The Customer Experience Index, 2013

For: Customer experience professionals The Customer Experience Index, 2013 by megan Burns, January 1, 2013 Key TaKeaWays no Major shifts in industry Rankings The ranking of industries in the 2013 CXi did not shift, compared with the previous year. The top industries leading the pack are retailers and hotels, while the bottom industries are Internet service providers and health insurance providers. value Brands delivered excellence The top-scoring company in the CXi is Marshalls, a retail company that provides goods at discounted prices. In addition, 10 of the 13 brands in the excellent category are companies that position themselves as value-based brands. Clear Winners Lead Their industries Companies like USAA, Southwest Airlines, US Cellular, and Vanguard are clear winners in the banking, airline, wireless, and investment industries. They provide examples of high customer experience quality for all firms. Forrester research, inc., 60 acorn park Drive, Cambridge, ma 02140 usa tel: +1 617.613.6000 Fax: +1 617.613.000 www.forrester.com

January 1, 2013 The Customer Experience Index, 2013 Benchmarks: The Customer Experience Management Playbook by Megan Burns with Harley Manning, Allison Stone, and Jason Knott Why Read This Report How good is the customer experience at your company as rated by your own recent customers? This report answers that question by providing benchmarks of the quality of customer experience for 14 large US brands across 14 industries including retailers, hotels, banks, credit card providers, insurance firms, airlines, wireless service providers, and investment firms. We show not only the highest- and lowest-scoring companies and industries but also the ones that moved up or down since our 2012 study. Customer experience professionals should use it to understand their competitive environment and set goals for optimizing their customer experience management system. Table Of Contents 2 6 9 21 22 Forrester s Customer Experience Index, 2013 A Year Of Little Overall Progress But Competition Was Hot Within Some Industries This Year s Best, Worst, And Most-Improved Brands WHAT IT MEANS Superior Customer Experience Will Lead To Superior Profits Supplemental Material Notes & Resources As part of an online survey in Q4 2012, Forrester asked 7,06 US consumers about their interactions with airlines, banks, consumer electronics manufacturers, credit card providers, health insurance plans, hotels, insurance providers, Internet service providers, investment firms, parcel shipping firms, rental car providers, retailers, TV service providers, and wireless service providers. Related Research Documents Executive Q&A: Forrester s Customer Experience Index January 4, 2013 Don t Fix Customer Experience Problems, Prevent Them November 30, 2012 The Customer Experience Index, 2012 January 23, 2012 2013, Forrester Research, Inc. All rights reserved. Unauthorized reproduction is strictly prohibited. Information is based on best available resources. Opinions reflect judgment at the time and are subject to change. Forrester, Technographics, Forrester Wave, RoleView, TechRadar, and Total Economic Impact are trademarks of Forrester Research, Inc. All other trademarks are the property of their respective companies. To purchase reprints of this document, please email clientsupport@forrester.com. For additional information, go to www.forrester.com.

The Customer Experience Index, 2013 2 forrester s customer experience index, 2013 Forrester s research shows that improving customer experience can have an enormous positive impact on a firm s bottom line. 1 To measure whether or not customer experience is improving at major US companies, we created Forrester s sixth annual Customer Experience Index (CXi). To calculate the CXi, we: Asked consumers to identify companies they do business with. Consumers selected the companies they work with most in 14 different industries (see Figure 1). 2 In all, we collected data on 237 North American organizations but limited our rankings to the 14 brands for which we had at least 100 responses. Posed three questions about each brand. Customers want a company to deliver value, be easy to do business with, and be enjoyable to do business with the three levels of the customer experience pyramid. We asked consumers how each brand they selected measured up in these dimensions (see Figure 2). Calculated the CXi for 14 brands. To calculate each brand s CXi score, we subtracted the percentage of its customers who reported a bad experience from the percentage who reported a good experience for all three questions. 3 The overall CXi is the average of those three results (see Figure 3).

