Barnes & Noble, Kohl’s, and Marriott Top Customer Service Ratings

In a new report called Rating Customer Service Experiences, 2010, I analyzed how 4,600+ US consumers rated their customer service experiences with 92 large companies across 14 industries. Led by Barnes & Noble, Kohl’s, and Marriott, 24 companies received a Net Satisfaction Score* of 80% or higher.

At the other end of the spectrum, 10 firms had Net Satisfaction Scores below 50%: Charter Communications, Comcast, Washington Mutual, United Healthcare, Aetna, Citigroup, AOL, HSBC, Bank of America, and Capital One.

The absolute scores tell only a part of the story. We also compared the customer service rating for each company with the average for its industry. It turns out that credit unions, Kaiser, and Apple led 25 firms that were five or more percentage points above their peers.

At the other end of the spectrum, 11 firms fell more than 10 percentage points below their industry average: Washington Mutual, Charter Communications, Bank of America, Citigroup, HSBC, United Healthcare, JP Morgan Chase, Aetna, Capital One, United Airlines, and Office Depot.

I also examined the ratings given by different generations of consumers. In 10 of the 14 industries, Seniors were the most satisfied with customer service. For nine of the industries, Gen Y were the least satisfied.

*Net Satisfaction Score: We asked consumers to rate their customer service experiences on a 5-point satisfaction scale. To create the Net Satisfaction Score, we took the percentage of consumers who gave the company a “4” or “5” and subtracted the percentage of consumers that gave the company a “1” or “2.”

The bottom line: Focus on customer service in 2010.

It’s Time For Text Analytics

After my previous post about Goofy, I feel the need to get a bit more serious about text analytics. This is a capability that ALL large organizations will need to deploy within the next couple of years.

At the Clarabridge event this week, I got to spend time with many executives from large companies that were thrilled with the results from their text analytics efforts. While most companies were still in relatively early stages of their deployments, the ROI of their efforts were already compelling. The business results for using text analytics came from areas like:

  • Reducing warranty costs by spotting quality issues much faster
  • Identifying underperforming franchisees that need training
  • Cutting operational costs of manually categorizing customer comments
  • Quickly identifying the impact and severity of service issues
  • Understanding “why” metrics like NPS are going up or down

I was also able to see Clarabridge’s new product release which improves on the product’s linguistics, usability, and reporting (including a cool integration of Google’s motion chart gadget). But I don’t want this to sound like a Clarabridge advertisement. There are other vendors like Attensity and Overtone that also provide excellent text analytics offerings.

These vendors are making it easier than ever to extract huge value from previously ignored unstructured text. That’s why my #1 trend in Voice Of The Customer (VoC) programs is “Tapping into unstructured and unsolicited feedback” which I show like this:

vocdomain_vsmall1

Businesses are full of unstructured text like customer comments on surveys, notes and verbatims from contact center conversations, inbound emails, online chats, social media sites, customer feedback comments, etc. This information represents immense untapped value that I expect companies to start unlocking.

The bottom line: What’s your plan for text analytics?

My Text Analytics Panel Got All Goofy

What happens when you mix together a panel discussion on text analytics with Goofy? Here’s the answer…

Yesterday was a busy day at the Clarabridge user group meeting in Orlando (at the Disney Yacht Club). I started the morning giving the keynote speech and ended the day by moderating a panel called “Introducing your CFO to your Customer – Lessons Learned in CEM Funding.” (Believe it or not, that’s actually an interesting topic :-))

As you can see in the video, Goofy walked in on us as the panel was coming to an end. I knew it was going to happen (thanks Keri), but the attendees and panelists didn’t know he was coming. It turned out to be a very appropriate ending to the first day of an event at Disney!

The bottom line: It’s okay to add some Goofyness to a business meeting.

Starbucks Brews A Comeback With Purpose

Starbucks recently announced excellent results for Q4 2009. Earnings more than tripled and it posted its first quarterly same-store-sales gain in two years, up 4%. Here’s what CEO Howard Schultz said about the results:

I am pleased to report continued progress in our efforts to transform Starbucks and return the company to sustainable, profitable growth while at the same time [remaining] true to our core values and guiding principles

How does Schultz explain the turnaround?

