The Perfect Customer Experience

New Customer Experience Management Benchmark Study Finds Leading Companies Increase Customer Experience Investment in Tough Economic Times

By Randy Saunders

Strativity Group has published their 2009 Global Customer Experience Management Benchmark Study that finds savvy companies increase investment in customer strategies during tough economic times to build competitive advantage.

In an economic downturn, the first thing companies are conditioned to do is cut costs. But this new study indicates that they should be doing just the opposite.

“The biggest surprise in the study was that certain companies decided to INCREASE their investment in customer relationships rather than decrease it as the majority do. These companies reap the rewards already through more profitable business with their customers," offered Strativity CEO Lior Arussy.

Despite the uncertain economy, 80% of executives surveyed said that customer experience strategies continue to be a more important part of their organizations’ agendas than in the past three years.  In fact, over this time period:

• 48% report that their companies have increased investments in customer experience by 10% or more
• 17% reported increasing investments by 20% or more

The dividends for companies that have invested in customer experience are significant.  The study finds in contrast with organizations that invest less than 2% of revenues on customer experience, companies that invest 10% or more:

• Have significantly lower customer attrition rates
• Enjoy referral rates that are twice as high
• Are twice as likely to have customer satisfaction scores of 81% or more

When comparing companies that increased customer experience investment over the last three years with those that decreased spending, the former:

• Report satisfaction scores that are 60% higher
• Are 30% more likely to have attrition rates of 5% or less

You can download the complimentary executive summary of this report at:
http://www.strativity.com/products/2009-experience-management-benchmark-study.aspx.

Delta Air Closes India Call Centers After Years of Customer Complaints

By Randy Saunders

Delta Air Lines, the world’s largest carrier, has stopped using India-based call centers to handle sales and reservations.  The company has decided the cost savings of directing calls offshore are outweighed by the backlash from customers.

Delta had said previously that moving calls to India saved $25 million a year.  However, they hadn’t anticipated all the complaints by American customers who say they sometimes have tremendous difficulty understanding the foreign telephone workers.

"Customer acceptance of call centers in foreign countries is low and our customers are not shy about letting us have that feedback,” said Richard Anderson,  Delta's chief executive.

While Delta has closed centers in India, it will maintain its centers in Jamaica and South Africa which haven't generated such turbulent feedback.

The move makes Delta the second big U.S. carrier in 2009 to return customer service work back to America. In February, United Airlines announced they would also be moving some India-based phone work back to Chicago and Honolulu.

Net Promoter Benchmark Reports Highlight Customer Experience Leaders in Financial Services, Telecommunications, Technology and Online Services

by Randy Saunders

Satmetrix has published its 2009 Net Promoter Score (NPS®) rankings that highlight the customer loyalty leaders and laggards in 11 segments in the telecommunications, financial services, technology and online services industries.

"With the economy in turmoil, companies are focusing on customer experience and retention more than ever," said John Abraham, general manager of Net Promoter programs at Satmetrix. "These benchmarks give companies a way to compare themselves against other companies in key industries and understand who is best-in-class when it comes to customer loyalty and organic growth potential."

Here are some highlights from the new benchmark reports:

• Across all industries, the top five loyalty leaders were Amazon, Apple, Costco.com, Google and USAA.

• Online services had the highest average Net Promoter Scores (NPS) of all industries.  Google was the loyalty leader in the online search sector outpacing rival Yahoo! by 30 points. Social networking sites also ranked high, with Facebook's higher NPS reflected in faster growth in monthly unique visitors than rival MySpace.  Amazon led online shopping, but was followed closely by Costco.com.

• Vonage was the breakaway winner in the local and long distance sector, one of the poorest performing industry segments with an average NPS of -7.  Verizon led the cellular sector. 

• Among Internet service providers, only three of the nine providers studied received positive scores, with AT&T topping the list at just 11 percent.  As these industries continue to provide converged services, the NPS leaders will have a strong competitive advantage in customer loyalty and positive word of mouth.

• The financial services industry saw a decline in NPS from the previous year.  USAA led the banking sector with an NPS score more than 100 points above the laggard, Citigroup.  Charles Schwab led the brokerage sector, while USAA and American Express led the credit card sector.

• Apple continues to demonstrate its loyalty leadership as the top performer in the computer hardware segment, while Adobe led the consumer software sector. Symantec showed significant improvements over the previous year on the back of major product and service enhancements in its Norton product line.

Postal Service Possibly Eliminating Saturday Delivery

Congress can be a bit nutty. They demand 6-day a week postal delivery and then complain about the rising cost of postage stamps.