The Customer Experience Index, 2013 3 Figure 1 Consumers Rated The Experience Of 14 Brands Across 14 Industries Airlines American Airlines Delta Air Lines Consumer electronics manufacturers Banks Ally Bank Bank of America BB&T Capital One Bank/ING Direct Chase Citibank Credit card providers Acer Apple BlackBerry Dell Hewlett-Packard American Express Bank of America Barclaycard Capital One Hotels Best Western Choice Hotels Comfort Inn Courtyard by Marriott Insurance providers AAA Allstate Insurance American Family Farmers Insurance Geico Internet service providers Investment firms AT&T U-verse Bright House Networks Cablevision Charles Schwab E-Trade Edward Jones Fidelity Investments JetBlue Airways Southwest Airlines Fifth Third HSBC PNC Regions Bank SunTrust Bank TD Bank HTC LG Microsoft (e.g., Xbox, Connect, Windows Phone) Motorola Chase Citi Discover Days Inn Embassy Suites Hampton Inn/Suites Hilton Hotels Liberty Mutual MetLife Nationwide Progressive State Farm Century Link Charter Comcast ING ShareBuilder Merrill Lynch Morgan Stanley Smith Barney TD Ameritrade United Airlines US Airways USAA US Bank Wells Fargo Another regional or community/local bank Another credit union (bank) Nintendo (Wii, DS) Samsung Sony Toshiba Vizio USAA US Bank Wells Fargo Holiday Inn Hyatt Hotels & Resorts Marriott Hotels & Resorts Wyndham Hotels & Resorts The Hartford Travelers USAA An independent insurance agent Road Runner Verizon (DSL) Verizon FiOS Vanguard Wells Fargo Advisors Other full-service brokerage (includes dedicated advisor) A credit union Source: North American Technographics Customer Experience Online Survey, Q4 2012 (US)

The Customer Experience Index, 2013 4 Figure 1 Consumers Rated The Experience Of 14 Brands Across 14 Industries (Cont.) Medical insurance provider Parcel delivery/ shipping providers Rental car providers FedEx Avis Rent A Car Budget Rent A Car Retailers Amazon Barnes & Noble Best Buy BJ s Wholesale Club Costco CVS ebay Home Depot JCPenney TV service providers Wireless service providers Aetna Anthem Blue Cross Blue Shield Blue Cross Blue Shield of Illinois Blue Cross Blue Shield of Michigan AT&T U-verse Bright House Networks Cablevision/Interactive Optimum (io) AT&T Wireless Metro PCS Sprint Blue Shield of California (this is not Blue Cross) Cigna Humana United Parcel Service of America (UPS) Enterprise Rent-A-Car Kmart Kohl s Lowe s Macy s Marshalls Office Depot OfficeMax Old Navy Rite Aid Charter Communications Comcast Cox Communications T-Mobile TracFone US Cellular Kaiser Permanente Other Blue Cross Blue Shield UnitedHealthcare United States Postal Service does not include mailing letters Hertz Sam s Club Sears Staples Target TJ Maxx Toys R Us Walgreen Wal-Mart DirecTV Dish Network/EchoStar Verizon FiOS Verizon Wireless Virgin Mobile Source: North American Technographics Customer Experience Online Survey, Q4 2012 (US)

The Customer Experience Index, 2013 Figure 2 Three Questions Drive The Customer Experience Index Forrester s Customer Experience Index Thinking of your interactions with these firms over the past 90 days... Enjoyable How enjoyable were they to do business with? Easy How easy were they to do business with? Meets needs How effective were they at meeting your needs? Figure 3 How We Calculate Customer Experience Index Scores Meets needs criteria (on a scale of 1 [didn t meet any of my needs] to [met all of my needs]) Easy to do business with criteria (on a scale of 1 [very difficult] to [very easy]) Enjoyability criteria (on a scale of 1 [not at all enjoyable] to [very enjoyable]) Chose 4 or Example: Acme Chose 1 or 2 Net score 82% - 4% = 78% 81% - 1% = 80% 7% - 1% = 74% Average CXi score: 77

