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The State Of The Customer Experience 2016

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“Customer experience leaders grow revenue faster than CX laggards, drive higher brand preference, and can charge more for their products.” That is an exact quote from the "U.S. Customer Experience Index, 2016" by Forrester’s Rick Parish.

This is not news. This has been demonstrated and documented for years. Yet, for some reason, most companies tend to fall into the laggard category rather than the leader category. However, many of the laggards think they are leaders. They put customer service initiatives into words, but not so much into action. Many times it’s someone from leadership spouting instructions that are barely more sophisticated than “Just be nice to the customer.”

To become a leader takes more than words. It takes a shift in culture. It takes having the right people in the right jobs and training them to do the right thing. And, while conceptually it may appear to be simple, the execution, especially for larger companies, is not always so easy.

If you’re looking for guidance on creating a better customer experience, there’s plenty of information out there, including many of my own articles penned for Forbes. For now, let’s make the case that will motivate the laggards to move up – and leaders to move to the next level.

Many times I’m asked if customer service is getting better or worse. My answer over the last few years has been that it is getting better, but at the same time, the customers’ expectations are getting even higher. The net doesn’t always balance out. The expectations are sometimes exceeding the increase in performance. While service is getting better, it doesn’t always appear to be so, simply because the customer expects more and more each year. And, why shouldn’t they? We teach them to expect more. We promise better service and even brag about our industry ratings and awards. We’re teaching them what good service is, and they are expecting that we will give it to them.

Each year, the Forrester report benchmarks the CX quality of large U.S. brands as well as the federal government.

The good news is that that 58 out of 319 brands had significant improvement in their CX since the third quarter of 2015, and 28 of those brands had significant increases in the last year. This is noteworthy, because the last Forrester report (Q3 2015) had only seven brands significantly improving.

Five of the 21 industries surveyed had dramatic increases, while only two fell, and those only slightly. The winners were wireless service providers, traditional retailers, hotels, Internet service providers and the U.S. federal government. The industries that saw minor decreases in their CX scores were direct banking and the direct/discount brokerage industries.

The rating system has five levels: very poor, poor, okay, good and excellent. It is important to note that of the 21 industries represented, not one of the industry-wide averages crossed into the very poor rating, although some of the individual companies and organizations did.

Six industries fell into the poor category, and these included rental car providers, health insurance providers, airlines, TV service providers, Internet service providers and U.S. federal government agencies. There were just two industries that reached the border of okay to good, traditional retail banks and digital-only retailers. No industry crossed into the zone of excellent.

The companies that led in their industry aren’t surprising. Some of the industry leaders included JetBlue in the airline industry, USAA in financial services (in several categories), Apple in PC manufacturers and Lexus in automotive.

An emotional connection with a customer is key to high CX ratings. The report indicated that a “happy customer” does not correlate with brand loyalty. The top three drivers for loyalty are making customers feel valued, appreciated and confident.

On the flip side, angering a customer isn’t the worst thing you can do to erode loyalty (and receive a lower rating). Annoying, disappointing and frustrating customers are the drivers for a lower CX rating.

All of this information, and much more outlined in the Forrester report, leads to a logical conclusion. There is tremendous opportunity out there for a company that wants to compete through service. Go back and read the first line of this article again. Do you want faster revenue growth, higher brand preference and the leeway to charge a higher price? Of course you do.

Let’s end with something tactical. How can you tune up and turn up your CX ratings? Ask your customers for some advice. Start with the standard one to 10 scale rating. If they give you a 10, ask what I call the One Thing Question, which is, “Can you think of one thing that would make doing business with us even better?” And, for the customers who give you anything less than a 10, ask them for a suggestion on how to improve, such as, “What would it have taken for you to raise our rating by just one point?”

The opportunity to improve is in those answers. It’s not what you come up with. It’s what your customers say is important to them. So ask, listen, and then do.

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