Report: Economics of Net Promoter Score, 2016

1606_EconomicsofNetPromoter_COVERWe just published a Temkin Group report, Economics of Net Promoter, 2016. Here’s the executive summary:

Net Promoter® Score (NPS®) is a popular metric that companies use to analyze their customer experience efforts, but how does it actually relate to loyalty? We asked thousands of consumers to give an NPS to 294 companies across 20 industries, and then we examined the connection between NPS and four key areas of loyalty. We found that compared to detractors, promoters are more than five times as likely to repurchase from companies, more than seven times as likely to forgive companies if they make a mistake, and almost nine times as likely to try new offerings from companies. Our research also shows that promoters recommend a company to an average of 3.5 people. The following analysis provides detailed loyalty data of promoters, passives, and detractors across 20 industries: airlines, auto dealers, banks, computer and tablet makers, credit card issuers, fast food chains, health plans, hotel chains, insurance carriers, Internet service providers, investment firms, major appliance makers, parcel delivery services, rental car agencies, retailers, software firms, supermarkets, TV service providers, utilities, and wireless carriers. Ultimately, if a company wants to benefit from using NPS as a key metric, it must focus on improving customer experience, not obsessing over the metric itself.

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Here’s one of the 12 graphics in the report, which shows the average loyalty differences for promoters, passives, and detractors across all industries:NPSEconomicsOverview

The report provides this loyalty data for promoters, passives, and detractors for 20 industries: airlines, auto dealers, banks, computer and tablet makers, credit card issuers, fast food chains, health plans, hotel chains, insurance carriers, Internet service providers, investment firms, major appliance makers, parcel delivery services, rental car agencies, retailers, software firms, supermarket chains, TV service providers, utilities, and wireless carriers.

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See our VoC/NPS resource page, which includes great resources for creating a successful NPS program. You mat also want to see our latest NPS Benchmark Report with NPS data on 291 companies.

The bottom line: Promoters are much more valuable than detractors.

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

Report: The State of the CX Management, 2016

1605_StateOfCXMgt16_COVERWe just published a Temkin Group report, The State of the CX Management, 2016. This is the seventh annual benchmark of CX activities, competencies, and maturity levels.  Here’s the executive summary:

For the seventh straight year, Temkin Group surveyed large companies to evaluate the state of their Customer Experience (CX) management. This year we found an abundance of CX ambition and activity. Most companies have a CX executive leading the charge, a central team coordinating significant CX activities, and a staff of six to 10 full-time CX professionals. Temkin Group has identified four CX core competencies that companies must master if they want to become customer-centric: Purposeful Leadership, Compelling Brand Values, Employee Engagement, and Customer Connectedness. Using Temkin Group’s CX competency and maturity assessment, we found that only 10% of companies have reached the highest two levels of customer experience, and companies are weakest in the Compelling Brand Values competency. We additionally compared CX laggards with CX leaders and discovered that the leaders have stronger financial results, have more senior executives leading the company-wide CX efforts, have more full-time CX employees, use more analytics, and have more support from senior leaders. This report also includes an assessment that companies can use to benchmark their CX efforts and capabilities.

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Temkin Group’s Customer Experience Maturity Model uses six stages of CX maturity based on the four customer experience core competencies. Here’s what we found when 210 companies completed the assessment:

1606_CXMaturity

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Report: Emotion-Infused Experience Design

1606_EmotionInfusedExperienceDesign_COVERWe just published a Temkin Group report, Emotion-Infused Experience Design.

Emotions play an essential role in how people make decisions. Consequently, how a customer feels about their experience with a company has the most significant impact on their loyalty to that company. And yet despite their importance, both customers and companies agree that organizations do a poor job of engaging customers’ emotions. To help companies create a stronger emotional connection with customers, we’ve developed an approach called Emotion-Infused Experience Design (EIxD). To master EIxD, organizations must continuously focus on three questions: “Who exactly are these people (who happen to be our customers)?” “What is our organizational personality?” and “How do we want customers to feel?” This report offers both advice and examples about how to apply these three questions across four facets that affect emotion: senses, feelings, social, and values. And to help infuse these practices across the organization, we have also identified some strategies for how to turn employees into agents of EIxD.

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Our research shows that emotion is often a missing link in customer experience. While emotions may seem ephemeral and subjective, we developed a concrete methodology you can use to design for emotion. We call this methodology “Emotion-Infused Experience Design” (EIxD), and we define it as:

An approach for deliberately creating interactions that evoke specific customer emotions.

