Full report included
Retailers And Hotels Top Forrester’s Annual Customer Experience Ranking The Customer Experience Index, 2008
Continue Making Customer Experience A Priority In An Economic Downturn Only 11 percent of companies garnered a rating of “excellent” in this year’s Customer Experience Index of large US firms. We asked more than 4,500 consumers about their interactions with 114 companies across 12 different industries and developed its Customer Experience Index based on the usefulness, ease of use, and enjoyability of those experiences. Thirty-eight percent of firms were rated as “poor” or “very poor.”
Our Recommendations To keep customer experience momentum in a downturn, we offer several recommendations for companies including: Prioritizing the moments of truth that occur during customer interactions
because they have the biggest impact on overall satisfaction, likelihood to repurchase, and likelihood to recommend. Seeking usability improvements to key customer touch points like Web sites,
service emails, and interactive voice response (IVR) systems. Increasing communication with employees to keep them apprised of any shifts in
priorities and engaged with overall customer experience efforts.
For more information Forrester offers research, workshops, peer networking, and consulting services specifically for the needs of Customer Experience professionals. To find out more about how Forrester can make you successful every day, please contact your account manager or visit us at www.forrester.com/customerexperience.
Making Leaders Successful Every Day
December 12, 2008
The Customer Experience Index, 2008 by Bruce D. Temkin for Customer Experience Professionals
Making Leaders Successful Every Day
For Customer Experience Professionals
December 12, 2008
The Customer Experience Index, 2008
Consumers Rate The Customer Experience Across 114 Large US Firms
This is the first document in the “Customer Experience Index, 2008” series. by Bruce D. Temkin with William Chu and Steven Geller
Exec uti v e S u m ma ry Forrester asked nearly 5,000 consumers about their interactions with a variety of companies, gauging the usefulness, ease of use, and enjoyability of those experiences. Based on these consumer responses, we calculated the Customer Experience Index for 114 firms in 12 different industries. Barnes & Noble and USAA topped the rankings, while Charter Communications and Medicaid came in at the bottom. Only 11% of the firms wound up with “excellent” ratings — and 38% were “poor” or “very poor.” At an industry level, retailers and hotels ended in the top spots for all categories, while medical insurers and TV service providers ended up at the bottom. Led by U.S. Bancorp, SunTrust, and Citibank, banks made the largest improvement from last year. Time Warner Cable, Charter Communications, and Blue Shield of California had the largest decline. Even in an economic downturn, firms need to keep customer experience momentum and chart a course toward Experience-Based Differentiation.
tabl e o f Co nte nts 2 Barnes & Noble Takes The Top Spot In Forrester’s 2008 Customer Experience Index Forrester’s 2008 CxPi Rankings: Barnes & Noble And USAA Top The List The Usefulness, Ease Of Use, And Enjoyability Leaders 14 Retailers And Hotels Sweep The Customer Experience Categories recommendations
17 Continue To Make Customer Experience A Top Priority 18 Supplemental Material
NOT E S & R E S OUR CE S As part of an online survey in Q4 2008, Forrester asked 4,564 US consumers about their interactions with airlines, banks, cell phone service providers, credit card providers, hotels, insurance firms, Internet service providers, investment firms, medical insurance companies, PC manufacturers, retailers, and TV service providers. The questions examined the usefulness, ease of use, and enjoyability of those experiences.
Related Research Documents “The Customer Experience Journey” September 17, 2008 “The Business Impact Of Customer Experience” March 24, 2008 “The Customer Experience Index, 2007” November 21, 2007 “Experience-Based Differentiation” January 2, 2007
© 2008, Forrester Research, Inc. All rights reserved. Forrester, Forrester Wave, RoleView, Technographics, TechRadar, and Total Economic Impact are trademarks of Forrester Research, Inc. All other trademarks are the property of their respective companies. Forrester clients may make one attributed copy or slide of each figure contained herein. Additional reproduction is strictly prohibited. For additional reproduction rights and usage information, go to www.forrester.com. Information is based on best available resources. Opinions reflect judgment at the time and are subject to change. To purchase reprints of this document, please email clientsupport@forrester.com
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The Customer Experience Index, 2008 For Customer Experience Professionals
Barnes & Noble Takes THE Top SPot IN FORRESTER’S 2008 CUSTOMER EXPERIENCE INDEX Executives tell us that customer experience is critical to their competitiveness.1 That makes sense because our research shows that good customer experience correlates with customer loyalty.2 But how effective are their firms at delivering good customer experiences? To answer this question, we created Forrester’s second annual Customer Experience Index (CxPi). Calculating the CxPi required the following steps.
· We asked consumers to identify companies they do business with . . . Consumers selected
companies they work with in 12 different industries (see Figure 1). In all, we collected data on 220 different North American organizations, but we limited our rankings to the firms where we had at least 100 responses.
· . . . and answer three questions about each organization . . . Customers want their interactions with companies to be useful, easy, and enjoyable.3 To gauge these dimensions we asked consumers three questions about the firms they work with (see Figure 2).4
· . . . which let us calculate a customer experience index for 114 firms. To calculate each firm’s CxPi, we subtracted the percentage of its customers that reported a bad experience from the percentage that reported a good experience — for all three questions. The overall CxPi is an average of those three results.
