Toyota and Mercedes-Benz Earn Top Customer Experience Ratings for Auto Dealers

We recently released the 2016 Temkin Experience Ratings that ranks the customer experience of 294 companies across 20 industries based on a survey of 10,000 U.S. consumers.

Toyota and Mercedes-Benz deliver the best customer experience amongst auto dealers, according to the 2016 Temkin Experience Ratings, an annual ranking of companies based on a survey of 10,000 U.S. consumers.

Out of the 20 auto dealers included in this study, Toyota earned the highest customer experience score with a rating of 66%, which put it in 89^th place overall out of 294 companies across 20 industries. Mercedes-Benz came in a close second with a 65% rating and an overall rank of 100^th.

Toyota is no stranger to the top; it has been the highest-scoring auto dealer for three out of the past five years and come in second place the other two years. Mercedes-Benz, on the other hand, has historically stayed in the middle of the pack, ascending to the top this year by virtue of being one of only three companies whose scores improved over the past year. The other two companies whose ratings went up since 2015 are Kia and Audi.

At the other end of the spectrum, Volkswagen received the lowest score in the industry with a rating of 44%, which put it in 278^th place overall. Volkswagen’s score tumbled a dramatic 17 percentage points over the last year—the biggest decline of any company in any industry.

Off Topic: Sheraton, Mercedes & GM Customers Will Watch The Super Bowl

Tomorrow is Super Bowl Sunday. While my Patriots aren’t playing, I’m still planning to watch the game, as will many, many more people. I tapped onto our research of 10,000 U.S. consumers to look at the popularity of the NFL.

Football is clearly America’s primary sport. Nearly 56% of the US populations likes to watch professional football, dwarfing the next sport on the list, baseball (35%). Over the last year, however, the NFL has lost a bit of its popularity, dropping almost 2 %-points. The only sports to increase their fan bases over the previous year were hockey and soccer, and they were both very small gains.

One of the exciting parts of the Super Bowl Sunday is the television ads. It made me wonder about which companies would get the most value from buying those expensive commercial spots. So I looked at the degree to which different companies’ customer bases are NFL fans. My analysis spanned 318 companies across 20 industries, and the range of NFL fandom went from 48% to 74%.

At the top of the list are Sheraton (74%), Mercedes-Benz (72%), GM (70%), Hertz (69%), Alabama Power Company (69%), Quiznos (69%), Travelers (69%), and Merrill Lynch (69%).

At the bottom of the list are Empire BCBS (48%), DTE Gas Company (50%), Cablevision Optimum (51%), Subaru (51%), Cablevision (52%), Orange Julius (52%), Consolidated Edison of NY (52%), Southern California Gas (52%).

Download the entire list of 318 companies 

Lexus and Toyota Lead Auto Dealers in Customer Experience

We recently released the 2015 Temkin Experience Ratings that ranks the customer experience of 293 companies across 20 industries based on a survey of 10,000 U.S. consumers.

Here are some highlights from the auto dealer results between 2012 and 2015:

• Auto dealers’ average rating dropped from 66.3% in 2014 to 63.7% in 2015, the lowest score they’ve had since 2012. This is also the first year that the industry average has declined for auto dealers.
• Despite dropping one percentage-point from last year, Lexus is still the highest-rated auto dealer, with a score of 73%. Lexus also boasts the highest score in the emotion component, as its 70% rating is 12.6 percentage-points above industry average. Toyota dealers were close behind at 71%, but dropped 3 points from last year.
• Subaru not only experienced the sharpest decline of any auto dealer, but it actually experiences the sharpest decline of any company in the Ratings. Between 2014 and 2015, Subaru’s rating dropped 16 percentage-points, from 73% down to 57% over the past year.
• Audi received the lowest rating of any auto dealer, scoring 53% and coming in 261^st place out of 293 companies.
• Auto dealer’s ratings decreased more dramatically than any other industry’s. Of the five companies in the entire Ratings whose scores declined the most between 2014 and 2015, three of the companies are auto dealers. Subaru’s rating went down by 16 percentage-points, Buick’s went down by 12 percentage-points, and Audi’s went down by 11 percentage-points. At the other end of the spectrum, Dodge saw one of the largest score increases over the past year, going up 8 percentage points between 2014 and 2015.
• Of the twenty auto dealers that we evaluated both in 2014 and in 2015, only five improved their scores over the past year: Dodge (+8 points), Chrysler (+4 points), Nissan (+3 points), Kia (+3 points), and Honda (+2 points).

