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.

Exploring Multiple Emotions During Contact Center Interactions

In a previous post, I discussed results from a joint study that we conducted with Mattersight Personality Labs (MPL) to examine customer emotions within contact center interactions.

MPL isolated the occurrence of four specific emotions: joy, anger, sadness, and fear in more than 118,000 calls across 11 large brands. In addition to detecting the customer emotion, we also analyzed the lengths of the calls, the percentage of calls transferred to other agents or supervisors, and the Net Promoter® Score (NPS®) provided by customers right after their calls.

To normalize the analysis across companies, we divided the data for individual calls by company averages. So a “1.0” is equal to company average.

While the previous post examined the individual emotions, this post looks at the combinations of the four emotions. While less than 1% of callers experienced all four emotions, it happened during more than 650 calls­—more than enough for us to analyze.

1610_emotioncombinations

As you can see in the chart above:

  • Joy plus Fear creates the longest calls. When the calls contain all four emotions, they are almost two and a half times as long as an average call. The next two combinations, which are also more than two times as long as an average call, also contain joy and fear.
  • Multiple emotions create longer calls. The only calls that are shorter than average are those where we could only detect sadness. The next shortest calls were those that only had joy and anger.
  • Anger plus Fear creates the most transfers. When callers exhibit both anger and fear, the calls are transferred at a rate that is seven times the average. The next highest transfers also happen when the caller demonstrates fear.
  • Joy creates the fewest transfers. The three types of calls that have the lowest transfer rates all contain joy, as do six out of seven. The only types of calls without joy that also have below average transfer rates are those that only contain sadness.
  • Joy raises NPS. When a caller feels only joy, the call results in the highest NPS. Joy is also a part of the calls that earn the two next highest NPS.
  • Anger plus other emotions lowers NPS. The lowest NPS occurs whenever anger is combined with another emotion. The worst combination is anger plus sadness.

The bottom line: Anger and fear are terrible emotions to occur on a call.

Guide to Organizational Culture Change (Infographic)

We regularly help companies create cultures that are more customer-centric.  So it seemed like a fun idea to create an infographic on the topic. Enjoy! You may want to see a video we created about customer-centric culture or the report, Employee-Engaging Transformation.
guide-to-organizational-culture-change

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

The bottom line: The customer experience you deliver is a reflection of your culture

Report: State of Voice of the Customer Programs, 2016

1610_stateofvocprograms2016_coverWe published a Temkin Group report, State of Voice of the Customer Programs, 2016. This is the sixth year that we’ve benchmarked the competency & maturity of voice of the customer programs within large organization. Here’s the executive summary:

For the sixth straight year, Temkin Group has benchmarked the competency and maturity levels of voice of the customer (VoC) programs within large organizations. We found that while most companies think that their VoC efforts are successful, less than one-third of companies actually consider themselves good at reviewing implications that cut across the organization. Respondents think that in the future, the most important source of insights will be customer interaction history and the least important source will be multiple-choice questions. And although respondents believe that technology will play an increasingly important role in their VoC efforts, they also cite “integration across systems” as the biggest obstacle to their VoC success, and this concern has only grown in the past year. In addition to asking questions about their VoC program, we also had respondents complete Temkin Group’s VoC Competency and Maturity Assessment, which examines capabilities across what we call the “Six Ds”: Detect, Disseminate, Diagnose, Discuss, Design, and Deploy. Only 16% of companies have reached the two highest levels of VoC maturity, while 43% remain in the bottom two levels. When we compared higher-scoring VoC programs with lower-scoring programs, we found that companies with mature programs are more successful, they focus more on analytics, and they have more full-time staff, more strongly coordinated efforts, and more involved senior executives.

See the State of VoC reports from 2010201120132014, and 2015.

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Here are the results from Temkin Group’s VoC Competency & Maturity Assessment:

1610_vocmaturity

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Modernize Leadership: Detect and Disseminate

1609_ML_DetectDisseminate

In a previous post, I described how today’s management techniques reflect outdated assumptions of technology-enabled practices, human behavior, and the meaning of success. That’s why organizations must shift to what I’m calling Modernize Leadership.