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The Customer Experience Index, 2008 For Customer Experience Professionals
Figure 1 Consumers Rated The Experience Of 114 Firms Across 12 Industries Airlines American Airlines Continental Airlines Delta Air Lines Banks A credit union Bank of America Capital One/North Fork Bank
Northwest Airlines Southwest Airlines
United/Ted US Airways/America West
Citibank JP Morgan Chase National City SunTrust Bank U.S. Bancorp
Wachovia Washington Mutual Wells Fargo
Credit card American Express Citigroup (e.g., Citibank) USAA providers Bank of America (including MBNA) Discover Bank Washington Mutual Capital One HSBC (including Orchard Bank) Wells Fargo Chase Health Aetna insurance Anthem (Blue Cross Blue Shield) plans Blue Shield of California Hotels Comfort Inn Hampton Inn/Suites
CIGNA Kaiser Medicaid
Medicare TriCare United Healthcare
Hilton Hotels Holiday Inn
Holiday Inn Express Marriott Hotels & Resorts
Insurance AAA Geico Progressive providers Allstate Insurance Liberty Mutual Insurance State Farm An independent insurance agent Nationwide Mutual Insurance USAA Farmers Insurance Group Internet AOL (America Online) service AT&T/SBC/Yahoo! providers BellSouth
Charter Communications Comcast Cox Communications
MSN (Microsoft Network) Qwest Communications Road Runner (Time Warner Cable) Verizon (Internet)
Edward Jones Fidelity Investments
Merrill Lynch Other full-service brokerage The Vanguard Group
Dell Gateway
Hewlett-Packard
eBay The Home Depot JCPenney Kmart Kohl’s Lowe’s Macy’s Office Depot
Old Navy RadioShack Sam’s Club Sears Staples Target Toys “R” Us Walgreens Wal-Mart
TV service Bright House providers Charter Communications
Comcast Cox Communications DirecTV
Dish Network (EchoStar Satellite) Other cable TV provider Time Warner Cable
Wireless Alltel service AT&T providers
Sprint T-Mobile
TracFone Wireless Verizon Wireless (cell phone)
Investment A credit union firms Charles Schwab PC Apple manufacturers Compaq Retailers Amazon.com Barnes & Noble Best Buy BJ’s Wholesale Club Borders Circuit City Costco Wholesale CVS
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Source: Forrester Research, Inc.
December 12, 2008
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Figure 2 Three Questions Drive The Customer Experience Index Useful Thinking about your recent interactions with these firms, how effective were they at meeting your needs? Didn’t meet any of my needs
Met all of my needs
Easy to work with Thinking about your recent interactions with these firms, how easy was it to work with these firms? Very difficult
Very easy
Enjoyable Thinking about your recent interactions with these firms, how enjoyable were the interactions? Not at all enjoyable 45192
Very enjoyable
Source: Forrester Research, Inc.
Forrester’s 2008 CxPi Rankings: Barnes & Noble And USAA Top The List After coming in third place last year, Barnes & Noble took the top spot in Forrester’s 2008 CxPi rankings — beating out USAA by just 1% (see Figure 3).5 At the other end of the spectrum, Charter Communications and Medicaid landed at the bottom of the rankings. Here are some additional insights about the overall results:
· Retailers take seven out of the top 10 spots. Last year, nine out of the top 10 firms were
retailers. While retailers still dominate the top of the CxPi, three nonretailers have cracked the top 10: USAA, Hampton Inn, and credit unions.
· Healthcare and TV dominate the bottom. The bottom 10 companies came from only four
industries: four health insurance plans (Medicaid, Blue Shield of California, Aetna, and CIGNA), three TV service providers (Charter Communications, Time Warner Cable, and Comcast), two ISPs (Charter Communications and Comcast), and one wireless service carrier (Sprint). Charter Communications, Medicaid, Aetna, and Sprint were also on last year’s bottom 10 list.
· There was more poor than good. Only 13 firms ended up with an “excellent,” and 28 received
a “good” rating (see Figure 4). At the other end of the spectrum, 43 received either a “poor” or “very poor” rating (see Figure 5).
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The Customer Experience Index, 2008 For Customer Experience Professionals
· Several banks made significant improvements. When we compared firms’ 2008 CxPi with
last year’s results, we found that a number of companies had improved (see Figure 6-1). The three firms with double-digit improvements were all banks (U.S. Bancorp, SunTrust Bank, and Citibank), and six out of the top seven improvements were made by banks as well.
· TV and Internet service firms declined. Seven companies ended up with 2008 CxPi scores that were at least 10 percentage points lower than in 2007 (see Figure 6-2). In that group of severe decliners are three ISPs (Comcast, Time Warner Cable, and Charter Communications) and two TV service providers (Time Warner Cable and Comcast).
The Usefulness, Ease Of Use, And Enjoyability Leaders Examining company scores in each of the three underlying criteria — usefulness, ease of use, and enjoyability — yielded additional insights. Here’s what we found:
· USAA, Amazon.com, and Barnes & Noble lead in usefulness. The firm that most often met
the needs of its customers was the credit card business of USAA. Two booksellers — Amazon. com and Barnes & Noble — followed close behind in the usefulness rankings (see Figure 7). In all, 27 firms received a rating of “excellent,” and six ended up with “very poor” ratings in this area: Charter Communications, Medicaid, Blue Shield of California, Sprint, Time Warner Cable, and Comcast.