To master EIxD, you must ask (and answer) three questions throughout the entire design process:

  1. Who exactly are these people (who happen to be our customers)? You cannot design emotionally engaging experiences without a solid grasp on who your target customers are—what they want, what they need, what makes them tick.
  2. What is our organizational personality? Research shows that people relate to companies as if they are fellow human beings rather than inanimate corporate entities.
  3. How do we want our customers to feel? People are inherently emotional beings, and every interaction they have with you will make them feel a certain way—whether you intend it to or not.

To address the three questions of EIxD, this report shows how to design around four elements of emotion: senses, feelings, social, and values. Here are two of the 26 figures in the report:

1606_TwoPartsofEmotion1605_CokeStarbucksEmotions

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USAA and Publix Top 2016 Temkin Forgiveness Ratings

We just published the 2016 Temkin Forgiveness Ratings, the sixth year of the ratings. It uses feedback from 10,000 U.S. consumers to rate the level of trust that consumers have with 294 organizations across 20 industries (see .pdf with full list). You can see all of the company data on the Temkin Ratings website.

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USAA ‘s banking business and Publix took the top spots in the 2016 Temkin Forgiveness Ratings. USAA (credit cards), Amazon.com (for retail and computer & tablets), Food Lion, H-E-B, Wawa Food Markets, and Kroger fill out the top spots.

Comcast (for both TV service and Internet service) earned the lowest Temkin Forgiveness Ratings. Other firms on the bottom of the ratings are Charter Communications (TV service and Internet service), Motel 6, Health Net, Time Warner Cable (TV service and Internet service), Cox Communications and Anthem.

1604_ForgivenessRatings_TopBottom

Additional highlights of the 2016 Temkin Forgiveness Ratings: Read more of this post

USAA, Credit Unions and Publix Top 2016 Temkin Trust Ratings

We just published the 2016 Temkin Trust Ratings, the sixth year of the ratings. It uses feedback from 10,000 U.S. consumers to rate the level of trust that consumers have with 294 organizations across 20 industries (see .pdf with full list). You can see all of the company data on the Temkin Ratings website.

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For the second straight year, USAA (for banking and insurance) took the top two spots. The next highest scoring companies are credit unions, Publix, Mercedes-Benz, USAA (credit cards), Chick-fil-A, Amazon.com, Residence Inn, H-E-B, Lexus, and BJ’s Wholesale Club.

Also for the second year in a row, Comcast earned the lowest two spots in the Temkin Trust Ratings for its TV service and Internet service businesses. But many of its competitors also earn very poor ratings. The next lowest rated companies are Charter Communications (for Internet service and TV service), Time Warner (for Internet service and TV service), and Cox Communications.

1604_TTR_TopBottomOrgs

Additional highlights of the 2016 Temkin Trust Ratings: Read more of this post

Report: Customer-Infused Process Improvement

1604_CustomerInfusedProcessImprovement_COVERWe just published a Temkin Group report, Customer-Infused Process Improvement, which provides five strategies for instilling customers’ needs into process improvement methodologies. Here’s the executive summary:

Process improvement and customer experience have traditionally served different roles in a company. However, these two disciplines are starting to intersect as customer experience looks to process improvement to operationalize key customer interactions and process improvement needs customer experience to provide customer-focused insights and continually monitor new processes. Temkin Group proposes that companies bring these two approaches together into Customer-Infused Process Change. This report highlights five strategies critical to driving this new approach: Prioritize Improvements Across Customer Journeys, Embrace Deep Customer Empathy, Involve Customers in Solution Development, Innovate to Meet Latent Needs, and Measure Success with Customer-Focused Metrics. To make process improvement efforts more customer-centric, organizations need to infuse these strategies across all aspects of process improvement.

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It’s time for process improvement to become more focused on customers. Rather than abandoning existing process improvement methodologies, Temkin Group recommends bringing a customer orientation into your efforts. We call this approach Customer-Infused Process Change (CiPC), which we define as:

Driving improvements based on a deep understanding of customer needs.

The report provides best practices across five strategies of CiPC:

  1. Prioritize Improvements Across Customer Journeys: By understanding customer interactions in the context of their broader journeys, companies can invest in process improvements projects that have the most impact on the customer’s experience.
  2. Embrace Deep Customer Empathy: In order to effect sustainable changes, employees impacted by redesigned processes need to understand why these changes are important to customers.
  3. Involve Customers in Solution Development: Process improvement efforts must have resources available to ensure that ongoing, incremental changes can be made based on this customer input.
  4. Innovate to Meet Latent Needs: Customers can’t always articulate what they want; instead, they often describe a slightly improved version of what they already know.
  5. Measure Success with Customer-Focused Metrics: Companies can’t measure the success of process improvement efforts with internally focused, operational metrics.