I’m writing individual posts for each of the eight key changes required to modernize leadership. In this post, I’m examining one of them, the shift from:

Amass and Review to Detect and Disseminate

Here’s some more information to better understand this shift:

Outdated Thinking
Here are some ways in which leaders must change how they view the world:

  • Leaders rely on periodic, deep understanding of the business. But the pace of change is increasing, and that point-in-time understanding of the past does not always provide a meaningful view of the future, or even how to compete in the present. Leaders need a more continuous set of insights.
  • Leaders often act as if customer insights are difficult to gather, so they periodically ask for a large project to provide a Powerpoint-dump to their executive teams. But current technology allows for more ongoing collection and presentation of insights.
  • Customer insights teams are required to focus many of their resources on the needs of the leadership team, providing support for a few key decisions. At the same time, a myriad of decisions across the organization are being made without the benefit of strong customer insights.
  • Customer insights teams aim to provide “statistically significant” insights, requiring large datasets and extensive timeframes for collecting data. But it takes only a few datapoints to create actionable insights when they are presented to employees across the business who have more context about the business.

Galileo Galilei, the father of the scientific method, once said:

All truths are easy to understand once they are discovered; the point is to discover them.”

Modernized Leadership Actions
Here are some ways in which leaders should act based on a modernized perspective:

  • Build a customer insight backbone. Given the state of technology, companies need to stop viewing customer insight as a set of market research projects and see it as a core organizational infrastructure. That’s why companies need to build what we defined in 2010 as customer insight & action (CIA) platforms. The goal should be to enable a continuous flow of customer-insightful decisions.
  • Distribute role-based insights. All employees make decisions on a regular basis, and many of those would be improved with a deeper understanding of customers. But distributing a common set of monthly Powerpoint slides is not the answer. Engineering teams, for instance, don’t need the same information as the legal department. Companies must tailor insights for each organization to provide the right information at the right time to fuel the decisions that are being made by employees with different roles.
  • Tap into the power of context. While analysis of large datasets may be great, people across an organization can often act on smaller timely nuggets of data. A call center supervisor, for instance, only needs to see one negative piece of customer feedback to kick off a coaching session if she is already concerned about that phone rep. These relevant datapoints fuel what we call contextual insights.
  • Raise all employees’ customer-awareness. Since insights can be more easily distributed, leaders should look for ways to tap into the insights in order to make everyone in their organization more aware of (and empathetic to) customers’ needs and perceptions.

The bottom line: Turn customer insight into a continuous, distributed capability.

Report: Net Promoter Score Benchmark Study, 2016

1610_npsbenchmarkstudy_coverWe published a Temkin Group report, Net Promoter Score Benchmark Study, 2016. This is the fifth year of this study that includes Net Promoter® Scores (NPS®) on 315 companies across 20 industries based on a study of 10,000 U.S. consumers. Here’s the executive summary:

As many large companies use Net Promoter® Score (NPS) to evaluate their customer loyalty, Temkin Group measured the NPS of 315 companies across 20 industries. With an NPS of 68, USAA’s insurance business earned the highest score in the study for the fourth year in a row. Four other companies also earned an NPS of 60 or higher: Cadillac, USAA’s banking business, Apple, and USAA’s credit card business. In addition to earning some of the top scores, USAA’s banking, credit card, and insurance businesses also all outpaced their respective industries’ averages by more than any other company. Comcast, meanwhile, earned the lowest NPS for the second year in a row, coming in just below Time Warner Cable, Cox Communications, and McDonalds. And while all 20 industries increased their average NPS from last year, utilities enjoyed the biggest improvement in its score. Out of all the companies, US Airways’s and Advantage Rent-A-Car’s scores improved the most, whereas TriCare’s and Lexus’s scores declined the most. On average across the industries, the youngest consumers gave companies the lowest NPS, while 35- to 44-year-olds gave them the highest NPS.

See the NPS Benchmark Studies from 2012, 20132014, and 2015.

Here’s a list of companies included in this study (.pdf).

