CUSTOMER EXPERIENCE PAYS
In 2009, Forrester Research released a report that put some juicy flesh on the bones of a customer experience hypothesis that attempted to connect loyalty and business benefits. By ranking Customer Experience Index (CxPi) scores of 113 organizations and segmenting them into quartiles based on their scores, Forrester could compare customer loyalty between the haves (1st quartile) and the have-nots (4th quartile). The results revealed double-digit differences:
• More customers willing to purchase: 14.4 percent
• More customers reluctant to switch: 15.8 percent
• More customers likely to recommend: 16.6 percent
shows the full hall of fame—or shame—depending within which quartile you find yourselves.
Applying these scores against a set of business and revenue assumptions revealed some staggering numbers when extrapolating a 10 percent CxPi shift (i.e., what would happen with a 10 percent improvement) against projected or extrapolated revenue change:
• Large firms48
can gain $177 million to $311 million per year.
• Increased loyalty from an enhanced customer experience can generate more than $206 million per year from a combination of increased tenure (decreased churn or switching) and increased purchases.
• Word of mouth, on the other hand (highest levels of volume predictably among airlines, followed by wireless carriers), can net up to $118 million incrementally per year.
Source: Forrester Research, ...