We lost our way. We went back to start-up mode, hand-to-hand combat every day. And with the kind of discussion and focus that probably we had not had as a company since the early days — the fear of failure, the hunger to win.

My take: Starbucks’ turnaround was not accidental. It came from a multi-year effort to rediscover the essence of the company’s brand.

Nearly two years ago I wrote that Starbucks had lost its soul. That’s why Schultz returned to his role as CEO in January 2008. Shortly after his return, Shultz took the unprecedented action of closing 7,100 stores for three hours to “retrain” employees on the Starbucks experience.

Unfortunately, many companies go through this loss of identity when their initial leaders move on. The new executive team often lacks the same clarity and unrelenting commitment to a clear mission.

Shultz said many years ago:  “Customers must recognize that you stand for something.” That sense of purpose was key to Starbucks’ initial expansion as well as its recent recovery. It’s also a great example of what I call Purposeful Leadership, which is one of the four key ingredients of great organizations.

The bottom line: Does your organization have enough purpose?

Credit Unions And SunTrust Lead Banks In Customer Experience

Forrester’s 2010 Customer Experience Index (CxPi) ranks 133 firms across 14 industries. I recently published the bank analysis which examines the 13 banks in the CxPi. Here are the overall results:

As a group, the banks were in the middle of the pack of industries with an “okay” average rating of 66%. But banks had the largest drop of any industry, down five percentage points from the 2008 CxPi. Here are some insights from looking at the banking results:

  • The best bank customer experience. Credit unions and SunTrust Bank up well above the other 11 banks on the list.
  • The worst bank customer experience. At the bottom of the list, three banks ended up with “very poor” ratings: Washington Mutual, Bank of America, and Capital One.
  • Most banks declined. Of the 11 banks that were also ranked in 2008, only three of them improved: SunTrust Bank, Wachovia, and U.S. Bancorp. Going in the other direction, Bank of America, Washington Mutual, and Wells Fargo had double-digit declines.
  • Capital One and Bank Of America and Citibank aren’t enjoyable. The CxPi has three underlying components: 1) meeting needs, 2) being easy to work with, and 3) enjoyability. Three banks tied for the bottom of the “enjoyability” ratings: Bank of America, Capital One, and Citibank.

The bottom line: Banks headed in the wrong direction in 2009

Four Leadership Lessons From Leno Blunder

The Jay Leno experiment didn’t last long. While NBC executives tried to fill a prime time hour with Jay Leno instead of more expensive programming, local affiliates couldn’t deal with the ratings decline and the resulting loss in viewers for their lucrative late night news shows.

Many of the reports are calling this a blunder by NBC, but Mark Cuban has an interesting alternative viewpoint:

What Zucker and NBC did was the EXACT RIGHT MOVE… In today’s corporate world, if you don’t take the risks, you don’t get skewered on blogs, on cable news, in the newspaper. Public condemnation appears to be a far worse consequence than financial success is a reward. Thats a huge problem for our country. 

My take: I’m not a TV programming expert by any means, but there are some interesting lessons in leadership that we can learn from this situation:

  • Innovation requires embracing failure. I agree with the general direction of Cuban’s comments; if you want to have innovation, then you need to deal with some failures. If you react too harshly when people fail, then they will be much less likely to take any risks in the future. With all of the change in technology, the TV industry certainly needs some more innovation. 
  • Don’t expect to get it right the first time. The Leno show was setup as if it was going to be perfect from the outset. Why else would you take over 5 nights of programming all at once?!? With that type of schedule, there was no time for the production staff to learn what worked and didn’t work and make mid-course corrections. If the network had factored learning and improving into the equation, they may have started with Leno on a 2-night schedule.
  • For every action, there’s a reaction. When we remodeled our house a few years ago, we wanted to move a window. Our contractor, who always said “for every action, there’s a reaction” thought about it for a little while and ultimately showed us how ugly it would have looked from the outside. So we didn’t make the change. Given that NBC execs expected ratings were going to go down during prime time, they should have better anticipated (and proactively dealt with) push-back from the affiliates. 
  • People love a juicy failure. There aren’t many jokes on talk shows or skits on Saturday Night Live when something succeeds. But when there’s a perceived failure of any kind (like The Leno Show at 10 PM), the comedians come out of the woodwork. That’s why leaders need to have thick skin, keep from getting defensive, and have a good sense of humor.

