April 25, 2017
April 25, 2017 Leave a comment
We just published a Temkin Group report, The Four CX Core Competencies. This blueprint to building a customer-centric organization is an update to our groundbreaking research that was originally published in 2010 and updated in 2013.
Temkin Group has conducted multiple large-scale studies demonstrating that customer experience (CX) is highly correlated with loyalty across many different industries, in both business-to-consumer and business-to-business environments. When customers have a good experience with a company, they are more likely to repurchase from the company, try its new offerings, and recommend it to others.
While many companies try to improve their CX by making superficial changes, Temkin Group has found that the only path to lasting differentiation and increased loyalty is to build a customer-centric culture. Temkin Group has studied hundreds of companies to uncover the difference between CX leaders and their less successful peers, and has identified four CX competencies that companies must master if they wish to build and sustain CX differentiation:
- Purposeful Leadership: Operate consistently with a clear set of values.
- Compelling Brand Values: Deliver on your brand promises to customers.
- Employee Engagement: Align employees with the goals of the organization.
- Customer Connectedness: Infuse customer insight across the organization.
This whiteboard video describes the Four CX Core Competencies:
Here are the best practices described in the report:
April 24, 2017 Leave a comment
In a recent post, Temkin Group analyzed 10 emotions that consumers feel after completing a number of different interactions. We decided to dig deeper into one of those interactions, researching a health plan. We analyzed the emotional responses across different ages of consumers after that interaction and found that:
- Consumers who are 44-years-old or younger tend to feel happy
- Consumers who are 45-to-64 years old tend to feel frustrated
- Consumers who are 65-years-old and older tend to feel relieved
As you can see in the chart below:
- 18- to 24-year-olds: The most common emotion of the youngest consumers is happiness, and these young group are the happiest of any age level. They are also the most likely to feel appreciated (along with 35-to-44-year-olds) and angry.
- 25- to 34-year-olds: This age group is also most likely to feel happy, but are also the group that is most likely to feel excited, worried, and confused.
- 35- to 44-year-olds: This age group is also most likely to feel happy and is also the most likely (along with the youngsters) to feel appreciated.
- 45- to 54-year-olds: This age group is by far the most likely to feel frustrated and is the most frustrated of any age group. They are also the most likely to feel disappointed.
- 55- to 64-year-olds: This age group is most likely to feel frustrated and are also the age group that is least likely to feel happy or appreciated.
- 65-years-old or older: The most common emotion of the oldest consumers is feeling relieved, and they are the most relieved of any consumers. They are also the most likely to feel confident. In addition, they are the least likely to feel angry, excited, confused, or frustrated.
Why is this important? Our research shows that emotion is the largest driver of customer loyalty. So companies must not only start talking about emotion, but they also need to develop unique approaches for dealing with different emotions across their customer segments.
The bottom line: It’s time to make customer emotion a top priority.
April 20, 2017 5 Comments
We are finally seeing a movement by the general business world to seriously focus on the role and value of employees, which is why “Embracing Employee Engagement” is one of our 2017 CX Trends. Temkin Group has viewed employee engagement as a critical foundation for customer experience since our inception. It’s one of our Four CX Core Competencies.
While the trend is great, there’s still a long way to go. I’d love to see many more human resources organizations recognize that employee engagement is one of their strategic objectives (see my post, HR Execs: Wake Up To Employee Engagement!).
It’s important to understand the distinction, because only one of them is the foundation to success. So let’s look at each of them:
- Employee Experience deals with how employees enjoy their job or environment. It deals with making things fun and enjoyable. People often say things like “let’s treat the employees’ experience like we do the customers’ experience.” They think of ways to make the work place more exciting and fun, by adding things outside of work like pizza parties and gift swaps. Employee experience can be measured by questions like “how much fun do you have at work.”
- My take: This is a very nice thing to do for your employees, but it is insufficient to drive success.
- Employee Engagement deals with how committed employees are to the mission of their organization. It deals with human beings’ intrinsic needs for a sense of meaningfulness, choice, competence, and progress. People who want to affect change in this area must focus on the design of the work environment using what we call the Five I’s: Inspire, Inform, Involve, Instruct, and Incent. Employee engagement can be measured by the three questions in the Temkin Employee Engagement Index.
- My take: This is a requirement to drive long-term success.
If you want to build a high performing organization that consistently delivers great customer experience, then you need to focus on employee engagement. If you happen to improve employee experience along the way, then that’s an added bonus.
The bottom line: Focus on employee engagement, not employee experience.