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Here are the NPS scores across 20 industries:
1610_rangeofindustrynps

Here are some other highlights of the research:

  • Five industries toped the list with an average NPS of 40 or more: auto dealers, software, investments, computers & tablets, and appliances.
  • The bottom scoring industries are TV service providers, Internet service providers, and health plans.
  • USAA’s insurance, banking, and credit card businesses earned NPS levels that are 30 or more points above their industry averages. Five other firms are 20 or more points above their peers: com, credit unions, Chick-fil-A, Apple, and Trader Joe’s.
  • Five companies fell 25 or more points below their industry averages: RadioShack, Motel 6, eMachines, McDonalds, and Days Inn.
  • US Airway’s NPS increased by 31 points between 2015 and 2016, the largest increase of any company. Eight other companies improved by 25 or more points: Fifth Third, 21st Century, Fujitsu, DHL, MetLife, HSBC, Commonwealth Edison, PSE&G, and Hannaford.
  • TriCare, Lexus, Mercedes-Benz, Baskin Robins, and Nordstrom had double-digit declines in NPS between 2015 and 2016.

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If you want to know what data is included in this report and dataset, download this sample Excel dataset file.Screen Shot 2014-10-17 at 4.05.17 PM

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

Start Talking About Emotions (Video)

To help celebrate “The Year of Emotion” on CX Day (and beyond), Temkin Group created this fun, short video: Start Talking About Emotion.

The bottom line: Add the Five A’s of an Emotional Response to your vocabulary

Free eBook: 25 Tips For Tapping Into Customer Emotions

1609_ebook_25emotiontips_finalAs part of our CX Day celebration, we’re giving away this free eBook: 25 Tips For Tapping Into Customer Emotions.

Here’s the executive summary:

Emotions play an essential role in how people form judgments and make decisions. Consequently, a customer’s emotional response to an experience with a company has a significant impact on their loyalty to that company. To help you improve your customer experience, we’ve compiled a list of 25 examples from companies who are tapping into customer emotions, which you can emulate at your own organization.

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The eBook contains 25 tips across four areas: Experience Design, Organizational Personality, Organizational Empathy, and Customer Segmentation.

1610_25emotiontips

The bottom line: Apply these lessons to tap into your customers’ emotions

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

 

Infusing Humanity Into CX, Discussion With Barry Schwartz

It’s CX Day in New Zealand, so that’s reason enough to kick off Temkin Group’s CX Day celebration. I can’t think of a better way to start CX Day in The Year of Emotion, then to share my Q&A with Barry Schwartz.

During this one hour video focused on Infusing Humanity into CX, we discuss some of Barry’s key findings about people and happiness, and explore what it means for customers, employees, and leaders. Sit back and enjoy the discussion, and then follow the links below for more information.

In case you don’t know Barry (and you should!), he’s the Emeritus professor of psychology at Swarthmore College, and has spent forty years thinking and writing about the interaction between economics and morality. 

This Q&A was a real pleasure for me, because Barry has heavily influenced my thinking over the years. He’s one of the key thought leaders of our time, and I believe that all CX professionals (and all leaders) can learn from him.

Here’s some of Barry’s work that we discuss:

Here’s some of our research that we discuss:

The bottom line: Thank you Barry Schwartz!

Report: Translating Brand Promises into Employee Behaviors

1608_translatingpromisesintobehaviors_coverWe just published a Temkin Group report, Translating Brand Promises into Employee Behaviors. Here’s the executive summary:

Temkin Group has found that the companies that deliver great customer experience use their brand as a blueprint for how they treat customers, which is why Compelling Brand Values is one of our four customer experience core competencies. Too often organizations put a lot of energy into communicating the brand externally, only to fall short on connecting employees to their role in keeping brand promises. And when employees aren’t connected to these promises, they tend to be less proactive, to act inconsistently, and to care less about their work. In this report, we describe three steps that companies can use to translate their brand promises into employee behaviors: Make promises, Embrace promises, and Keep promises. To illustrate this approach, we share over 20 examples of best practices from companies including Anthem, A&W Food Services of Canada, the city of Centennial, Oklahoma City Thunder, and Quest Diagnostics. To evaluate how well your organization follows this approach, use Temkin Group’s Compelling Brand Promises Assessment.