1604_CustomerInfusedProcess5Strategies

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The bottom line: Process improvements need more customer insights.

Report: What Happens After a Good or Bad Experience, 2016

1603_WhatHappensAfterGoodBadExperiences_COVERWe just published a Temkin Group report, What Happens After a Good or Bad Experience, 2016. 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:

We asked 10,000 U.S. consumers about their recent interactions with 315 companies across 20 industries, and compared results with similar studies over the previous five years. More than 20% of the customers of Internet service providers and TV service providers reported a bad experience, considerably above the rates for any other industry. Air Tran Airways, Time Warner Cable (TV service and Internet service), Comcast (TV service), and HSBC delivered bad experience to at least one-quarter of their customers. At the same time, less than 3% of Michael’s, Advance Auto Parts, Whole Foods, Publix, Subway, Vanguard, Trader Joe’s, and GameStop customers report having bad experiences. We examined the combination of the volume of bad experiences and the resulting revenue impact and created a Revenues at Risk Index for all 20 industries. At the top of the list, TV service providers and rental car agencies stand to lose at least 6.5% of their revenue from bad experiences. Conversely, less than 2% of the revenues for retailers and supermarket chains are at risk. The companies that recovered very poorly after a bad experience lost sales from 63% of their customers, more than 2.5 times as many as companies that recovered very well. Companies that do a very good job at recovering after a bad experience have more customers who increase spending than those who decrease spending. After a very bad or very good experience, consumers are more likely to give feedback directly to the company than they are to post on Facebook, Twitter, or third party rating sites. Regardless of the channel, consumers are more likely to discuss a very bad experience than a very good one. While the way that consumers give feedback has not changed much since last year, the volume of Twitter usage grew for both positive and negative experiences. Piggly Wiggly, US Cellular, Fifth Third, The Hartford, TriCare, and PSE&G face the potential for the most negatively biased feedback from customers.

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Here are excerpted versions of 4 (out of 15) graphics in the report: Read more of this post

Report: The Federated Customer Experience Model

1603_PathtoFederation_COVERWe published a Temkin Group report, The Federated Customer Experience Model. Here’s the executive summary:

When a company starts its customer experience (CX) journey, it often establishes a centralized team to build the necessary internal capabilities and catalyze change. However, that team’s effectiveness can be limited by a number of things, including divided attention within lines of business and a lack of resources to reach across the company. In its 2012 report, The Future of Customer Experience, Temkin Group identified the need for CX efforts to become more federated. To succeed in the long-run, companies need to focus more on embedding CX capabilities across departments and functions through a federated CX model. A federated model is a structure for enabling and coordinating a distributed set of customer experience capabilities, and it operates through centers of excellence—which spread specialized expertise beyond the boundaries of the centralized team—and enterprise CX coordination—which ensures that company-wide goals and standards are in place—and distributed CX skills and mindsets—which infuses customer-centric mindset throughout the company. These centers of excellence include deep analytics, reporting and data visualization, experience design, customer-driven process improvement, and culture change management. Enterprise CX coordination oversees enterprise CX strategy and governance, insights, metrics and reporting, standard methodologies and tools, central CX storylines, and portfolio management. And distributed CX skills and mindsets encompasses CX goal alignment, customer understanding, empathy orientation, improvement focus, and organizational awareness. The path companies take to federation can include multiple phases, such as centrally driven, cross-functional participation, distributed expertise, and federated. As their companies move down this path, successful CX professionals will be the ones who learn the business, coach and advise others, embrace empowerment, and keep learning; or, alternatively, they can choose to specialize and leave the central CX team to join one of the centers of excellence.

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Here are the elements of a Federated CX Model:

1603_FederatedCXModel

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Data Snapshot: Media Use Benchmark, 2016

1603_DS_MediaBenchmark2016_COVERWe just published a Temkin Group data snapshot, Media Use Benchmark, 2016. This is our annual analysis of how much time consumers spend using different media channels (see last year’s data snapshot).

Here’s the data snapshot description:

In January 2016, we surveyed 10,000 U.S. consumers about their media usage patterns and compared the results to similar data we collected in January 2015, January 2014, January 2013, and January 2012. Our analysis examines the amount of time consumers spend every day watching television, browsing the Internet (for both work and leisure), reading books (both print and electronic), reading newspapers (both print and electronic), listening to the radio, reading a print magazine, and using a mobile phone. This data snapshot breaks down the results by income level, education level, and, most expansively, by age.

