Report: ROI of Customer Experience, 2018

ROI of Customer Experience (CX), 2018We just published a Temkin Group report, ROI of Customer Experience, 2018. Here’s the executive summary:

To understand the connection between customer experience (CX) and loyalty, we examined feedback from 10,000 U.S. consumers describing both their experiences with and their loyalty to different companies. The CX scores used in this model come from the 2018 Temkin Experience Ratings (TxR), which evaluated 318 companies across 20 industries. Our analysis shows that:

  • The correlation between CX and repurchasing is very high (R= 0.82).
  • There’s a 21-point difference in Net Promoter Score between consumers who’ve had a very good experience with a company and those who’ve had a very poor experience.
  • CX is made up of three components – success, effort, and emotion. While all three elements impact customer loyalty, an improvement in emotion drives the most significant increase in loyalty.
  • We built a model to estimate how a modest improvement in CX would impact the revenue of a typical $1 billion company across in 20 industries. On average, companies can gain $775 million over three years. Software companies stand to earn the most ($1 billion over three years), while utilities stand to earn the least ($476 million over three years).
  • The report contains data charts showing how loyalty levels change based on customer experience across 20 industries.
  • We also describe a five-step process for calculating the ROI of CX for your organization.

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ROI of Customer Experience (CX), 2018

Here are two of the 14 graphics in the report:

Correlation between customer experience (CX) improvement and future purchase intentionsRevenue increase from improvement in customer experience (CX)

Download report for $195+ROI of Customer Experience (CX), 2018

CX Myth #2: You Need A 360-Degree View of Customers

CX Myths: Debunking Misleading Beliefs About Customer Experience

Many common beliefs about customer experience are misguided, based on oversimplifications or a lack of consideration for real-world constraints. In this series of posts, we debunk these myths.


CX Myth #2: You Need A 360-Degree View of Customers

What’s Wrong: If companies had an unlimited set of resources to plow into their customer insights efforts and an equally unlimited number of people prepared to take action on those insights, then shooting for a 360-degree view of your customers would be viable. But this is not the case for most organizations. So striving to understand everything about every customer (360-degree view) pushes organizations to over-invest in data and squeezes out the critical focus on taking action on the insights.

What’s Right: Organizations need to focus their insights efforts in areas where they are prepared to take action. Rather than aiming for a 360-degree view of all customers, organizations would be better served with a more targeted approach, focusing their insights investments on understanding key customer groups during specific parts of their journeys.

What You Should Do:

  • Separate the notions of Detect and Diagnose, which are two parts of the Six D’s of a Voice of the Customer Program. You can track the high-level feedback from a large number of customers (“Detect”) and then use those insights to identify areas where you should dig deeper to drive action (“Diagnose”).
  • Identify the actions that your organization is prepared or willing to take based on customer insights. This includes items across all four action loops: immediate response, corrective action, continuous improvement, and strategic change.
  • Define the target customers that you need to understand in order to support actions. This should include the type of customers and the specific stages of their journey that you’re most interested in understanding.
  • Make it as easy as possible for people across your organization to use the insights. Tailor the information to the specific ways that people in your organization make decisions. Minimize the requirement for non-analyst users to interpret and manipulate the data to uncover actionable insights.
  • Whenever you’re presenting customer insights, try not spend more than 20% of the time discussing data. Use the majority of the time talking about what the data means,  implications, opportunities for improvement, and next steps.
  • Help stakeholders across your organization understand new and more impactful ways that they can use customer insights to drive action. They may not immediately understand how to best use insights, so you may need to help them evolve through seven stages to a data-centric mindset.

The bottom line: Focus on developing the most actionable insights.

Republicans & Trump Fans Have Highest Level Of Well-Being

Temkin Group has been using the Temkin Well-Being Index (TWBi) since 2012 to track the overall quality of life for U.S. consumers. 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 adults (18 and older) who agree with these statements:

  • I am typically happy
  • I am healthy
  • I am financially secure

In our Q1 2018 survey, we also asked questions about consumers’ political views. So we thought it would be interesting to examine TWBi based on answers to the following questions:

  • Which of the following best describes your political preference?
  • How would you rate President Trump’s performance so far as president?