P.S. Based on some great comments to this post, I want to clarify something. Improving employee experience is not a bad thing. But a company should not be focusing its energy on improving employees experience just for the sake of that improvement. The ultimate goal should be in creating an engaged workforce, not just ensuring that employees enjoy their work experience. See my post: Are You Creating Engaged or Entitled Employees?
April 18, 2017 2 Comments
Temkin Group has been doing large-scale consumer research for several years. As part of our ongoing studies, we track many consumer attitudes. To gauge the overall quality of life for the U.S. population, we created the Temkin Well-Being Index (TWBi) based on a few of those attitudinal elements.
The TWBi is based on a survey of 10,000 U.S. consumers in January. The overall index is an average of three measurements representing the percentage of U.S. adults (18 and older) who agree with these statements:
- I am typically happy
- I am healthy
- I am financially secure
We’ve been tracking it since 2012. As you can see in the figure below:
- After the TWBi reached 65.9%, the highest over the six years we’ve been tracking the metric.
- The increase of 4 %-points between 2016 and 2017 is the largest single-year increase.
- All three areas of the TWBi are at their highest levels, and increased since last year. The largest increase is in financial security, which gained 5.5 %-points between 2016 and 2017.
The bottom line: U.S. consumers are more well off this year.
April 17, 2017 Leave a comment
Amazon.com CEO Jeff Bezos recently sent a letter to shareholders sharing his view on how Amazon would avoid what he calls “Day 2,” because…
Day 2 is stasis. Followed by irrelevance. Followed by excruciating, painful decline. Followed by death. And that is why it is always Day 1.
I’ve shared the full letter below, but want to share my thoughts on Bezos’ four themes he shares for avoiding Day 2:
- True Customer Obsession: Obviously this theme completely resonates with me. I love the line… “Even when they don’t yet know it, customers want something better, and your desire to delight customers will drive you to invent on their behalf.” My take: Companies need to look for the unchartered white space, and innovate at the intersection between customers’ latent needs and emerging capabilities.
- Resist Proxies: Bezos calls out “process” and “surveys” as proxies to watch out for. Process is an issue because it can reinforce compliance and complacency, instead of empowering individuals to drive innovation. Surveys are an issue, because they can provide employees with a superficial understanding of customers. Deep insights into what people like, love, and dream about aren’t fully answered with percentage points. My take: You need to create deep customer empathy, not just statistically significant charts and metrics. Find ways to include more qualitative research.
- Embrace External Trends: Amazon will likely be more adept at grabbing the “tailwinds” of trends than most companies, but it’s critical for all leadership teams to keep an eye on how the world is changing. That’s why we issue our annual listing of CX trends. I was also very intrigued by Bezos’ discussion about easy access to Amazon’s “deep learning frameworks.” An API that taps into Amazon’s rich analytics backbone could be much more exciting than even IBM’s Watson. My take: Every organization should identify a set of key trends and ask the question: “How will these put us out of business or help us to create even more value to customers?”
- High-Velocity Decision Making. Bezos discusses three elements of his leadership philosophy. First of all, treat many decisions as reversible, so that you are creating an option — not just putting all your chips on a single approach. Second, is to get comfortable with making decisions without full information. Thirdly, he talks about “disagree and commit” which means that everyone needs to get in line when a decision has been made. Finally, he wants true misalignment to be identified and dealt with immediately. Nothing kills a culture more than lingering, unaddressed issues. My take: It’s smarter to get moving and learn along the way (see my post Modernize Leadership: Learn and Adjust).
The bottom line: Every leadership team should proactively avoid Day 2.
April 12, 2017 9 Comments
As if flying isn’t enough of a hassle, United Airlines has made every passenger in every flight around the world a little more uncomfortable in their seats until the plane is in the air.
Unless you’ve been hibernating from all media feeds, you’ve likely seen the video of a passenger being forcibly removed from a United Airlines flight. It’s almost frightening to watch, as the passenger is being yanked out of his chair. Here’s a very simplified recap of what happened:
- United needed to make room on a full plane for some of its employees.
- Not enough of the passengers agreed to take United’s offers to give up their seats to accommodate the United employees.
- United “randomly” (they applied a set of internal rules, I think) selected a passenger to remove from the flight.
- The selected passenger, who had paid for his flight and was sitting on the plane, did not want to give up his seat.
- Security agents yanked the passenger out of his seat and violently dragged him out of the plane.
- United CEO Oscar Muñoz issues statement describing the incident as “re-accommodating” passengers and seeming to provide some justification for the incident.
