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Customer Experience ROI Study Graphic

It is reasonable to ask, if my company invests in the customer experience, will it work?

This question drove Watermark Consulting to evaluate the macro impact of customer experience excellence. They’ve accomplished this over the years by studying the total returns for two model stock portfolios comprised of the Top 10 (“Leaders”) and Bottom 10 (“Laggards”) publicly traded companies in Forrester Research’s annual Customer Experience Index ranking. The results are stunning.

For the 10-year period from 2007 to 2017, the Customer Experience Leaders in their study outperformed the broader market, generating a total return that was three times higher on average than the S&P 500 Index. Furthermore, while the Customer Experience Leaders handily beat the S&P 500, the Laggards trailed it by a wide margin.

Keep in mind, this analysis reflects more than half a decade of performance results.  It spans an entire economic cycle, from the pre-recession market peak in 2007 to the post-recession recovery that continues today. The Customer Experience Leaders in this study are clearly enjoying the many benefits that happy, loyal customers deliver:  better retention, greater wallet share, lower acquisition costs and more cost-efficient service.

And the Laggards?  They are being crushed under the weight of high customer turnover, escalating acquisition costs and an uncompetitive cost structure that is inflated by each customer complaint and avoidable inquiry.

As a digital executive, do you want to be a leader or a laggard? You can be a hero and lead the way to an amazing ROI. Your customers will love you for it.

Here are the key ideas:

  1. Start by beginning to measure your customer experience by using the Customer Experience Index.
  2. Begin by reporting results, focus on gaps and continuously improve the experience.
  3. Encourage a culture focused on building loyalty at every point of the customer journey.
  4. Agree on how to measure improvement.
  5. Tie loyalty to “bottom line” results.
  6. Involve customer experience ambassadors at every level of the organization.
  7. Identify budget constraints in investment decisions.