The bottom line: For some reason, I feel like ending this post with an unrelated joke from Johnny Carson:

If life was fair, Elvis would be alive and all the impersonators would be dead.

Don’t Listen To Customers, Understand Them

There’s an interesting article in BusinessWeek about how innovation requires executives to periodically step back from three things: “decision attitudes,” “users,” and “your assumptions.” I really like this quote from Sir Denys Lasdun, the English architect, saying that the architect’s job is to give a client:

Not what he wants but what he never dreamed that he wanted; and when he gets it, he recognizes it as something he wanted all the time.

My take: In a previous post, I discussed the power of an approach called “deliberation without attention.” The idea is similar; step back and let your mind process information in a different way. It’s particularly valuable technique for complex situations. Executives definitely need to learn when to step back and reassess a situation or a decision.

While stepping back from “decision attitudes” and “your assumptions” makes intuitive sense, the idea of stepping back from “users” may seem to conflict with customer-centric behavior. But it really doesn’t.

Breakthrough innovations often address needs that customers can’t articulate with solutions that customers can’t imagine. So customers feedback can not be used to define the requirements. Does this mean that innovation is devoid of customers? No!

Instead of looking at direct responses to questions, breakthrough innovations often require a different type of customer input: Observation. Companies need to understand the core needs and desires of target customers through ethnographic techniques and through observations about larger trends in society (like the rise in social networking) to extrapolate (and hypothesize) what type of offering may “click” with those customers.

Customer feedback plays a very important role in fine-tuning the offering. Once prototypes of the solutions exist, companies need to observe (not just survey) how target customers use them. Keep in mind that customers’ first reaction to those offerings may not be nearly as important as their feelings after using them for a while.

The bottom line: Breakthrough innovations require understanding customers, not listening to them.

Barnes & Noble Leads Retailers In Customer Experience

My research plan for Forrester’s 2010 Customer Experience Index (CxPi) includes an analysis of all 14 industries in the rankings. I recently published the retail analysis which examines the 25 retailers (out of 133 total companies) in the CxPi. Here are the overall results: 

As a group, the retailers did quite well; grabbing 12 out of the top 20 spots in the rankings. Retailers also showed a modest improvement over the 2008 CxPi. Here are some insights from looking at the retail results:

  • The best retail customer experience. At the top of the list, 7 retailers ended up with “excellent” ratings: Barnes & Noble, Amazon.com, Kohl’s, JCPenney, Macy’s, BJs Wholesale Club, and Costco Wholesale.
  • The worst retail customer experience. At the bottom of the list, 2 retailers ended up with “okay” ratings: Office Depot and Marshalls.
  • Best Buy & Macy’s got better. When we compared the 2010 results with those of the 2008 CxPi, we found that nine retailers improved. Best Buy and Macy’s made the largest gains. Going in the other direction, Toys “R” Us, Old Navy, Borders, and Staples had the largest declines.
  • Wal-Mart and  Office Depot aren’t enjoyable. The CxPi contains three underlying components: 1) meeting needs, 2) being easy to work with, and 3) enjoyability. There were only 2 ratings that fell below “okay” in any of those three areas: Both Wal-Mart and Office Depot received “poor” ratings for “enjoyability.”
  • iTunes is most difficult to work with. 24 of the retailers received “good” or “excellent” ratings in the second area, being easy to work with. The lone exception: Apple iTunes received only an “okay” rating.

