You would think that the return on customer experience is obvious. A better customer experience improves loyalty, and loyalty means you can spend more time serving customers than chasing new ones, resulting in cost savings.
There are a number of studies that support this contention, including:
But my favorite is the annual review by Watermark Consulting. Earlier in the year I was bummed because it didn’t look like they were running an update. But I just ran across their newest report. What distinguishes Watermark’s results from others is that they tie customer experience directly to stock performance.
The report simulates a CX Believer, a CX Non-Believer, and compare the results with the S&P 500 in stock purchases from 2007 through 2013. At the start of the year, the CX Believer buys the top 10 publicly-traded companies in Forrester’s annual customer experience index (coined CX Leaders). The CX Non-Believer buys the bottom 10 (called CX Laggards). All stocks are sold at the end of the year, purchasing the newest leaders and laggards.
I love this report – it really shows the bottom-line impact of customer experience. So, how did each portfolio perform over the past 7 years?
So, yes, Customer Experience pays. By building loyalty, companies with a great customer experience grow organically, through keeping customers and selling more to them.
If you’d like to learn more about Customer Experience, join the CXPA for Customer Experience Day, where we will have tons of great activities going on. Check out www.CXDay.org for a full list, including a great event here in Minneapolis!
By the way, Leslie Pagel at Walker just posted this great piece on ROCX – The Return on Customer Experience. Check it out!