The Customer Experience Index, 2013 6 A Year Of little overall Progress After calculating the CXi score for each of the brands, we grouped them into five categories based on their score: excellent (8 and higher), good (7 to 84), OK (6 to 74), poor ( to 64), and very poor (less than ). We examined the distribution of scores and found that (see Figure 4): 4 Most brands still rate OK to very poor. This year, 61% of brands got a rating of OK, poor, or very poor from their customers. That s just a slight improvement over last year when 63% of brands fell into our three lowest categories. A higher percentage of brands ended up in the OK category, compared with last year, while the percentage of brands in the poor and very poor categories decreased. That s good news of a sort, as companies climbed up out of the basement and into mediocrity. The top- and bottom-scoring industries remained exactly the same. We next examined how each of the 14 industries in the index did as a whole (see Figure ). Looking at the high, low, and average CXi scores for each industry, we found that for the fourth year in a row, retailers (82) and hotels (79) had the highest average scores across all industries. And once again, TV service providers (8), Internet service providers (7), and health insurance providers (6) brought up the rear.

The Customer Experience Index, 2013 7 Figure 4 Distribution Of Customer Experience Index Scores, 2007 To 2013 Excellent (score: 8+) 0% 8% 3% 6% 10% 11% 2013 2012 2011 2010 2008 2007 Good (score: 7 to 84) 31% 34% 29% 26% 2% 2% OK (score: 6 to 74) 36% 31% 3% 30% 26% 40% Poor (score: to 64) 17% 23% 18% 21%24% 23% Very poor (score: <) 8% 10% 11%13% 14% 12% Base: 14 large North American brands scored in Forrester s Customer Experience Index, 2013; 160 large North American brands scored in Forrester s Customer Experience Index, 2012; 13 large North American brands scored in Forrester s Customer Experience Index, 2011; 133 large North American brands scored in Forrester s Customer Experience Index, 2010; 113 large North American brands scored in Forrester s Customer Experience Index, 2008; and 112 large North American brands scored in Forrester s Customer Experience Index, 2007 Source: North American Technographics Customer Experience Online Survey, Q4 2007, Q4 2008, Q4 2009, Q4 2010, Q4 2011, Q4 2012 (US)

The Customer Experience Index, 2013 8 Figure Range Of Company CXi Results Within 14 Industries = Average industry score Very poor Poor OK Good Excellent 20 30 40 0 60 70 80 90 100 Industry (average) Retailers (82) Hotels (79) 7 89 72 88 Parcel delivery/shipping providers (77) 74 80 Consumer electronics manufacturers (74) Insurance providers (73) Investment firms (73) Banks (71) Credit card providers (70) Rental car providers (68) 67 83 64 83 61 83 3 8 63 82 67 76 Airlines (67) Wireless service providers (6) TV service providers (8) Internet service providers (7) 4 77 4 69 4 67 81 Health insurance plans (6) 49 66 Base: US online consumers who have interacted with brands in these industries Source: North American Technographics Customer Experience Online Survey, Q4 2012 (US)

The Customer Experience Index, 2013 9 But Competition Was Hot Within Some Industries Although no industry shot up as a whole this year, the story our data tells about what happened within each industry is quite different. Airlines and banks have clear CX winners and losers. In the banking category, USAA scored an 8. That s seven points ahead of the next-closest named bank, SunTrust, and a full 32 points above bottom scorers HSBC and Fifth Third (tied at 3). 6 Among airlines, Southwest Airlines led the industry with its score of 81. JetBlue Airways came in second, lagging Southwest by just three points while leading the next-highest-scoring airline, Delta Air Lines, by a full 12 points. Meanwhile, category laggard United Airlines (4) trailed Southwest by a whopping 27 points. The gap between leaders and laggards widened for investment firms. The gap between high- and low-scoring investment firms jumped from 1 points to 22 points. What happened? Vanguard leapfrogged over its competitors with an increase of seven percentage points, setting a new high bar for the industry with its score of 83. 7 The low bar was set by Wells Fargo Advisors with its score of 61, just one point below the industry low score for last year. In wireless, the best got better and the worst got worse. The gap between high- and low -scoring wireless service providers widened to 22 points from just 12 points last year for two reasons. Top-scoring US Cellular grew its leadership position with a four-point increase over last year (77 versus 73). At the same time, T-Mobile cemented its last-place position in the industry by dropping six points to a score of. Among the biggest providers, the story was one of shared mediocrity. AT&T Wireless raised its score five points from 61 to 66 not nearly enough to catch US Cellular but sufficient to create a three-way tie with its two largest competitors, Verizon Wireless and Sprint. The CX race got tighter among credit card firms. The gap between leading and lagging credit card providers shrank from 30 points last year to 19 points in 2013. Part of that decrease came from a two-point drop in USAA s score (as a credit card provider), but most of it can be attributed to a seven-point increase in the score for last year s laggard Bank of America. 8 This Year s Best, Worst, And Most-Improved Brands We examined the scores of individual brands to determine the top and bottom performers across all industries as well as those whose scores went up or down most since our 2012 report (see Figure 6). 9 Looking at these individual rankings, we find that: Marshalls took the top spot. The discount retailer led all brands for the first time with a score of 89. That score represents a seven-point increase over last year, catapulting Marshalls from the good category to the top of the excellent category. Ten-point jumps in both its meets-needs and ease-ofdoing-business scores combined with the highest industry score for being enjoyable show that Marshalls is doing a superior job at every level of the customer experience pyramid.