The bottom line: Retailers are good, but not great in customer experience

Forrester’s 2010 Customer Experience Rankings

This is our third year publishing the CxPi. The 2007 CxPi and the 2008 CxPi rankings were published in Q4. We decided to publish this year’s CxPi in Q1 2010, so we don’t have a 2009 CxPi.

The 2010 CxPi ranks 133 organizations across 14 industries: Airlines, Banks, Credit Card Providers, Health Plans, Hotels, Insurance Firms, Internet Service Providers, Investment Firms, Parcel Shipping Services (new this year), PC Manufacturers, Retailers, TV Service Providers, Utilities (new this year), and Wireless Carriers.

The CxPi is based on consumer evaluations during November 2009 across three areas: 1) meeting needs; 2) being easy to work with; and 3) enjoyability (see the methodology section below).

Here are the full 2010 CxPi rankings

Barnes & Noble took the top spot in the CxPi rankings for the second year in a row. Marriot Hotels, Hampton Inn, Amazon.com, and Holiday Inn Express round out the top 5. At the other end of the spectrum, Charter Communications landed at the bottom of the CxPi rankings for the third year in a row. Here are some additional insights about the overall results:

  • Retailers take 12 out of the top 20 spots. Most of the top rated companies on the list are retailers. Hotels also grabbed three of the top 20 spots. Interestingly, three financial services firms also cracked the top 20: credit unions, SunTrust Bank, and Vanguard.
  • Healthcare, Internet and TV services dominate the bottom. The bottom 11 companies on the list came from only four industries: five health insurance plans (United Healthcare, Medicaid, Anthem, and CIGNA), three ISPs (Charter Communications, Comcast, and Qwest), two TV service providers (Charter Communications and Comcast), and one credit card provider (HSBC).
  • There was very little excellence. Only 13 firms ended up with an “excellent,” and 35 received a “good” rating. 40 companies fell in the middle with “okay” ratings. At the bottom of the list, 45 received either a “poor” or “very poor” rating.
  • Liberty Mutual improved the most. When we compared firms’ 2010 CxPi with last year’s results, we found that 22 companies had improved by at least five percentage points. Led by Liberty Mutual’s 15 percentage point increase, five firms even had double-digit improvements (Comfort Inn, Sprint, and Time Warner Cable).

CxPi Results Across Industries

We also looked at the overall results for the 14 industries included in the CxPi.

Read more of this post

Setting Your 2010 Customer Experience Agenda

Hopefully, some of my customer experience resolutions will make it on on to your 2010 agenda. If so, here are a few posts that should help:

  • Areas to focus on in 2010:
  • 7 Keys To Customer Experience In 2010, Part 2
  • Rate Your Customer Experience Skills With The EBD Self-Test
  • Fundamentals of customer experience:
  • Free Book: The 6 Laws Of Customer Experience
  • My Manifesto: Great Customer Experience is Free
  • What The Heck Is Customer Experience?
  • Blueprint for customer experience excellence:
  • Experience-Based Differentiation 
  • Phases of customer experience maturity
  • The Customer Experience Journey 
  • The ROI of customer experience:
  • Customer Experience Boosts Revenue 
  • Embracing the voice of the customer:
  • 16 Voice Of The Customer Recommendations
  • Six Trends Reshape Voice Of The Customer 
  • Building a customer-centric culture:
  • 6 C’s Of Customer-Centric DNA
  • Management Imperative #1: Invest In Culture As A Corporate Asset
  • Capitalizing on customer service:
  • Five Wishes For Customer Service In 2010
  • Customer Service Attracts Loyal Customers
  • With Customer Service, CARES Beats ACES
  • Using centralized customer experience groups:
  • Corporate Customer Experience Groups; To Do Or Not To Do?
  • Chief Customer Officer: To Do, Or Not To Do? 
  • Developing executive commitment:
  • The 8 Signs Of Executive Commitment
  • Free Book: The 6 New Management Imperatives
  • The bottom line: Good luck with customer experience in 2010!