· Barnes & Noble and USAA lead in ease of use. Barnes & Noble ended up with an incredibly
high score of 98% for being easy to work with, while USAA’s credit card business wasn’t far behind (see Figure 8). Twenty-five firms received an “excellent” rating for ease of use, while 14 firms received a “very poor” rating. Three firms even received ease of use ratings below 40%: Medicaid, Charter Communications, and Time Warner Cable.
· Barnes & Noble and Borders top enjoyability. On average, firms scored significantly lower on enjoyability than they did on usefulness and ease of use (see Figure 9). Only Barnes & Noble and Borders received an “excellent” rating, and Hampton Inn led 15 firms that received “good” ratings. At the other end of the spectrum, 52 were rated “very poor,” and three firms ended up with enjoyability scores below 30%: Charter Communications, Blue Shield of California, and Comcast.
© 2008, Forrester Research, Inc. Reproduction Prohibited
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Figure 3 Forrester’s Customer Experience Index Rankings 1. Barnes & Noble (retailer) 54. Other full-service brokerage (investment firm)* 2. USAA (credit card provider) 59. T-Mobile (wireless service provider)* 3. Borders (retailer)* 59. Verizon Wireless (wireless service provider)* 3. Amazon.com (retailer)* 59. Fidelity Investments (investment firm)* 3. Costco Wholesale (retailer)* 62. AAA (insurance provider)* 3. Hampton Inn/Suites (hotel)* 62. Bank of America (bank)* 7. BJ’s Wholesale Club (retailer)* 64. Citigroup (e.g., Citibank) (credit card provider)* 7. Sam’s Club (retailer)* 64. Farmers Insurance Group (insurance provider)* 9. A credit union (bank)* 64. Capital One (credit card provider)* 9. Kohl’s (retailer)* 64. TracFone Wireless (wireless service provider)* 9. Marriott Hotels & Resorts (hotel)* 64. MSN (Internet service provider)* 9. JCPenney (retailer)* 64. Gateway (PC manufacturer)* 9. Target (retailer)* 64. AT&T (wireless service provider)* 14. Old Navy (retailer)* 71. Chase (credit card provider)* 14. Toys “R” Us (retailer)* 72. Continental Airlines (airline)* 16. USAA (insurance provider)* 72. BellSouth (Internet service provider)* 16. Holiday Inn Express (hotel)* 72. Liberty Mutual Insurance (insurance provider)* 18. eBay (retailer)* 72. Wachovia Bank (bank)* 18. CVS (retailer)* 72. Qwest Communications (Internet service provider)* 18. Holiday Inn (hotel)* 72. Hewlett-Packard (PC manufacturer)* 18. Lowe’s (retailer)* 78. Bank of America (credit card provider)* 22. Southwest Airlines (airline) 78. DirecTV (TV service provider)* 23. Staples (retailer)* 78. Other cable TV provider (TV service provider)* 23. Macy’s (retailer)* 78. Washington Mutual (bank)* 23. Apple (PC manufacturer)* 78. Bright House (TV service provider)* 23. Walgreens (retailer)* 78. Citibank (bank)* 27. American Express (credit card provider) 78. Capital One/North Fork Bank (bank)* 28. Kmart (retailer)* 78. Compaq (PC manufacturer)* 28. Progressive (insurance provider)* 86. Verizon (Internet service provider)* 28. Hilton Hotels (hotel)* 86. Merrill Lynch (investment firm)* 31. The Vanguard Group (investment firm)* 88. Cox Communications (TV service provider)* 31. The Home Depot (retailer)* 88. JP Morgan Chase (bank)* 31. Sears (retailer)* 90. American Airlines (airline) 31. A credit union (investment firm)* 91. Washington Mutual (credit card provider)* 35. State Farm (insurance provider)* 91. Delta Air Lines (airline)* 35. Wal-Mart (retailer)* 93. Dell (PC manufacturer)* 37. Best Buy (retailer)* 93. United/Ted (airline)* 37. Circuit City (retailer)* 93. Cox Communications (Internet service provider)* 37. RadioShack* 96. Northwest Airlines (airline)* 37. Discover (credit card provider)* 96. Dish Network/EchoStar (TV service provider)* 37. National City (bank)* 98. Medicare (health insurance plan)* 42. Independent insurance agent (insurance provider) 99. Road Runner (Internet service provider)* 43. SunTrust Bank (bank)* 99. HSBC (credit card provider)* 43. Allstate (insurance provider)* 99. Anthem (BCBS) (health insurance plan)* 43. Wells Fargo (credit card provider)* 102. TriCare (health insurance plan) 43. U.S. Bancorp (bank)* 103. US Airways/America West (airline) 43. Geico (insurance provider)* 104. United Healthcare (health insurance plan) 48. Alltel (wireless service provider)* 105. Comcast (Internet service provider)* 48. Nationwide Mutual Insurance (insurance provider)* 105. CIGNA (health insurance plan)* 48. Edward Jones (investment firm)* 107. Aetna (health insurance plan) 51. AOL (America Online) (Internet service provider)* 108. Sprint (wireless service provider) 51. Office Depot (retailer)* 109. Comcast (TV service provider) 51. AT&T/SBC/Yahoo! (Internet service provider)* 110. Time Warner Cable (TV service provider) 54. Kaiser (health insurance plan)* 111. Charter Communications (TV service provider) 54. Charles Schwab (investment firm)* 112. Blue Shield of Calif. (health insurance plan) 54. Wells Fargo (bank)* 113. Medicaid (health insurance plan) 54. Comfort Inn (hotel)* 114. Charter Communications (Internet service provider) *Note: These companies have the same CxPi as other firms and are therefore tied in the rankings. 45192
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Source: Forrester Research, Inc.