Toyota, Buick, and Lexus Lead Auto Dealers in 2014 Temkin Experience Ratings

We recently released the 2014 Temkin Experience Ratings that ranks the customer experience of 268 companies across 19 industries based on a survey of 10,000 U.S. consumers.

Toyota, Buick, and Lexus all earned a 74% rating—only narrowly surpassing Subaru—and tied for 59^th place overall out of 268 companies across 19 industries. While this is both Buick’s and Lexus’s first time evaluated in the Ratings, this is Toyota’s second straight year in the top spot.

At the other end of the spectrum, Chrysler tumbled down the rankings from its “okay” rating in 2013 to a “poor” rating this year, finishing as the lowest-ranking auto dealer with a score of 50% and a ranking of 256^th place. Kia and Dodge also declined in the ratings and received “poor” scores of 57% and 55% respectively, both hovering near the bottom of the auto industry rankings for the third year in a row.

Download entire dataset for $395

Here are some additional findings from the auto industry:

Report: What Happens After a Good or Bad Experience, 2014

We just published a Temkin Group report, What Happens After a Good or Bad Experience, 2014. The report, which includes 19 data charts, examines which companies and industries provide the most bad experiences, what impact those experiences have on spending, and how the negative impacts of bad experiences can be mitigated by good service recovery. The report also examines how consumers share their good and bad experiences with companies as well as with other people. 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 268 companies across 19 industries. Results show that Internet services and TV services are the industries most likely to deliver a bad experience to their customers, while grocery chains are the least likely to. At the company level, Scottrade had the smallest percentage of customers reporting a recent bad experience with the company and Time Warner Cable had the highest. More than half of the customers who encountered a bad experience at a fast food chain, credit card issuer, grocery store, or hotel either decreased their spending with the company or stopped altogether. However, our data shows that a good service recovery effort can help mitigate a bad experience. Unfortunately, many firms—especially in the banking, Internet services, and TV services sectors—aren’t very good at service recovery. In addition to the consequences of bad interactions, we also examined which channels customers use to share their good and bad experiences and how these changed across age groups. We then compared these results to survey responses from the past two years. We also uncovered a negative bias inherent in how customers provide feedback. ING Direct, Residence Inn, and Fairfield Inn have the most negative bias in the feedback they receive directly from customers, while Hy-Vee and Hyundai have the most negative bias on Facebook. 

Click link to see full list of industries and companies covered in this report (.pdf).

Download report for $195

One of the most interesting analyses in the report is the look at how service recovery after a bad experience affects the spending pattern of consumers. Here’s a summary of one of the charts showing just how important it is for a company to recover well after making a mistake:

Here are some other insights from the research:

• Sixteen percent of consumers who have interacted with TV service and Internet service providers report having a bad experience over the previous six months. Next on the list are wireless carriers, with 12% of their customers reporting a bad experience. At the other end of the spectrum, only 3% of consumers report a bad experience with grocery chains and 4% report having a bad experience with fast food chains.
• The five companies with the most customers reporting bad experiences are Time Warner Cable (25%), Motel 6 (22%), Coventry Health Care (21%), and Comcast (21%). There were 10 companies with only 1% or less of their customers reporting bad experiences: Scottrade, Chick-fil-A, H.E.B., Whole Foods, ShopRite, ING Direct, Starbucks, Trader Joe’s, Vanguard, and True Value.
• More than one-quarter of consumers who have a bad experience stop spending with computer makers, car rental agencies, credit card issuers, hotel chains, and software companies. The impact of bad experiences is less costly for parcel delivery services, wireless carriers, health plans, TV service providers, Internet service providers, and grocery chains, as less than 15% of their customers with bad experience stopped spending.
• The industries that are the best at responding to a bad experience are investment firms, major appliances, retailers, and car rental agencies. The industries that are the worst at responding to a bad experience are TV service providers, wireless carriers, Internet service providers, parcel delivery services, and health plans.
• Thirty-two percent of consumers give feedback directly to companies after a very bad experience and 23% give feedback after a very good experience.
• Overall, 25- to 34-year-olds are the most likely to share feedback about their experiences. After a good experience 57% tell a friend directly, 28% share on Facebook, and 18% put a comment or rating on a review site. After a bad experience, 60% tell a friend directly, 31% share on Facebook, and 20% write a review.