The Customer Experience Index, 2013 10 Value brands dominated the top rankings. Value brands have scored well every year since Forrester began the CXi six years ago, when Costco took the top spot. This year, that trend hit new heights: 10 of the 13 brands in the excellent category position themselves as value brands, including all of the top four (Marshalls, Courtyard by Marriott, Sam s Club, and Target). It s not surprising that consumers turn to value brands in a weak economy. However, the fact that the customers of these brands rate their overall experience so highly is noteworthy clearly, consumers are not just making do. Only two brands both from the same company saw double-digit improvement. US Bank was the only firm with scores that went up by 10 points or more this year. It achieved that distinction in both of the categories where it appeared banking and credit cards (see Figure 7-1). 10 US Bank s credit card business saw a 16-point improvement, fueled by a 2-point surge in its score for meeting needs. Its bank business had an 11-point increase, driven by 14-point and 13-point increases in its scores for meeting needs and being easy to do business with, respectively. Three brands slid 10 points or more. Three brands had significant drops year-over-year (see Figure 7-2). Fifth Third bank shed a whopping 24 points, Blue Cross Blue Shield (BCBS) of Illinois lost 14 points, and American Family Insurance fell 10 points. American Family s decline came from a decrease of eight points or more in all three components of the CXi. BCBS of Illinois and Fifth Third can both attribute a significant portion of their overall declines to a drop of 24 points or more in the enjoyable component.

The Customer Experience Index, 2013 11 Figure 6 Forrester s 2013 Customer Experience Index Rankings 6-1 Companies with excellent CXi scores Marshalls Courtyard by Marriott Sam s Club Target Very poor Poor OK Good Excellent 0 10 20 30 40 0 60 70 80 90 100 Amazon 8 USAA (bank) 8 Rite Aid 8 Costco 8 Lowe s 8 TJ Maxx 8 JCPenney 8 Kohl s 8 Marriott Hotels & Resorts 8 Rating scale Excellent 8+ Good 7 to 84 OK 6 to 74 Poor to 64 Very poor < Base: US online consumers who have interacted with each brand (numbers have been rounded) Source: North American Technographics Customer Experience Online Survey, Q4 2012 (US) 89 88 87 86

The Customer Experience Index, 2013 12 Figure 6 Forrester s 2013 Customer Experience Index Rankings (Cont.) 6-2 Companies with good CXi scores Very poor Poor OK Good Excellent 0 10 20 30 40 0 60 70 80 90 100 Choice Hotels Walgreen 84 Barnes & Noble 84 USAA (insurance provider) 83 Vanguard 83 Hampton Inn/Suites 83 Nintendo (Wii, DS) 83 Old Navy 82 USAA (credit card provider) 82 Another credit union (bank) 82 CVS 82 Home Depot 82 Southwest Airlines 81 Embassy Suites 81 Sears 81 ebay 81 Staples 81 Wyndham Hotels & Resorts 80 Another regional or community/ local bank 80 Hyatt Hotels & Resorts 80 UPS 80 BJ s Wholesale Club 80 Hilton Hotels 79 Apple 79 Toys R Us 78 Rating scale Excellent 8+ Good 7 to 84 OK 6 to 74 Poor to 64 Very poor < Base: US online consumers who have interacted with each brand (numbers have been rounded) Source: North American Technographics Customer Experience Online Survey, Q4 2012 (US) 84

