2014 Temkin Experience Ratings H.E.B. and Trader Joe s Top Ratings of 268 U.S. Companies Across 19 Industries By Bruce Temkin Customer Experience Transformist & Managing Partner Temkin Group March 2014 Temkin Group info@temkingroup.com (617) 916-2075
Executive Summary In our 2014 Temkin Experience Ratings, H.E.B. earned the top spot, followed by Trader Joe s, Chick- fil- A, and Publix. This cluster of grocers and fast food chains at the top of the list exemplifies the dominance of these two industries in our ratings; they together claim 15 of the top 21 spots. We asked 10,000 U.S. consumers to rate their recent interactions with 268 companies across 19 industries. Consumers evaluated their experiences with these firms across three dimensions: functional, accessible, and emotional. On an industry level, grocery chains, fast food chains, parcel delivery services, retailers, and banks all earned good ratings on average, whereas TV service providers, health plans, Internet service providers, and rental car companies received poor ratings on average. We also compared individual companies to their industry averages and found that Kaiser Permanente, USAA (insurance), A credit union, Southwest Airlines, and Regions all outperformed their peers by more than 10 percentage points. Meanwhile, DHL, HSBC (credit cards), Chrysler, US Cellular, Coventry Health Care, and HSBC (bank) each fell 15 percentage points or more below their competitors. Between 2013 and 2014, credit card issuers increased their rating the most dramatically, while hotel chains decreased their ratings most steeply. Of all companies, EarthLink, Regions, and Humana improved the most over the past year. H.E.B and Trader Joe s Earn the Top Spots in 2014 Temkin Experience Ratings To evaluate the quality of the experiences that U.S companies deliver to their customers, we surveyed 10,000 U.S. consumers about their recent interactions with organizations. 1 We then used this consumer feedback to create our fourth annual Temkin Experience Ratings by: Examining three elements of the experience. We asked consumers to rate their experiences with different companies over the past 60 days. These questions evaluated on a seven- point scale covered the three components of an experience: functional, accessible, and emotional (see Figure 1). Only analyzing data from companies with more than 100 respondents. Although consumers rated a multitude of companies for our survey, we only analyzed those that received at least 100 consumer responses. Ultimately, we examined data from 268 companies across 19 industries (see Figure 2). Calculating the component ratings. We developed ratings for each of the three components of experience functional, accessible, and emotional by subtracting the percentage of consumers who rated a company poorly from the percentage of consumers who gave the company a high rating. 2 Calculating the overall ratings. We found the Temkin Group Rating for each company by averaging the ratings of the three experience components. 1 Data come from the Temkin Group Q1 2014 Consumer Benchmark Survey an online study of 10,000 U.S. consumers completed during January 2014. Survey respondents were representative of the U.S. Census based on quotas for age, income, ethnicity, and geographic region. 2 We describe the methodology for calculating the Temkin Experience Ratings at the end of this document. Page 2
Food Services Dominate the Top of the Ratings We examined the Temkin Experience Ratings for 268 companies from 19 industries and found that: H.E.B and Trader Joe s lead the pack of grocers and fast food chains. Grocers and fast food chains dominate the Temkin Experience Ratings, with H.E.B and Trader Joe s claiming the top two spots and Chick- fil- A and Publix coming in closely behind (see Figures 3 and 4). Overall, grocery chains fill eight of the top 21 spots, while fast food chains fill seven of the top spots. Four banks and two retailers account for the rest of the top companies. Health plans receive the lowest ratings. Health plans took the bottom four spots with Coventry Health Care, Empire (BCBS), Highmark (BCBS), and Medicaid. Overall, five of the bottom 18 companies are health plans, four are hotels, three are TV service providers, and a mixture of other industries account for the rest. Customer experience is staying relatively steady. We compared this year s results with survey responses from the past three years and found that like in 2013 37% of companies earned a good or excellent rating (see Figure 5). Compared with 2013, today more companies deliver excellent customer experience, but fewer companies deliver good customer experience. Across the three components, companies decreased a little bit in both the functional and accesible categories, but increased slightly in the emotional area. Grocery Chains are the Top Industry and TV Services are the Bottom Industry We assessed the Temkin Experience Ratings of 19 industries and uncovered that: Five industries