The Customer Experience Index released by Forrester is very telling. It names and shames those companies that provide excellent customer experience to their clients, and those that don’t seem to care -- providing haphazard experiences that are sure to alienate customers.

For all the talk of "the customer comes first" and "valuing the customer," this list shows there are still a lot of companies who are out of touch with the experiences customers have with their brand. 

Little Change in Customer Experiences

This, the sixth annual index from Forrester, makes clear that a lot of companies need to put a lot more thought into the Customer Experience. For a business, not doing this is like shooting yourself in the foot, as report author Megan Burns points out that companies that will survive the current downturn, and profit most in the inevitable upturn, will be those that look after their customers.

Technology alone cannot do that. Technology is only a tool. Ultimately, it is the people behind the technologies, the ones that make decisions based on information gathered through the CXM technologies that will come out of the current economic phase smelling of roses.

It seems incredible in the current climate that businesses don’t look after their customers better. From some of the findings in this report it would appear that many companies are being run by events outside their control.

This is particularly true when you look at the key takeaways that Burns has produced from the report:

  • No Major shifts in industry rankings: The ranking of industries are still the same as last year. Top industries leading the pack are retailers and hotels, while bottom industries are Internet service providers and health insurance providers. This would suggest that the message is taking its time getting through.
  • Value-based bands are top: Of the top scoring companies, ten out of thirteen are companies that position themselves as value brands. While this would indicate that lower prices and convenience are two factors that drive customer satisfaction, the inclusion of so many companies in this category point to a larger trend of customer service.
  • Clear winners and leaders: The companies that are providing the best customer experience are also those that are leading their business sector. Companies like USAA, Southwest Airlines, US Cellular and Vanguard come out on top in this respect.

Forrester's Findings

The results were provided from response to an online survey done at the end of 2012 where Forrester asked 7506 US customers about their interactions with 14 different sets of industries including airlines, TV service providers, internet service providers, wireless service providers, banks and others.

The results are based the real experience customers have had with these industries, with the good, bad and incompetent named and shamed, as indeed they should be.

The questionnaire wasn't difficult and there were no trick questions. Forrester simply asked whether customers felt the company delivered value, whether they were easy to do business with and whether they were enjoyable to do business with, all elements that current CXM technologies attempt to gauge.

1. Little Movement

The results show that despite everything, little progress has been made this year. Most of the brands that were rated fell into the category of OK to very poor with 61 percent getting a rating of OK, poor or very poor from their customers.

This is only slightly lower than the previous report where 63 percent fell into that category, even though a higher percentage ended up in the OK category as opposed to the poor category. The number of companies in the very poor category also decreased, even if there really shouldn't be any in this category at all.

2. Top, Bottom Stagnation

The top and bottom scoring industries remained exactly the same as they were last year. For the fourth year in a row, retailers (82%) and hotels (79%) had the highest average scores across all industries.

Internet service providers were among the bottom crawlers along with TV service provides and health insurance providers, most likely due to the attitude from these companies of “if-we-sell-it-they-will-come” regardless of the customer experience provided.

3. Growing Competition

That said, there is evidence of growing competition within some industries and although there was no notable improvements industry-wise this year, within industry categories there was some change. Without going into the details here on airlines and banks, there are some clear winners and losers, while in investment firms the gap between winners and losers has widened.

Wireless companies fluctuated, with the best getting better and the worst getting worse. In the credit card sector, the gap narrowed between the best and the worst.

Customer Experience Future Experiences

Burns concludes that companies need to be thinking of the future and warns those waiting for the upturn that this alone will not solve all problems. With that in mind, she says that in terms of customer experience we can expect:

1. Value brands

Value Brands will keep building. Over the next three years value brands will take more and more market share and will win more and more customers by delivering high-quality customer experience that is not necessarily predicated on value for money.

2. Upturn

When the economy eventually does improve, it will be the companies with better CX that will recover faster. She says that an analysis of customer experience leaders over a five-year period shows that those that provided a better customer experience, crushed under heel those that didn't really make an effort. Those that provide better customer experience will also see those customers that stuck with them through the hard times stick with them now.

3. Patience

It takes time for CX scores to rise and even those companies that have introduced CX programs will have to wait to see any sign of progress. Only those that stick to their guns over a number of years will see competitive results.