The Customer Experience Index, 2013 13 Figure 6 Forrester s 2013 Customer Experience Index Rankings (Cont.) 6-2 Companies with good CXi scores (cont.) Very poor Poor OK Good Excellent 0 10 20 30 40 0 60 70 80 90 100 SunTrust Bank 78 JetBlue Airways 78 Kmart 78 Wal-Mart 78 FedEx 78 PNC 77 Office Depot 77 US Cellular 77 TD Bank 77 Sony 76 Other full-service brokerage 76 (includes dedicated advisor) Macy s 76 Hertz 76 Fidelity Investments 76 Edward Jones 7 Samsung 7 Best Buy 7 Holiday Inn 7 Best Western 7 American Express 7 OfficeMax 7 Morgan Stanley Smith Barney 7 Rating scale Excellent 8+ Good 7 to 84 OK 6 to 74 Poor to 64 Very poor < Base: US online consumers who have interacted with each brand (numbers have been rounded) Source: North American Technographics Customer Experience Online Survey, Q4 2012 (US)

The Customer Experience Index, 2013 14 Figure 6 Forrester s 2013 Customer Experience Index Rankings (Cont.) 6-3 Companies with OK CXi scores Very poor Poor OK Good Excellent 0 10 20 30 40 0 60 70 80 90 100 State Farm 74 Microsoft (e.g., Xbox, Connect, Windows Phone) 74 ING ShareBuilder 74 Vizio 74 Nationwide 74 United States Postal Service does not include mailing letters 74 Barclaycard 74 Discover 74 HTC 74 Progressive 73 Hewlett-Packard 73 Days Inn 73 TracFone 73 TD Ameritrade 73 Toshiba 72 Comfort Inn 72 Avis Rent A Car 72 Allstate 72 Geico 72 Farmers Insurance 72 BB&T 72 US Bank (bank) 72 Rating scale Excellent 8+ Good 7 to 84 OK 6 to 74 Poor to 64 Very poor < Base: US online consumers who have interacted with each brand (numbers have been rounded) Source: North American Technographics Customer Experience Online Survey, Q4 2012 (US)

The Customer Experience Index, 2013 1 Figure 6 Forrester s 2013 Customer Experience Index Rankings (Cont.) 6-3 Companies with OK CXi scores (cont.) Very poor Poor OK Good Excellent 0 10 20 30 40 0 60 70 80 90 100 Merrill Lynch 72 AAA 72 Charles Schwab 71 Chase (credit card provider) 71 Ally Bank 71 An independent insurance agent 71 Motorola 71 MetLife 70 US Bank (credit card provider) 70 E-Trade 69 Enterprise Rent-A-Car 69 LG 69 Regions Bank 69 Bright House Networks (TV service provider) 69 Travelers 69 Citi (e.g., Citibank) (credit card provider) 69 Chase (bank) 69 Cox Communications (TV service provider) 68 Acer 68 Dell 67 Budget Rent A Car 67 BlackBerry 67 Rating scale Excellent 8+ Good 7 to 84 OK 6 to 74 Poor to 64 Very poor < Base: US online consumers who have interacted with each brand (numbers have been rounded) Source: North American Technographics Customer Experience Online Survey, Q4 2012 (US)

The Customer Experience Index, 2013 16 Figure 6 Forrester s 2013 Customer Experience Index Rankings (Cont.) 6-3 Companies with OK CXi scores (cont.) Very poor Poor OK Good Excellent 0 10 20 30 40 0 60 70 80 90 100 Capital One (credit card provider) 67 Verizon FiOS (Internet service provider) 67 Verizon Wireless 66 Sprint 66 Delta Air Lines 66 The Hartford 66 Kaiser Permanente 66 AT&T Wireless 66 Liberty Mutual 6 DirecTV 6 A credit union (investment firm) 6 Bright House Networks (Internet service provider) 6 Rating scale Excellent 8+ Good 7 to 84 OK 6 to 74 Poor to 64 Very poor < Base: US online consumers who have interacted with each brand (numbers have been rounded) Source: North American Technographics Customer Experience Online Survey, Q4 2012 (US)