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Here’s are two of the 15 graphics in the report:

1609_bestpracticemakeembracekeeppromises 1609_promisesmissionvalues

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Customer Emotions (Joy, Anger, Sadness, and Fear) Affect Contact Center Interactions

As you may know, Temkin Group labeled 2016 “The Year of Emotion” in its annual listing of customer experience trends. Why? Because emotion drives loyalty. And yet, despite its significant impact on customer loyalty, organizations do not focus on emotion enough. So to help increase organizations’ awareness of this critical area of customer experience, we created the Intensify Emotion Movement.

As part of our efforts to bring emotion to forefront of CX discussions, we worked with Mattersight Personality Labs to examine customer emotions within contact center interactions, a notorious hotbed of customer discontent. Analysts at Mattersight did the heavy lifting, applying the company’s analytical models to more than 118,000 calls across 11 large brands. While customers experience multiple emotions during every call, for this analysis we isolated the occurrence of four specific emotions: joy, anger, sadness, and fear.

Temkin Group and Mattersight Personality Labs collectively analyzed the results of this work. In addition to detecting customers’ emotions, we also analyzed the lengths of the calls and the Net Promoter® Score (NPS®) provided by customers right after their calls. [Why NPS? Because we had the data.]

To normalize the data across companies, we divided the data for individual calls by company averages. So a “1.0” is equal to company average.

06_Call-Experience_v02

The chart above captures some of the key findings:

  • Joy leads to best calls. No surprise, the only positive emotion we examined results in the highest NPS, the shortest calls, and the least frequent call transfers. Interestingly, the calls where we detected joy are actually slightly longer than average (although well less than the other three emotions). While we didn’t analyze the exact reasons why this happens, it could be caused by the willingness of the caller and agent to take a bit more time conversing when the customer feels happier and more friendly.
  • Fear leads to most expensive calls. In instances when customers felt detectably fearful, the call time jumps to 87% higher than company average, by far the longest of any emotion. In these calls, we also found that the caller was transferred to another agent or supervisor more than 3.5-times as frequently as the company average. The NPS drops lower than average as well.
  • Anger leads to lowest NPS. When customers experience anger, they give the lowest NPS (19% below company average). The calls are also 40% longer than average and are more than twice as likely to be transferred.
  • Sadness leads to low NPS. Customers who experience sadness give companies an NPS that is only slightly higher than the one they give when they are angry (18% below company average).

Additional Findings

Here are some additional findings from the research:

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Data Snapshot: Channel Preferences Benchmark, 2016

1609_ds_channelpreferences2016_coverWe just published a Temkin Group data snapshot, Channel Preferences and Cross-Channel Activity Benchmark, 2016. The research examines consumer preferences for using different channels for completing common tasks as well as the frequency of several cross-channel interactions.

Here’s the executive summary:

In Q3 2016, we surveyed 10,000 U.S. consumers about their channel preferences for performing 11 different activities—such as selecting a life insurance policy or applying for a new credit card—and compared them to the results of a similar study conducted in 2015. This data snapshot examines how channel preferences vary across age groups, how these preferences have changed over the past year, and how channel preferences differ across multiple activities. (See last year’s data snapshot).

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A key component of the research examines how consumers would like to complete 11 different interactions with companies: Apply for a new credit card, change the beneficiary on a life insurance account, check the balance on a savings or checking account, check the delivery status of a purchase you made, investigate a mistake in your monthly cell phone bill, open a new investment account, purchase a new auto insurance policy, resolve a technical problem with your computer, select a life insurance policy,  and update your address on an account after you move.

The report has 13 data-filled charts, covering the 11 activities with details of preferences by age. Here’s one of the graphics (without the numbers) showing that consumers most prefer using their computers…

1609_channelpreferences

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Wells Fargo: A Lesson in Leadership & Culture Gone Awry

In case you missed this in the news, Wells Fargo is under investigation for opening fraudulent accounts for its customers. During a period between 2011 and 2015, it is estimated that there were as many as 1.5 million deposit accounts and more than half a million credit card accounts opened inappropriately on behalf of customers.

