• January 15, 2013
  • By Leonard Klie, Editor, CRM magazine and SmartCustomerService.com

Brands Continue to Fail Their Customers

A new report from Forrester Research shows that companies have done little to improve customer service in the past year, with most brands still rating OK to very poor.

According to the report, "The Customer Experience Index, 2013," 61 percent of companies received ratings of OK, poor, or very poor. That's just a slight improvement over last year, when 63 percent of firms received those ratings. But while it shows some improvement, Forrester analyst Megan Burns says there's little reason to celebrate. "Companies climbed up out of the basement and into mediocrity," she wrote in the report.

Little has changed in the industry profiles either. For the fourth straight year, retailers and hotels had the highest average scores, at 82 and 79 respectively, while TV and Internet service providers and health insurance providers had the lowest scores (58, 57, and 56 respectively).

In this year's ratings, only eight brands scored ratings of excellent, with scores of 85 or higher; 31 were considered good, with scores of 75 to 84; 36 were OK, with scores of 65 to 74; 17 percent were poor, with scores of 55 to 64; and 8 percent were very poor, with scores lower than 55.

Probably not surprising given current economic conditions, value brands dominated the top rankings. In fact, 10 of the 13 brands that were rated excellent position themselves as value brands. Discount retailer Marshalls took the top spot, with a score of 89, up seven points from last year, but others that fit in the value-brand category included Courtyard by Marriott (88), Sam's Club (87), and Target (86).

Burns expects other value brands to emerge as leaders. "Over the next three years, we'll see more value brands win customers by delivering a high-quality customer experience consistent with their overall brand positioning," she wrote in the report.

Other brands providing excellent customer experiences included Amazon, Costco, Rite-Aid, Lowe's, TJ Maxx, JCPenney, Kohl's, Marriott Hotels & Resorts, and USAA Bank. They all had scores of 85.

Among individual industries, USAA scored the highest in the banking category, with a score of 85, while HSBC and Fifth Third scored the lowest at 53. Among airlines, Southwest led with a score of 81, followed by JetBlue at 78. United took the low spot at 54. In the investment firm category, Vanguard scored a high of 83, while Wells Fargo Advisors scored the lowest with 61. In wireless, US Cellular was the leader, with 77, while T-Mobile cemented a last-place finish with 55. AT&T, Verizon, and Sprint tied at 66.

US Bank was the only firm to improve by more than 10 points this year. It's credit card business saw a 16-point improvement to 70, while its bank business improved by 11 points to 72. 

Conversely, three firms dropped 10 points or more. They were Fifth Third Bank, which fell 24 points to 53, Blue Cross-Blue Shield of Illinois, which lost 14 points to finish with a score of 54, and American Family Insurance, which dropped 10 points to finish at 64.

Forrester's sixth annual Customer Experience Index determines the quality of 154 large US brands by surveying more than 7,000 US consumers. 

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