The Customer Experience Index, 2013 17 Figure 6 Forrester s 2013 Customer Experience Index Rankings (Cont.) 6-4 Companies with poor CXi scores Very poor Poor OK Good Excellent 0 10 20 30 40 0 60 70 80 90 100 Wells Fargo (bank) 64 American Family 64 Metro PCS 64 Wells Fargo (credit card provider) 64 Humana 63 Dish Network/EchoStar 63 Virgin Mobile 63 Verizon FiOS (TV service provider) 63 Bank of America (credit card provider) 63 Citibank (bank) 62 American Airlines 62 Cablevision (Internet service provider) 62 Capital One Bank/ING Direct 62 Rating scale Excellent 8+ Good 7 to 84 OK 6 to 74 Poor to 64 Very poor < Base: US online consumers who have interacted with each brand (numbers have been rounded) Source: North American Technographics Customer Experience Online Survey, Q4 2012 (US)

The Customer Experience Index, 2013 18 Figure 6 Forrester s 2013 Customer Experience Index Rankings (Cont.) 6-4 Companies with poor CXi scores (cont.) Very poor Poor OK Good Excellent 0 10 20 30 40 0 60 70 80 90 100 Road Runner (Time Warner Cable) 61 Wells Fargo Advisors 61 Bank of America (bank) 60 Century Link (Internet service provider) 60 AT&T U-verse 9 (Internet service provider) Verizon (DSL) 9 US Airways 8 AT&T U-verse (TV service provider) 7 UnitedHealthcare 7 Other Blue Cross Blue Shield 6 Cigna 6 T-Mobile Aetna Rating scale Excellent 8+ Good 7 to 84 OK 6 to 74 Poor to 64 Very poor < Base: US online consumers who have interacted with each brand (numbers have been rounded) Source: North American Technographics Customer Experience Online Survey, Q4 2012 (US)

The Customer Experience Index, 2013 19 Figure 6 Forrester s 2013 Customer Experience Index Rankings (Cont.) 6- Companies with very poor CXi scores Very poor Poor OK Good Excellent 0 10 20 30 40 0 60 70 80 90 100 Cablevision/Interactive Optimum (io) (TV service provider) 4 Blue Cross Blue Shield of Illinois 4 United Airlines 4 HSBC 3 Fifth Third 3 Blue Cross Blue Shield of Michigan 3 Anthem Blue Cross Blue Shield 2 Comcast (TV service provider) 0 Comcast (Internet service provider) 49 Blue Shield of California (not Blue Cross) 49 Charter (Internet service provider) 4 Charter Communications (TV service provider) 4 Rating scale Excellent 8+ Good 7 to 84 OK 6 to 74 Poor to 64 Very poor < Base: US online consumers who have interacted with each brand (numbers have been rounded) Source: North American Technographics Customer Experience Online Survey, Q4 2012 (US)

The Customer Experience Index, 2013 20 Figure 7 Companies With Large Changes In CXi Between 2012 And 2013 7-1 Companies with CXi increases of five or more percentage points Change from CXi 2013 CXi 2012 2012 to 2013 Increases of 10 or more points US Bank (credit card provider) 70 4 16 US Bank (bank) 72 61 11 Increases of five to nine points 78 69 9 77 68 9 74 66 8 68 60 8 83 7 8 83 76 7 73 66 7 76 69 7 SunTrust Bank (bank) TD Bank (bank) ING ShareBuilder (investment firm) Cox Communications (TV service provider) Nintendo (Wii, DS) (consumer electronics manufacturer) Vanguard (investment firm) Days Inn (hotel) Other full-service brokerage (includes dedicated advisor) (investment firm) Marshalls (retailer) Citi (e.g., Citibank) (credit card provider) Bank of America (credit card provider) Rite Aid (retailer) Delta Air Lines (airline) Marriott Hotels & Resorts (hotel) Farmers Insurance (insurance provider) Bright House Networks (TV service provider) Motorola (consumer electronics manufacturer) MetLife (insurance provider) Bank of America (bank) TJ Maxx (retailer) Progressive (insurance provider) Courtyard by Marriott (hotel) AT&T Wireless (wireless service provider) Anthem Blue Cross Blue Shield (health insurance provider) PNC (bank) TracFone (wireless service provider) Sears (retailer) AT&T U-verse (Internet service provider) BlackBerry (consumer electronics manufacturer) Hilton Hotels (hotel) Capital One (credit card provider) Source: North American Technographics Customer Experience Online Survey, Q4 2011, Q4 2012 (US) 89 69 63 8 66 8 72 69 71 70 60 8 73 88 66 2 77 73 81 9 67 79 67 Base: US online consumers who have interacted with each brand (numbers have been rounded) 82 62 6 79 60 79 66 63 6 64 80 68 83 61 47 72 68 76 4 62 74 62 7 7 7 6 6 6 6 6 6 6