© 2008, Forrester Research, Inc. Reproduction Prohibited
The Customer Experience Index, 2008 For Customer Experience Professionals
Figure 4 Customer Experience Index — Top 25 Overall Very poor
Poor
Okay
Good
Excellent 92%
Barnes & Noble
91%
USAA (credit cards) Borders
88%
Amazon.com
88%
Costco Wholesale
88%
Hampton Inn/Suites
88%
BJ’s Wholesale Club
86%
Sam’s Club
86%
A credit union (bank)
85%
Kohl’s Marriott Hotels & Resorts JCPenney
85%
Target
85%
Old Navy
84%
Toys “R” Us
84%
85% 85%
USAA (insurance)
83%
Holiday Inn Express
83%
eBay
82%
CVS
82%
Holiday Inn
82%
Lowe’s
82%
Southwest Airlines
81%
Staples
80%
Macy’s
80%
Apple
80%
Walgreens
80%
30% 40% 50% 60% 70% 80% 90% Base: US consumers who have interacted with each firm (numbers have been rounded) Source: Forrester’s North American Technographics® Customer Experience Online Survey, Q4 2008 45192
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100%
Source: Forrester Research, Inc.
December 12, 2008
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The Customer Experience Index, 2008 For Customer Experience Professionals
Figure 5 Customer Experience Index — Bottom 25 Overall Very poor
Poor 60%
American Airlines Washington Mutual
59%
Delta Air Lines
59%
Dell
58%
United/Ted
58%
Cox Communications (TV service provider)
58%
Northwest Airlines
56%
Dish Network/EchoStar
56%
Medicare
54% 54%
TriCare
53%
US Airways/ America West
50%
United Healthcare
49%
Comcast (Internet service provider)
47%
CIGNA
47%
Aetna
46%
Sprint
45%
Comcast (TV service provider)
Blue Shield of Calif. Medicaid
Excellent
54%
Anthem (BCBS)
Time Warner Cable
Good
55%
Road Runner (Time Warner Cable) HSBC (including Orchard Bank)
Charter Communications (TV service provider)
Okay
42% 41% 40% 39% 38%
Charter Communications (Internet service provider) 32% 30% 40% 50% 60% 70% 80% 90% Base: US consumers who have interacted with each firm (numbers have been rounded) Source: Forrester’s North American Technographics® Customer Experience Online Survey, Q4 2008 45192
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100%
Source: Forrester Research, Inc.
© 2008, Forrester Research, Inc. Reproduction Prohibited
The Customer Experience Index, 2008 For Customer Experience Professionals
Figure 6 Firms With The Largest Changes In CxPi Between 2007 And 2008 6-1 25 firms with the largest increase in CxPi 2008 CxPi 73% 73% 63% 92% 67% 75% 70% 84% 75% 82% 88% 70% 63% 61% 75% 73% 80% 73%
2007 CxPi 55% 61% 53% 83% 59% 67% 62% 76% 68% 75% 81% 63% 56% 54% 69% 67% 74% 67%
Change 2007 to 2008 (percentage points) 18 12 10 9 8 8 8 8 7 7 7 7 7 7 6 6 6 6
AOL (America Online) (Internet service provider)
71%
66%
5
AT&T/SBC/Yahoo! (Internet service provider) Kohl’s (retailer) Borders (retailer) The Home Depot (retailer) Sam’s Club (retailer) The Vanguard Group (investment firm)
71% 85% 88% 77% 86% 77%
66% 80% 83% 72% 81% 73%
5 5 5 5 5 4
U.S. Bancorp (bank) SunTrust Bank (bank) Citibank (bank) Barnes & Noble (retailer) Bank of America (bank) National City (bank) Wells Fargo (bank) Toys ‘‘R’’ Us (retailer) RadioShack (retailer) eBay (retailer) Amazon.com (retailer) Kaiser (health insurance plan) Capital One/North Fork Bank (bank) JP Morgan Chase (bank) Circuit City (retailer) Allstate (insurance provider) Macy’s (retailer) Geico (insurance provider)
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Source: Forrester Research, Inc.
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Figure 6 Firms With The Largest Changes In CxPi Between 2007 And 2008 (Cont.) 6-2 25 firms with the largest decrease in CxPi
Time Warner Cable (TV service provider) Charter Communications (Internet service provider) Blue Shield of Calif. (health insurance plan) Road Runner (Time Warner Cable) (Internet service provider Comcast (TV service provider) Liberty Mutual Insurance (insurance provider) Comcast (Internet service provider) CIGNA (health insurance plan) Washington Mutual (credit card provider) Office Depot (retailer) Merrill Lynch (investment firm) HSBC (including Orchard Bank) (credit card provider) Medicaid (health insurance plan) Edward Jones (investment firm) Sprint (wireless service provider) Dish Network (EchoStar) (TV service provider) DirecTV (TV service provider) Wachovia (bank) Other full-service brokerage (investment firm) BellSouth (Internet service provider) Medicare (health insurance plan) Aetna (health insurance plan) Fidelity Investments (investment firm) Cox Communications (TV service provider) Staples (retailer) 45192
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2008 CxPi 41%
2007 CxPi 59%
Change 2007 to 2008 (percentage points) -18
32%
48%
-16
39%
54%
-15
54%
67%
-13
42% 64% 47% 47% 59% 71% 62%
54% 74% 57% 57% 68% 79% 70%
-12 -10 -10 -10 -9 -8 -8
54%
62%
-8
38% 72% 45% 56% 63% 64% 70% 64% 55% 46% 68% 61% 80%
46% 79% 52% 62% 69% 69% 75% 69% 59% 49% 71% 63% 82%
-8 -7 -7 -6 -6 -5 -5 -5 -4 -3 -3 -2 -2 Source: Forrester Research, Inc.
