Forrester’s Fifth Annual Customer Experience Index Shows Excellence Is Exceedingly Rare

Today we published Forrester’s 2012 Customer Experience Index (CXi). It’s our fifth annual benchmark of customer experience quality as judged by the only people whose opinion matters — customers. The CXi is based on research conducted at the end of 2011 and reflects how consumers perceived their experiences with 160 brands across 13 industries to be.

For those new to the index, let me explain how it works. The process has three steps:

  1. We ask more than 7,600 consumers to identify companies they do business with in 13 different industries.
  2. We ask them to tell us how well each firm met their needs, how easy the firm was to work with, and how enjoyable it was to work with. We ask these questions at the brand level to get a sense of their overall experience with the company regardless of channel.
  3. For all three questions, we calculate each firm’s CXi score by subtracting the percentage of its customers who reported a bad experience from the percentage who reported a good experience. The overall CXi is an average of those three results.

So what did this year’s results tell us? They told us:

  • Which companies are delivering great customer experiences. Congratulations to the four companies that earned an “excellent” score (85 points or more) this year: USAA (bank), Kohl’s, Amazon, and Costco! Interestingly, there was a steep drop in the percentage of companies that earned “excellent” scores this year: Only 3% of brands made the cut in 2012, compared with 6% last year. And when we look back over the past five years, we see that the excellent ranks have been steadily declining even as the number of brands in the survey has gone up over time.
  • Which companies are delivering not-so-great experiences. Across the board, we still see customer experience ranging from “okay” to “very poor” for almost two-thirds of the brands in our study. We place the cut-off point between “okay” and “good” at 75 points on our 100-point scale. This year, 64% of the brands in our report didn’t make it over that 75-point mark.
  • Which companies are getting better. Five brands raised their 2012 CXi scores by 10 points or more over last year, led by a whopping 17-point increase from Wyndham Hotels and Resorts. This year’s top movers included a few health insurance plans and TV service providers, industries that typically fare very poorly in our study. So to those out there who think some industries will never be capable of delivering useful, easy, and enjoyable experiences — I say, think again.

What does all this mean? I take away three things: 

  • Customers’ expectations of their experiences are getting higher. They’re accustomed to more options, greater control, and a worldwide platform to tell others what they think about the way brands treat them. What brands in one industry do affects what people expect from other industries, raising the bar for everyone at lightning speed. 
  • Parity is a moving target. Companies hoping to differentiate on the basis of customer experience (and there are a lot of them!) will have to work even harder just to catch up to the leaders in their industry. Case in point: The gap between the high- and low-scoring bank in our study grew by 10 points this year, in part because USAA widened its lead in this category by six points in a single year.
  • No one can afford to be complacent when it comes to customer experience. While many scores rose this year, many also fell. Perennial leader Barnes & Noble dropped seven points in one year and was one of 23 brands whose scores fell by five points or more since 2011.

Over the coming weeks, I’ll be exploring this year’s CXi results in more detail. To stay abreast of the latest insights, here are three ways to join the conversation: 

  1. Join me for a webinar on Tuesday, January 31, at 1 p.m. ET

  2. Subscribe to my blog. I'll be posting regularly throughout 2012 with interesting findings from this year's CXi data. 

  3. Look for the update to last year’s very popular report “How Companies Raised Their Customer Experience Index Scores” in early Q2. We’re interviewing several firms to see what’s behind their great performance in this year’s index and looking at how others can mirror their success.

So stay tuned . . . we’re on tap to make the CXi’s fifth year the best year yet!

Best,
Megan

Comments

Thanks for this. In addition

Thanks for this. In addition to which companies are delivering great customer experiences, which companies are delivering not-so-great experiences, and which companies are getting better, it would be nice to hear about how companies are getting better. How did they become aware of a problem, and how did they improve it? Because not all companies that undertake to improve customer experience are successful at doing so. I read a good article online about this problem entitled "3 Pitfalls of Your Customer Experience Measurement Program."

Thanks, Tony. That's a great

Thanks, Tony. That's a great suggestion. And in fact it's one we've already been working on. Last year we published "How Companies Improved Their CXi Scores, 2011" and we're putting the finishing touches on the 2012 version of that same report as we speak. I expect it to be out in just a few weeks. In the meantime if you want to peruse last year's report, which has many ideas that are still very relevant, you can find it here:

http://www.forrester.com/How+Companies+Raised+Their+Customer+Experience+...