CX & Loyalty: A Bad Experience Decreases Spending (Charts For 20 Industries)

Can a single bad experience cost a company money? You bet! As a matter of fact, 53% of consumers reported a cut in spending at fast food restaurants and rental car agencies after they’ve had a very bad experience. Those are the highest levels across the 20 industries we examined. At the bottom of this post we’ve assembled a number of industry-specific data charts that you can download and use.

In the report, What Consumers Do After a Good or Bad Experience, 2016, we analyzed how 10,000 U.S. consumers changed their spending after having a bad experience with hundreds of companies.

1612_afterbad_20industryaverage

On average across all industries, 10% of consumers have had a very bad experience in the previous six months. After that experience, 37% of consumers cut back on their spending. As a result, 3,7% of revenues are at risk after a very bad experience (10% x 37%). This at-risk revenue ranges from a high of 6.5% for rental cars down to a low of 1.6% for supermarkets and retailers.

Bad Experience And Spending Change Charts for 20 Industries

If you’re looking for good data for your industry, we’ve put together these 20 industry charts. Feel free to use them within your presentations in accordance with our citation policy.

For example, here’s some draft copy you might use, together with your industry’s chart, in your company’s internal or external blog:

At [Your Company’s Name], we work hard to improve our Customer Experience, and this industry chart from Temkin Group shows why even one bad experience can cost us lost sales.

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Want Loyal Customers? Start Talking About Their Emotions!

Did you know that customers who feel adoring after an experience are more than 11 times as likely to buy more from a company than customers who feel angry? And customers who feel appreciative are more than 5 times as likely to trust a company than those who feel agitated?

That’s because how customers feel about an interaction has a significant impact on their loyalty to a company. So let’s talk about emotions.

Despite the importance of customer emotions, they are all too often neglected (or outright ignored) inside of companies. As a result of this negligence, consumers give their providers very low emotion scores in our Temkin Experience Ratings.

It’s time to start talking about emotions. To help spur this dialogue, we introduced a new vocabulary that we call the Five A’s of an Emotional Response.

1612_5asofemotionalresponse

Every time a customer interacts with you, they feel one of these A’s:

  • Angry: Customers feel wronged by the interaction and will look for opportunities to tell other people (a.k.a. vent) about the situation. They will try to stay away from the organization.
  • Agitated: Customers didn’t enjoy the interaction and will think twice about doing business with the organization in the future.
  • Ambivalent: Customers had no significant emotional response and will remain as loyal as they were before the interaction.
  • Appreciative: Customers feel that the organization outperformed their expectations and are more inclined to do business with the organization in the future.
  • Adoring: Customers feel like company fully met their needs and will look for opportunities to tell other people about the situation. They will try to interact more with the organization in the future.

If you’re still wondering why you might want to talk about the Five A’s, here’s some data that will hopefully entice you to increase your emotion vocabulary. We analyzed the loyalty of 10,000 U.S. consumers based on the Five A’s of their emotional response to interactions across 20 industries – more than 100,000 overall interactions in total.

1612_loyaltyoffiveasofemotion

As you can see above, the Five A’s aren’t just a set of words, they’re a strong indication of the loyalty of your customers. Compared with those who feel “angry,” customers who feel “adoring” are more than 11 times as likely to buy more, 17 times as likely to recommend the company, 9 times as likely to try new offerings, 6 times as likely to forgive the company if it makes a mistake, and 10 times as likely to trust the company.

If you are not talking about emotion, then you’re not being purposeful about customer loyalty. Here are some ways that you can start using the Five A’s:

  • Training. If you teach all employees this scale, then your organization will have a common vocabulary for discussing customer reactions. This framework will help trainees gauge how customers would likely respond to situations and discuss what they could do to improve the customer’s ultimate emotional response.
  • Coaching. Supervisors can ask their employees a very simple question after an interaction: “How do you think the customer felt about the call?” This can work for any employee that interacts with customers: phone reps, retail salespeople, cashiers, insurance agents, bank tellers, etc.
  • Designing. When you are creating a new experience (product, process, interaction, etc.), get feedback from customers about how they feel. Internally, you can have discussions like… “Most of the customers were ambivalent, but if we make this change then I think we can make most of them appreciative and even a few of them will be adoring.
  • Tracking customer emotions. Every time employees interact with a customer or make a decision, they can give themselves a score based on what they believe is (or will be) the customers’ most likely emotional response to their action:
    • Angry (-3)
    • Agitated (-1)
    • Ambivalent (0)
    • Appreciative (+1)
    • Adoring (+3)

The total across these interactions and decisions represents a customer delight score. Employees can calculate this score on a regular basis (daily, weekly) and track how well they are doing over time.

Having an emotion vocabulary will hopefully get you to focus more about this critical topic. And if you just start talking about emotion, you will help stimulate employees’ natural empathy. So… start talking about emotion!

The bottom line: Talk about making customers adoring, not angry.

Report: 2016 Temkin Experience Ratings of Tech Vendors

1610_temkinexperienceratingstechvendors_coverWe just published a Temkin Group report 2016 Temkin Experience Ratings of Tech Vendors that rates the customer experience of 62 large tech vendors based on a survey of 800 IT decision makers from large North American firms. This is the fifth year of the ratings, here are links to the 2012, 20132014, and 2015 ratings.

Here is the executive summary of the report:

The 2016 Temkin Experience Ratings of Tech Vendors evaluates the customer experience of 62 large technology vendors. We surveyed 800 IT decision-makers from large companies regarding three components – success, effort, and emotion – of their experiences with these IT providers. Out of all the vendors we looked at, HPE outsourcing, IBM SPSS, and Google earned the highest ratings, while Capgemini, Infosys, and Accenture received the lowest ratings. The average score for the Ratings dropped by one percentage-point over the past year, down from 59% in 2015 to 58% this year. Furthermore, our research shows that the Temkin Experience Ratings are strongly correlated with multiple elements of loyalty behavior, including likelihood of repurchasing from the company, likelihood of recommending the company, likelihood of trying new products, and likelihood of forgiving the company if it makes a mistake.

This product has a report (.pdf) and a dataset (excel). The dataset has the details of the 2016 Temkin Experience Ratings, including all three components, for the 62 tech vendors as well as data on customers’ likelihood to repurchase from the vendors, their 2016 Temkin Forgiveness Ratings, and their 2016 Temkin Innovation Equity Quotient. It also includes a summary of the 2015 Temkin Experience Ratings, likelihood to repurchase, and Temkin Forgiveness Ratings.

Download for $695, includes report (.pdf) and data file (.xls)
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The Temkin Experience Ratings of Tech Vendors evaluates three areas of customer experience: success (can customers achieve what they want to do), effort (how easy is it for customers to do what they want to do), and emotion (how do customers feel about their interaction). Here are the overall results:

1610_techvendortxr_companies

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Report: ROI of Customer Experience, 2016

1610_roiofcx_coverWe published a Temkin Group report, ROI of Customer Experience, 2016. This research shows that CX is highly correlated to loyalty across 20 industries. Here’s the executive summary:

To understand the connection between customer experience (CX) and loyalty, we examined feedback from 10,000 U.S. consumers that describes both their experiences with and their loyalty to different companies. To examine the CX component, we used the 2016 Temkin Experience Ratings (TxR), which evaluated 294 companies. Our analysis shows that there’s a very large correlation between companies’ TxR and the willingness of customers to purchase more from them. This connection holds true for other areas of customer loyalty as well. We used this data to calculate the revenue impact of CX across 20 industries. We found that a moderate increase in CX generates an average revenue increase of $823 million over three years for a company with $1 billion in annual revenues. Rental car agencies have the most to gain from improving CX ($967 million), while utilities have the least to gain ($645 million). While all three components of customer experience¬—success, effort, and emotion—have a strong effect on loyalty, our research shows that emotion is the most important element. When compared with companies with very poor CX, companies with very good CX have a 16.7 percentage-point advantage in customers who are willing to purchase more from them, 16.7 percentage-point advantage in customers who trust them, 10.3 percentage-point advantage in customers willing to forgive them if they make a mistake, and 7.1 percentage-point advantage in customers who are willing to try their new products. Additionally, companies with very good CX ratings have an average Net Promoter Score that is 22 points higher than the scores of companies with poor CX. We recommend that you build your own CX ROI models, using our five-step approach for guidance.