Download report for $195

The bottom line: Make sure to recover quickly after a bad experience

GM’s New Formula: Quality + Customer Experience

This week General Motors announced that they were combining the leadership of the Product Quality and Customer Experience organizations into a single role, a first of its kind move for the auto industry. Alicia Boler-Davis will be GM’s Vice President for Global Quality and U.S. Customer Experience and her primary focus is on strengthening the experience in order to raise customer retention, which by GM’s calculation is worth $700 million for each percentage point increase. In addition to the merging of quality and customer experience, GM’s plan includes:

• Dealership renovations so that the showroom enhances customer confidence and provides a strong first impression to car buyers
• Support experts to handle the dealer and customer training required by the growing integration of technology into vehicles
• A team to proactively handle social media monitoring and response
• New programs to empower front-line sales and service personnel to resolve issues quickly

My take:  I applaud GM’s combination of quality and customer experience. In My Manifesto: Great Customer Experience is Free, I describe customer experience in terms of total quality.

Why does this combination make sense? Quality efforts tend to focus on removing waste and building more consistent processes, but they often lack the deep external perspective of customer needs and desires. The push for removing waste can also squeeze out some important design considerations and overly focus on short-term savings versus longer-term loyalty gains. Customer experience efforts can fill in those gaps and benefit from quality approaches for process redesign and control.

In the 2012 Temkin Experience Ratings, Chevrolet – the only GM brand in our ratings – lead the auto dealer segment and was the only one to receive a “good” customer experience rating. So the big auto maker has a solid base to work with. We’ll keep an eye on Boler-Davis’ progress.

The bottom line: Quality and CX are two great tastes that taste great together

The US Auto Industry Needs More Customer Focus

Given the current struggles in the auto industry, I revisited at a post called GMs customer experience woes. It referenced an article written by HBS professor John Quelch that outlined eight reasons why GM failed as a marketer. The number one item on his list was GM’s focus on products, not customers. For regular readers of this blog, you’ll recognize that this directly conflicts with the first principle of Experience-Based Differentiation: Obsess about customer needs, not product features.

The post also referenced some data from the 2008 American Customer Satisfaction Index (ACSI). I examined the data again and developed this chart which shows how US car brands rate in terms of their customer satisfaction and the change in satisfaction levels between 2007 and 2008.

Some things pop out quickly on this chart:

• The top four brands are all foreign; and three of them are from Japan.
• The bottom five brands are all American; and three of them are from Chrysler.
• GM owns the top three US brands; and four out of the top five US brands.
• Saturn is the top US brand; and it is also the brand that improved the most since last year.
• Eleven brands improved over 2007; and only four of them were from the US.
• Seven brands declined from 2007; and six of them were from the US.

The bottom line: The US needs a more customer-centric car industry.

GM’s Customer Experience Woes

I read an interesting blog post about the leadership mistakes in the auto industry. It discusses the adversarial relationship between workers and management in the industry. There’s no surprise that the US auto makers are having such a hard time meeting consumers’ needs, given the 4th rule of customer experience: Unengaged Employees Don’t Create Engaged Customers.

According to the 2008 American Customer Satisfaction Index (ACSI), foreign car makers own the four highest customer satisfaction scores.  Interestingly, GM owns the top three US brands (Saturn, Cadillac, and Buick). So I took a closer look at the ACSI scores for all of the GM brands over the last five years:

Customer Satisfaction Of GM Brands (Data Source: The ACSI)

It turns out that Saturn is not only one of the top GM brands, but it also made the largest improvement over 2007. As a matter of fact, it was the most improved of any car brand. Even with this surge in satisfaction, GM is considering shutting down Saturn. This is just another sign that GM is out of touch with consumers. Even GM admits that it is out of touch.

In a post called How General Motors Violated Your Trust, Harvard Business School professor John Quelch outlines eight reasons why GM failed as a marketer.  The number one item on his list is: Focus on products, not customers. GM has become so out of touch with consumers that it is heading in the opposite direction of the first principle of Experience-Based Differentiation: Obsess about customer needs, not product features.

The bottom line: No company is big enough to ignore customer experience.