Š 2008, Forrester Research, Inc. Reproduction Prohibited
The Customer Experience Index, 2008 For Customer Experience Professionals
Figure 7 Customer Experience Index — Usefulness Rankings Top 25 firms Firm 1. USAA (credit card provider) 2. Amazon.com* 2. Barnes & Noble* 4. Hampton Inn/Suites* 4. Sam’s Club* 4. Costco Wholesale* 7. A credit union (bank) 8. Old Navy* 8. Target* 8. Lowe’s* 11. Borders* 11. Toys “R” Us* 11. Southwest Airlines* 11. Kohl‘s* 11. Staples* 11. BJ’s Wholesale Club* 17. USAA (insurance provider) 18. Marriott Hotels & Resorts* 18. CVS* 18. Progressive* 18. Holiday Inn* 18. State Farm* 18. Walgreens* 24. eBay* 24. The Vanguard Group* 24. American Express* 24. Wal-Mart*
Usefulness index 95% 92% 92% 91% 91% 91% 90% 89% 89% 89% 88% 88% 88% 88% 88% 88% 87% 86% 86% 86% 86% 86% 86% 85% 85% 85% 85%
Bottom 25 firms
Usefulness Firm index 68% 90. Compaq* 90. Cox Communications 68% (Internet service provider)* 68% 90. Medicare* 90. Washington Mutual (bank)* 68% 94. TriCare* 67% 67% 94. United/Ted* 67% 94. American Airlines* 94. US Airways/America West* 67% 66% 98. Dish Network (EchoStar)* 66% 98. Washington Mutual (credit card provider)* 98. Road Runner (Time Warner Cable)* 66% 65% 101. Merrill Lynch 64% 102. Continental Airlines* 64% 102. United Healthcare* 64% 102. HSBC (including Orchard Bank)* 105. Comcast (Internet service provider) 63% 62% 106. CIGNA 107. Aetna 59% 55% 108. Charter Communications (TV service provider) 54% 109. Comcast (TV service provider) 53% 110. Time Warner Cable (TV service provider) 51% 111. Sprint* 51% 111. Blue Shield of Calif.* 50% 113. Medicaid 114. Charter Communications 48% (Internet service provider)
CxPi ratings: Excellent: 85%+ Good: 75% to 84% Okay: 65% to 74% Poor: 55% to 64% Very poor: <55% Base: US online consumers who have interacted with each firm (numbers have been rounded) *Note: These companies have the same CxPi as other firms and are therefore tied in the rankings. Source: Forrester’s North American Technographics® Customer Experience Online Survey, Q4 2008 45192
© 2008, Forrester Research, Inc. Reproduction Prohibited
Source: Forrester Research, Inc.
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Figure 8 Customer Experience Index — Ease Of Use Rankings Top 25 firms Firm 1. Barnes & Noble 2. USAA (credit card provider) 3. Costco Wholesale* 3. BJ’s Wholesale Club* 5. Marriott Hotels & Resorts* 5. A credit union* 5. Amazon.com* 8. Kohl’s* 8. JCPenney* 8. Borders* 11. USAA (insurance provider) 12. Sam’s Club* 12. Holiday Inn Express* 12. Progressive* 12. Target* 16. CVS* 16. Southwest Airlines* 16. Toys “R” Us* 16. Hampton Inn/Suites* 20. Old Navy* 20. American Express 22. eBay* 22. Apple* 24. Holiday Inn* 24. Walgreens*
Ease of use index 98% 95% 93% 93% 92% 92% 92% 91% 91% 91% 90% 89% 89% 89% 89% 88% 88% 88% 88% 87% 87% 86% 86% 85% 85%
Bottom 25 firms
Ease of use Firm index 62% 90. Verizon (Internet service provider)* 62% 90. United/Ted* 90. Cox Communications (Internet 62% service provider)* 60% 93. BellSouth* 93. Dish Network (EchoStar)* 60% 59% 95. HSBC (including Orchard Bank) 58% 96. Dell 57% 97. Anthem (BCBS) 56% 98. Medicare 55% 99. Delta Air Lines* 99. TriCare* 55% 54% 101. Northwest Airlines* 101. Road Runner (Time Warner Cable) 54% (Internet service provider)* 52% 103. United Healthcare 104. Comcast (Internet service provider)*48% 48% 104. Sprint* 48% 104. US Airways/America West* 46% 107. Aetna 44% 108. Comcast (TV service)* 44% 108. CIGNA* 44% 108. Charter Communications* 41% 111. Blue Shield of Calif. 38% 112. Time Warner Cable (TV service provider) 113. Charter Communications 33% (Internet service provider) 114. Medicaid 32%
CxPi ratings: Excellent: 85%+ Good: 75% to 84% Okay: 65% to 74% Poor: 55% to 64% Very poor: <55% Base: US Online consumers who have interacted with each firm (numbers have been rounded) *Note: These companies have the same CxPi as other firms and are therefore tied in the rankings. Source: Forrester’s North American Technographics® Customer Experience Online Survey, Q4 2008 45192
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Source: Forrester Research, Inc.