The Customer Experience Index, 2013 21 Figure 7 Companies With Large Changes In CXi Between 2012 And 2013 (Cont.) 7-2 Companies with CXi decreases of five or more percentage points CXi 2013 CXi 2012 Change from 2012 to 2013 Decreases of 10 or more points Fifth Third (bank) 3 77-24 Blue Cross Blue Shield of Illinois (medical insurance provider) 4 68-14 American Family (insurance provider) 64 74-10 Decreases of five to nine points Comfort Inn (hotel) 72 81-9 Charter (Internet service provider) 4 2-7 LG (consumer electronics manufacturer) 69 7-6 T-Mobile (wireless service provider) 61-6 Acer (consumer electronics manufacturer) 68 74-6 AAA (insurance provider) 72 77 - BB&T (bank) 72 77 - Bright House Networks (Internet service provider) 6 70 - Capital One Bank/ING Direct (bank) 62 67 - Source: North American Technographics Customer Experience Online Survey, Q4 2011, Q4 2012 (US) Base: US online consumers who have interacted with each brand (numbers have been rounded) What It Means superior customer experience will lead to superior profits There s no silver lining in sight for the dark cloud hovering over the US economy. When things do get better, they won t get better fast. With that firmly in mind: 1. Expect value brands to keep building momentum across industries. 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. This trend won t just apply to retailers as evidenced by Courtyard coming in at No. 2 in our index, Southwest continuing to hold the No. 1 position in its industry, and the standout performance by Vanguard, which differentiates through low-cost investing. 2. When the economy finally improves, companies with better CX will recover faster. An analysis of the effect of superior customer experience over a five-year period shows that customer experience leaders beat the S&P 00 Index and crush customer experience laggards. 11 This is not a short-term anomaly but a clear long-term performance advantage:

The Customer Experience Index, 2013 22 CX leaders declined less in the downturns and bounced back faster when the economy began to improve. As the economy continues to improve, today s leaders will see their business performance accelerate as a result of customers who stayed with them during the down cycle and former customers who flock back to them faster. 3. Patient executives will win the CX race. CXi scores tend to go up slowly over time. As a result, firms that have lagged for years will see slow progress even if they have recently implemented strong CX programs (or are about to). Only those companies with executives who have a strong belief in the long-term power of CX will improve enough to become (or stay) competitive at it. Expect Fidelity Investments to continue its slow, steady rise. Other companies including Cigna and AT&T have gotten on the right path and show strong signs of staying there. Supplemental Material Methodology Forrester fielded the North American Technographics Customer Experience Online Survey, Q4 2012 (US), in November 2012 of 7,06 US individuals ages 18 to 88. For results based on a randomly chosen sample of this size (N = 7,06), there is 9% confidence that the results have a statistical precision of plus or minus 1.13% of what they would be if the entire population of US online individuals ages 18 and older had been surveyed. Forrester weighted the data by age, gender, income, broadband adoption, and region to demographically represent the adult US online population. The survey sample size, when weighted, was 7,440. (Note: Weighted sample sizes can be different from the actual number of respondents to account for individuals generally underrepresented in online panels.) Please note that this was an online survey. Respondents who participate in online surveys have in general more experience with the Internet and feel more comfortable transacting online. The data is weighted to be representative for the total online population on the weighting targets mentioned, but this sample bias may produce results that differ from Forrester s offline benchmark survey. The sample was drawn from members of MarketTools online panel, and respondents were motivated by receiving points that could be redeemed for a reward. The sample provided by MarketTools is not a random sample. While individuals have been randomly sampled from MarketTools panel for this particular survey, they have previously chosen to take part in the MarketTools online panel. For Technographics Clients: How To Get More Technographics Data Insights Forrester s North American Technographics Customer Experience Online Survey, Q4 2012 (US), of 7,06 US individuals includes many additional questions and parameters by which you can analyze the data contained in this report. If you wish to subscribe to Forrester s Consumer Technographics services, please contact your account manager or data@forrester.com. If you are an existing