    Ten Customer Experience Resolutions For 2010

    Keeping up the tradition from 2008 and 2009, I’m providing customer experience resolutions for the new year. This proverb sets the right tone:  

    The best time to plant a tree is twenty years ago. The second best time is now.

    While most executives think customer experience is important, many companies haven’t treated it strategically. That lack of attention will become a serious competitive problem as more companies expand their efforts.

    With that in mind, here are 10 New Year’s resolutions that your company should consider making about its customer experience efforts (some are carry-overs from last year)…

    1. We shall put in place a robust voice of the customer program
    2. We shall stop playing with social media and put it to good use
    3. We shall treat customer service as a loyalty-driver, not a cost center
    4. We shall go beyond just fixing problems and inspire brand promoters
    5. We shall establish clarity in our brand, internally and externally
    6. We shall identify a senior executive to lead the transformation effort
    7. We shall help new customers get value from us faster and easier
    8. We shall improve the usability of all self-service interactions
    9. We shall communicate more clearly with customers across all channels
    10. We shall make our culture more customer-centric

    The bottom line: Put customer experience on the top of your 2010 agenda!

    What People Read (Of My Stuff) In 2009

    Happy New Year (xin nian kuai le, gelukkig Nieuwjaar, bonne année, ein gutes neues Jahr, shana tova, buon anno, feliz ano novo, feliz año nuevo, etc.)!

    Before I turn my focus completely on 2010, I want to take a moment to look back at 2009.

    In Q4, I was Forrester’s most-read analyst — for the 12th consecutive quarter. Over the year, I ended up with 45% more readership than the next analyst on the list. It’s clear that customer experience remains a critical topic for executives within large organizations!

    Let’s look at what people are reading. As P. L. Travers said:

    A writer is, after all, only half his book. The other half is the reader and from the reader the writer learns. 

    Here are my 15 most-read research reports in 2009 (and publication dates): 

    1. The State Of Customer Experience, 2009 (4/09)
    2. Voice Of The Customer: The Next Generation (2/09)
    3. The Customer Experience Journey (9/08)
    4. Customer Experience Correlates To Loyalty (2/09)
    5. The Experiences That Satisfy Consumers, 2009 (4/09)
    6. The Customer Experience Index, 2008  (12/08)
    7. Customer Experience Boosts Revenue (6/09)
    8. Customer Experience And Loyalty: A Closer Look (3/09)
    9. Engage Gen Y Online With Social Interactivity (6/09)
    10. Obstacles To Customer Experience Success, 2009 (2/09)
    11. How Customer Experience Drives Word Of Mouth (5/09)
    12. Experience-Based Differentiation (1/07)
    13. Customer Experience Index 2008 Snapshot: Retail (2/09)
    14. The Customer Experience Generation Gap (9/09)
    15. Customer Experience Index 2008 Snapshot: Banks (12/09)

    Here are my 15 most-read blog posts in 2009 (and publication dates):

    1. Free Book: The 6 Laws Of Customer Experience (7/08)
    2. Forrester’s 2008 Customer Experience Rankings (12/08)
    3. LEGO’s Building Block For Good Experience (3/09)
    4. Free Book: The 6 New Management Imperatives (2/09)
    5. Apple Beats Windows In Customer Experience (4/09)
    6. Experience-Based Differentiation (6/07)
    7. Customer Experience Correlates To Loyalty (2/09)
    8. The Customer Experience Journey (9/08)
    9. Customer Experience Boosts Revenue (6/09)
    10. Six Trends Reshape Voice Of The Customer (3/09)
    11. Discussing Zappos’ Culture With Tony Hsieh (5/08)
    12. Don’t Confuse Customer Service With Customer Experience (2/09)
    13. Are you listening to the voice of the customer? (7/07)
    14. My Manifesto: Great Customer Experience is Free (9/07)
    15. Five Disruptive Customer Experience Strategies (7/07)

    The bottom line: I hope that 2010 is a happy, healthy, and customer-centric year for you!

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