Kudos To Customer Service Leaders

The annual Customer Service Week starts today and goes through Friday (10/7). Given the occasion, it seems like a good opportunity to acknowledge some of the better performers in our 2011 Temkin Customer Service Ratings, which ranks 129 large companies across 12 industries.

First of all, kudos to the top 25 companies in the ratings. led by USAA, Edward Jones, Courtyard by Marriott, and Sam’s Club:

But, overall, companies aren’t very good at customer service and there is a wide difference across industries…

…so I want to give a shout out to companies that most outperformed their industry averages. Led by USAA, Southwest Airlines, Discover, American Express, and Edward Jones here are the top 25:

The bottom line: Happy customer service week!

Morton’s Story Is Not About Great Customer Service

Over the past few days, I’ve been bombarded by emails telling me about “The Greatest Customer Service Story Ever Told.” It’s a blog post about how Morton’s Steakhouse delivered a steak dinner to a traveler at an airport after he tweeted the following…

Hey @Mortons – can you meet me at newark airport with a porterhouse when I land in two hours? K, thanks 🙂

My take: This is a great story and is getting Morton’s a lot of exposure. It’s wonderful that Morton’s delivered the unexpected steak dinner, but it’s not great customer service. As a matter of fact, it’s not even good customer service.

Here’s how I would dissect the story:

  • Some person joked on twitter about wanting a steak (the tweeter admits he was joking)
  • Morton’s sent an employee 24 miles to deliver a steak dinner to the Newark airport

So Morton’s spent valuable resources (the food, deliver person for at least a few hours, etc.) to respond to someone who was joking.

I often tell companies that “heros don’t scale.” Great customer experience (and customer service) is demonstrated by repeatable processes, not by periodic heroic behavior.

Are more people going to tweet Mortons about delivering a meal? Yes. Is Morton’s planning to respond to all tweets with a personally delivered meal? Probably not. Are there going to be many people disappointed that they’ve been left hungry? Probably.

Having said all of that, I like what Morton’s did. It was great marketing.

The bottom line: Don’t bet your customer service on heroics

P.S. Morton’s: I love porterhouse and prefer it medium rare. I’ll be in Stockbridge, MA tomorrow 🙂

Report: 2011 Temkin Customer Service Ratings

We just published a new Temkin Group report, 2011 Temkin Customer Service Ratings.

Companies are recognizing that customer service is more than a cost-center; it’s often a critical moment of truth that drives customer loyalty. But how effective are companies at delivering good customer service experiences?

Here’s the executive summary:

USAA and Edward Jones took the top spots in the 2011 Temkin Customer Service Ratings. We asked 6,000 US consumers to rate their recent customer service experience. This data allowed us to rate 129 companies across 12 industries. Only 12 of those companies received a “strong” customer service rating. Retailers, hotel chains, and investment firms have the highest average rating, while Internet and TV Service Providers are squarely at the bottom of the ratings. To improve customer service, companies should look at the experience holistically, using Temkin Group’s SLICE-B methodology.

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First of all, kudos to the top 10 firms in the ratings:

1. USAA (insurance)
2. Edward Jones (investments)
3. Courtyard By Marriott (hotels)
3. Sam’s Club (retail)
5. Kohl’s (retail)
5. Lowe’s (retail)
5. Marriott (hotels)
8. BJ’s Wholesale Club (retail)
8. Costco (retail)
8. Hyatt (hotels)

Here are the results across industries:

The report also looks at how companies perform relative to these industry averages. In that analysis, we find that USAA and Southwest Airlines are the most ahead of their industries while RadioShack and HSBC are the farthest behind.

Download report for $195

If you want to get access to all of the data in this ratings, check out the Temkin Ratings website

The bottom line: Customer service needs an experience makeover

The 6 Levels Of Proactive Support

I’ve noticed a lot of discussion lately around proactive support. A host of technologies (analytics, alerts, mobile, etc.) are creating new ways for companies to better help customers with their problems. But the discussions often talk about “proactive support” as if it’s one thing.

Proactivity is not a single attribute; it’s actually on a spectrum. To make that clear, I’ve identified six different levels of proactive support.

Here’s an example of different levels of support, from the least to the most proactive, for a customer who’s flight was cancelled:

  1. Ignore: Customer gets to airport and finds that flight is canceled and can’t seem to find anyone who can help.
  2. React: At airport, someone successfully helps her get a new flight; consistent with Temkin Group’s C.A.R.E.S. model.
  3. Alert: Airline sends message to customer letting her know right away when the flight is cancelled; so she can make plans before going to airport.
  4. Self-heal: Airline sends message to customer letting her know right away when the flight is cancelled; and provides simple options for her to quickly find an alternative itinerary.
  5. Pre-empt: Airline sends message to customer letting her know right away when the flight is cancelled; and rebooks her on a couple of flights that make sense given her itinerary and her travel profile. If it requires an unexpected overnight stay, the airline also books a hotel room.
  6. Avoid: Airline finds way not to keep from canceling the flight.