© 2008, Forrester Research, Inc. Reproduction Prohibited
The Customer Experience Index, 2008 For Customer Experience Professionals
Figure 9 Customer Experience Index — Enjoyability Rankings Top 25 firms Firm 1. Barnes & Noble 2. Borders 3. Hampton Inn/Suites 4. USAA (credit card provider) 5. Costco Wholesale* 5. Amazon.com* 7. Holiday Inn Express* 7. JCPenney* 9. Sam’s Club* 9. BJ’s Wholesale Club* 11. Kohl’s* 11. Marriott Hotels & Resorts* 11. Target* 11. Old Navy* 15. eBay* 15. Toys “R” Us * 15. A credit union* 18. Holiday Inn* 18. Kmart* 20. Lowe‘s 21. Apple* 21. USAA (insurance provider)* 21. Macy’s* 21. CVS* 25. Hilton Hotels* 25. Circuit City*
Enjoyability index 86% 85% 84% 83% 80% 80% 78% 78% 77% 77% 76% 76% 76% 76% 75% 75% 75% 74% 74% 73% 72% 72% 72% 72% 71% 71%
Bottom 25 firms
Enjoyability Firm index 47% 90. Citibank* 90. Dell* 47% 47% 90. Bank of America (credit card)* 45% 91. United/Ted* 91. Cox Communications (TV 45% service provider)* 44% 93. Northwest Airlines* 93. Washington Mutual (credit card)* 44% 93. Cox Communications (Internet 44% service provider)* 43% 96. Road Runner (Time Warner Cable) (Internet service provider)* 43% 96. Dish Network (EchoStar)* 43% 96. Liberty Mutual Insurance* 42% 99. Medicare 39% 100. HSBC (including Orchard Bank) 36% 101. TriCare* 36% 101. US Airways/America West* 36% 101. CIGNA* 104. Sprint* 35% 35% 104. Anthem (BCBS)* 34% 106. Aetna 33% 107. Medicaid 32% 108. Time Warner Cable (TV service provider)* 32% 108. United Healthcare* 110. Comcast (Internet service provider) 31% 28% 111. Comcast (TV service provider) 24% 112. Blue Shield of Calif. 113. Charter Communications (TV) 20% 16% 114. Charter Communications (Internet service provider)
CxPi ratings: Excellent: 85%+ Good: 75% to 84% Okay: 65% to 74% Poor: 55% to 64% Very poor: <55% Base: US online consumers who have interacted with each firm (numbers have been rounded) *Note: These companies have the same CxPi as other firms and are therefore tied in the rankings. Source: Forrester’s North American Technographics® Customer Experience Online Survey, Q4 2008 45192
© 2008, Forrester Research, Inc. Reproduction Prohibited
Source: Forrester Research, Inc.
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Retailers And Hotels sweep The Customer Experience categories There are clear differences between how firms rank on customer experience. But how do the different industries in our study compare with each other? We looked at the aggregate CxPi ratings for all 12 industries and found that (see Figure 10):
· Retailers and hotels lead the overall ratings. Two industries at the top of the ratings, retailers
(81%) and hotels (79%), were the only industries to receive “good” average ratings. The two industries at the bottom of the list ended up with “very poor” average ratings: health insurance plans (51%) and TV service providers (52%).
· Investment firms were the most consistent. The overall CxPi ratings for investment firms
ranged from 62% to 77%; this 15% spread is the smallest range for any industry. Four industries ended up with CxPi spreads of more than 30%: Internet service providers (39%), credit card providers (37%), health insurance plans (32%), and airlines (31%).
· Banks improved and TV service providers got worse. Comparing this year’s data with last
year’s results, we found that four industries have improved, while five had gotten worse. Banks made the largest improvement, increasing their average CxPi scores by 7 percentage points (see Figure 11-1). On the other hand, the average CxPi scores for TV service providers dropped by 8 percentage points.
· Retailers are the most useful and usable. Besides leading in the overall rankings, retailers
received the highest average scores for both usefulness and ease of use (see Figure 11-2). Hotels and insurers came in second place for usefulness, and hotels came in second place for ease of use. TV service providers and health insurance plans were at the bottom of both of these categories.
· Hotels are the most enjoyable. With an average score of 72%, hotels came out on top of the
enjoyability rankings. Retailers were a close second, with 71%. Once again, TV service providers and health insurance plans ended up at the bottom of this category.
December 12, 2008
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The Customer Experience Index, 2008 For Customer Experience Professionals
Figure 10 Range Of Company CxPi Results Within 12 Industries Very poor
= Average industry score 20% Industry (average)
30%
40%
50%
Poor
Okay
Good
60%
70%
80%
Insurance providers (73%)
88% 83%
64%
Banks (71%)
61%
Investment firms (69%)
62%
Credit card providers (68%)
85% 77%
54%
Airlines (65%)
91%
50%
Wireless service providers (64%)
81%
45%
72% 80%
58%
PC manufacturers (64%)
100%
92%
70%
Hotels (79%)
32%
71%
TV service providers (52%) Health insurance plans (51%)
90%
71%
Retailers (81%)
Internet service providers (59%)
Excellent
40% 38%
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63% 70%
Source: Forrester Research, Inc.