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This is one of the figures in the report, and it shows the high correlation between Temkin Experience Ratings (customer experience) and purchase intentions for 294 companies across 20 industries:
1610_purchasemorecorrelationgraphHere’s an excerpt from the graphic showing the three year impact on revenues for a $1 billion company in 20 different industries:

1610_roirevsbyindustry

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To see the customer experience levels of all 294 companies, download to the free 2016 Temkin Experience Ratings report.

P.S. Net Promoter Score, Net Promoter, and NPS are registered trademarks of Bain & Company, Satmetrix Systems, and Fred Reichheld.

The Ultimate Customer Experience Infographic, 2016

Once again, Temkin Group is publishing a new infographic as part of our CX Day celebration.

1610_cxmattersinfographic

Take a look at last year’s ultimate CX infographic.

Here are links to download different versions of the infographic:

1610_cxmattersinfographic Infographic: in .jpg format, in .pdf format

1610_cxmattersinfographic_poster 18″ x 24″ poster: in .jpg format, in .pdf format

 

The (Large) Connection Between Emotion And Loyalty

In case you missed it, we labeled 2016 as The Year of Emotion in our annual listing of CX trends. To help organizations better understand customer emotions, we created the Intensify Emotion Movement. Why did we put so much of a focus on emotion? Because it drives loyalty.

We tapped into our recent consumer benchmark study to examine the connection between how consumers rate the emotional component of their interactions and their loyalty across 20 industries. [Note: The emotional data is from the emotion component of the Temkin Experience Ratings]

In the graphic below, we examined the average across all 20 industries. Compared with consumers who had negative emotional experience, consumers who had positive emotional experiences are:

  • 15.1 times more likely to recommend the company
  • 8.4 times more likely to trust the company
  • 7.8 times more likely to try new products and services
  • 7.1 times more likely to purchase more from company
  • 6.6 times more likely to forgive company after a mistake

1608_EmotionAndLoyalty

If you’d like to see this data for each of the 20 industries, you can purchase and download the dataset for $195. To see what you’ll be purchasing, download this sample spreadsheet.

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The bottom line: Want loyal customers? Provide positive emotional experiences.

Report: Economics of Net Promoter Score, 2016

1606_EconomicsofNetPromoter_COVERWe just published a Temkin Group report, Economics of Net Promoter, 2016. Here’s the executive summary:

Net Promoter® Score (NPS®) is a popular metric that companies use to analyze their customer experience efforts, but how does it actually relate to loyalty? We asked thousands of consumers to give an NPS to 294 companies across 20 industries, and then we examined the connection between NPS and four key areas of loyalty. We found that compared to detractors, promoters are more than five times as likely to repurchase from companies, more than seven times as likely to forgive companies if they make a mistake, and almost nine times as likely to try new offerings from companies. Our research also shows that promoters recommend a company to an average of 3.5 people. The following analysis provides detailed loyalty data of promoters, passives, and detractors across 20 industries: airlines, auto dealers, banks, computer and tablet makers, credit card issuers, fast food chains, health plans, hotel chains, insurance carriers, Internet service providers, investment firms, major appliance makers, parcel delivery services, rental car agencies, retailers, software firms, supermarkets, TV service providers, utilities, and wireless carriers. Ultimately, if a company wants to benefit from using NPS as a key metric, it must focus on improving customer experience, not obsessing over the metric itself.

Download report for $295
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Here’s one of the 12 graphics in the report, which shows the average loyalty differences for promoters, passives, and detractors across all industries:NPSEconomicsOverview

The report provides this loyalty data for promoters, passives, and detractors for 20 industries: airlines, auto dealers, banks, computer and tablet makers, credit card issuers, fast food chains, health plans, hotel chains, insurance carriers, Internet service providers, investment firms, major appliance makers, parcel delivery services, rental car agencies, retailers, software firms, supermarket chains, TV service providers, utilities, and wireless carriers.