Leading-edge companies should be aiming for the top three: avoid, pre-empt, and self-heal.

The bottom line: Simple proactive support is not good enough

8 Customer Experience Trends For 2011

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It’s the time of year when prognosticators drag out their crystal balls and divine about next year. Well, I’m not too different. But instead of a crystal ball, I’ll tap into the 8 customer experience megatrends that I outlined earlier this year. They remain the key trends that I think we’ll see in 2011.

Here are the 8 megatrends along with my thoughts about how they’ll play out in 2011:

1. Customer Insight Propagation. Most decisions in companies are made without any real customer insight. Companies will increasingly recognize that they need to integrate a deeper understanding of their customers throughout their company. That’s why Voice of the Customer (VoC) programs represent one of the most popular customer experience efforts. A new cadre of vendors are making it easier to collect, analyze, and share customer information broadly across just about any organization.

2011: I’ve written a lot about VoC programs this year. Companies are beginning to figure out how to better use the insights and an emerging set of vendors have deployed customer insight and action (CIA) Platforms that can help considerably. But there’s still a long way to go. In the research report The State Of Voice Of The Customer Programs, we found that only 1% of large companies are “Transformers,” which is the highest level of maturity. In 2011,  I expect to see many companies move up on the VoC maturity scale as this continues to be an increasing area of focus next year. Don’t be surprised to see CRM players like Oracle and SAP acquire some of the CIA vendors.

2. Unstructured Data Appreciation. Deep feelings that customers have about a company often get truncated into a 5-point, 7-point, or even 11-point multiple choice scales; making it difficult to understand “why” things are happening. New text analytics applications can quickly process thousands of pieces of unstructured data and discern what’s making customers happy or what’s making them upset; pushing a dramatic rise in companies analyzing rich unstructured data like comments on surveys, call center verbatims, or social media discussions.

2011: As I said in a blog post earlier this year, it’s time for text analytics. I’m working with many companies on strategies for getting deeper customer insights and just about all of them involve a component of text analytics. In 2011, I expect there to be twice as many text analytics pilots as in 2010 and a lot of companies touting success stories at conferences. I expect IBM to make a big push in this area next year with SPSS and I would not be surprised to see Big Blue acquire either Clarabridge or Attensity.

3. Customer Service Rejuvenation As companies do touchpoint analyses and customer journey maps, they often find that customer service is a key “moment of truth” for customers. Unfortunately, the cost-cutting in this area over the last several years has created many poor experiences. Companies are recognizing that poor customer service is creating a very negative perception of their brand and will increasingly make investments to improve these experiences.

2011: During customer service week in October, I discussed how companies sometimes seem to care more about saving $1.50 in transaction costs than they care about $60 worth of business. But, I am seeing some changes. I’ve actually been working with a number of contact centers that are transforming the service they deliver. In 2011, I expect to see more contact centers drop average handle time (AHT) as a core metric and revamp quality measures based on customer feedback.

4. Loyalty Intensification. Over the last several years, many executives have realized that shareholder value is not an objective; it’s actually the outcome of building stronger customer loyalty. As companies starts using measures like Net Promoter Scores (NPS) to track loyalty, more firms will elevate these metrics to their executive dashboard; pushing companies to think and act more strategically about loyalty.

2011: Many companies are developing loyalty metrics and infusing them into their management dashboards. We found that 45% of companies tie compensation to some customer feedback metrics, but don’t push too hard, too early with compensation.  We also found that only 25% of respondents think their senior executives are willing to trade-off short-term financial results for longer-term loyalty. In 2011, it will become much more common for companies to balance loyalty metrics with financial ones. And many companies will evolve beyond fixing problems that cause dissatisfaction and start designing experiences that inspire advocates.

5. Interaction iPod-ization. QWERTY keyboards help make PCs so universal. But a keyboard-based QWERTY device is not the ideal interface for the next generation of digital devices. Fortunately, Apple’s iPod (and iPhones, iPads) are doing the same thing that QWERTY did over 100 years ago, teaching myriads of people how to interact with a touch-screen. As a result, a new wave of touch-pad based applications will emerge.

