A recent Forrester Research report shines a spotlight across different
industries on companies whose people skills leave a bit to be desired, to say
the least.
Customer experience can make or break a company. Whether customer service is
very good or very bad, it gets peoples' attention, creates customer loyalty and
affects a company's bottom line
Forrester Research launched the U.S. Customer Experience Index as an annual
report in 2007. This year, for the first time, the company published it twice,
and from now on it will release two reports per year. The company looked at 299
brands in 18 industries.
"The impetus was that companies were increasingly looking to customer experience
as a way to set themselves apart and how important it is in terms of customer
loyalty,” says Megan Burns, an analyst at Forrester and the report's principle
author. “As companies decided to focus on this, they wanted to measure
themselves in some way. The problem is there's a disconnect between selling and
marketing and what's actually happening."
According to Forrester, analyzing and tracking customer buying behavior to
ensure that they keep coming back is only the beginning. Customer experience
improvements also drive revenue, ensure customer loyalty and benefit investors.
The edition published in May presents the example of AT&T, which grew its
U-verse service 28 percent after improvements in the TV and Internet service
provider product experiences. Forrester also found that customer experience
"explains anywhere from 47 percent of the variation in loyalty for investment
firms on the low end to 76 percent of that variation for car rental companies."
It also states that Watermark Consulting has analyzed differences in stock
performance between customer experience "leaders and laggards," accounting for
80 percentage points of difference, and a gap in the S&P 500 Index by 26
percentage points.
According to Burns, "The audience is broader than just CRM executives. It's a
growing population of people. In addition to the vice president of customer
experience and CMO, increasingly CEOs have cited the data on investor calls.
Sprint, for example, has done this. They say, 'The way we'll compete is on
customer experience, and we need a benchmark to measure that.' Even COOs,
interestingly, are part of the audience, because they're operationalizing
customer experience."
"Overall, and we have 25 different drivers per industry. Things like how quickly
did they solve a problem? The report publishes a synopsis, the best of the best.
Now, companies don't aspire to be the best in their industry, but to be the best
in any industry. Regardless of what industry they're in, they want to benchmark
against Amazon or Zappos."
The second report for 2015, released in October, reveals that most companies
have a long way to go, "but they're trying," says Burns. The lowest scorers in
each industry have their work cut out for them. The list of the worst scorers
reads like a who's who of organizations that have plenty of publicity, and
proved the old saw about any publicity being good publicity dead wrong.
It’s hard to climb out of the cellar
Comcast gets double the bad news in the report, earning the worst score in two
industry categories.
In an effort to improve customer service, last year, the company appointed
Charlie Herrin as senior vice president of customer experience. In the press
release on the new hire, Comcast's Neil Smit, president and CEO, Comcast Cable,
and executive vice president, Comcast Corp., said "Transformation isn’t going to
happen overnight. In fact, it may take a few years before we can honestly say
that a great customer experience is something we’re known for. But that is our
goal and our number one priority … and that’s what we are going to do."
But Comcast continued to struggle with its image, and in May, after federal
government regulators denied its plan to buy Time Warner Cable, Comcast pledged
to devote $300 million to customer service. The plan included hiring 5,500 new
customer service representatives, new technicians, and an app called Tech
Tracker, building three new call centers, and redesigning its bills.
Comcast didn't fare any better in other customer service reports. It scored the
third lowest in the American Customer Satisfaction Index's 2015
Telecommunications and Information Report. The company's satisfaction score
slipped 10 percent from 2014. Comcast's Internet service was rated last in that
industry.
For its part, Consumer Reports placed Comcast near the bottom in the telecom
industry. According to the Philadelphia Inquirer, the company's hometown
newspaper, Brian Roberts, Comcast's CEO said that resources that would have been
directed at merging with Time Warner Cable would be directed into improving its
experience. Neil Smit, head of the cable division said customer experience would
come to be viewed as the company's best product. He announced a 10-point plan to
achieve that.
U.S. Cellular survived widespread billing problems in 2013, including cases
where customers using electronic payment were billed multiple times, and some
weren't billed at all. The company has taken a long fall from its position in
first place among wireless carriers in Forrester's 2012 and 2013 U.S. Customer
Experience Index reports.
After a renewed focus on turning profits on its smartphones, Acer made a push in
China by inking deals with Chinese carriers in 2012. While that may have helped
the bottom line, the company still gets bad marks from Forrester in terms of
customer experience. The company took the bottom spot in both 2015 reports.
In response to our request for comment, Acer's vice president of customer
service, Mark Groveunder, responded as follows:
"With the goal of raising the bar on our customer experience, we've leveraged
Forrester's U.S. Customer Experience Index this year to begin implementing key
changes within our organization with a priority on customer service. Customer
needs are changing and we're working to adapt to not only accommodate them, but
to really exceed their expectations. We believe we've always provided good
service, but we are taking it to an even higher level. In that spirit, we
launched "Project CX" that includes investing heavily in improving employee
involvement, employee training on the importance of the customer experience and
leveraging journey mapping to determine from the customer's perspective what
works best and what doesn't in terms of our internal processes. We're using this
training to create cross-functional teams to identify the moments that matter in
the various customer journeys and working to implement changes to improve the
customer experience at these critical moments. Toward the end of this year,
we'll start implementing the changes based on our research, while we're also
providing feedback to our product design teams on how to improve future products
and to our web team on how we can improve the customer experience there."