My take: There’s no excuse for this. None. There’s no grey zone, no “maybe’s,” no alternative interpretations. Even if United had the “legal right” to force this passenger from the plane, it was still wrong. If you can’t entice a passenger to get off the plane to make room for one of your employees, then you need to add more to your offer, or you “re-accommodate” your employees.
If customers can’t trust a company to deliver the products or services that they purchase, then the company’s brand has no value. This is the minimum requirement for any brand.
Here’s some of my advice for Mr. Muñoz:
- Adjust the way you react to situations so that your first reaction to any situation is to show empathy and compassion for your customers.
- Make a commitment to customers, and make it clear to everyone in your organization, that paid passengers who don’t want to give up their seats will never be forced to give up their seats.
- Make it clear to customers, employees, investors, analysts, and anyone who cares to listen that this is unacceptable behavior and that you are taking personal accountability for this issue. Learn how to master our C.A.R.E.S. model for service recovery.
- Acknowledge that you have a systemic problem… with your customers and employees. Would this ever happen at Southwest Airlines? United Airlines ranked 224th out of 331 companies in the 2017 Temkin Experience Ratings and its rating is likely dropping by the minute.
- Fix your problems… United needs to make improvements across what we call the Four CX Core Competencies: Purposeful Leadership, Compelling Brand Values, Employee Engagement, and Customer Connectedness.
The bottom line: United and Mr.Muñoz need to take decisive action.
April 12, 2017 Leave a comment
We just published a Temkin Group report, Humanizing Digital Interactions.
Emotions play an integral role in how customers make decisions and form judgments. This means that how a customer feels about an interaction with a company has an enormous impact on his or her loyalty to that company. However, companies tend to ignore customer emotions, especially during digital interactions, which is problematic as customers are increasingly interacting with companies online. This report focuses on humanizing digital interactions by replicating the elements of strong human conversations.
Here are some highlights:
- We developed The Human Conversational Model, which is made up of seven elements – Intent Decoding, Contextual Framing, Empathetic Agility, Supportive Feedback, Basic Manners, Self-Awareness, and Emotional Reflection.
- We share over 35 examples of best practices from companies that are designing digital experiences across the seven elements of The Human Conversational Model.
- We demonstrate how you could apply The Human Conversational Model to three types of digital activities: opening a new bank account online, purchasing a pair of shoes through an app, and getting technical support online.
A gratifying conversation requires two processes:
- Cooperative Interface. Each participant is required to collaborate with her partner to achieve the shared goal of the conversation – be that casually catching up, gathering information, sharing knowledge, etc. This is the part of the model that a conversational partner sees and responds to, and it consists of five elements: contextual framing, intent decoding, empathetic agility, supportive feedback, and basic manners.
- Background Mindfulness. This portion of the model is not observable within what would normally be considered the scope of the conservation as it pertains to what happens internally within person. Each participant has a pre-existing notion of who he is as an individual (self-awareness) and throughout the course of the conversation, learns about how he affects other people (emotional reflection). Though not directly observable, “background mindfulness” informs the way in which each participant communicates with his current and future partners.
Here’s an overview of the Human Conversation Model along with best practices we highlight in the report:
April 9, 2017 Leave a comment
After a great trip last year, Temkin Group is coming back to Australia. Do you want to see us while we’re there? Here are some opportunities:
- Melbourne, 19-20 June: Conference: Customer Experience Tech Fest
Join me at this exciting conference where I will deliver keynote addresses on CX trends and customer-centric culture. I’m looking forward to the entire event and hearing the other great speakers, as the agenda looks fantastic.
- Melbourne, 21 June: Temkin Group Bootcamp: CX Leadership (AU$1495)
Register for this unique learning opportunity. During this intensive one-day workshop, attendees will gain the knowledge and tools to transform their organization’s customer experience.
- On-Site Training and Consulting: We have some limited availability to work with companies beyond these times, so send us a note (email@example.com) if you’re interested in us helping your CX efforts. Some good ways to leverage our visit is to have an interactive discussion with your leadership team, deliver an educational speech, or review your CX plans. We can even deliver an in-house workshop.
We’re looking forward to seeing our Australian friends again in June!
April 6, 2017 Leave a comment
Someone recently raised the question: Why do companies need a chief customer officer… isn’t that the job of the CEO?
Versions of that question have been around since the role started to become popular more than five years ago. It’s a fair question, since organizations can’t just keep adding new “Chief <Fill In The Blank> Officers” to their executive teams.