are good. Although the individual company scores vary widely, overall grocery chains earned the highest average industry rating (see Figure 6). Fast food chains, parcel delivery services, retailers, and banks each also received an average industry rating of good. At the other end of the spectrum, TV service providers, health plans, Internet service providers, and rental cars all have poor average ratings. USAA leads in two industries. We examined the best and worst companies in each industry and found that USAA earned the highest ratings in two industries: credit card issuers and insurance carriers (see Figure 7). Additionally of note, the lowest- rated fast food company Orange Julius still recieved higher marks than most of the other industries top companies. Kaiser Permanente outperforms its competitors. We compared the scores of individual companies to the average scores of their industries and found that Kaiser Permanente earned ratings 11 percentage points higher than the average health plan (see Figure 8). USAA for insurance carriers, A credit union and Regions for banks, and Southwest Airlines for airlines each also received ratings 10 percentage points higher than their industry norms. DHL falls far behind its peers. DHL lags 20 percentage points behind the parcel delivery industry average, while HSBC for credit cards issuers, Chrysler for auto dealers, US Cellular for wireless carriers, Coventry Health Care for health plans, and HSBC for banks all fall 15 percentage points or more below their respective industry averages. Page 3
Examining Functional, Accessible, and Emotional Experience Ratings We examined the three components of the Temkin Experience Ratings functional, accessible, and emotional for each company and discovered that: Emotional experience is the weakest component. Across all 19 industries, the scores of the emotional experience fall well below the scores of both the functional and accessible components (see Figure 9). In fact, grocery chains and fast food chains are the only industries in which the emotional experience comes even close to approaching an okay rating. And just seven of the nineteen industries banks, credit card issuers, fast food chains, grocers, insurance carriers, parcel delivery services, and retailers have both accessible and functional scores that are okay or better. H.E.B. and Regions offer the top functional experience. Led by H.E.B. and Regions, 57 companies earned excellent ratings (80% or above) for the functional component of their experiences (see Figure 10). In contrast, Coventry Health Care received the only very poor rating (below 50%) for functional experience, while 27 other companies earned poor ratings (between 50% and 60%). H.E.B. provides the most accessible experience. Of the 61 companies that received an excellent rating for the accessible component of their experience, H.E.B. earned the top spot (see Figure 11). Medicaid had the lowest accessible rating and is joined on the bottom by seven other very poor performers: Empire (BCBS), Coventry Health Care, Highmark (BCBS), Motel 6, Super 8, Residence Inn, and Hitachi. Thirty- four other companies scored poor ratings on their accessible experience. H.E.B. delivers the best emotional experience. H.E.B. is the only company to earn an excellent rating for its emotional experience (see Figure 12). Trader Joe s followed closely behind as one of the 15 companies that earned a good rating for this component. At the bottom of the list, Empire (BCBS) lead the 48 companies with very poor ratings, while another 110 companies scored poor ratings in this area. How the Results Changed Between 2011 and 2014 We examined how company ratings changed for the 243 organizations that appeared in both the 2013 and 2014 Temkin Experience Ratings. We also compared the ratings of the 12 industries that have been represented in our findings every year since the inception of our Temkin Experience Ratings in 2011. We found that: Credit card issuers improved, while hotels declined. Of the 19 industries that appeared in both the 2013 and the 2014 Temkin Experience Ratings, the scores of 15 of them increased from last year to this year (see Figure 13). Credit card issuers gained the most percentage points over the past year with an average increase of 4.1 points. Meanwhile, hotel chains dropped a significant 5.4 percentage points, the largest decline of the four companies whose scores decreased. Of the 12 industries that we have analyzed every year for the past four years, five of them have made steady gains each year: banks, computer makers, credit card issuers, health plans, and insurance carriers. EarthLink, Regions, and Humana improved the most. Of the 243 companies that were included in both the 2013 and 2014 Temkin Experience Ratings, 117 firms (48%) improved Page 4
