BCG What Really Shapes Customer Experience
BCG What Really Shapes Customer Experience
Customer Experience
Dag Fredrik Bjrnland, Cyrus Ditzel, Pedro Esquivias, Jody Visser, Steve Knox, and
Victor Snchez-Rodrguez
September 2015
AT A GLANCE
Four things get people talking about a brand: value for money, customer service,
product satisfaction, and emotional connection. Word-of-mouth recommendations
offer a critical way to measure and improve a companys performance on each
dimensionand ultimately to boost growth.
Where Growth Comes From
People who have excellent customer experiences become strong advocates for a
brand; they also spend significantly more and are much more loyal than customers
who have poor experiences.
The Upshot
Companies in every industry can use these insights to improve their customers
experience and thereby generate significantly higher growth.
2
For this years report, we used BAI to measure the experiences of more than
227,000 customersroughly double the number of customers surveyed in our
previous reportwith 650 brands in eight countries and seven industries. (See
Fueling Growth Through Word of Mouth: Introducing the Brand Advocacy Index, BCG
Focus, December 2013.) Our survey revealed the companies whose customers experiences have earned them the strongest word-of-mouth recommendations. (For
a list of the top brands by BAI, see the sidebar The Most Recommended Brands
2015.)
Our survey also revealed the sources of growth as a result of good customer experience. We know that people who have excellent customer experiences become
strong advocates for a brand, spend significantly more, and are much more loyal
than customers who have poor experiences. Companies in every industry can use
these insights to improve their customers experience and thereby generate significantly higher growth.
4
BROADBAND
CAR
INSURANCE
MOBILE
TELECOM
RETAIL
BANKING
RETAIL
GROCERY
AUTOMOTIVE
(NONLUXURY)
INDUSTRY
AVERAGE
BAI (%)
TOP
BRANDS,
BY BAI (%)
UNITED
STATES
Volkswagen
74 Honda
1 (Spain)
Volkswagen
74 Toyota
52 2 (Italy)
Toyota
3 (Spain)
Esselunga
3 (Italy)
18
53 Aldi
SPAIN
ITALY
JAPAN
55 koda
55 SEAT
66 Nissan
64 Daihatsu 41
44 Lidl
30 Aldi Sd
22 Lidl
46 Esselunga
Max
50 Valu
12 Costco
41
42 U
25 Globus
21 Mercadona 44 Eurospin
47 SEIYU
12 Longos
33
24 Kaufland
19 Aldi
Seven46 Eleven
11 No Frills 31
43 Lidl
SBI
68 Sumishin 20 Tangerine 42
Net Bank
43 Boursorama 55 DKB
USAA
2 (U.S.)
Union
61 Bank
43 TSB
Crdit
20 Mutuel
Sony
31 ING Direct 57 Mediolanum 57 Bank
31 Comdirect
31 CheBanca
Japan
56 Post
Bank
Aldi Talk
48 Simyo
62 Wind
39 Docomo 19 Koodo
44
Fonic
37 Yoigo
50 Fastweb
35 KDDI
31
Congstar
30 ONO
46 TIM
33 SoBank 9 Fido
La Banque
17 Postale
20 ING DiBa
Simyo
1 (Spain)
62 TracFone 34 Three
26
50 T-Mobile 31 O
21
31 TalkTalk 16
Presidents
18 Choice
37
30 Bankinter
Huntington
Tesco
EVO Banco
61 Bank
40 Bank
3 (Spain)
48 Virgin
44
59 Nissan
First
61 Direct
USAA
1 (U.S.)