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Here’s a portion of the first figure from the data snapshot that contains 12 data-rich charts. As you can see, over the past five years:

  • Time spent with mobile web/apps has increased the most, followed by using the Internet at work and at home.
  • Time spent with TV, radios, books, and newspapers have declined.

1603_MediaChanges

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Report: 2016 Temkin Experience Ratings

1603_2016TemkinExperienceRatings_FINALTemkin Ratings websiteWe published the 2016 Temkin Experience Ratings, the most comprehensive benchmark of customer experience. In the sixth year of the Ratings, we analyze feedback from 10,000 U.S. consumers to rate 294 organizations across 20 industries. Here’s the executive summary:

2016 marks the sixth straight year that we’ve published the Temkin Experience Ratings, a cross-industry, open standard benchmark of customer experience. This year, Publix and H-E-B earned the top two spots, and supermarket chains overall took six of the top 11 spots. At the other end of the spectrum, Fujitsu received the lowest score of any company, closely followed by Health Net. Five other health plans joined them in the bottom 11. To generate these ratings, we asked 10,000 U.S. consumers to rate their recent interactions with 294 companies across 20 industries and then evaluated their experiences across three dimensions: success, effort, and emotion. Publix and H-E-B earned the highest ratings for success, while Publix, O’Reilly Auto Parts, True Value, and Save-a Lot earned the highest for effort, and Publix, Chick-fil-A, and Residence Inn earned the highest for emotion. And when we looked at who had the best and the worst ratings for each industry, we found that USAA actually earned the highest ratings in two industries, while Comcast received the lowest ratings in two industries. Amazon.com, USAA, Holiday Inn Express, and Residence Inn outperformed their industry averages by the most points, while Fujitsu, Motel 6, and HSBC fell behind by the most points. Although all industries declined between 2015 and 2016, rental car agencies and health plans experienced the most dramatic drops. Meanwhile, Coventry Health Care, Con Edison of New York, and True Value improved the most over the last year, and Volkswagen dealers, Fairfield Inn, and Fujitsu dropped the most. To improve customer experience, companies need to master four competencies: Purposeful Leadership, Compelling Brand Values, Employee Engagement, and Customer Connectedness.

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See our FAQs about the Temkin Experience Ratings.

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

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

Here are the top and bottom companies in the ratings:

1603_2016TxR_TopBottomOrgs

***See how your company can reference these results or
display a badge for top 10% and industry leaders***

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Report: Mobile Experience Review: Purchasing an eGift Card

1603SLICE-B_COVERWe just published a Temkin Group report, Mobile Experience Review: Purchasing an eGift Card. The report uses our SLICE-B experience review methodology to evaluate mobile experiences. We attempt to achieve a specific customer goals and then grade the experience on 12 criteria across six areas: Start, Locate, Interact, Complete, End, and Brand Coherence.

Here’s the executive summary:

As more customers use smartphones, companies need to adjust their websites and processes for the smaller screens. To evaluate the customer experience of mobile websites, we used Temkin Group’s SLICE-B experience review methodology to assess the experience of purchasing an eGift Card from ten large retailers: Macy’s, Kohl’s, Amazon, Barnes & Noble, Petco, Petsmart, Kroger, Safeway, Michaels, and Jo-Ann. Macy’s earned the highest score for its simple yet engaging process, while the user was unable to complete the full purchasing goal at Barnes & Noble, Petco, Petsmart, Kroger, Safeway, and Kohl’s.

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Here’s an overview of the results:

1603_MobileSLICEBevals

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Report: State of the CX Profession, 2016

1603_StateOfCX Profession2016_COVERWe just published a Temkin Group report, State of the CX Profession, 2016. This is the fifth year that we’ve examined the roles of CX professionals and the third year that we’ve done a compensation study. Here’s the executive summary:

To better understand the mindset and roles of CX professionals today, we surveyed 208 CX professionals and then compared their responses to similar studies we’ve conducted over the previous four years. Eighty-six percent of respondents reported that their CX efforts positively impacted their organization’s business results in 2015, while 96% believe that customer experience is a great profession to work. About nine out of 10 respondents feel satisfied with the people they work with, the content of their jobs, and the company they work for; however only 61% are satisfied with their opportunities for professional advancement. Both web interactions and voice of the customer programs continue to be key areas of responsibility for these professionals, and respondents expect spending on CX activities to grow in 2016, with text analytics and predictive analytics showing the most positive momentum. On this year’s survey, we included our third annual compensation study. We looked at 105CX professionals from large organizations and found that their average compensation (salary plus bonus) ranged from $135,000 for mid-level individual contributors to $260,000 for CX executives.

