Webinar Forrester’s Customer Experience Index, 2013 Megan Burns, Principal Analyst January 24, 2013. Call in at 12:55 p.m. Eastern time

Agenda What is Forrester’s Customer Experience Index? What’s changed in this year’s Index? What were the overall results, by industry and by company? How can you use this data to support customer experience efforts?

Agenda What is Forrester’s Customer Experience Index? What’s changed in this year’s Index? What were the overall results, by industry and by company? How can you use this data to support customer experience efforts?

Forrester’s Customer Experience Index An annual benchmark of the quality of the customer experience delivered by large US companies in 14 industries.

How customers perceive their interactions with your company

How was the data collected? Online survey More than 7,500 consumers October 18–29, 2012

Forrester’s Customer Experience Index Thinking of your interactions with these firms over the last 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?

Customers rate Customer Experience Index questions on a five-point scale Didn’t meet any of my needs (1) Met all of my needs (5) Very difficult (1) Very easy (5) Not at all enjoyable (1) Very enjoyable (5) Source: January 4, 2013, “Executive Q&A: Forrester’s Customer Experience Index” Forrester report

How is the index calculated? At least 100 consumer respondents per brand Percentage 4s and 5s — percentage 1s and 2s Average of the three individual scores

How is the index calculated? (cont.) Example: ACME Corporation Chose 4 or 5 Chose 1 or 2 Net score 82% 4% 78% Thinking about your recent interactions with these firms, how effective were they at meeting your needs? (“Meets needs” criteria) Chose 4 or 5 Chose 1 or 2 Net score 81% 1% 80% Thinking about your recent interactions with these firms, how easy was it to work with these firms? (“Easy to do business with” criteria) Chose 4 or 5 Chose 1 or 2 Net score 75% 1% 74% Thinking about your recent interactions with these firms, how enjoyable were the interactions? (“Enjoyability” criteria) CXi score: 77

Agenda What is Forrester’s Customer Experience Index? What’s changed in this year’s Index? What were the overall results, by industry and by company? How can you use this data to support customer experience efforts?

2013 brought minor changes Kept what worked in 2012 Adjusted company lists Added rental car companies

Agenda What is Forrester’s Customer Experience Index? What’s changed in this year’s Index? What were the overall results, by industry and by company? How can you use this data to support customer experience efforts?

Things are moving at a snail’s pace.

We break the landscape into five buckets Excellent (85 and above) Good (75 to 84) Okay (65 to 74) Poor (55 to 64) Very poor (Below 55)

Most brands still rate “OK” or worse 64% Source: January 15, 2013, “The Customer Experience Index, 2013” Forrester report

Brands are trending toward mediocre Base: 154 North American brands scored in Forrester’s Customer Experience Index, 2013 and 160 North American brands scored in Forrester’s Customer Experience Index, 2012; Source: North American Technographics® Customer Experience Online Survey, Q4 2012 (US) and North American Technographics Customer Experience Online Survey, Q4 2011 (US) Note: Percentages may not total 100 because of rounding.

Industry rankings didn’t change . . . 2013 2012 Retailers (82) Retailers (81) Hotels (79) Hotels (76) Parcel delivery/shipping (77) Parcel delivery/shipping (75) Consumer electronics manufacturers (74) Consumer electronics manufacturers (73) Insurance providers (73) Insurance providers (71) Investment firms (73) Investment firms (70) Banks (71) Banks (70) Credit card providers (70) Credit card providers (67) Rental car providers (68) Airlines (67) Airlines (66) Wireless service providers (65) Wireless service providers (63) TV service providers (58) TV service providers (56) Internet service providers (57) Internet service providers (56) Health insurance plans (56) Health insurance plans (55)

. . . but some competitive dynamics did Investment firms (2012) 15 62 77 Investment firms (2013) 22 61 83 Source: January 15, 2013, “The Customer Experience Index, 2013” Forrester report

Vanguard leapfrogged its competitors CXi 2013 CXi 2012 Change Vanguard 83 76 +7 Fidelity Investments 72 +4 Edward Jones 75 +3 Morgan Stanley Smith Barney 77 -2 ING ShareBuilder 74 66 +8 TD Ameritrade 73 Merrill Lynch 70 +2 Charles Schwab 71 69 E-Trade 65 A credit union 62 Wells Fargo Advisors 61 -1 Source: January 15, 2013, “The Customer Experience Index, 2013” Forrester report

Vanguard leapfrogged its competitors CXi 2013 CXi 2012 Change Vanguard 83 76 +7 Fidelity Investments 72 +4 Edward Jones 75 +3 Morgan Stanley Smith Barney 77 -2 ING ShareBuilder 74 66 +8 TD Ameritrade 73 Merrill Lynch 70 +2 Charles Schwab 71 69 E-Trade 65 A credit union 62 Wells Fargo Advisors 61 -1 Source: January 15, 2013, “The Customer Experience Index, 2013” Forrester report

Wireless scores stretched at both ends Wireless service providers (2012) 12 61 73 Wireless service providers (2013) 22 55 77 66 AT&T Verizon Sprint Source: January 15, 2013, “The Customer Experience Index, 2013” Forrester report

But who won?

