Why it is important to keep your customers happy
Forrester Customer Experience Index If I look on the bright side, it's fair to say that not all companies are going to be the next Kodak, although they will have to pay close attention to their customer's needs, no doubt.
This morning I came across a post by Forrester's Megan Burns, who provides a synopsis of the company's latest customer research, one that measures sentiment around customer experience quality when consumers interact with brands.
It is only a synopsis, (the full research paper is available for download via the link below for $499.00,) but the two obvious takeaways are - customer's expectations when interacting with brands are much higher these days and that puts pressure on brands to excel, not just be 'okay.' And of course, the web is the mouthpiece for those customers who feel let down by a brand. Nothing new there.
Today we published Forrester’s Customer Experience Index, 2012 (CXi). It’s our fifth annual benchmark of customer experience quality as judged by the only people whose opinion matters –customers. The CXi is based on research conducted at the end of 2011 and reflects how consumers perceived their experiences with 160 brands across 13 industries.
For those new to the index, let me explain how it works. The process has three steps:
We ask more than 7,600 consumers to identify companies they do business with in 13 different industries.
We ask them to tell us how well each firm met their needs, how easy the firm was to work with, and how enjoyable it was to work with. We ask these questions at the brand level to get a sense of their overall experience with the company regardless of channel.
For all three questions, we calculate each firm’s CXi score by subtracting the percentage of its customers who reported a bad experience from the percentage who reported a good experience. The overall CXi is an average of those three results.
So what did this year’s results tell us? They told us:
Which companies are delivering great customer experiences. Congratulations to the four companies that earned an “excellent” score (85 points or more) this year: USAA (bank), Kohl’s, Amazon, and Costco! Interestingly, there was a steep drop in the percentage of companies who earned “excellent” scores this year: only 3% of brands made the cut in 2012 compared to 6% last year. And when we look back over the past five years we see that the excellent ranks have been steadily declining even as the number of brands in the survey has gone up over time.
Which companies are delivering not-so-great experiences. Across the board we still see customer experience ranging from “okay” to “very poor” for almost two-thirds of the brands in our study. We place the cut-off point between “okay” and “good” at 75 points on our 100-point scale. This year, 64% of the brands in our report didn’t make it over that 75-point mark.
Which companies are getting better. Five brands raised their 2012 CXi scores by 10 points or more over last year, led by a whopping 17 point increase from Wyndham Hotels and Resorts. This year’s top movers included a few health insurance plans and TV service providers, industries that typically fare very poorly in our study. So to those out there who think some industries will never be capable of delivering useful, easy, and enjoyable experiences – I say think again.
What does all this mean? I take away three things:
Customers’ expectations of their experiences are getting higher. They’re accustomed to more options, greater control, and a worldwide platform to tell others what they think about the way brands treat them. What brands in one industry do affects what people expect from other industries, raising the bar for everyone at lightning speed.
Parity is a moving target. Companies hoping to differentiate on the basis of customer experience (and there are a lot of them!) will have to work even harder just to catch up to the leaders in their industry.
Case in point: the gap between the high and low scoring bank in our study grew by 10 points this year, in part because USAA widened its lead in this category by 6 points in a single year.
No one can afford to be complacent when it comes to customer experience. While many scores rose this year, many also fell. Perennial leader Barnes & Noble dropped 7 points in one year, and was one of 23 brands whose scores fell by 5 points or more since 2011.