As you can see in the chart below, staunch republicans and fans of President Trump have the highest TWBi.

Temkin Well-Being Index (TWBi) By Political Leanings

Propelling Experience Design (Infographic)

In the report Propelling Experience Design Across An Organization, we examine how companies can best use a very important skill, experience design. This infographic provides an overview.

Here are links to download different versions of the infographic:

Here are some of the reports with data included in the infographic:

CX Myth #1: The Customer Is Always Right

CX Myths: Debunking Misleading Beliefs About Customer Experience

Many common beliefs about customer experience are misguided, based on oversimplifications or a lack of consideration for real-world constraints. In this series of posts, we debunk these myths.


CX Myth #1: The Customer Is Always Right

What’s Wrong: Like all human beings, customers aren’t always right. They sometimes complain when the company did nothing wrong, request things that the company can not or should not provide, and periodically just make mistakes.

What’s Right: Customers are not always right, but they always deserve the benefit of the doubt, and to be treated with respect even when they are wrong.

What You Should Do:

  • Just like with customers, always treat employees with respect, even when they’re wrong.
  • Teach employees how to deal with upset customers. This includes learning not to get defensive, showing empathy, and using positive language to dampen customers’ negative emotions.
  • Allow employees to disengage with customers when they are being disorderly.
  • Review situations when customers are wrong to identify (and improve) areas where your organization may be purposely or inadvertently misleading customers.
  • Don’t worry about losing customers who can’t—or won’t—be happy with how you run your organization.

The bottom line: Customers aren’t always right.

The Six Key Traits of Human Beings (Video)

One of the most important – but often forgotten – elements of customer experience is that it’s all about human beings. Customers are human beings, employees are human beings, and executives are human beings. This video identifies six key characteristics to keep in mind whenever you’re dealing with all types of people.


CX Sparks: Guides For Stimulating Customer Experience DiscussionsThis video is a great introduction to a discussion with your team. That’s why we’ve created a CX Sparks guide that you can download and use to lead a stimulating discussion.


Video Script:

One of the most important – but often forgotten – elements of customer experience is that it’s all about human beings. Customers are human beings, employees are human beings, and executives are human beings.

So if you want to improve customer experience, you need to understand and embrace how human beings actually think and behave.

But human beings are complex and can be difficult to fully understand. That’s why Temkin Group has identified Six Key Traits of Human Beings, which you will need to keep in mind at all times.

Six Key Traits Of Human Beings

First of all, human beings are INTUITIVE. People have two different modes of decision making. One mode is rational, which is slow, logical, and deliberate. The second mode is intuitive, which is fast, automatic, and based on biases and a set of heuristics, or rules of thumb.

Human beings make almost all of their decisions using the intuitive mode, but organizations focus most of their attention on customers’ rational behavior. You can better meet customers‘ needs by catering to their intuitive mode.

Human beings are also SELF-CENTERED. We look at the world through our own personal perspective, which, because of our unique life experiences, is totally different than anyone else’s.  This individual perspective often separates employees and customers, as employees are more familiar with their company than customers are. This knowledge gap frequently causes miscommunications and a lack of empathy. Once we recognize our self-centeredness, we can take steps to mitigate the issues it creates.

Human beings are EMOTIONAL. We remember experiences based on how they make us feel. Our memories are not like video cameras, they’re more like an Instagram account where we take pictures whenever we feel strong emotions, and then we judge that experience in the future based on reviewing those pictures. That’s why it’s critical to proactively think about which emotions an experience is likely to generate.

Human beings are MOTIVATED. We all strive to fulfill our four intrinsic needs: a sense of meaning, control, progress, and competence. So when we think about the people who work for us and with us, we need to spend less time focusing on their compensation and more time helping them fulfill their intrinsic needs.

Human beings are also SOCIAL. We want to connect with other people who are “like us,” and we tend to trust those people more than we trust other people or institutions. So to create good experiences, we should not only recognize that people’s social groups are an important area of influence, we should also help employees and customers build meaningful connections between themselves and each other

And finally, human beings are HOPEFUL. We flourish when we envision a positive future. So you can motivate employees, leaders, customers, and partners by painting a picture of future success that addresses their needs and aspirations.