New in 2013: CXi Award of Excellence Insert image of web badge here. Your company name here!

Congratulations to this year’s winners! Marshalls (89) Courtyard by Marriott (88) Sam’s Club (87) Target (86) Amazon (85) USAA (bank) (85) Rite Aid (85) Costco (85) Lowe’s (85) TJ Maxx (85) JCPenney (85) Kohl’s (85) Marriott Hotels & Resorts (85) Note: Bold indicates brands that also scored “Excellent” in the 2012 Customer Experience Index.

Value brands continue to perform well Marshall’s (89) Courtyard by Marriott (88) Sam’s Club (87) Costco (85) TJ Maxx (85) Kohl’s (85) Choice Hotels (84) Hampton Inn/Suites (83) Southwest Airlines (81) JetBlue Airways (78)

Financial services firms led the “most improved” category in 2013 CXi 2013 2012 Change from 2012 to 2013 US Bank (credit card provider) 70 54 +16 US Bank (bank) 72 61 +11 SunTrust Bank 78 69 +9 TD Bank 77 68 Source: January 15, 2012, “The Customer Experience Index, 2013” Forrester report

Agenda What is Forrester’s Customer Experience Index? What’s changed in this year’s Index? What were the overall results, by industry and by company? How can you use this data to support customer experience efforts?

Benchmarking and basic diagnostics Whose experience is this measuring? Where are we versus the competitors? Does that match our customer experience strategy? Where are we strongest, where are we weakest? Which experiences does this reflect? Why did we go up (or down) this year?

Example: ACME Corp Analysis Customer Experience Index, 2013

53 75 – 84  Good 85+  Excellent 75–84  Good 65–74  Okay 55–64  Poor 53 < 55  Very poor

Digging deeper into the overall score Meets needs 65% Easy 51% Enjoyable 44% Base: US online consumers that have interacted with ACME Corp; Source: Sample data for illustrative purposes only

Which criteria went up or down? Meets needs Easy Enjoyable Total score 2013 65% (-3) 51% (-10) 44% (-3) 53 (-6) 2012 68% (-7) 61% (-9) 47% (-6) 59 (-7) 2011 75% 70% 53% 66 Source: Sample data for illustrative purposes only 33

Meets needs Easy Enjoyable +10 +10 +1 Example: Marshall’s Overall change: +7 Meets needs Easy Enjoyable +10 +10 +1 Base: US online consumers that have interacted with Marshall’s in the prior 90 days; Source: January 15, 2013, “The Customer Experience Index, 2013” Forrester report

Was the movement a result of worse experiences or less “wow”? Meets needs (Top two to bottom two) Easy Enjoyable 2011 73% - 8% 60% - 11% 56% - 12% 2010 75% - 7% 71% - 10% 59% - 12% 2009 79% - 4% 77% - 7% 63% - 10% Source: Sample data for illustrative purposes only 35

Which interactions did people have? Base: 400 respondents who have interacted with this brand in the past 90 days; Source: Sample data for illustrative purposes only

What channels did they use to interact? Base: 400 respondents who have interacted with brands in this industry; Source: Sample data for illustrative purposes only

How did scores differ for different groups? Business versus leisure travelers Investible assets (e.g., affluent, mass affluent) Employer-sponsored insurance versus self-insured (healthcare) Chronic illness Bundled versus not bundled telecom services Agent versus direct insurance customers Technology optimists versus pessimists Gen Y versus Baby Boomers Draft Slide08

There’s more to the data than just CXi Three loyalty questions Willingness to consider for another purchase Likelihood to recommend Likelihood to switch Word of mouth dynamics Consumer demographics Technology attitudes

CXi is designed to be a springboard for additional analysis Understand the competitive landscape Prioritize improvement opportunities Focus next-level research Structure internal CX metrics Feed data into broad ROI models

Not in the syndicated benchmark? Implement your own Customer Experience Index. Customize: Survey population. Detailed diagnostic questions. Business impact variables. “Executive Q&A: Forrester’s Customer Experience Index” Talk to your Forrester account manager for more info.

Coming soon . . . even more analysis! On my blog . . . http://blogs.forrester.com/megan_burns In my research . . . “The State Of Customer Experience Management, 2013” (Feb/March) “How Companies Improved Their CXi Scores, 2013” (April) "The Business Impact Of Customer Experience, 2013" (TBD)

Questions

Megan Burns +1 617.613.6294 mburns@forrester.com Blog: http://blogs.forrester.com/megan_burns Twitter: @mbcxp