The Temkin Group just published a great report, ROI of Customer Experience, 2018. This is updated annually. Bottom line, there is a huge payback to investments in improving the customer experience.
Here’s the executive summary:
To understand the connection between customer experience (CX) and loyalty, they examined feedback from 10,000 U.S. consumers describing both their experiences with and their loyalty to different companies. The CX scores used in this model come from the 2018 Temkin Experience Ratings (TxR), which evaluated 318 companies across 20 industries.
Their analysis shows that:
- The correlation between CX and repurchasing is very high (R= 0.82).
- There’s a 21-point difference in Net Promoter Score between consumers who’ve had a very good experience with a company and those who’ve had a very poor experience.
- CX is made up of three components – success, effort, and emotion. While all three elements impact customer loyalty, an improvement in emotion drives the most significant increase in loyalty.
- We built a model to estimate how a modest improvement in CX would impact the revenue of a typical $1 billion company across in 20 industries. On average, companies can gain $775 million over three years. Software companies stand to earn the most ($1 billion over three years), while utilities stand to earn the least ($476 million over three years).
- The report contains data charts showing how loyalty levels change based on customer experience across 20 industries.
- We also describe a five-step process for calculating the ROI of CX for your organization.