Make sure to focus on these Six Key Traits of Human Beings whenever you are thinking about customers, employees, leaders, or partners. It will allow you to better influence their behaviors and fulfill their needs.

If being customer-centric matters to your organization, then why leave it to chance? Contact Temkin Group, the customer experience experts, by emailing info@temkingroup.com, or visit our website, at TemkinGroup.com.

Collage of 2018 Customer Experience Infographics (So Far)

We’re always looking for ways to share interesting data and concepts, so we regularly publish parts of our content in infographics. In case you’ve missed any of them, here’s a collage of the infographics that we’ve already published this year.

Collage Of Temkin Group's Customer Experience (CX) InfographicsHere are the individual infographics:

Report: Employee Engagement Competency & Maturity, 2018

Purchase report: Employee Engagement Competency & Maturity, 2018We just published a Temkin Group report, Employee Engagement Competency & Maturity, 2018. Here’s the executive summary of this annual review of employee engagement activities, competencies, and maturity levels for large companies:

To understand how companies are engaging their employees, we surveyed 178 large companies and compared their responses with similar studies we’ve conducted in previous years. We also asked survey respondents to complete Temkin Group’s Employee Engagement Competency & Maturity (EECM) Assessment. The EECM Assessment places companies in one of five stages of maturity and evaluates their performance across five employee engagement competencies: Inspire, Inform, Instruct, Incent, and Involve. Highlights from our analysis of their responses include:

  • Team leaders of non-customer-facing groups are the least supportive of customer-centric activities.
  • Nearly 70% of companies measure employee engagement at least annually, yet only 40% of executives consider acting on the results to be a high priority.
  • The top obstacle to employee engagement activities continues to be the lack of an employee engagement strategy.
  • While only 19% of companies are in the top two stages of employee engagement maturity, 49% are in the bottom two.
  • When we compared companies with above average employee engagement maturity to those with lower maturity, we found that employee engagement leaders have better customer experience, enjoy better financial results, have more coordinated employee engagement efforts, have more widespread support across employee groups, are more likely to act on employee feedback, and face fewer obstacles than their counterparts with less engaged workforces.
  • You can use the results of the EECM Assessment to benchmark your own employee engagement activities.

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Buy employee engagement competency and maturity report

Here’s an excerpt from two of the 19 graphics that shows the maturity levels of employee engagement efforts in large companies and their effectiveness across five employee engagement competencies:

Employee Engagement Competency & Maturity ModelEmployee Engagement Competency & Maturity Levels of Large Organizations

Download report for $195+download employee engagement competency report

2018 Temkin Emotion Ratings: Wegmans Earns Top Spot

Emotion is one of the three components of a customer’s experience (along with success and effort), so it’s a fundamental element for companies to track. In this post, I examine the eight annual Temkin Emotion Ratings for U.S. companies. It’s one of the components of the overall Temkin Experience Ratings, the open standard CX metric.

Temkin Experience Ratings: The Open Source Customer Experience (CX) Metric

In January 2018, we surveyed 10,000 U.S. consumers about their experiences with companies. We used that feedback to calculate the Temkin Emotion Ratings for 318 companies across 20 industries (see full list of companies).

***Detailed data is included in the overall Temkin Experience Ratings dataset***

Here are some highlights of the ratings:

  • Wegmans earned the highest rating (78%), followed by H-E-B (76%), Aldi (75%), Bed & Body Works (74%), Regions Bank (74%), and Baskin Robbins (74%).
  • At the other end of the spectrum, Cox Communications earned the lowest ratings (32%), just slightly behind Comcast (34%), Spectrum (35%), and Optimum (35%).
  • On average, supermarkets, earned the highest ratings (68%), followed by fast food chains (65%), hotels (64%), and retailers (64%). TV/Internet service providers (40%) and health plans (46%) earned “very poor” average scores.
  • Ten companies earned ratings that are 10 or more points above their industry averages: Georgia Power, Regions Bank, ACE Rent A Car, Alaska Airlines, Alabama Power Company, Citizens Bank, USAA (for credit cards and banking), credit unions, and Bath & Body Works.
  • Nine companies earned ratings that are 12 or more points below their industry averages: Hitachi, Consolidated Edison of NY, Days Inn, DHL, Haier, Chrysler, CarMax, Spirit Airlines, and Motel 6.
  • We compared Temkin Emotion Ratings between 2017 and 2018 and found that nine companies improved by at least eight points: BCBS of Florida, MetroPCS, Dollar General, Airbnb, Avis, Aldi, Wawa Food Markets, Taco Bell, and Hyundai.
  • Eight companies dropped by 15 or more points over the previous year: Hitachi, Audi, Amazon Fresh, Southern California Edison, Haier, HSBC, TXU Energy, and Appalachian Power Company.
  • Led by a seven point drop in utilities and a four point drop in auto dealers, 18 of the 20 industries declined over the previous year.

