Retailers and Hotels Top the 2010 Customer Experience Index

For the second year running, Barnes & Noble takes the number one spot in Forrester's Customer Experience Index. For its annual report, Forrester asked more than 4,600 US consumers about their interactions with a variety of companies. The 2010 index includes 133 companies and calculates experience scores based on the following survey questions:

  1. Thinking about your recent interactions with these firms, how effective were they at meeting your needs? 
  2. Thinking about your recent interactions with these firms, how easy was it to work with these firms? 
  3. Thinking about your recent interactions with these firms, how enjoyable were the interactions? 

Thirteen companies received "excellent" ratings --coincidentally the same number of excellent companies as in last year's index -- with percentage scores 85 percent and higher:

  • Barnes & Noble: 91 percent
  • Marriott Hotels & Resorts: 90 percent
  • Hampton Inn/Suites: 89 percent
  • Amazon.com: 88 percent
  • Holiday Inn Express: 88 percent
  • Kohl's: 87 percent
  • JCPenney: 85 percent
  • Macy's: 85 percent
  • A credit union: 85 percent
  • BJ's Wholesale Club: 85 percent
  • Comfort Inn: 85 percent
  • Costco Wholesale: 85 percent
  • Hilton Hotels: 85 percent

According to Bruce Temkin, Forrester's vice president and principal analyst for customer experience, finishing in the top echelon of the index is no easy task. "It's really hard to be excellent in customer experience," he says. "It requires dedication, focus, and a real push." Temkin points out that it's much easier to fall somewhere in the middle when it comes to experience. "I see a lot more companies focusing on trying to eliminate problems, which is really about how do you go from being poor, bad, or okay into being good," he says. "We're not seeing yet a lot of companies thinking how to be excellent." 

Movement on the index goes to show just how possible it is for a company to change its customer experience motives. Temkin points to a handful of companies that have either slipped on the index or climbed further to the top. The banking and financial services sector is particularly intriguing to watch. Last year financial services companies did better than they ever have in terms of placement; however the 2010 index shows slippage by the vertical. "The lesson in the banking industry and financial services is you have to stay constantly focused on customer experience," Temkin says.

Interestingly, Wachovia and Wells Fargo, companies that merged in January 2009, were both rated as separate entities on the index. Wachovia came in the top half at number 63, whereas Wells Fargo fell to the bottom of the heap at number 118. Customers scored the companies differently based on how they thought the distinctive companies handled the merger.  "Wells went through a period where they were trying to absorb acquisition, and that defocused them -- maybe rightfully so -- from core customer experience efforts," Temkin says, rationalizing the placements.  "Wachovia, we see some uptick on their end because of the ability to act quickly and find a home."

Another notable climber on the charts (number 102) is wireless service provider Sprint. Sprint seems to be steadily moving its way out of the "very poor" experience category, and edging into "okay" territory. "For a long time, Sprint has been toward the bottom of the index and has been hemorrhaging customers," Temkin says. "This dramatic increase seems to be a clear indicator that they've turned the corner." Stories of Sprint's horrendous service seem to be fading, Temkin says, which is evidence of the company's two hard years of internal efforts to correct problems.

The insurance sector -- with the exception of health insurance providers -- seems to be also moving up in terms of customer experience. Temkin says it's noticeable, not only with movement on the index by companies such as Liberty Mutual (the top climber in 2010), but based on the requests he receives at Forrester, as well. The insurance industry is increasingly committed to the customer experience journey, Temkin says. Expect insurance companies to continue inching up the list in the next few years. 

Health insurance providers, on the other hand, did not fare as well. United Healthcare, Medicaid, Aetna, and CIGNA all received "very poor" ratings, all coming in below 50 percent. "Certainly we see a lot of healthcare and TV service providers consistently at the bottom," Temkin says. "It's not surprising." 

In 2010, Forrester added the utilities and delivery services industries to the index for the first time. Temkin notes that parcel delivery services received "good" average ratings, just below the retail and hotel industries. This placement, Temkin says, is not one Forrester was anticipating. Another surprise, the analyst says, was with the rating of Apple iTunes -- the company's first year on the index. iTunes came in tied for 46th, which was lower than Forrester expected. 

The beauty of The Customer Experience Index is that there is plenty of opportunity for a company to improve its standing over the course of the year. Temkin says he hopes that next year we will see more companies coming into "excellent mode" as they shift from not just fixing problems, but also to effectively delighting their customers. "There's a lot of upside," he says. "Any company trying to figure out the potential for customer experience should get a slice of the results. There's enormous opportunity to outperform your competitor and to build customer experience."

News relevant to the customer relationship management industry is posted several times a day on destinationCRM.com, in addition to the news section Insight that appears every month in the pages of CRM magazine. You may leave a public comment regarding this article by clicking on "Comments" at the top; to contact the editors, please email editor@destinationCRM.com.

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