2011: Add Nooks, Android, and Windows Phone to the list of devices that will be teaching people how to touch, drag, shake, pinch, and tap to get what they need. In 2011, Mainstream PCs with a keyboard and mouse will seem even more like relics’ as people increasingly transition to iPad (and iPad-like) devices.  I also expect to see more voice interfaces emerge.

6. Social Media Assimilation. Social media is a hot topic. But Social Media is not really a new thing for companies; it represents just another interaction channel with customers. Companies will increasingly fold Social Media activities into the core activities of the company; especially within customer service.

2011: I created a term called “Social Schizophrenia” which describes companies that provide levels of service in social media that differ significantly from service levels in other channels. That still describes a lot of companies. In 2011, focus on social media will continue to grow but I expect much more mature approaches as the tools and processes are evolving.

7. Digital/Physical Integration. Consumers increasingly go online with their cell phones while they are doing activities like walking through a mall or eating at a restaurant. At the same time, iPhones have introduced consumers to the notion of task-specific application downloads. In this environment, companies can no longer think about online as a separate and distinct channel. They will start designing more experiences that blend together online and offline interactions.

2011: Mobile applications will increasingly take advantage of location-awareness to provide services and capabilities that are specific to the store, restaurant, hotel, ball park, intersection, or wherever you are. In 2011, we’ll also see more adoption of recognition-based services like Shop Savvy that can scan barcodes and Google Goggles that recognizes landmarks, text — pretty much anything you can take a picture of with your phone. Given the capabilities, I think we’ll see a bunch of integrated digital/physical offerings in the second half of the year.

8. Cultural Renovation. Companies are increasingly recognizing that “unengaged employees can’t create engaged customers” which is one of my “6 Laws Of Customer Experience.” That’s why many firms are starting to focus on the culture of their firms; trying to align employees with the vision, mission, and brand of the company. Cultural change takes several years to take hold; so significant changes won’t show up in companies immediately. But when change happens, it will very difficult for competitors to replicate.

2011: It’s great to see many executives ask for help building a customer-centric culture. I often compare customer experience to quality, which is captured in my manifesto: Great Customer Experience Is Free. I also like usurping this quote from the quality movement: “Great customer experience is the result of a carefully constructed cultural environment. It has to be the fabric of the organization, not part of the fabric.” We gauge customer-centric culture with Temkin Group’s Four Customer Experience Core Competencies. Our assessment of 144 large firms showed that only 3% are customer-centric. In 2011, I expect many companies to put in place the foundations for improving their customer-centricity while a few will revert back to their old ways; this stuff is not easy.

The bottom line: Hopefully you’re ready for 2011!

A Bit Of Customer Service Data

For my second post in honor of National Customer Service Week, I’m sharing some data.

Tealeaf commissioned a consumer study by Harris Interactive about online interactions. I was struck by the data on customer service. Over the last couple of years, consumers have been more inclined to contact customer service after a problem with their online experience… especially over the phone:

What is it like for consumers when they contact a company’s customer service organization? Not very good. Considerably less than half of companies regularly delight customers in any channel:

The bottom line: Customer service needs more attention.

Happy National Customer Service Week!

One of my 8 Customer Experience Megatrends is Customer Service Rejuvenation, which I describe as follows:

As companies do touchpoint analyses and customer journey maps, they often find that customer service is a key “moment of truth” for customers. Unfortunately, the cost-cutting in this area over the last several years has created many poor experiences. Companies are recognizing that poor customer service is creating a very negative perception of their brand and will increasingly make investments to improve these experiences

Customer service has been a very under-appreciated interaction, so I am thrilled to celebrate National Customer Experience Week this week. Hopefully all companies will take this week to rethink their approach to customer experience. If they do, we will no doubt see changes to a critical element of the customer service mix: Contact Centers.

I was recently commissioned by Jacada to write a series of blog posts about the intersection of customer experience and contact centers. I began the first post called The Customer Experience Evolution of Contact Centers by asking the question: Are contact centers becoming extinct like dinosaurs or typewriters? I used Darwin’s model of evolution to make the case that contact centers need to evolve in two areas:

  • Collaborate contact centers need to connect with other channels. They need to augment and support Web, store, branches, mobile, and social media interactions. It’s no longer viable to think of phone interactions as standalone experiences; they’re an integral component of multi-channel experiences.
  • Improvise: contact centers need to redefine their purpose; their raison d’être. For many years, contact centers have been considered cost–centers; companies did everything they could do squeeze every last penny out of the cost of every last phone interaction.

I also touched on the need of contact centers to “improvise” in this recent graphic:

Hopefully National Customer Service Week will act as an evolutionary catalyst for contact centers.

The bottom line: Every week should be National Customer Service Week!