45
68 USAA
Aldi Talk
3 (Germany)
CANADA
60 Volkswagen 55 Toyota
50 Waitrose 35 E.Leclerc
15 TD
13 Wind
24
30
64 USAA
64 LV
40 MAIF
HUK41 Coburg
51 AAA
Tesco
47 Bank
38 MAAF
32 R+V
Lnea
27 Directa
Direct Line
3 (Italy)
48 Geico
46 Aviva
34 Generali
32 LVM
Catalana
26 Occidente
38 Genertel
Mitsui
47 Marine
23 TD
TekSavvy
1 (Canada)
Verizon
51 FiOS
Virgin
28 Media
18
1&1
20 ONO
41 Sky Italia
38 KDDI
10 TekSavvy 51
ONO
2 (Spain)
41 DIRECTV 18 Sky
12
Kabel
Deutschland
13 Jazztel
34 Tiscali
34 SoBank 10 Eastlink 16
Sky Italia
3 (Italy)
Dish
38 Network
15 Infostrada
34 Docomo
Genialloyd
31 2 (Italy)
15 TalkTalk
Mutua
26 2 Madrilea
(Spain)
Barmer
3 GEK
(Germany)
Mutua
AXA
35 Madrilea 47 Genialloyd 51 Direct
28 RBC
27 Desjardins 38
Unitymedia 10 Orange
Techniker
36 Krankenkasse
49 Mutua
39
Madrilea
AXA
32
Blue Cross
39 Blue
24
Shield
Groupama
Barmer
34 GEK
38 Sanitas
36
Sony
Life
29
United38 Healthcare
SuisseLife
28 AOK
31 MAPFRE
35
Tokio
Marine
Nichido
27
21
41
35
5 Vidotron 15
Crdit
Agricole
Techniker
1 Krankenkasse 49 Humana 29
(Germany)
HEALTH
INSURANCE
GERMANY
63 Volkswagen 67 Toyota
65 Hyundai 59 Toyota
50 Wegmans 50 Lidl
50 Costco
FRANCE
Fineco
1 (Italy)
Yoigo
25 2 (Spain)
14
67 koda
73 Chevrolet 56 Mini
Trader
Trader Joes
53 Joes
1 (U.S.)
Wegmans
26 2 (U.S.)
UNITED
KINGDOM
Sources: IntelliSurvey of more than 227,000 customers in the U.S., the UK, France, Germany, Spain,
Italy, Japan, and Canada; BCG analysis.
Note: BAI = Brand Advocacy Index. Scores reflect customer opinions only. Blank boxes indicate
industries or countries for which the sample size was too small to list brands.
(continued)
Average
Maximum
Automotive
(nonluxury)
Car
insurance
Health
insurance
Retail
grocery
Mobile
telecom
Retail
banking
Broadband
-40
-20
20
40
60
Sources: IntelliSurvey of more than 227,000 customers in Canada, France, Germany, Italy, Japan,
Spain, the UK, and the U.S in 2015; BCG analysis.
6
Exhibit 1 | People Most Often Consult Friends and Family Before Making a Purchase
50%
39%
13%
Company websites
13%
35%
Percentage of people
consulting each
source before
purchasing1
Newspapers
and magazines
10%
TV
Social media
4X-5X
3%
Radio
Sources: IntelliSurvey of more than 227,000 customers in Canada, France, Germany, Italy, Japan, Spain, the UK, and the U.S in 2015; BCG analysis.
1
The average of all countries and sectors covered in the survey; multiple answers were possible.
higher than the second-highest company in Germany. BAI reveals that a key driver
for that performance is TKs attention to customer service. (See the sidebar Techniker Krankenkasse: Excelling in a Traditional Industry.)
In this report, we have strengthened the proof of BAIs impact on growth and identified the precise sources of that boost in performance. Our research shows that strong
advocates for a brand spend more, as measured by higher rates of cross-selling, larger shares of wallet, and other industry-specific metrics. In car insurance, for example,
strong advocates buy 74 percent more products than strong critics. These findings
prove that a better experience leads to greater revenues, loyalty, and growth.
A companys BAI also predicts whether customers will stick with a brand or leave
it. A companys strong advocates have much higher levels of loyalty. For example,
39 percent of the strong critics of retail banking brands were thinking about leaving
the company, while only 3 percent of the strong advocates were considering doing
so. Thirty-six percent of the strong critics of health insurers were thinking about
leaving, compared with only 4 percent of strong advocates. (See Exhibit 2.)
Whats more, we have found that once a customer leaves a brand, word of mouth
often doesnt stop. Thirty-seven percent of all former customers continue talking
about their experience with a brandalmost half of them negativelyafter they
have left. By contrast, 54 percent of current customers talk about the brand, but
only about 6 percent do so in a negative way. Results vary by market and industry,
especially in the smartphone and nonluxury automotive industries, where former
Techniker Krankenkasse
8
Exhibit 2 | Advocates Are Less Likely to Leave Than Critics, and They Spend More
Additional products purchased by strong advocates vs.
strong critics (%)2
Mobile telecom
36
3
Retail banking
19
30
39
5
Car insurance
74
43
4
36
Strong advocates
Health
insurance
255
Strong critics
Sources: IntelliSurvey of more than 227,000 customers in Canada, France, Germany, Italy, Japan, Spain, the UK, and the U.S in 2015; BCG analysis.
1
Customers who are willing to leave a company, are actively looking for better oers, or are already switching brands.
2
Any product that a customer purchased in addition to the original product.
