Overall, international hotels set the highest bar for customer experience in China, holding the top-five spots in the hospitality industry. The highest-rated Chinese hotels are Home Inns and Jinjiang Inn, two value- oriented hotel chains, which tied with a score of 78.
To compile the report, Forrester asked 4,500 online consumers in metro China about their interactions with a variety of companies, gauging the usefulness, usability, and enjoyability of those experiences. Based on these consumer responses, Forrester calculated the Customer Experience Index for 46 firms in four different industries: retailers, airlines, hotels, and banks.
As this was the first time the research firm compiled this index in China, the context of the results obtained from the surveys are at times unclear. “One thing we’ve noticed is that Chinese customers are reluctant to give low ratings—there are fewer ‘very poor’ and ‘poor’ ratings compared to the US,” observed Harley Manning, research director in the customer experience practice at Forrester. “We don’t know yet why. But we have a working hypothesis that they don’t like to give extremely low ratings. 'Okay' or 'good' from a Chinese consumer? That’s probably telling you that you don’t have any merit with that consumer.”
Taken in this context, it’s perhaps indicative that out of the 46 firms surveyed, only four received an ‘excellent’ rating.
While the two hotel chains received the highest individual scores on the index, the retail industry rated higher overall. T-Mall led that category with a score of 85. Trailing at the other end of the spectrum is Amway (73).
“It’s not surprising, retailers live or die based on a good customer experience,” said Manning.
What is unusual however is that one of the four firms that made it into the ‘excellent’ category is China Merchants Bank; financial institutions don't tend to score well out in other markets.
“Second-tier commercial banks scored very well both in their industry and China relative to other banks in US and Europe. Bank of Communications, China Guangfa Bank and Shanghai Pudong Development Bank also scored above 80,” noted Manning. “In general however, we’ve found that compared with the big four banks, the second tier of 30-year-old or younger banks have higher incentive to gain and keep market share and therefore are motivated to deliver better customer service.”
The sector delivering the worst customer experience (CX), according to the report, is the airlines industry, which had an average score of 74. The highest score in that category went to Air China, which only scored 76.
Taking a closer look at the responses, Forrester found that richer online urban Chinese consumers say they generally receive a better customer experience while mid- and lower-income consumers give lower scores. The differences can be stark. For example, China Southern Airlines received an average score of 80 (a good rating) from the upper-income group but only a 66 (an OK rating) from middle-income metro Chinese online consumers.
One of the reasons for this could be the stronger use of technology by richer consumers in China. ‘Technology optimists’ (Forrester’s term for people who embrace and enjoy technology) tended to give companies higher scores than ‘tech pessimists’. For example, Hanting Inns, a Chinese hotel chain, received an overall score of 88 (excellent) from technology optimists but a score of only 57 (poor) from technology pessimists—a 31-point spread. Similarly, technology optimists rated Bank of China a surprising 28 points higher than did technology pessimists.
This makes sense, said Manning, when you consider that much of what is being done to improve CX in China centres around digital and tech improvements—making it hard for tech-haters to do business.
For firms looking to improve their CX scores, Forrester has the following recommendations:
- Develop an outside-in approach to understanding customers: Many Chinese companies are accustomed to copying business models or designs that work for their competitors or for companies that do well in other industries. It’s time to instead for them to listen to what their customers have to say and to design an experience that’s right for them. Start by establishing a voice of the customer (VoC) programme.
- Manage a portfolio of customer experience improvement projects: As a natural result of having a customer understanding programme, companies will be able to identify opportunities to improve experiences. In fact, most firms will find more opportunities for improvement than they have time and money to address. To prioritise potential efforts, firms should convene a cross-functional customer experience steering committee that decides where to begin.
- Define your customer experience strategy: Over time, companies will find that they have fixed most of their badly broken experiences and will want to begin creating new, improved experiences. That’s when they’ll want to develop a customer-experience strategy, which defines the intended experience, directs employee activities and decision-making, and guides funding decisions and project prioritisation.