Download report for $295
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See our VoC/NPS resource page, which includes great resources for creating a successful NPS program. You mat also want to see our latest NPS Benchmark Report with NPS data on 291 companies.

The bottom line: Promoters are much more valuable than detractors.

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

Customer Experience: The Path From Fluff to Tough (Infographic)

Temkin Group’s research shows that companies evolve through six stages of CX maturity, but the higher levels of maturity take a significant jump in focus and commitment. What does that path look like? Take a look at this infographic.

1601_CXFluffToTough_infographic

You can download (and print) this infographic in different forms:

The bottom line: Make the leap from fluff to tough

ROI of Customer Experience (Infographic)

People always ask about the connection between customer experience and business results. Well, here’s some visual evidence of the linkage. In this infographic, we share data from the Temkin Group research report, ROI of Customer Experience 2015.

1601_ROIofCX_Infographic

You can download (and print) this infographic in different forms:

Why CX Does Not Always Drive Loyalty

We recently published the Temkin Loyalty Index (TLi), which examines five areas of loyalty for 293 companies. So I looked at how that data related to the Temkin Experience Ratings (TxR) for those same companies. To normalize the data across industries, we compared company scores to the averages for their industries. As you can see below, there’s a very high correlation between the two.

1512_LoyaltyIndexTxR2

For most companies, their CX is fairly predictive of their loyalty. But this connection is not equally strong for all companies. We took a look at the outliers, the companies that have loyalty levels that are much stronger or much weaker than their CX would suggest.

1512_CXLoyaltyOutliers

Why is it that some companies have a much higher or lower loyalty than their CX would suggest? Here are some reasons:

  • Brand halo: Sometimes consumers’ view of a brand is stronger or weaker than would be supported by their experiences with the company. For some reason, there are emotional drivers that make consumers love or hate the company.
  • Loyalty latency. When consumers have an experience that is not reflective of their expectations for a company, they often treat it as an exception. So it can take time for consumers to recognize that a company’s CX has improved or declined, and to adjust their loyalty accordingly.
  • Switching costs. The harder it is for a consumer to move from one provider to another, the less effect bad CX will have on loyalty.
  • Perceived alternatives. The fewer direct replacements that a consumer thinks he/she has for a company’s product or service, the less effect bad CX will have on loyalty.

The bottom line: CX has a strong, but not complete effect on loyalty

Report: ROI of Customer Experience, 2015

1510_RoIofCX_COVERWe published a Temkin Group report, ROI of Customer Experience, 2015. This research shows that CX is highly correlated to loyalty across 20 industries. Here’s the executive summary:

To understand the connection between customer experience (CX) and loyalty, we examined feedback from 10,000 U.S. consumers that describes both their experiences with and their loyalty to 293 companies across 20 industries. Our analysis shows a strong correlation between customer experience and loyalty factors such as repurchasing, trying new offerings, forgiving mistakes, and recommending the company to friends and colleagues. While all three components of customer experience—success, effort, and emotion—have a strong effect on loyalty, our research shows that emotion is the most important element. When we compared the consumers who gave companies a very good customer experience rating to those who gave companies a very bad customer experience rating, we found that at companies with high customer experience ratings, the percentage of customers who plan on purchasing more is 18 points higher, the percentage who will forgive the company if it makes a mistakes is 12 points higher, the percentage who will try a new offering is 10 points higher, and the percentage who trust the company is 19 points higher. Additionally, companies with very good CX ratings have an average Net Promoter® Score that is 24 points higher than the scores of companies with poor CX. We built a model to evaluate how, over a three-year period, customer experience impacts the revenue of a $1 billion business within each of the 20 industries. This model shows that CX has the largest impact on the revenue of hotels ($823 million) and rental cars ($755 million) over three years. This report also includes a five-step approach for building a model that estimates the value of CX for your organization.

