Take Stock In Customer Experience Leaders

Jon Picoult, the Founder of Watermark Consulting, just published a blog post called Yes, Virginia, There Is A Return On Customer Experience Investments. He looked at the stock performance of companies based on how well they did in Forrester’s Customer Experience Index (CxPi).

It’s great work! Here’s a graphic from his post that shows how customer experience leaders outperform customer experience laggards in the stock market. His analysis used the results from our 2007 CxPi.

My take: Picoult’s work complements my findings from research called customer experience boosts revenue in which I analyzed last year’s CxPi. Here’s the difference in loyalty that I found 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

The bottom line: There’s good reason to be bullish on customer experience

Written by 

I am an experience management transformist, helping organizations improve business results by engaging the hearts and minds of their customers, employees, and partners. My "job" is Head of the Qualtrics XM Institute. The Institute is still being established, but our goal is to help organizations around the world thrive by mastering Experience Management (XM). As part of this focus, I examine strategy, culture, interaction design, customer service, branding and leadership practices. And, as many people know, I love to speak about these topics in almost any forum. Prior to joining Qualtrics, I was managing partner of Temkin Group (leading CX research, advisory, and training firm), co-founder and chair of the Customer Experience Professionals Association (CXPA.org), and a VP at Forrester Research. I'm a fanatical student of business, so this blog provides an outlet for sharing insights from my ongoing educational journey. Check out my LinkedIn profile: www.linkedin.com/in/brucetemkin

15 thoughts on “Take Stock In Customer Experience Leaders”

  1. Kudos to Jon Picoult and to you, Bruce. The financial performance payoff for customer experience is too often intuitive (“We THINK this should payoff”) and not often tangible (“We KNOW this improves performance”). We’ve found similar results in our national research: organizations that define a target experience are nearly twice as likely to beat their profit targets than those who do not. Yes; twice as likely.

    We also found that the more consistently customer experience is used as a driver for decision making across an organization, the better the organization performs. you might like this post on finding profit: http://tinyurl.com/findprofit. For more on the research: http://www.ceforprofit.com/evidence.html

    Great discussion!

  2. Great conversation everyone…

    Damian: Thanks for your feedback and support for my blog. I have a policy about not commenting on Forrester’s policies.
    Linda: Thanks for the links and sharing your insights.
    jpdenison: I hope that noone ever has a reason to move on from my blog. 🙂

  3. Bruce, so happy you posted the link to this work. We (customer service zealots) seem to struggle articulating the quantifiable benefits of delivering superior service. Facts like these demonstrate that customer service should no longer be thought of as an necessary evil, but as a way to sustain and grow a business. Long live the customer!

  4. Sorry to re-post, the Forrester blog Commenting did not seem to work.

    As Jon points out there is not enough samples to draw predictability argument. As you can see from the dip in 2008 there are many other factors that are important and most importantly we need to ask what is the lurking variable here.

    The question we need to ask is, after accounting for all other variables (like size, market, competition, etc) what percentage of changes in stock growth is explained by CX?

    I disagree with any causation or predictive power attributed to CX.

    1. Hi Rags: I agree with your observation about the inability to draw too many conclusions about causation and predictiveness from this data. Take a look at my most recent post. I’ll be I can guess your response to the poll. Thanks for sharing your thoughts.

    1. Hi Leigh: I’m sorry if your comment was somehow lost; not sure what happened. I have noticed that some “good” comments have been caught in the spam filter which I had never checked prior to about a week ago. I’ll start looking at that folder more frequently. Rest assured, however, that I approve every comment that is on topic as long as it isn’t attacking anyone. So please continue to leave posts — and let me know if something doesn’t show up. Thanks!

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