Contact Centers Enter The Loyalty Mix

Over the previous decade, companies have squeezed costs out of their contact centers through automation, offshore labor, and self-service alternatives. But no matter how hard they try, most companies can’t take human contact out of the service mix.

Many companies are realizing that some of their contact center interactions represent more than just costs; they’re moments of truth for customers, points in time that significantly impact customer loyalty.

I’ve been doing a lot of work around contact centers lately. It’s clear that companies are beginning to reinvest in these important customer contact points. So I’ll be writing more about contact centers in the near future. But for now, I just want to introduce the idea of viewing contact centers as loyalty drivers, as opposed to the historical view that they are cost centers.

Here’s how I’d compare the two approaches.

Loyalty Drivers also tap into the deep customer insight from their contact centers within their voice of the customer (VoC) programs. This goldmine has been completely untapped in most contact centers, but the rise of voice and data analytics is helping to unlock this valuable asset.

The bottom line: Contact centers affect loyalty whether you take advantage of it or not.

8 Symptoms Of Social Schizophrenia

A few months ago, I tweeted about one of my posts post called XFINITY Is (Unfortunately) More Of The Same. Immediately afterwards, a nice woman from Comcast replied to my tweet and tried to change my opinion. This type of social media outreach is not unusual for Comcast, which has made a name for itself over the last few years with an active presence on Twitter.

Comcast, however, continues to receive less-than-stellar (I’m being nice) feedback on its customer service. The company managed to come in 125th and 126th out of 133 companies in Forrester’s 2010 Customer Experience Index and ended up in 3rd place on MSN Money’s 2010 Customer Service Hall Of Shame.

So Comcast reaches out to strangers on Twitter, but doesn’t service customers very well when they contact Comcast. Something seems out of whack.

My take: Unfortunately, this type of behavior is becoming more common as the wave of social media excitement continues to crest. In order to better understand this disorder, I’ve given it a name — “Social Schizophrenia” — which I defined as:

Providing levels of service in social media that differ significantly from service levels in other channels

Does your company suffer from this ailment? Answer the eight questions below to diagnose the symptoms. A single “yes” may indicate that your company has Social Schizophrenia.

  1. Does your company have poor customer service ratings and aggressive goals for social media?
  2. Does your company treat people with “influential” social media voices better than it treats other people, even good customers?
  3. Has your company invested more in social media outreach than it has invested in improving its traditional service organization?
  4. It is “cooler” in your company to be part of the social media team than it is to be a part of the customer service organization?
  5. Are employees reaching out in social media more empowered to solve customer problems than other customer service agents?
  6. Does your company’s social media team have more headcount than its voice of the customer team?
  7. Does your company have separate organizations handling social media complaints than it does handling complaints that flow through other channels?
  8. Is more than 20% of your company’s customer experience strategy focussed on social media?

Does this mean that companies should stay away from social media? No. But social media efforts can’t be used to mask poor service. If your company delivers poor or inconsistent experiences to customers, then fixing those problems should be the primary focus of your efforts. Eliminate poor experiences from happening; don’t chase down social media complaints after the fact.

If customers do run into problems, companies should take action when they complain directly to the company — embracing the five elements of my C.A.R.E.S. model for service recovery: communication, accountability, responsiveness, empathy, and solution. Once this is in place, companies can add social media outreach to the customers that fall through the cracks.

The bottom line: Use social media to augment, not avoid, the delivery of great service

There’s Little Delight For Customers

One of the questions we asked in our May 2010 survey was how often respondents felt that they “delighted” customers in different interactions across different channels. Here’s what they told us:

While half of the companies think they regularly delight customers during in-person interactions, there’s a serious dearth of delight in the online channel.

Interestingly, respondents gave their companies the highest marks in customer service. In research that I completed earlier this year at Forrester, I found that consumers rated customer service the least satisfying interaction. So, there’s clearly a mismatch between companies and their customers in that area.

The bottom line: Are you delighting your customers?

Customer Service Is The Worst Touchpoint

I recently published a report called Experiences Across the Customer Lifecycle that examines how satisfied US consumers are with four interactions (researching a product/service, purchasing a product/service, using a product/service, getting customer service) across 14 industries.