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This is the first figure in the report, and it shows the high correlation between Temkin Experience Ratings (customer experience) and purchase intentions for 293 companies across 20 industries:
1510_CXvsRepurchase

Here’s an excerpt from the graphic showing the three year impact on revenues for a $1 billion company in 20 different industries:

1510_ROIRevenues

Download report for $295
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To see the customer experience levels of all 293 companies, download to the free 2015 Temkin Experience Ratings report.

P.S. Net Promoter Score, Net Promoter, and NPS are registered trademarks of Bain & Company, Satmetrix Systems, and Fred Reichheld.

The Ultimate Customer Experience Infographic, 2015

Once again, Temkin Group is publishing a new infographic for CX Day.

CXMattersInfoCut

You can see the full infographic below. Here are links to:

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Customer Experience Matters (The Video)

CX Day is less than one week away!

As part of Temkin Group’s CX Day celebration, we created a new video, Customer Experience Matters® . It shows the value and power of customer experience. Share it, share it, share it!

The bottom line: Customer experience really matters

Customer Experience Matters is a registered trademark of Temkin Group

Report: Economics of Net Promoter, 2015

1506_Economics of Net Promoter_COVERWe just published a Temkin Group report, Economics of Net Promoter, 2015. Here’s the executive summary:

Net Promoter® Score (NPS®) is a popular metric that companies use to analyze their customer experience efforts, but how does it actually relate to loyalty? We asked thousands of consumers to give an NPS to 293 companies across 20 industries, and then we examined the connection between NPS and four key areas of loyalty. We found that compared to detractors, promoters are more than five times as likely to repurchase from a company, more than five times as likely to forgive a company if it makes a mistake, more than seven times as likely to try a new offering shortly after its introduction, and that they recommend the company to about four times as many people. This analysis examines the loyalty behaviors of promoters, passives, and detractors across 20 industries: airlines, appliance makers, auto dealers, banks, rental car agencies, computer and tablet makers, credit card issuers, fast food chains, health plans, hotel chains, insurance carriers, Internet service providers, investment firms, parcel delivery services, retailers, software firms, supermarkets, TV service providers, utilities, and wireless carriers. The percentage of promoters who are likely to repurchase ranges from 96% for retailers, fast food chains, and supermarkets down to 77% for airlines, while the percentage of those who are likely to forgive ranges from 72% for computers & tablets, utilities, and supermarkets down to 51% for airlines. Meanwhile, the percentage of those who are likely to try new offerings ranges from 70% for major appliances and software firms down to 52% for banks. Ultimately, if a company wants to benefit from using NPS as a key metric, it must focus on improving customer experience, not obsessing over the metric itself.

Download report for $295
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Here’s an excerpt from one of the 12 graphics, which shows the loyalty differences for promoters, passives, and detractors across all industries:

1506_ValueOfPromotersDetractors

The report provides loyalty data for promoters, passives, and detractors across 20 industries: airlines, auto dealers, banks, computer and tablet makers, credit card issuers, fast food chains, health plans, hotel chains, insurance carriers, Internet service providers, investment firms, major appliance makers, parcel delivery services, rental car agencies, retailers, software firms, supermarket chains, TV service providers, utilities, and wireless carriers.

Download report for $295
BuyDownload3

See our VoC/NPS resource page, which includes great resources for creating a successful NPS program. You mat also want to see our latest NPS Benchmark Report with NPS data on 283 companies.

The bottom line: Promoters are much more valuable than detractors.

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

The Ultimate Customer Experience Infographic, 2014

In honor of Customer Experience Day, Temkin Group created its second annual “The State of Customer Experience” infographic.

1410_TemkinGroup_StateOfCX_POSTER

You can see a vertical  infographic below or:

Here are links to the research referenced in this infographic:

Here’s a link to last year’s infographic.

The bottom line: Happy Customer Experience Day!

This blog post is part of the 2014 CX Day Customer Experience Blog Carnival hosted here:  http://community.cxpa.org/blogs/val-moschella/2014/10/07/cx-day-blog-carnival-cx-core-competencies

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