CX ROI: Better Customer Experience = More Recommendations

In a recent post, I showed the correlation between customer experience and consumers’ likelihood to repurchase.

Since that post was so popular, I decided to once again tap into our survey of 10,000 U.S. consumers to analyze the relationship between CX (Temkin Experience Ratings) and likelihood to recommend.

To determine likelihood to recommend, we asked consumer how likely they were to recommend the company to friends and family. We calculated the percentage of each company’s customers who selected “8,” “9,” or “10” on a scale from “0” (not at all likely) to “10” (extremely likely).

In the chart below, we normalize the data for 329 across 20 industries by subtracting each company’s scores from the average for their industries.

As you can see, CX is highly correlated to recommendations (R= 0.70).

Data showing ROI of Customer Experience, correlating CX with loyalty through recommendations

In the chart below, we segmented consumers into five groups based on the TxR scores they gave companies (an average of success, effort, and emotion ratings). We then averaged the future purchase intentions of those groups across the 20 industries.

As you can see, consumers who have had a very good CX are 5x more likely to recommend a company than consumers who have had a very poor CX.

CX ROI: Customer experience correlates to more positive recommendations.

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

2 thoughts on “CX ROI: Better Customer Experience = More Recommendations”

  1. I have done similar analyses using 1-5 scales for overall satisfaction and likely to recommend. I then plotted the % of each level of satisfaction against the % responding only “5” for likely to recommend. The results were comparable with somewhere in the 80% to 90% of 5’s for CSAT also 5 for likely to recommend. It never ceases to amaze me that 18% of 1’s on CSAT are still definately likely to recommend.

    1. Sam, thanks for sharing in the conversation. There’s a lot of inertia in the world, so people tend to be more loyal than you’d think.

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