their scores at least slightly (see Figure 14). EarthLink, Regions, and Humana most significantly increased their ratings, but Morgan Stanley Smith Barney and Capital One also saw double- digit improvements to their scores over the past year (see Figure 15). Coventry Health Care declined dramatically. Coventry Health Care s rating decreased by 18 percentage points, the most of any company. US Cellular, Marriott, Fifth Third, and Chrysler s scores all decreased by more than 10 points since 2013. Calculating the Temkin Experience Ratings We calculated the Temkin Experience Ratings for each company by (see Figure 16): First, for each separate component (functional, accessible, and emotional), we analyzed the percentage of consumers who gave the company a good score ( 6 or 7 ) and the percent who gave the company a bad score ( 1, 2, or 3 ). Second, within each individual component, we subtracted the percentage of bad scores from the percentage of good scores, which resulted in three separate ratings for each company. Finally, we averaged these three component scores for each company to generate that firm s Temkin Experience Rating. The Path to Customer Experience Excellence The Temkin Experience Ratings show that most companies have a long way to go before they reach the highest levels of customer experience maturity (see Figure 17). Although any company can improve narrow segments of its customer experience, creating lasting differentiation requires more than just strong ambitions and superficial changes. Our research shows that long- term success requires companies to build and sustain four customer experience competencies: 3 Purposeful Leadership: Operate consistently with a clear set of values. Employee Engagement: Align employees with the goals of the organization. Compelling Brand Values: Deliver on your brand promises to customers. Customer Connectedness: Infuse customer insight across the organization. To see and sort through the data for all Temkin Ratings, visit www.temkinratings.com 3 See the Temkin Group report The Four Customer Experience Core Competencies (January 2013). Page 5
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Temkin Group Insight Report Figure 2 Copyright 2014 Temkin Group. All rights reserved. Page 7
Temkin Group Insight Report Figure 3 Copyright 2014 Temkin Group. All rights reserved. Page 8
2014 Temkin Experience Ratings (TxR), Bottom 51 Organizations Rank Company Industry TxR Coventry Health 268 Care Health Plans 41% 267 Empire (BCBS) Health Plans 42% 266 Highmark (BCBS) Health Plans 44% 265 Medicaid Health Plans 45% 264 US Cellular Wireless Carriers 46% 260 Comcast TV Service 47% 260 Comcast Internet Service 47% 260 Motel 6 Hotels 47% 260 Super 8 Hotels 47% 258 Charter Comm. TV Service 48% 258 CareFirst (BCBS) Health Plans 48% 256 Crowne Plaza Hotels 50% 256 Chrysler Auto Dealers 50% 254 HSBC Credit Cards 51% 254 Days Inn Hotels 51% Time Warner 251 Cable TV Service 52% 251 US Airways Airlines 52% 251 Hitachi Major Appliances 52% 246 Qwest Internet Service 53% 246 DHL Parcel Delivery 53% 246 Anthem (BCBS) Health Plans 53% 246 AT&T TV Service 53% 246 Residence Inn Hotels 53% 241 Verizon TV Service 54% 241 CIGNA Health Plans 54% 241 Dollar Rental Cars 54% Rank Company Industry TxR 241 Blackboard Software 54% 241 Westin Hotels 54% 232 Time Warner Internet Service 55% 232 Charter Internet Communications Service 55% 232 Dodge Auto Dealers 55% 232 21st Century Insurance Carriers 55% 232 Sony Computers 55% 232 MSN Internet Service 55% 232 Compaq Computers 55% 232 Health Net Health Plans 55% 232 Haier Major Appliances 55% Optimum (io)/ 226 Cablevision TV Service 56% 226 HSBC Banks 56% 226 American Family Insurance Carriers 56% 226 Hertz Rental Cars 56% 226 AirTran Airways Airlines 56% 226 Fujitsu Major Appliances 56% 218 Sprint Wireless Carriers 57% 218 AT&T Internet Service 57% 218 Verizon Internet Service 57% 218 Aetna Health Plans 57% 218 Avis Rental Cars 57% 218 Adobe Software 57% 218 Kia Auto Dealers 57% 218 Activision Software 57% Base: 10,000 U.S. consumers Source: Temkin Group Q1 2014 Consumer Benchmark Survey Copyright 2014 Temkin Group. All rights reserved. Figure 4 Page 9
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About the Author, Bruce Temkin Bruce Temkin is a Customer Experience Transformist & Managing Partner of Temkin Group. He is also the co- founder and Chair of the Customer Experience Professionals Association (cxpa.org). Bruce is widely viewed as a leading expert in how organizations build differentiation through customer experience. He has worked with hundreds of large organizations on the strategies, operational processes, organizational structures, leadership, and culture required to sustain superior customer relationships. Bruce s research focuses on identifying current and emerging best practices. He has published seminal reports, such as The ROI of Customer Experience, The Future of Customer Experience, and The Four Customer Experience Core Competencies. He uses this insight to advise companies on their customer experience journeys, identifying opportunities for sustainable breakthrough performance. Bruce is the author of the popular blog Customer Experience Matters where he regularly posts insights on topics such as customer experience, branding, leadership, and employee engagement. His ebook Six Laws of Customer Experience which is available for free on the blog, has been downloaded by tens of thousands of people around the world. 