2018 Temkin Emotion Ratings: Company Leaders and Laggards2018 Temkin Emotion Ratings: Range of Industry Scores

Purchase Temkin Experience Ratings dataset (includes Temkin Effort Ratings)You can access this data as part the overall Temkin Experience Ratings dataset

CX Leaders Demonstrate Higher Levels Of Humanity

Year of Humanity: Embrace Diversity, Extend Compassion, Express AppreciationHopefully you already seen that Temkin Group has called 2018, The Year of Humanity. We’ve been focused on finding ways to help people increase humanity as individuals, as CX professionals, and as a collective community.

In our latest survey of CX professionals, we asked respondents to estimate how often employees in their organizations demonstrate three traits of humanity:

  • Embrace diversity. Recognize our differences and find ways to treat people as individuals.
  • Extend compassion. Tune into the condition of the people around us and care about their well-being.
  • Express appreciation. Proactively look for and acknowledge the positive aspects of the world around us.

We then segmented the responses based on how they rated their company’s customer experience compared with other companies in their industry. This chart shows the data…

Company Humanity Traits Differ By Customer Experience Levels

As you can see in the chart above:

  • When it comes to all three humanity behaviors, companies with better CX have more employees demonstrating those behaviors.
  • The largest difference is with “Express Appreciation,” where there’s a 33-point gap between CX leaders and CX laggards.

What does this data mean? It demonstrates that customer experience leaders have a different culture than other companies. They tend to attract people who demonstrate these positive humanity behaviors and the environment further nurtures these behaviors.

Hopefully you are motivated to incorporate these behaviors into more of your activities and to encourage them in the people around you. Who knows… maybe you’ll even improve your organization’s customer experience.

The bottom line: All of us can (and should) improve humanity!

What is Net Promoter Score? (Video)

Net Promoter® Score (NPS®) is one of the most popular CX metrics, so we are often asked to discuss it with clients. In addition to helping build successful NPS systems, we often provide a basic overview for executive teams and broader audiences of employees. That’s why created this video. It’s meant to explain what NPS is all about and why it may be a valuable approach for some companies. It’s a great video to share across your organization if you are using or considering using NPS. If you’d like more information, check out our NPS/VoC program resources.


CX Sparks: Guides For Stimulating Customer Experience DiscussionsThis video is a great introduction to a discussion with your team. That’s why we’ve created a CX Sparks guide that you can download and use to lead a stimulating discussion.


Video Script:

You may have heard of Net Promoter Score, which is often referred to as NPS. It’s a popular customer experience metric. Let’s examine what it is.

Walt Disney once said “Do what you do so well that they want to see it again and bring their friends.” He understood the incredible value of customers who actively recommend a company.

NPS is a measurement system that helps companies track and increase the likelihood of customers recommending an organization.

First of all, let’s describe the actual NPS measurement. It begins by asking customers a simple question:

“How likely are you to recommend this company to a friend or relative?”

Customers choose a response from an 11-point scale that goes from 0 “not at all likely” to 10 “extremely likely.”

Based on their response, customers are placed into one of three categories:

  • If they choose between 0 and 6, then they are DETRACTORS.
  • If they choose 7 or 8, then they are PASSIVES.
  • If they choose 9 or 10, then they are PROMOTERS.

NPS is calculated by taking the percentage of Promoters and subtracting the percentage of Detractors. You then multiply the percentage by 100 to get a whole number between -100 and +100.