As part of a hearing of the Senate Banking Committee, U.S. Senator Elizabeth Warren grills Wells Fargo CEO John Stumpf and makes a few very important points. Stumpf heavily, heavily pushed his organization to cross-sell products, setting a long-term goal of 8 products per household, while the industry average was around three. He regularly touted the increase in products per household (over 6.1) to investment analysts and pushed his organization for the growth to continue.

My Take: Stumpf should resign (or be fired). That sounds abrupt, but let me explain…

In this blog, I often discuss the power of culture. It’s one of the most critical drivers of the behaviors of employees across large organizations. As a matter of fact, Peter Drucker has been credited as saying, “Culture eats strategy for lunch.”

Whenever there is a consistent set of widespread actions (good or bad), then the first place you should look to explain them is the culture. One of our Six Laws of Customer Experience is that employees do what is measured, incented, and celebrated. Clearly at Wells Fargo, cross-selling new accounts to customers was measured, incented, and celebrated.

So Wells Fargo employees acted in ways that were consistent with their environment.  They acted in accordance with the company’s culture. Does that mean that the individuals who did the wrong things should be absolved of their errors? Absolutely not. They were wrong and should face the consequences for their actions. But the acts of individuals are symptoms, while the culture that encouraged those behaviors is the systemic issue.

That gets me back to Stumpf. He created (or at least nurtured) the culture across Wells Fargo, and should therefore be held accountable for the consequences. Let me put it this way, should Victor Frankenstein be held accountable for the damage caused by the monster he created? Of course!

Stumpf was rewarded handsomely for the cross-sell results of the culture he created. It’s now time for him to pay the price for the problems caused by that culture.

The bottom line: Leaders must be more mindful of the culture they create.

 

2016 Temkin Emotion Ratings (Publix, Chick-fil-A, and Residence Inn Are the Leaders)

For the previous five years, we’ve measured emotion as part of the Temkin Experience Ratings (TxR). This year, we examined 294 companies across 20 industries based on a survey of 10,000 U.S. consumers (see methodology section below). The TxR examines the three elements of customer experience: success, effort, and emotion. In this post, I examine the results for the Temkin Emotion Ratings.

Emotion is the component of customer experience that is the most significant driver of customer loyalty. And we showed the connection between emotion and loyalty in a recent post. To find out more about how you can tap into the power of customer emotions, visit the Intensify Emotion Movement.

Publix, Chick-fil-A, and Residence Inn earned the only “good” scores for delivering the most positive emotional experiences, followed closely by H-E-B, True Value, Kroger, Save-a-Lot, Wawa Food Market, QVC, and Amazon.

At the other end of the emotional spectrum, the companies with the lowest Ratings are Comcast (for both Internet service and TV service), Fujitsu, Health Net, Blue Shield of CA, Anthem, Time Warner Cable, Commonwealth Edison, Medicaid, Charter Communications, and AT&T.

1609_temotr_leaderslaggards

Do you want to the data from the 2016 Temkin Effort Ratings? It’s included in the Temkin Experience Ratings spreadsheet that you can purchase for $395.
Here’s a sample of the spreadsheet (.xls)

Here are some additional insights from the 2016 Temkin Emotion Ratings:

  • The supermarket and fast food industries earned the highest average Temkin Emotion Ratings (at “okay” level), while health plans, TV service providers, and Internet providers were at the bottom with “very poor” ratings.
  • The following companies earned ratings that are the most above their industry averages: Amazon, Residence Inn, Florida Power & Light, TXU Energy, National Car Rental, and Alabama Power Company.
  • The following companies earned ratings that are the farthest below their industry averages: Fujitsu, Motel 6, Super 8, Chrysler, Volkswagen, Commonwealth Edison, and Citibank.
  • The following companies earned the largest improvement between the 2015 and 2016 Ratings: Coventry Health Care, True Value, Con Edison of NY, Consumers Energy Company, Dominion Virginia Power, and Fox Rent A Car.
  • The following companies declined the most between 2015 and 2016: Volkswagen, Fujitsu, Commonwealth Edison, BMW, GM, Health Net, and JetBlue.

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