22
27
23
30
30
29
30
VALUE FOR
MONEY
18
30
19
28
27
24
24
27
35
24
28
Smartphone
24
Retail
banking
32
22
Automotive
(nonluxury)
29
23
20
20
Health
insurance
Car
insurance
29
31
28
17
16
15
Mobile
telecom
Broadband
Retail
grocery
CUSTOMER
SERVICE
PRODUCT
SATISFACTION
EMOTIONAL
CONNECTION
Sources: IntelliSurvey of more than 227,000 customers in Canada, France, Germany, Italy, Japan, Spain, the UK, and the U.S in 2015; BCG analysis.
High performers often score well in both value for money and emotional connection, for example, but an emotional connection is more importantby 13 percentage pointsthan value for money for advocacy among leading brands.
Top-scoring brands Samsung and iPhone illustrate the power of an emotional connection. When it comes to smartphones, key emotional factors include how much
consumers identify with a brand and how much they perceive it to be innovative. For
Samsung, value for money fuels recommendations twice as often as for iPhone, but
iPhone scores higher on emotional factors. For iPhone, emotional factors can trump
lower cost, allowing the brand to charge premium prices. Emotional factors cause
iPhone to score higher than Samsung in the U.S., Spain, and Japan, for example.
Trader Joes shows how an emotional connection can play a starring role even in
a relatively low-tech and store-based industry such as retail grocery. With a BAI of
53 percent, Trader Joes is the top retail grocer in the U.S. on our list of most recommended brands. It scored the highest on BAI among retail grocers in the countries
we studied, ahead of highly popular brands such as Wegmans and Costco in the
U.S. and Esselunga in Italy (each with a score of 50 percent). (See the sidebar
Trader Joes: Leading in a Store-Based Industry.)
10
Boursorama Banque
BAI can guide companies as they pinpoint efforts that will generate a step change
in improvement of the customer experience and therefore in the levels of advocacy,
loyalty, andultimatelygrowth. Advocacy levels reveal the key sources of growth
as well as the underlying reasons for over- or underperformance. This allows targeted interventions and investments to improve a companys performance compared
with competitors.
11
Trader Joes
Companies can take the following steps to improve the overall experience of
their customers and to manage customers perceptions of, and advocacy for, that
experience.
Improve the omnichannel customer experience. The best companies develop a
clear vision on the basis of insights about customer preferences. For example, a
company may aim to provide personalized and relevant service, enabling customers
to perform most operations across all touch points, resolve questions on the first
interaction, and learn about the best uses of a product and about available support
services.
12
Leading companies also detail key customer pathways, with a focus on so-called moments of truth, which determine whether a customer will buy a product or choose
to switch companies. They recognize that each channel has a defined role at each
step on the customer pathway. At any point along the path, a customer may transition seamlessly among channels depending on whats most convenient. For example, a customer may browse online with a mobile device, receive relevant offers
through e-mail, and obtain service and support in a store. Companies can create an
attractive business case by optimizing the key pathways on the basis of lifetime customer value and return on investment across channels, with each channel making a
clear contribution to the major sources of value in the customer relationship.
13
Effective companies also create the conditions for success: organizational capabilities, culture, KPIs, processes, and systems. For example, collaboration among channels can be reflected in KPIs, while processes may encourage self-service through
online channels. Finally, the best companies develop a transformational roadmap
for success, with a clear end point in mind and realistic milestones along the way.
Proactively fuel higher advocacy. Companies with great customer experiences have
a clear focus on specific and well-defined target customer segments, whose members share the same values as the brand and are aligned with the brands marketing goals. The crucial, most influential advocatestypically only 2 percent of a
communitycan be found in those segments.
Next, such companies build relationships with these informal opinion leaders that
go beyond the transactional. For instance, the most effective companies offer gifts
that matter to target customers and increase affinity with the brand without expecting anything in return. This move simultaneously develops an experience that
disrupts the status quo and compels people to talk about the brand. In addition,
such companies foster ongoing, two-way communications and relationships across
online and off-line platforms.
14
Acknowledgments
This report would not have been possible without the efforts of our colleagues Jan Cortenbach,
Maria Enderiz, Hemant Sangwan, Jos Mara Sanz, and David Vigo.
The authors are grateful to Mickey Butts for his writing leadership and to Katherine Andrews, Gary
Callahan, Lilith Fondulas, Kim Friedman, Abby Garland, and Sara Strassenreiter for their contributions to the reports editing, design, and production.
15
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The Boston Consulting Group, Inc. 2015. All rights reserved.
9/15
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