In 12 of the 14 industries, customer service was the lowest (or tied for lowest) rated interaction. Across all four touchpoints, hotels are at the top and health plans are at the bottom. Here are some of the highlights from the analysis:

I also examined how consumers rated individual companies. Here’s a shout-out to the companies that outperformed their industry averages by more than 10 percentage points:

  • Researching a product/service: Credit unions, American Express, AT&T, DirecTV, USAA, Amazon.com, Verizon, and Barnes & Noble.
  • Purchasing a product/service: Credit unions, American Express, Medicare, Vanguard, Visa, Apple, Aol, Southwest Airlines, and ING Direct.
  • Using a product/service: Credit unions, Apple, Medicare, USAA, and Toshiba.
  • Getting customer service: Credit unions, Kaiser, Apple, Cox Communications, American Express, Visa, USAA, Barnes & Noble, Marriott, Kohl’s, Southwest Airlines, and Verizon.

The bottom line: The entire customer lifecycle needs and upgrade, especially customer service.

5 Ingredients For Saving Toyota’s Brand

Toyota’s recall and the way that it has handled the problems so far has certainly eroded consumer trust in Toyota. Does this mean that the Toyota brand is dead? Not necessarily; it depends on how the company responds to this crisis going forward.

While there will definitely be a lot of negative sentiment in the short-term, Toyota can come out of this period with renewed strength in its brand if it delivers on the five elements of my C.A.R.E.S. model for service recovery: communication, accountability, responsiveness, empathy, and solution.

There will be twists and turns to Toyota’s brand perception over the next several weeks, but the long-term impact won’t be seen for at least several months. If Toyota can get passing marks for how it C.A.R.E.S. through this period, then it should be able to save its brand. But if it doesn’t, then…

The bottom line: During a crisis, intensify your focus on customers

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.

Consumers Expect Poor Customer Service

I just published a research report with Andrew McInnes (a researcher on our team) called Consumers Expect Poor Service Experiences. The research, which was based on surveying more than 4,200 US consumers, looked at consumer expectations for getting an issue resolved in 10 different areas (apparel, bank account, hotel, auto insurance policy, TV service, credit card, wireless phone plan, Internet service, computer, and health insurance policy).

It turns out that consumers don’t expect much from customer service. Here are some of the findings:

  • In only one of the areas, apparel, did a majority of consumers (54%) expect to have an easy time getting their issue resolved.
  • The lowest marks were in computers and health insurance policies, where only 30% of consumers expected customer service to be easy.
  • In 6 of the 10 areas, Seniors were the most optimistic about these customer service interactions. But…
    • … in the 4 other industries, hotels plus three technology areas (wireless phone plans, computers, and Internet service), Seniors were the least optimistic about getting an issue fixed.
  • Only 23% of Seniors thought it would be easy to get a computer issue resolved — the lowest level we found.
  • Not surprisingly, Gen Yers were the most optimistic about customer service in the three technology areas.

The bottom line: Companies need to surpass customer service expectations.

American Airlines Fails In Service Recovery

Yesterday was a real “fun” day. When I arrived at the San Francisco airport at noon for my 1:40 flight, I was informed that the flight was delayed until 7:30 PM. After a few seconds it sunk in — I wasn’t going to make it home last night.

The agent didn’t really answer my questions about what had happened and told me that there weren’t any options on any airline that could get me home any sooner (although she didn’t seem to look very hard). She didn’t apologize and didn’t even seem to notice the enormous inconvenience to me.  

After I told her how horrible the situation was, she gave me some vouchers for free food. As a business traveler with an expense account, this gesture did nothing to dampen the prospects of my 6 hour delay. So I asked if she could at least give me a pass into the Admiral’s Club. She said that she couldn’t do that; all she could do is give me the food vouchers (compare this with my post about Ritz-Carlton).

It turned out that the delay was caused by mechanical problems; so it was totally American Airline’s fault. And the plane ended up leaving even later and I got home at 5:30 AM in the morning — about 7.5 hours later than scheduled.

 Here’s how I’d rate American’s customer service with my C.A.R.E.S. model:

  • Communication: D
    The airline didn’t provide much information at all about the situation
  • Accountability: E
    The airline didn’t try and do anything proactively to remedy the situation (like getting a plane quicker) or offer any options that lessened the inconvenience
  • Responsiveness: D-
    The airline didn’t notify me in advance of the delay and didn’t try to rebook me on another flight. 
  • Empathy: D
    The pilot was the only American Airline employee that apologized for the inconvenience.
  • Solution: D
    A seven hour delay with no real attempt at remedying the situation for travelers is not an acceptable solution.

To put this in perspective, I’m a Platinum member of American’s loyalty program and am very close to reaching the Executive Platinum level (the airline’s highest level). So this is an indication of how American treats its best customers.

While American Airlines can’t avoid all situations where it inconveniences travelers, it certainly can (and must) do much better job with its service recovery process (responding to problem situations) and improve its corporate culture which is not very customer-centric.

The bottom line:  American Airlines does not seem to care about customer experience.