It can get crowded at the bottom
The banks that were "too big to fail" already had their work cut out for them
after the 2008 financial crisis and federal government bailout. Consumer
Reports’ Consumerist website, in its annual poll to nominate the Worst Company
in America, has consistently placed the company in the top three worst
performers. At the same time, the Consumer Financial Protection Bureau has
recorded tens of thousands of complaints about the banking giant over the past
several years, most of them about how it services mortgages. Bank of America has
received more than 30,000 mortgage complaints in the database since 2011,
representing about 23 percent of all mortgage-related complaints.
The company has made annual appearances on other worst-performers lists,
including appearances in the Zogby Analytics and 24/7 Wall Street Customer
Service Hall of Shame since 2009, and the American Customer Service Satisfaction
Index five of the last six years, leading the pack in 2014.
Don Vecchiarello, a spokesman for Bank of America, responded to our request for
a comment with the following statement:
"We take our clients’ feedback very seriously, and we are confident in our
strategy and the investments we have made to improve their experience with us.
Everything we do now is focused on making the financial lives of our clients
better. We believe over time, we will earn a better perception in the eyes of
our clients."
For its part, Cigna spokesman Joe Mondy, provided this statement:
"The 2015 customer experience index runs contrary to the findings of Cigna's own
Net Promoter Score (NPS) research, as well as the findings of other third party
studies that measure customer experience that we have been part of over the past
several years. We are reviewing the recently released data, as well as what
impact the recent changes in methodology that company has instituted, but our
efforts to improve customer experience have been showing great results, and we
will continue to invest in efforts to improve the experience customers have with
Cigna."
Lower-cost doesn’t mean lowered expectations
Low cost is the name of the game for Frontier Airlines, but travelers should
still expect a modicum of customer service. Earlier this year, CEO Dave Siegel
stepped down, and was replaced by the company's chairman, Bill Franke, and
president, Barry Biffle.
In May, a government report ranked Frontier last among U.S. carriers in on-time
performance and customer complaints. Complaints were logged at the rate of 8.2
per 100,000 boardings, compared with 2.98 in May 2014. At the time, Biffle told
the Denver Post that the new leadership was focused on improving reliability by
changing the design of the schedule. As a result, the airline's on-time
performance improved.
Still, in 2015, Frontier ranked last in J.D. Power's North America Airline
Satisfaction Study. More than one third of the company's flights were at least
15 minutes late in March 2015. The federal government said that Frontier had the
highest complaint rate and worst on-time performance among the nation's leading
airlines in March.
Customers are paying for more than just their car rental at Dollar Rent a Car,
even if they didn't know it. Among rental car agencies, Dollar Rent a Car scored
lowest, possibly due in part to complaints that it signed customers up for
insurance even when they explicitly did not want it.
Anyone who expected not to see Walmart take the last spot hasn't been on the
Internet or watched TV in the past few years. In 2014, the American Customer
Satisfaction Index found that overall satisfaction with retail stores fell 1.4
percent after improving steadily for three years. Walmart scored its worst
rating since 2007, at the bottom of the list.
Early this year, the company announced it would spend $1 billion to raise pay
for employees. CEO Doug McMillon vowed to make customer service a priority after
a rash of complaints from customers about empty store shelves and not being able
to find store clerks, even as pallets of merchandise piled up in warehouses.
Bloomberg recently reported that even though stores grew 13 percent, the number
of employees only grew 2 percent.
Analytics firm ForeSee's annual ranking of customer satisfaction during the
holiday shopping season in 2012 ranked Gilt at the bottom for the eighth
consecutive year. The company attributed the poor result to bad Web site
functionality.
The Feds aren’t getting off the hook, either
In an audit by the federal government's Office of Inspector General in May, the
U.S. Postal Service was charged with having an excess of rude employees, and
this could cost the government $288.5 million in lost revenue. The audit stated,
"While the Postal Service's goal is 90 percent customer satisfaction, we found
that more than 20 percent of its customers in FY 2013 responded to the POS
[point of service] survey that they have been treated 'worse than other
retailers when visiting Postal Service retail counters. Dissatisfied customer
exist, in part, because procedures for improving customer service are not
functioning as intended."
The agency also took a hit in a survey conducted by Accenture in 2013, in which
the company evaluated 24 government-operated postal organizations and two
private companies that account for 75 percent of the world's mail. Accenture
concluded that the USPS blamed pensions and "restrictive" universal service
obligations.
It has been a battle for HealthCare.gov. When it was rolled out in 2013, the Web
site was full of bugs and agonizingly slow. The site is due for upgrades that
will take affect with the start of 2016 open enrollment. The changes are
designed to make it easier to browse taxpayer-subsidized health insurance plans,
among other things.