At least from a customer point of view, the USPS is being straight-forward about their problems.

Food companies have tried to shrink their packages, put in false bottoms, relabeled the food all to shrink the delivery of contents in the package. Their choice was increase prices or decrease food quantities per package. It just would have been more honest if they would have told us upfront -- New Lower Amounts for the Same Old Price. But they let the consumers discover the secret on their own. Shoppers across America were wondering how stupid they must seem to Food Manufacturers. This trickery yields a bad taste and a poor customer experience.

Now the Postal Service has a similar problem. The new, more costly stamps just became effective and they are still losing nearly $3 billion. Given the choice of another stamp hike, I'd rather give up getting mail on Saturdays. I can wait til Monday and the world won't end.

At the same time, we as consumers of the government's postal service should expect they will work double hard at more efficient processes, ways to cut back on gas consumption, whatever it is that is causing costs to racket up every few months. That's what any for-profit company would be doing. But then, for-profit companies do not have Congress as their boss.

The T. Boone Pickens Vision

I get emails occasionally from T. Boone Pickens. He does not know who I am, but he seems to care a lot about all of us who are victims of ineffective national energy policy. So he runs commercials on his vision and he writes emails to create more buzz.

His vision promises a customer experience -- one that just might be right. I am no expert on energy policy, but what we've been doing seems wrong and feels like a bad customer experience each week that I pull up to the gas station. If his plan actually accomplishes what he claims, it will be an experience on a grand scale that we will all enjoy. But surely something should be done to create independence from cartels that can ruin us in a blink.

Here's his latest email ... what kind of experience do you think this might create?

Forty years ago, the small company I founded was looking at a big deal. In fact it was our biggest deal ever. That's when a friend of mine, Dow Hamm, gave me a piece of advice I've never forgotten: "Boone, you'll spend just as much time on a big deal as on a little deal." And, he pointed out, you'll find plenty of lagniappe in a big deal.

What's lagniappe? I'll tell you what it is. When we get America to end its addiction to foreign oil, new jobs will be created in new industries we can't even begin to imagine. When we stop sending $700 billion a year to foreign countries and start spending that money on energy produced here in the United States, start-ups that none of us have ever heard of will get the seed capital they need to get off the ground and become industry giants. When we go all out and develop wind and solar and other renewable energies, the breakthroughs that American companies will pioneer are going to have other countries sending us billions of dollars for our technology, for our equipment, and for our know-how.

Over the last 50 years, I've done more than my share of big deals. But this one here with you, the Pickens Plan, is by far the biggest. And it's going to pay off bigger than any of us can ever imagine.

Customer Experience Drivers for the Millennial Generation – Convenience, Community and Cool

By Randy Saunders

A new white paper from Genesys titled, "Customer Experience Strategies for the Millennial Generation,” discusses the importance of the "millennial generation" that is entering the workforce now, and will have increasing buying power in the coming years. Although few businesses are prepared to address the needs and preferences of this rapidly growing segment, now is the time to engage and win their loyalty … because it will pay big dividends for decades to come.

The millennial generation—also known a “Gen Y”— includes those born between 1982 and 2001 (numbering approximately 80 million individuals in the U.S. alone). This generation outnumbers the baby boomers and is just entering the workforce now, while the bulk of the group will reach adulthood in the next decade. Gartner refers to them as “digital natives” because technology is embedded in their lives—they have truly never known life without the Internet and mobile phones.

As outlined in this paper, key motivational purchasing drivers for this generation include convenience, community, and cool.

• As shown in the research, in many cases millennials are willing to pay for more convenience or quality of experience. So you don’t have to compete on just price, but be prepared--they have higher expectations for service, and little tolerance for delays, inconvenience, or wrong answers.
• When you get it right, peer recommendations (community) work in your favor. Of course if you miss the mark, they’ll be happy to spread that news too!
• Cool: consider the popularity of Apple’s iPhone and iPod products when compared with other music players and mobile phones. “Cool” or style clearly matters with this group.

The impact of the millennial generation has already been felt in the social networking and Web 2.0 sites that are changing the online world--and extends well beyond their own generational group to the online world at large. This group has been a driving force behind the widespread adoption of products and services such as the Zappos, NewEgg,  and the Apple iPhone and iPod.

You can download this complimentary white paper at http://www.customerthink.com/paper/strategies_millennial_generation.