It turns out that the answer is not a simple “yes” or “no.” Here’s a decision tree that a CEO can use to decide if they should create a CCO role:
My view on this question is the same as it has been for many years, the position makes sense in the right environment. Rather than creating something new, I’m sharing a post from 2012 that still holds true: Timeless Advice About Chief Customer Officers…
It seems like there’s been a pickup of interest in the title of “Chief Customer Officer.” I’ve “studied” this role for a while and have worked with dozens of these execs (they often have a different “title”). Here’s my advice for companies that are considering this role that I published in the post: Chief Customer Officer: To Do, Or Not To Do?
There’s a question that I’ve heard a lot that seems to stir up some debate: Do firms need a Chief Customer Officer? Well, I’ve run into zealots on both sides of the argument.
Those who say “absolutely yes” are convinced that companies can’t change without a senior executive who “owns” customer relationships, someone who can bring senior executive visibility to all of a company’s customer-facing efforts. The argument is compelling — customers are certainly important enough to deserve a dedicated executive.
Those that say “absolutely not” are convinced that companies can’t just fix the problem by creating a new executive position. They believe that this ends up being a superficial move — like putting lipstick on a pig. The argument is compelling — people often call for a new executive whenever they don’t know what else to do.
It’s an interesting dilemma when both sides of an argument are compelling. My position on this question is equally dogmatic: Absolutely yes and absolutely no.
To understand my position, let’s start by shifting the question a bit. Instead of asking whether or not you need a person with the specific title of “Chief Customer Officer” let’s ask whether or not you need an executive in charge of a concerted effort to improve customer experience across the enterprise. If a company is truly committed to improving their customer experience, then an executive in charge of that change process will be very important. That person (who may or may not be called “Chief Customer Officer”) can lead a host of efforts like the establishing customer experience metrics and developing of a voice of the customer program.
But this type of position only makes sense if the CEO is truly committed to a significant change and will hold the entire executive team (not just the new executive) accountable for results. If the plan is to make the new executive responsible for “owning” the customer experience, then don’t create this position — it will only provide a handy scapegoat for executives who don’t make the required changes in their organizations.
While we’re on the topic of leading customer experience change, I’ll also point to another post: Corporate Customer Experience Groups; To Do Or Not To Do? Here’s what I discussed in that post:
Transformation isn’t easy. There’s a very strong need for a centralized group when companies are in a transformational mode, making changes that cut across the entire organization. This type of effort can’t be done without centralized support and facilitation. But companies that invest in centralized groups before the organization is committed to the journey are likely to either 1) completely offload responsibility for customer experience to these groups; or 2) stifle these groups through internal politics. In either case, they are likely to fail.
While these groups are important in some phases, they should never “take over” customer experience activities. Instead, they should facilitate and support transformational activities across the organization. In my research, I defined the following 8 categories of activities that these centralized customer experience organizations work on:
- Customer insight management. Develop and support a voice of the customer program.
- Customer experience measurement. Create and track key customer experience metrics and related management dashboards.
- Employee communications. Make sure that employees are informed and engaged in the efforts.
- Process improvement. Help the organization map interactions from the customer’s point of view and then redesign broken processes.
- Customer advocacy. Make sure that customers’ needs are taken into account in all key decisions.
- Culture and training. Actively work on cultural change and identify training required along the way.
- Issue resolution management. Establish and support the process for solving customer issues that get escalated.
- Cross-organizational coordination. Support the cross-functional teams and processes that govern the customer experience efforts.
The bottom line: Chief Customer Officers can be valuable in the right environments.
April 3, 2017 Leave a comment
The UK Temkin Experience Ratings is a cross-industry, open-standard benchmark of customer experience. To generate these scores, we asked 5,000 UK consumers to rate their recent interactions with 157 companies across 16 industries and then evaluated their experiences across three dimensions: success, effort, and emotion.
Here are some highlights from the research:
- Co-op, M&S Food, and Lidl earned highest overall ratings, while Audi, BMW, and Flybe earned the lowest.
- When we compared company ratings with their industry averages, we found that Saga, Premier Inn, Vauxhall, and Volkswagen most outperformed their peers, while Audi and Bank of Scotland fell well below their competitors.
- Take a look at a listing of all 157 companies.
Download report and dataset for $295
(Report includes an Excel file with data for all 157 companies.
Download sample dataset to see what’s included)
Here are the top and bottom companies and the industry averages in the 2017 Temkin Experience Ratings, UK:
Download report and dataset for $295
(Report includes an Excel file with data for all 157 companies.
Download sample dataset to see what’s included)