1602_DontBuyReportJoinCXPA

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Here’s some data that combines pieces of two graphic, showing that CX continues to be a great profession….

1602_CXisGreatProfession

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The bottom line: The CX profession is thriving.

Report: Employee Engagement Benchmark Study, 2016

1602_EEBenchmarkStudy16_COVERWe just published a Temkin Group report, Employee Engagement Benchmark Study, 2016. This is the fifth year that we’ve published the benchmark of U.S. employees. The research is based on an online survey on Q3 2015. (Take a look at our Employee Engagement Resource Page).

Here’s the executive summary: We used the Temkin Employee Engagement Index to analyze the engagement levels of more than 5,000 U.S. employees. We found that employee engagement has stayed relatively flat since last year, but engagement levels still vary by organization, industry, and individual. Companies with stronger financial performances and better customer experience have employees who are considerably more engaged than their peers. Our research also shows that out of all the industries, the construction sector has the highest percentage of engaged employees, while the retail sector increased the most since last year. We additionally found that companies with 501 to 1,000 employees have the highest percentage of engaged employees and companies with 10,000 or more employees have the lowest level of engagement. On an individual level, our research shows that employees who are highly educated, high-income earners, executives, male, and have very good bosses tend to be the most highly engaged. Given the significant value of engaged employees, we recommend that companies improve engagement levels by mastering our Five I’s of Employee Engagement: Inform, Inspire, Instruct, Involve, and Incent.

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Here’s what we found when we examined year-over-year results for the Temkin Employee Engagement Index:

1602_EEBenchmarkOverall

Here are some other findings from the research: Read more of this post

Report: Benchmarking HR’s Support of CX and Employee Engagement

1602_HRinCXBenchmark_FCOVERWe published a Temkin Group report, Benchmarking HR’s Support of CX and Employee Engagement.  We surveyed 300 HR professionals from large organizations in North America and compared the results to a similar study we did in 2012. Here’s the executive summary:

Employee engagement is a critical component of customer experience (CX). To determine how effectively human resource (HR) departments support these engagement efforts, we surveyed 300 HR professionals from large companies and compared the results to a similar study we conducted in 2012. Seventy-three percent of HR professionals believe that it’s very important for their organization to become more customer-centric, but only 31% believe that HR professionals are significantly helping these efforts. The good news? That’s more than twice the level of HR support we found in 2012. Compared with 2012, companies are both measuring and acting on employee feedback more frequently, and HR professionals have more bandwidth to work on employee engagement. When we compared the companies that deliver outstanding customer experience with the companies that don’t, we found that the CX leaders have better financial performance, enjoy higher levels of engaged employees, are more customer- and mission-centric, have HR groups that are more actively involved in CX and employee engagement activities, and more frequently measure employee feedback. To improve employee engagement, companies must master the Five I’s of Employee Engagement: Inform, Inspire, Instruct, Involve and Incent.

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Here’s one of the 25 figures in the report:

1602_ImportanceOfCXCulture

Here are some other findings in the research: Read more of this post

Data Snapshot: CX Expectations and Plans for 2016

1602_DS_CXPlansFor2016_COVERTemkin Group just published a data snapshot, Customer Experience Expectations and Plans for 2016. This annual research effort shows an increase in focus, effort, and spending on customer experience in 2016. Here’s a description of the data snapshot:

In December 2015, Temkin Group surveyed 160 respondents, each from a company with $500 million or more in annual revenues, about their customer experience efforts over the past year and their plans for 2016 and beyond. We compared the results of this survey to the results of similar surveys that we completed in Q4 of 2010, Q4 of 2011, Q4 of 2012, Q4 of 2013, and Q1 of 2015. This year’s results show that companies are planning on dedicating more money and effort to improve a variety of customer experience activities.

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The data snapshot has 12 graphics with data about CX plans and expectations for 2016.

1601_CXIMpact

Here are a some additional findings from the research:

  • 84% of firms expect CX to be more important in 2016, and only 1% expect it to be less important.
  • 57% of firms expect to spend more on CX in 2016, and only 6% expect to spend less.
  • 45% of firms have more than five full-time CX professionals. 37% expect to increase those employees, and only 2% expect to cut back.
  • Firms plan to increase their spending the most on voice of the customer software, CX consultants, and text analytics.
  • The areas that will get the most increase in focus are Web experience, CX measurement, CX insights, and customer-centric culture.
  • Nearly two-thirds of organizations tie some compensation to CX metrics for customer-facing employees.

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The bottom line: 2016 will be a very active year for CX management.

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