Calculating Net Promoter Score (NPS)

Let’s say that 100 people answered the question, and 40 are Promoters, 50 are Passives, and 10 are Detractors. To calculate NPS, we would take the 40% for Promoters, subtract the 10% for Detractors, which leaves 30%. After multiplying it by 100, the NPS is 30.

While NPS provides a score, 30 in this case, the power of the system does not come from overly focusing on the number.

The goal of using NPS is to find and correct issues that create Detractors and to find and repeat activities that create Promoters. So it is important to understand what is causing customers to choose their responses.

That’s why most NPS programs include a follow-up question that asks the customer why they chose the score that they did. This question should be open-ended, not multiple choice, so customers can express their views in their own words.

What do you do with the data?

First of all, you want to “close the loop” with the customers who responded. This means contacting at least some of the customers who respond. Companies often try to reach out to all of the Detractors, to find out more about their problems and to see if their issues can be resolved. They also often contact Promoters, to thank them and hear more about what they like.

Next, you want to examine the opportunities to improve NPS by looking at what situations and activities cause Promoters and Detractors. This requires analyzing the responses from each group separately, and often involves incorporating other information about customers. You may also want to examine what drives Promoters and Detractors across different business areas or customer segments.

There’s no value in identifying the items that are driving NPS up or down unless a company does something with what they learn.

That’s why companies establish processes for reviewing, prioritizing, and taking action on the items that they uncover. In other words, the way to improve NPS is to have an ongoing approach for improving customer experience.

When used correctly, NPS helps companies follow Disney’s advice and do what they do so well that their customers want to see them again and bring their friends.

If being customer-centric matters to your organization, then why leave it to chance? Contact Temkin Group, the customer experience experts, by emailing info@temkingroup.com, or visit our website, at TemkinGroup.com.

Note: Net Promoter, Net Promoter Score, and NPS are registered trademarks of Bain & Company, Inc., Fred Reichheld and Satmetrix Systems, Inc.

Purposeful Leadership Lessons From Coach Brad Stevens

In case you missed it, I’m a huge Boston sports fan. So it feels great to write a post that combines one of my favorite teams with one of our Four CX Core Competencies.

I’m focusing on the leadership style of Brad Stevens, coach of the Boston Celtics. I’ve been a fan of Stevens since he was a coach at Butler University. He smart, confident, and seems to understand how to lead people. To get to know him better, I read a number of his interviews, including:

It turns out that Stevens is a great example of a Purposeful Leader. His actions and behaviors are consistent with what we call the Five P’s of Purposeful Leaders:

Customer Experience (CX) Core Competency: Purposeful Leadership

  • Passionate. Leaders who aren’t energized by the company’s future can’t expect their employees, partners, or customers to be passionate about helping them get there. No matter what situation he’s been in, Stevens paints a compelling picture of success for all of the people around him.
  • Persuasive. Purposeful leaders don’t just bark orders about what things need to be done and how they expect people to do them. Instead they take the time to make sure that everyone understands why the organization needs to do something. Stevens has said “One of the things that I love about this league is that every one of these guys is here for a reason. It’s my job as a coach to focus on why are they here. I help them manage the areas where they need to improve.”
  • Positive. Temkin Group research found that employees who regularly receive positive feedback from their boss are three times more likely than other employees to do something unexpectedly good for the company and are three times more likely to make a recommendation for an improvement. Stevens gets this: “Our jobs are taking the 15 guys on the team, focusing on what they do best, and helping them soar with what they do best.”
  • Propelling. As leaders individually represent such a small percentage of an organization’s overall activity, whether they succeed or fail is not determined by what they personally do, but by how effectively they influence the actions of other people. Stevens recognizes that his success as a coach, is totally dependent on the performance of his players. Here’s what Stevens has said: “The people around you are accomplished, they’re passionate, they’re competitive, they want to do well, and your job is to help them find their best ability.”
  • Persistent. A leader’s words are only meaningful if they align with his or her actions. Stevens has said: “I think culture is something that, you know, it’s not something that automatically regenerates or automatically is year to year. It’s got to be passed along by the older players in your program. It’s got to be passed along by the way that you do things as a staff. Those are things that I’ve always found really challenging as a coach. If I’m going to demand that these things that we think are important to success on the court and also off of the court than I’ve got to try my best to be a model that’s striving to live towards that.”

