Roughly three-quarters of business leaders agree that improving customer experience at their organization is their top strategic priority, but only 1 percent of firms are actually delivering superior experience, Forrester’s 2015 Customer Experience report reveals. Forrester has been evaluating brands for a CX Index since 2007, but changed the research formula for this year's results. For the first time, Forrester employed a barometer to measure loyalty as an aspect of customer experience.
"It was important for us to incorporate loyalty this year, because delivering a good customer experience doesn't guarantee that customers will be back, just like delivering a bad experience doesn't always mean that customers won’t be back," says Megan Burns, Forrester analyst and the report's author. While some brands have retained their top customer experience provider status despite the new metrics, others have slipped, leaving room for new leaders to emerge.
For example last year, retailers earned the top spot in the industry ratings, but this year, when Forrester evaluated brick-and-mortar retailers separately from brands that are exclusively online, the former slipped to 12th place while the latter remained on top. "This makes intuitive sense because the more channels you have to manage, the more challenges that creates for customer experience," Burns says. "The retailers with physical locations are also typically older brands, while the online retailers are relatively new. This has a lot to do with the way they approach customer experience," she says.
The loyalty barometer hurt shipping companies and hotels as well. The industries ranked second and third, respectively, on the index for five years in a row, but with loyalty taken into account, shipping companies fell to 10th place, while hotels slipped to 11th.
There were other surprises as well. Despite extensive regulation in their industries, banks and investment firms performed better than 15 other industries. That, according to Burns, proves that regulation and complex processes are no excuse for bad customer experiences. There are ways to deliver positive experiences in spite of industry limitations, and banks and investment firms should serve as inspiration to companies in telecommunications, healthcare, and other industries with heavy oversight.
When it comes to CX performance among specific brands, Amazon and USAA dominated. USAA beat out competitors in the banking, credit card provider, and insurance categories, and also topped the investment category alongside Edward Jones. Some typically top-performing brands in the automotive space, including Audi, BMW, and Mercedes-Bens, were knocked out of the lead by Lexus, and Apple didn't earn the top spot in the mobile device category—Amazon Kindle "escaped the sophomore curse" and earned top honors there for the second year in a row, Burns wrote.
Among some of the more disappointing customer experiences are ones from Internet service providers, the report revealed. Though AOL, AT&T U-verse, Bright House Networks, and Verizon Fios were named the top ISPs in a category that included 14 other brands, all deliver equally bad experiences. "They should hold off on any bragging: all four still delivered poor customer experience, making them the tallest Bonsai trees in the ISP CX forest," Burns stated in the report.
Companies that struggle with customer experience, Burns says, should build experiences with effectiveness and ease in mind, but insists that making emotional connections with customers is more important. "I was surprised at how much better brands that made emotion a part of their customer experience strategy performed," Burns says.
Emotion is the biggest "lever" that companies must pull in order to improve experience, because emotion is a key driver of loyalty. Small moves make a big difference, Burns explained in the report, praising Macy's, which rolls out a red carpet during some of its furniture deliveries instead of using a more basic fabric. The reason a gesture like that is effective: It makes customers feel valued, which is crucial.
Once brands shift their focus to emotion, they're likely to notice a boost in not only customer experience ratings, but also revenue. Even AT&T, which didn't earn outstanding marks in the past, improved its U-verse product experience in recent years and saw 28 percent revenue growth, according to the report. There's still room for improvement, but the company is heading in the right direction, Burns maintains.