The Customer Experience Index, 2013 23 Technographics client, please contact your data advisor at consumerdataadvisor@forrester.com. We can provide additional insights about: Demographics. Forty-nine percent of respondents in the survey are male, and 1% are female. The mean age of respondents was 44.3. Endnotes 1 Customer experience professionals must clearly articulate the business benefits of improving customer experience. Years of Forrester data confirm the strong relationship between the quality of a firm s customer experience (as measured by Forrester s CXi) and loyalty measures like willingness to consider the company for another purchase, likelihood to switch business, and likelihood to recommend. We used that data to build simple models that show how changes in loyalty associated with higher CXi scores can affect a company s yearly revenue. See the March 26, 2012, The Business Impact Of Customer Experience, 2012 report. 2 This year, we added rental car providers to the 13 industries we benchmarked in our 2012 study. 3 For a detailed description of the methodology behind Forrester s CXi, see the January 4, 2013, Executive Q&A: Forrester s Customer Experience Index report. 4 While there appears to be a gap between 2008 and 2010 CXi data, this was simply a change in the report s naming convention and publication date. The 2008 CXi was published in December 2008 using data gathered earlier that quarter. The following year s index used data collected at the same time of year Q4 2009 but was called the Customer Experience Index, 2010, because it was published in January 2010. There has been no gap in the index since its inception in 2007. To calculate the average for an industry, we use all responses for any company in that industry even if the specific company did not receive enough responses to be included on its own. For example, if only 0 respondents rated Acme Bank, it would not be listed in the CXi as an individual company, but those 0 responses would be included in the average for the banking industry. 6 As in past years, credit unions scored higher than any named bank other than USAA. Due to the small sample size for any single credit union, we are unable to score them individually. 7 Overall, nine of the 12 investment firms in our study moved up and just three moved down. Forrester believes that part of the overall increase in scores in the investment industry can be attributed to better performance in the stock market. Firms in this industry tell us that their customer satisfaction scores often parallel market fluctuations, and our analysis shows that the S&P 00 had a rate of return of approximately 12% in 2012, compared with a rate of return of 0% in 2011 when our CXi 2012 data was collected. Source: Google Finance (http://www.google.com/finance).

The Customer Experience Index, 2013 24 8 It s likely that all or most of Bank of America s improvement reflects a rebound from the negative sentiment generated by last year s debit card fee debacle, which occurred during the exact same month in which we collected last year s data. 9 This is the sixth annual customer experience ranking based on Forrester s CXi. In 2007, we calculated the CXi for 112 brands in nine different industries. In 2008, we calculated the CXi for 113 brands in 12 different industries. In 2010 rankings, we calculated the CXi for 133 brands in 14 industries, and in 2011, we calculated the CXi for 13 brands in 13 industries. In 2012, we ranked 160 brands in 13 industries. 10 Some brands in the 2012 CXi were not included in the year-over-year comparison because they were not in the 2011 rankings. Companies listed as PC manufacturers in 2011 and consumer electronics manufacturers in 2012 were also not included in the year-over-year comparison because the broader category changed and therefore the scores are not measuring the same thing. 11 For more about the effect of customer experience on stock returns, check out Harley Manning s blog. Source: Harley Manning, When It Comes To Total Returns, Customer Experience Leaders Spank Customer Experience Laggards, Harley Manning s Blog, September 14, 2012 (http://blogs.forrester.com/ harley_manning/12-09-14-when_it_comes_to_total_returns_customer_experience_leaders_spank_ customer_experience_laggards).

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