Retailers And Hotels Top Forrester's Annual Customer Experience Ranking

by Randy Saunders

Only 11 percent of companies garnered a rating of "excellent" in this year's Customer Experience Index of large US firms, released today by Forrester Research.  The index is based on the usefulness, ease of use, and enjoyability of those experiences. Thirty-eight percent of firms were rated as "poor" or "very poor."

Barnes & Noble topped Forrester's customer experience ranking, while Charter Communications received the lowest score. Compared with last year, banks made the largest improvements, led by U.S. Bancorp, SunTrust, and Citibank. Meanwhile, Time Warner Cable, Charter Communications, and Blue Shield of California had the largest decline. At an industry level, retailers and hotels ended in the top spots of this year's Customer Experience Index for all categories, while medical insurers and TV service providers ended up at the bottom.

"Executives regularly tell us that customer experience is critical to their competitiveness, but this year's Customer Experience Index demonstrates that there's room for improvement across all industries," said Bruce D. Temkin, vice president and principal analyst at Forrester Research. "While many firms are dealing with rough economic times, they can't let customer experience fall to the back burner. If firms let their customer experience deteriorate, then they'll lose customers and amplify the negative impact of the downturn."

To keep customer experience momentum in a downturn, Forrester offers 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.

A complimentary copy of "The Customer Experience Index, 2008" report is available at: www.forrester.com/cxpindex2008.

Can I Please Speak with a Live Agent?

by Randy Saunders

A new report from Forrester Research, “Why Talking to Customers Is Ruining Your Business,” shows that customers still want to speak to live agents, but companies aren’t making it easy.

Forester’s study finds that 45 percent of consumers prefer to speak with a customer service agent to answer questions and resolve service issues, yet most walk away from customer service agent interactions disillusioned, disappointed, and disgruntled.

Why Are Customers Frustrated?
“While the trend over the past 10 years has been to try to move customers to self-service channels to reduce costs, 45 percent of consumers still prefer to speak with a customer service agent on the phone for customer service,” writes Natalie Petouhoff, senior analyst and lead author of the report.

“Consumers expect to speak with a human who is knowledgeable, patient, friendly, courteous, informed, easy to understand, and responsible for resolving issues,” Petouhoff continues. “Instead, consumers often encounter incorrect problem diagnosis, agent attitude issues, several transfers to ‘experts,’ long hold times, incomplete or contradictory answers, and a need to repeat information already given.”

Some of the major problem areas identified in this report include:

• Clumsy self-service to live service transition
• Routing calls to the wrong customer service agent
• Dismal knowledge management capabilities
• The agents’ ability to review customer histories, products, and services

Does Age Matter?
While you might expect that younger generations should prefer self-service channels, that's not what Forrester found.  “Boomers, Gen Xers, and Gen Yers all prefer talking to an agent to get service more than any other channel,” Petouhoff writes.

Five Ways To Deliver Extraordinary Customer Service Agent Interactions
To fix these problems and deliver extraordinary customer service agent interactions, Forrester recommends that customer service process and application professionals tackle five key initiatives:

1. Mapping out proper customer routing logic
2. Modernizing call center infrastructure
3. Beefing up agent management
4. Embracing natural language and intent-based knowledge management
5. Fixing self-service customer interactions

New Study Finds Customer Experience Expectations Continue to Rise Despite Economy

By Randy Saunders

A new Harris Interactive customer experience impact study (sponsored by RightNow Technologies) finds that 87 percent of consumers have stopped doing business with an organization after a bad customer experience. That’s up from 80 percent in 2007 and 68 percent in 2006.

The research also finds that even in a down economy, 58 percent of U.S. consumers will always or often pay more for a better customer experience.

Want Higher Advocacy?  Improve Customer Service
When recommending a company, the study found, customer service is more important (58 percent) than low prices (44 percent) and top quality products/services (43 percent).

What Are Customers Saying About Your Service?
In this age of instant communications, the good news is consumers are willing to recommend companies to others because of outstanding service.  But beware … they are almost twice as likely to tell others about poor treatment. In fact, the report shows that 84% of U.S. adults who had a negative experience with an organization or company indicated that they’d spread the word about a bad experience—up from 74% in 2007 and 67% in 2006.

In addition, blogging about a negative customer experience is on the rise—22 percent of consumers this year have posted negative feedback about a company, vs. only 13 percent in 2007.

Inspired by a Fisherman

We all grumble.

Steve Kayser writes "Shoot the Donkey" to show us the way around obstacles.

Now meet Clay Dyer ... a fisherman. Endless possibilities!