Earlier this week I published a research report called Customer Experience Boosts Revenue. In the report, I analyzed consumer data to figure out how a change in customer experience affects loyalty and how that can affect revenues. It built off of my earlier analysis about how customer experience correlates to loyalty. Here are a couple of slides that I used to introduce the research at Forrester’s Customer Experience Forum:
Here are some of the key findings:
- The difference in loyalty between companies in the top quartile of customer experience (when measured against industry averages) and the companies in the lowest quartile:
- 14.4% more customers willing to buy another product
- 15.8% more customers reluctant to switch
- 16.6% more customers likely to recommend
- I also examined the revenue change from a 10 point increase in a firm’s Customer Experience Index. It results in a $284 million change for every $10 billion in revenue (average across 12 industries):
- Additional purchases: $65 million
- Reduction in churn: $116 million
- Word fo mouth: $103 million
- Here’s some of the industry-specific data:
- Five largest revenue changes: Hotels ($311 million), credit card providers ($308 million), banks ($305 million), wireless carriers ($305 million), and TV service providers ($302 million)
- Most change in additional purchases and reduction in churn: Hotels and banks.
- Most increase from word of mouth: Airlines and wireless carriers
The bottom line: Customer experience is a great investment.