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

Examining Massive Decline in Customer Experience (Ratings)

In the 2016 Temkin Experience Ratings (TxR), we found that the average ratings for all 20 industries declined between 2015 and 2016 (see graphic). Here are some observations:

  • Across the 20 industries, TxR dropped by an average of 5.2 points between 2015 and 2016.
  • Three industries dropped by less than 4 points (banks, software, and wireless carriers), while five dropped by more than 6 points (investment firms, auto dealers, airlines, rental cars, and health plans).
  • Hotels are the only industry to improve since 2014.
  • Of the 12 industries that have been in the ratings for all six years, five have declined from 2011 (Internet Service Providers declined the most, down 7 points). Banks and computers improved the most since 2011 (up 5 points).
  • The percentage of good and excellent companies dropped from 37% in 2015 to 18% in 2016.
  • Of the 271 companies in both the 2015 and 2016 TxR, 85% declined by 1-point or more, while 6% increased by 1-point or more.
  • Coventry Health Care, Con Edison, True Value, Consumers Energy, and Fox Rent A Car had the highest level of improvement in TxR between 2015 and 2016.
  • Volkswagen, Fairfield Inn, Fujitsu, Commonwealth Edison, Humana, BMW dealers, and Bed, Bath & Beyond had the largest decline in TxR between 2015 and 2016.

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What’s going on?

As I mentioned last year when we saw our first major decline (10 out of 19 industries dropped), the issue has to do with consumer perceptions. Companies aren’t getting worse at CX. As a matter of fact, our data shows that large companies are putting more effort into CX and are actually getting better.

This year, something else seems to have kicked in as well. It looks like there’s a widespread decline in consumer sentiment, as you’ll see when we publish this year’s Temkin Well-Being Index.

What should you do about it? 

Forget the noise about the overall decline, there’s nothing you can do about consumer attitudes. But with consumers comparing your company to the best companies across all industries, you probably need to set your CX sights a bit higher. Keeping up with mediocre peers is a losing strategy.

As the gap between customer expectations and existing CX grows, there will be more opportunities to improve CX and expand your business. But only some companies will be able to take advantage of this growing CX thirst; others will see an exodus of increasingly disappointed customers. Choose your path.

The bottom line: Hopefully consumers will feel more positive next year!

 

Applauding Mobile eGift Card Receiving Experiences

In a recent report, we evaluated mobile eGift card buying experiences using Temkin Group’s SLICE-B experience review methodology. As part of the process, we also received a number of eGift cards. So we took a look at the experience through the eyes of the eGift card recipients. Rather than do an entire experience review, we decided to just give kudos for some of the better practices that we found:

  • Petco includes the sender’s email address with a helpful tip about saying thank you, making it convenient for the recipient to thank the sender.
  • Amazon clearly defines the next steps in the process, telling the receiver how to redeem her Amazon.com gift card in their original email, easing any potential anxiety about how to continue with the process.
  • Macy’s anticipates the receiver’s needs by including a section on featured help topics specific to the receiver, such as; Can I use my Gift Card at Macy’s stores and online, Can I reload my Macy’s gift card, and Macy’s store locations and hours.
  • Jo-Ann demonstrates consistency across the experience through the inclusion of its brand colors and logo on every email, reassuring the recipient that the company is fully connected to the brand.
  • Michael’s appeals to the excitement the recipient feels when she discovers she has a new gift card. The email features phrases such as “special delivery” and “congratulations” at the top of the note, eliciting an immediate, positive emotional response.

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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:

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Quick Take: Make More Human Emotional Connections (Video)

In a recent Customer Experience Professionals Association (CXPA.org) CustomerSpark event in Dallas, I spoke about the importance of focusing on emotion. Give that we’ve called 2016 “The Year of Emotion,” this is a popular topic for Temkin Group.

Here’s a short snippet from my speech (one of several quick take videos from the event), where I discuss how we need to Make More Human Emotional Connections:

I urge you to join the Intensify Emotion Movement.

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Off Topic: Young Adults Turn Off Baseball, Turn On Soccer

One of the things I noticed at this year’s Sloan Sports Analytics Conference is that teams were not as focused on the issue of losing younger fans. So I decided to see if there’s anything to worry about. While we don’t have data on kids, we do have lots of data on young adults.

I tapped into our 2012 and 2016 consumer benchmark studies to examine the percentage of of 18- to 24-year-olds who enjoy watching sports on TV. It turns out that:

  • The top 3 major league sports across all U.S. adults this year is football/NFL (56%), baseball/MLB (35%), and basketball/NBA (33%). For young adults, the top three are the NFL (46%), the NBA (38%), and soccer/MLS (23%).
  • Over the past four years, young adults have lost some interest in five of the eight sports we examine.
  • MLB has dropped the most (down 3.4 %-points) followed by NASCAR (down 2.6 %-points).
  • MLS has increased the most (up 7.1 points) followed by the NBA (up 2.5 points).