December 12, 2008
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The Customer Experience Index, 2008 For Customer Experience Professionals
Figure 11 CxPi Results By Industry 11-1 CxPi change by industry Industry Banks
2008 CxPi 71%
2007 CxPi 64%
Change (percentage points) 7
Retailers
81%
78%
3
Insurance providers
73%
71%
2
Credit card providers
68%
67%
1
Wireless service providers
64%
66%
-2
Investment firms
69%
72%
-3
Internet service providers
59%
62%
-3
Health insurance plans
51%
54%
-3
TV service providers
52%
60%
-8
Hotels*
79%
—
N/A
Airlines*
65%
—
N/A
PC manufacturers*
64%
—
N/A
*These industries were not included in the 2007 CxPi. 11-2 2008 CxPi average by industry Industry Retailers
Useful 86%
Easy to use 85%
Enjoyable 71%
Overall CxPi 81%
Hotels
81%
83%
72%
79%
Insurance providers
81%
79%
59%
73%
Banks
77%
77%
59%
71%
Investment firms
76%
76%
56%
69%
Credit card providers
77%
74%
53%
68%
Airlines
74%
67%
54%
65%
Wireless service providers
74%
68%
50%
64%
PC manufacturers
71%
66%
53%
64%
Internet service providers
70%
59%
46%
59%
TV service providers
63%
55%
39%
52%
Health insurance plans
65%
52%
37%
51%
CxPi ratings: Excellent: 85%+ Good: 75% to 84% Okay: 65% to 74% Poor: 55% to 64% Very poor: <55% 45192
December 12, 2008
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The Customer Experience Index, 2008 For Customer Experience Professionals
Rec o m m e n d a ti o n s
Continue To Make cUSTOMER eXPERIENCE a toP pRIORITY While the CxPi improved for many firms this year, it also declined for many others. One thing is clear: All industries still have room for improvement. Here are some items for customer experience professionals to put on their to-do list:
· Protect customer experience in an economic downturn. While most firms are dealing with rough economic times, they can’t let customer experience fall to the back burner. In a survey we did earlier this year about how companies will respond to a recession, more than one-third of firms expected to cut spending on customer experience at a lower rate than other areas.6 If firms lose pace with competitors’ customer experience, they may end up attenuating the negative impact of the economic downturn. To keep customer experience momentum in a downturn, we’ve highlighted several areas, including prioritizing moments of truth, seeking usability improvements, and increasing communication with employees.
· Look beyond your industry for best practices. While there are some customer experience best practices in every industry, firms should look for best practices across all industries. As a start, take a look at the firms at the top of the CxPi rankings, like Barnes & Noble, USAA, Borders, and Amazon. And if you’re in an industry that didn’t do well in the CxPi — like medical insurers, TV service providers, and Internet service providers — the search for best practices should predominantly focus on top retailers and hotels.
· Develop an outside-in approach. In many companies, key decisions are made based on a very limited (and sometimes inaccurate) view of customers. Internal silos can make matters even worse as people overly focus on the needs of their own organizations without even thinking about customers. How can companies shift this inside-out thinking to a more outside-in perspective? By systematically incorporating the voice of the customer.7 These programs should address five levels of activities: relationship tracking, interaction monitoring, continuous listening, periodic immersion, and project infusion. And when it comes to infusing customer needs into design projects, we’ve found that firms get a lot of value from using design personas.8
· Chart a course toward Experience-Based Differentiation. Firms should develop a road map to what Forrester calls Experience-Based Differentiation (EBD), a blueprint for customer experience excellence.9 To master EBD, firms will need to adopt three principles: 1) Obsess about customer needs, not product features; 2) reinforce brands with every interaction, not just communications; and 3) treat customer experience as a competence, not a function. Since firms can’t immediately master EBD, they need to chart a multiyear course through five stages of customer experience maturity.10
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The Customer Experience Index, 2008 For Customer Experience Professionals
Supplemental MATERIAL Methodology This analysis was based on responses from 4,564 US consumers during Forrester’s North American Technographics® Online Survey, Q4 2008. The survey was fielded during October 2008. The Customer Experience Index (CxPi) was calculated as an average of the indexes that came from consumer responses to the following three questions from an online survey: 1. Thinking about your recent interactions with these firms, how effective were they at meeting your needs? (This question drives the “Usefulness” index.) 2. Thinking about your recent interactions with these firms, how easy was it to work with these firms? (This question drives the “Ease Of Use” index.) 3. Thinking about your recent interactions with these firms, how enjoyable were the interactions? (This question drives the “Enjoyability” index.) Consumers selected responses along a five-point scale — ranging from a very negative experience (1) to a very positive one (5). The individual indexes were calculated by taking the percentage of consumers who selected one of the top two boxes (4 or 5) and subtracting the percentage of consumers who selected the bottom two boxes (1 or 2). In order to limit consumer feedback to organizations that consumers are familiar with, we only asked consumers about organizations in each industry that they’ve interacted the most with during the previous 90 days. Consumers were allowed to select an option saying that they had not interacted with any company in the industry. While we received feedback on 220 North America firms, the CxPi only includes the 114 organizations that had at least 100 consumer responses. Endnotes 1
To understand how customer experience is changing in 2008, we repeated a set of questions that we asked our Customer Experience Peer Research Panel last year. In the previous survey, 38% of respondents felt that customer experience was critical for 2007. In this year’s survey that number grows to 64%; a total of 91% of respondents feel that customer experience will be either critical or very important in 2008. See the February 7, 2008, “Obstacles To Customer Experience Success, 2008” report.