The bottom line: We can all learn from Coach Stevens’ leadership skills.

2018 Temkin Effort Ratings: Wegmans Earns Top Spot

Effort is one of the three components of a customer’s experience (along with success and emotion), so it’s a fundamental element for companies to track. In this post, I examine the eight annual Temkin Effort Ratings for U.S. companies. It’s one of the components of the overall Temkin Experience Ratings, the open standard CX metric.

Temkin Experience Ratings: The Open Source Customer Experience (CX) Metric

In January 2018, we surveyed 10,000 U.S. consumers about their experiences with companies. We used that feedback to calculate the Temkin Effort Ratings for 318 companies across 20 industries (see full list of companies).

***Detailed data is included in the overall Temkin Experience Ratings dataset***

Here are some highlights of the ratings:

  • Wegmans earned the top spot with a score of 90%, followed closely by Subway, Citizens Bank, Ace Hardware, and Wawa Food Markets at 89%.
  • Spirit Airlines earned the lowest ratings, 43%), just slightly behind Medicaid (45%), and CarMax (46%).
  • On average, supermarkets, fast food chains, and retailers earned “excellent” Temkin Effort Ratings. Health plans and TV/Internet service providers earned “poor” scores.
  • Ten companies earned ratings that are 10 or more points above their industry averages: Dish Network, USAA, Southern California Gas Company, TriCare, Whirlpool, Citizens, National Car Rental, Florida Power & Light, Georgia Power, and Southwest Airlines.
  • Seven companies earned ratings that are 15 or more points below their industry averages: Spirit Airlines, HSBC, CarMax, Fujitsu, Hitachi, DHL, and Days Inn.
  • We compared Temkin Effort Ratings between 2017 and 2018 and found that three companies increased by more than 10 points: MetroPCS, Avis, and Showtime. Five companies declined by 12 points or more: HSBC, CarMax, BMW, Fujitsu, and Dollar Car Rental.
  • At an industry level, banks and streaming media improved the most over the previous year, while  auto dealers and utilities declined the most.

2018 Temkin Effort Ratings- Leaders and Laggards

Temkin Effort Ratingstemkin effort ratings methodology

Purchase Temkin Experience Ratings dataset (includes Temkin Effort Ratings)You can access this data as part the overall Temkin Experience Ratings dataset

The Employee Engagement Virtuous Cycle (Video)

Why should you care about Employee Engagement? Because it fuels a virtuous cycle that drive customer experience and business success. Take a look…

Video Script:

Did you know that engaged employees are really, really valuable? Temkin Group’s research shows that when employees are highly engaged, they are much more likely to behave in ways that help your organization:

  • They stay late at work if something needs to be done
  • They help other people
  • Do good things for the company, even when it’s not expected of them
  • And they make recommendations about improvements

Don’t you want employees like that on your team?

Our research also shows that companies with more engaged employees deliver better customer experience.

That’s the first connection in what we call the Employee Engagement Virtuous Cycle.

Employee Engagement Virtuous Cycle (Temkin Group)

Here’s how it works:

Engaged employees create great customer experiences, which in turn create more loyal customers. This leads to stronger financial results for the organization.

With happy customers, employees are prouder of their work, which lowers turnover rates. Collectively, this improves financial results and provides more resources for investing in employees.

Are you doing enough to fuel the front end of this virtuous cycle?

To raise employee engagement in your organization, visit Temkin Group, the employee engagement experts at StartWithEmployees.com.

Six Laws of Customer Experience (Infographic)

The most dowloaded content that I’ve published is our free eBook, The Six Laws of Customer Experience. It’s been translated into many languages and read by 10’s of 1,000s of people. It continues to be very popular because it uses simple language and concepts to describe what we call “the fundamental truths about how organizations treat customers.”

We’ve developed an updated infographic that brings the laws to life. If you like the content, then we even have a CX Institute eLearning module that you can use to train everyone in your organization on this important concept!

Six Laws of Customer Experience

Here are links to download different versions of the infographic: