Report: ROI of Customer Experience, 2014

September 9, 2014 1 Comment

1409_RoIofCX_COVERWe just published a Temkin Group report, ROI of Customer Experience, 2014. The research shows the connection between customer experience, loyalty, and revenue growth for 19 industries. Here’s the executive summary:

To understand how customer experience corresponds to loyalty, we examined feedback from 10,000 U.S. consumers describing their experiences with and their loyalty to 268 companies. Our analysis shows a strong correlation between customer experience and loyalty factors such as repurchasing, trying new offerings, forgiving mistakes, and recommending the company to friends and colleagues. We compared the consumers who gave companies a very good customer experience rating to those who gave companies a very bad customer experience rating, and we found that the percentage of customers who plan on repurchasing products is 18 percentage-points higher at organizations with excellent CX ratings. Additionally, the Net Promoter Scores of companies with very good CX ratings average 22 points higher than the scores of companies with poor CX. We built a model to evaluate how customer experience impacts a $1 billion business’s revenue over three years in each of the 19 industries, and this model shows that CX has the largest impact on hotels ($461 million), fast food chains ($437 million), and retailers ($428 million). This report also includes a five-step approach for building a model that estimates the value of CX for your organization.

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The report has 29 charts, which includes specific details on the connection between customer experience, loyalty, and increased revenues for each of the 19 industries in the study: airlines, appliance makers, auto dealers, banks, car rental agencies, computer makers, credit card issuers, fast food chains, grocery chains, health plans, hotel chains, insurance carriers, Internet service providers, investment firms, parcel delivery services, retailers, software firms, TV service providers, and wireless carriers.

Here’s the first figure in the report:

CXLoyaltyCorrelation

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The bottom line: Customer experience is highly correlated with loyalty.

Filed under Bruce Temkin Research, Business impact, Customer experience, ROI of Customer Experience, Temkin Group Research Tagged with ,

About Bruce Temkin, CCXP
I'm an experience (XM) management catalyst; helping organizations improve results by engaging the hearts and minds of their employees, customers, and partners. I enjoy researching and speaking about these topics. I lead the Qualtrics XM Institute, which is the world's best job. We're igniting a global community of XM Professionals who are inspired and empowered to radically improve the human experience. To achieve this goal, my team focuses on thought leadership, training, and community building. My work is driven by a set of fundamental beliefs: 1) Everything starts and ends with human beings, so you need to understand how people think, feel, and behave; 2) XM is a discipline that needs to be woven throughout an organization's entire operating fabric; and 3) Building the XM discipline requires a combination of culture, competency, and technology.

One Response to Report: ROI of Customer Experience, 2014

  1. Babar Khan says:
    September 23, 2014 at 2:38 pm

    Thanks for sharing this Bruce. Indeed lets respect that a loyal customer is much more valuable to your company and brand. Countless research reports point out that repeat customers spend more and by rewarding them, a recommendation butterfly effect can create more customers thus lowering your direct costs of customer acquisition. Your research will help us (Ephlux) engage CX Cloud customers better.

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