2
Executives know that customer experience is important, but they can’t always tie it directly to business results. So we examined the correlation between the customer experiences delivered by 112 US firms (as defined by Forrester’s Customer Experience Index) and the loyalty of their customers. Our analysis shows that good customer experience correlates highly to loyalty across all nine industries we examined — especially when it comes to consumers’ plans for making additional purchases. See the March 24, 2008, “The Business Impact Of Customer Experience” report.
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The Customer Experience Index, 2008 For Customer Experience Professionals
3
The topic of desirability largely remains a mystery in the user experience community. We’ve explored three tactics for creating desirable online experiences: 1) providing engaging content and functionality; 2) focusing on aesthetics; and 3) incorporating elements of game design. See the August 8, 2007, “Desirable Online Experiences: Taking Web Sites Beyond Useful And Usable” report.
4
For this analysis, 4,564 US consumers responded to Forrester’s online survey during October 2008.
5
This is the second annual customer experience rankings based on Forrester’s Customer Experience Index (CxPi). In 2007, we calculated the CxPi for 112 firms in nine different industries. Led by Costco, Borders, and Barnes & Noble, retailers dominated the top of the rankings. In this year’s rankings, we’ve added three new industries: airlines, hotels, and PC manufacturers. See the November 21, 2007, “The Customer Experience Index, 2007” report.
6
Forrester asked its Customer Experience Peer Research Panel about the state of the economy. While most of the companies have lowered their financial outlooks, only a few felt that customer experience would become less important. However, if they do need to cut costs, companies ranked design agency services and focus groups high on the list of customer experience activities that might get trimmed back. In this environment, customer experience execs need to prepare for tightened budgets, intensified focus on costs, and customer dissatisfaction. To deal with this situation, Forrester recommends that these execs follow eight steps that include keeping an eye on the customer, prioritizing key moments of truth, and focusing on small-scale cultural changes. See the April 25, 2008, “Eight Steps For Keeping Customer Experience Momentum During An Economic Downturn” report.
7
Many companies say that they don’t have a good connection with customers. That’s why firms should consider developing a systematic approach for incorporating the needs of customers into the design of customer experiences — what Forrester calls a voice of the customer (VoC) program. Successful VoC programs will incorporate listening, interpreting, responding, and monitoring. As customer experience professionals roll out VoC programs, they should be prepared to overcome internal organizational obstacles. See the February 8, 2007, “Building Your Voice Of The Customer Program” report.
8
Spending for personas continues to increase, but companies don’t use them regularly. Our research uncovered three drivers of persona success: a design process that explicitly incorporates personas, an appropriately developed persona, and organizational buy-in to the use of those personas. But not all companies can immediately master these items. We found that companies advance their persona practice through five levels of maturity: isolated, connected, integrated, absorbed, and immersed. Companies interested in taking their persona efforts to the next level should begin by identifying projects that should use personas, creating a solid research plan, and integrating them into concrete deliverables. See the October 14, 2008, “How To Get The Most From Design Personas” report.
9
With more access to information, more sensitivity to price, and less sensitivity to advertising, customers are getting harder to win and keep. Organizations try to woo these empowered consumers with mediocre customer experiences — but it won’t work. Firms need to dramatically raise the bar on the customer experience they provide. How? By adopting what Forrester calls Experience-Based Differentiation (EBD): A systematic approach to interacting with customers that consistently builds loyalty. See the January 2, 2007, “Experience-Based Differentiation” report.
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The Customer Experience Index, 2008 For Customer Experience Professionals
10
Why is customer experience such a hot topic? Because it’s important, complex, and broken. That’s why firms should head toward Experience-Based Differentiation (EBD), a blueprint for customer experience excellence. But EBD can’t be mastered overnight. Instead, companies must embark on a multiyear journey through five levels of EBD maturity: 1) interested; 2) invested; 3) committed; 4) engaged; and 5) embedded. Along the way, firms need to develop customer-centric DNA, a corporate culture with six components that include collective celebrations, commitment to employees, and consistent tradeoffs. To succeed in the transformation, firms must prepare for a multiyear journey and include their HR groups in the effort. See the September 17, 2008, “The Customer Experience Journey” report.
December 12, 2008
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When the team at InterContinental A/B tested a hotel search page that included the range of available rates — a new addition to this page — they saw a significant spike in room bookings. After making the page fully available to all visitors, InterContinental found that the new design helped add $45 million in annual revenue from increased bookings. Web execs at Lands’ End realized that a large number of customer service calls focused on selecting the right size for an article of clothing. When the company added contextual help about product sizing and fit to its product pages, call center volume dropped by 20%, a huge cost savings. “Top 10 Ways To Improve Your Web Site User Experience,” November 2006 Forrester Research
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Organize your Web site for a successful customer experience
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Use reviews and advisory sessions to inform your decisions on vendor and product decisions
the 1,000-plus corporate
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