4 Prior to forming Temkin Group, Bruce was Vice President & Principal Analyst with Forrester Research. During his 12 years with Forrester, he led the company's business- to- business, financial services, e- business, and customer experience practices. Bruce was Forrester s most- read analyst for 13 consecutive quarters and remains one of the most respected analysts in the industry. Bruce authored several of Forrester s most popular research reports, including Experience-Based Differentiation, The Customer Experience Journey, and Voice Of The Customer: The Next Generation. He created Forrester s Customer Experience Index and Voice of the Customer Award and also led the creation and expansion of many of Forrester s experience evaluation methodologies and training workshops. Prior to Forrester, Bruce co- founded and led a couple of Internet start- ups. He also held management positions with GE, Stratus Computers, and Fidelity Investments. Bruce has been widely quoted in the press, including media outlets such as The New York Times, Wall Street Journal, and Business Week. Bruce is a highly demanded public speaker who combines deep expertise with an engaging, entertaining style. He has delivered keynote speeches at hundreds of industry and corporate events and is often recognized as one of the top speakers. Bruce holds a master s degree from the MIT Sloan School of Management, where he concentrated in business strategy and operations. He also holds an undergraduate degree in mechanical engineering from Union College. 4 Customer Experience Matters is a registered trademark of Temkin Group. Page 23
T E M K I N G R O U P O V E R V I E W Temkin Group is a leading customer experience (CX) research and consulting firm. We help many of the world s largest brands lead their transformational journeys towards customer-centricity and build loyalty by engaging the hearts and minds of their customers, employees, and partners. TEMKIN GROUP IS BASED ON FOUR CORE BELIEFS: CX drives loyalty. Our research and work with clients demonstrates that interactions with customers influence both how much business they ll do with you in the future and how often they recommend you to others. CX is a journey, not a project. Building the capabilities to consistently delight customers doesn t happen overnight. Companies need to plan for a multi-year change program. Improvement requires systemic change. Companies can improve isolated customer interactions, but they can t gain a competitive advantage until customer experience is embedded into their operational processes and culture. We can help you make a difference. Transformation isn t easy, but becoming more customer-centric is worth the effort. We help our clients accelerate their results and avoid many of the stumbling blocks along the way. HOW WE ARE DIFFERENT: Temkin Group combines thought leadership and benchmark data with a deep understanding of the dynamics of organizations, which enables us to accelerate customer experience results and help companies build the four competencies that are required to sustain long-term success. Purposeful Leadership Do your leaders consistently operate with a clear, well-articulated set of values? Customer Connectedness Is customer feedback and insight deeply integrated throughout your internal processes? CX CORE COMPETENCIES Compelling Brand Values Are your brand attributes driving decisions about how you treat customers and other stakeholders? Employee Engagement Are employees fully committed to the goals of your organization? HOW WE CAN HELP: 48 White Oak Road Waban, MA 02468 617/916-2075 tel 617/663-6124 fax Temkin Group provides a number of different services including: Research and Advisory Subscriptions. Access to all of our research on trends, best practices, and benchmark data as well as the option to ask questions or seek feedback on your efforts. CX Planning and Innovating. We ll examine your organization s goals and make sure that you have the right plans and priorities for CX, whether you re just starting the journey or looking to take your CX efforts to a much higher level. Engaging Workshops and Training. We deliver interactive workshops to help your organization understand the importance of CX and what it takes to achieve long-term success. We run workshops for executive teams, extended leadership groups, CX organizations, and broader sets of employees. Compelling Speeches. If you re planning a meeting or an offsite event, we ll infuse compelling CX content into the event. We can engage your audience on a wide range of topics related to customer experience, focusing on elements of our four customer experience competencies.