Data Snapshot: Social Media Benchmark, 2016

1607_DS_SocialMediaBenchmark2016_COVERTemkin Group just published a data snapshot, Social Media Benchmark, 2016. This annual research effort shows how consumer use of social media sites on both computers and mobile phones are changing. Here’s a description of the data snapshot:

In January 2016, we surveyed 10,000 U.S. consumers about how frequently they use social media on their computers and mobile phones, and we then compared these usage rates to analogous data we collected in January 2012, January 2013, January 2014, & January 2015. This analysis looks at the frequency with which consumers in different age groups use computers and mobile phones to access Facebook, LinkedIn, Twitter, Google+, Pinterest, Tumblr, and third-party rating sites.

Download data snapshot for $195BuyDownload3

The data snapshot has 13 graphics with data. Here’s a portion of one of the graphics:.

1607_DailySocialMediaComputersMobile

Here are a some additional findings from the research:

  • Daily use of Twitter, Facebook, and Pinterest on computers and mobile phones grew by 2 or more percentage points since last year. Tumblr grew 2 points on mobile phones.
  • All age groups of consumers under 45-years-old less frequently visited company Facebook pages on computers.
  • LinkedIn grew the most with 18- to 24-year-olds on computers, and 45- to 54-year-olds on mobile phones.
  • In most cases, mobile usage is strongest with 18- to 24-year-olds.
  • 18- to 24-year-olds had the largest drop in Facebook use, on both computers and mobile phones.
  • 45- to 54-year-olds had the largest jump in daily Facebook use, on both computers and mobile phones.
  • 25- to 34-year-olds are the largest daily users of almost all social media, on computers and mobile phone.
  • 18- to 24-year-olds are the largest daily users of Tumblr.

Download data snapshot for $195
BuyDownload3

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