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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.

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14 Highlights From the 2016 Sloan Sports Analytics Conference

This week, I made my 5th annual pilgrimage to the MIT Sloan Sports Analytics Conference. As always, I really enjoyed hearing players, owners, general managers, members of the press, and experts discuss two of my favorite topics: #sports and #analytics.

This was the 10th year of the conference. I want to say congratulations and thank you to the two co-founders and leaders of this great event:

  • Jessica Gelman (VP of Customer Marketing & Strategy, The Kraft Sports Group)
  • Daryl Morey (General Manager, Houston Rockets)

Moneyball Reunion

The conference opened up with a session called Moneyball Reunion, looking back at the book that fueled the sports analytics movement. Jackie MacMullen led a panel with Michael Lewis (author of Moneyball), Bill James (godfather of sports analytics), and Paul DePodesta (key player it the Moneyball story and now Chief Strategy Office of Cleveland Browns). Here’s one of my favorite scenes from the Moneyball movie:

Interesting comments from Michael Lewis:

  • He started out researching an article on financial inequities in baseball, wondering what the Oakland Athletics’ right fielder (who made $100K/year) felt about the fact that the right fielder was making $4M/year.
  • Bill James referred to a picture of the baseball diamond that was on his wall as a “field of ignorance.”
  • “Billy Beane had to learn not to trust his intuitive judgement.”
  • When he looked at the Oakland Athletics coming out of the shower for the first time, he was shocked at how fat and un-athletic they looked. He went on to say that the trick was to “find people with some defect that was overvalued.”

Interesting comments from Bill James:

  • I was just trying to get from a question to an answer. I never thought of the use of the data by baseball professionals.”
  • There was a lot of discussion about what people can’t do, which is irrelevant. What’s important is what people can do…. You win games with what people can do.”
  • When MacMullen asked how to speed up the game of baseball today, James said to get rid of the balk rule. He said the balk rule slows down the game the same that basketball would be slowed down if the fast break was eliminated.

14 Key Highlights From the Conference

Here are some other key themes that I heard during the conference. They don’t represent a full view of the event, because I only attended a subset of the sessions.

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Customer-Centric Culture Change (Video)

Our research and work with clients show that customer experience is a reflection of an organization’s culture. Any company that wants to build sustainable customer experience must build a customer-centric culture. How? By mastering Employee-Engaging Transformation.

Want to know more? Watch this short video:

The bottom line: CX success almost always requires culture change

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.

Download report for FreeFreeDownloadButton You can also download the dataset in Excel for $395

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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Modernize Leadership: Steve Jobs Demonstrates Purpose and Values

wordle4bIn a recent post, I discussed how management practices have become outdated and that there’s a strong need to Modernize Leadership. This change requires eight distinct shifts in how we lead organizations.

I just ran into this great video of a speech that Steve Jobs gave in September 1997. It’s really worth watching. Jobs demonstrates a few of the elements that I discuss in Modernize Leadership, and in particular he does a great job of highlighting this necessary shift:

5) Goals and Objectives to Purpose and Values

The bottom line: Tap into your purpose and values to drive simplicity

The Emotional Decline From New Purchase To Customer Service

How do consumers feel about their purchases and subsequent customer service interactions? To find the answer, we asked 10,000 U.S. consumers about those experiences across 11 different industries. We used their responses to calculate the Temkin Emotion Ratings. As you can see below:

  • Across all industries, purchasing provides a more positive emotional response than customer service. The gap in Temkin Emotion Ratings goes from 11 points (health plans) to 49 points (TV/Internet service).
  • New car purchases earn the highest Temkin Emotion Ratings.
  • Customer service interactions with TV/Internet service providers earn (by far) the worst emotion ratings (6%). The next worst emotional experience–health plan customer service (18%)–is three times better than the TV/Internet service providers.
  • Purchasing a new health plan provide the lowest emotional rating of any purchase, but it is also has the smallest gap when compared to the emotional ratings for health plan customer service.

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The bottom line: Customer service is an emotional trough.

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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Intensify Emotion Challenge: $1,000 For Great Ideas

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I’m happy to announce the kick-off of our #IntensifyEmotion campaign. It’s part of our celebration of 2016 as “The Year of Emotion.” Visit our Intensify Emotion™ page for valuable resources, and to learn how you can participate in our $1,000 challenge (and potentially win an Amazon gift card).

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.

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

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The bottom line: The CX profession is thriving.

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