Research Reveals Customer Experience Programs Deliver 301% ROI for B2C Companies

Highlights

  • Research with B2C companies found that every 1 dollar invested in a Customer Experience (CX) program delivered 3 dollars in additional company revenue.
  • The data also revealed that the top cited business benefit of a CX program was increased customer loyalty.
  • The data surfaced 7 contributing factors to improved loyalty. Targeting these levers as part of a CX program yields triple digit ROI.
Johnny Grow Revenue Growth Consulting

An effective CX program requires executive sponsorship, enterprise-wide participation, active customer engagement, technology automation, and real-time performance analytics. It's no small effort.

So, is the effort and investment worth it? We launched a consumer experience research survey to find out.

Because CX programs and results are very different for B2B and B2C companies and industries, this survey was limited to participants in consumer industries.

The survey was designed to identify the top CX benefits, the drivers of those benefits and their financial impact.

Here's three findings from the survey results.

1

Consumer Experience Benefits

Our first research survey objective was to identify the top benefits of CX programs. We asked survey participants, "What are the top benefits achieved from your Customer Experience program?"

The results are shown below.

Customer Experience Benefits Research
Customer Experience Benefits Research Survey Results

Customer loyalty was cited as the top benefit. That's powerful as loyalty is a leading indicator of customer revenues and retention. It's an effective measure of a company's relationship with its customers and predictor of future revenues and profits.

Customer loyalty is influential because even small improvements multiplied by the number of loyal customers creates large revenue growth.

2

Top Drivers of Customer Loyalty

Uncovering the benefits is one thing. Understanding how they are achieved is another.

We wanted to understand the specific factors that improved this important business performance measure. So, for respondents that cited this benefit, a follow-on survey question asked, "How did your consumer experience program increase customer loyalty?"

The responses are shown below.

Customer Loyalty Research Results
Customer Experience Impact to Customer Loyalty Research Results

Knowing how to improve loyalty gives the company controlling levers to systemically grow consumer and company revenues.

3

Customer Experience ROI

To practically every business executive, delivering rewarding and differentiating CXs sounds like a good idea. But good ideas are a dime a dozen.

A positive ROI is needed to sustain any business development program. So, the survey asked participants to identify their customer experience ROI. The results are shown below.

Customer Experience ROI
Customer Experience ROI Research Results

The reported ROI figures were impressive. The median value was 301%. That means for every dollar invested into a CX program, the company earned three dollars in additional revenue.

See the research study that shows every $1 invested into a customer experience program yields $3 in additional company revenues.

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There was one alarming find with the data. Only 37% of respondents measured their CX ROI. About two-thirds of respondents measured CSAT (customer satisfaction) or NPS (Net Promoter Score), however, did not or could not correlate these figures to a financial return.

That would suggest that despite an impressive upside, those respondents than cannot demonstrate a clear and compelling ROI may find their programs at risk when finances become scarce.

The Point is This

Competitive advantages used to be things like products, price, staff, service and location. But in the minds of consumers these are all easily substitutable and highly commoditized.

Competitive differentiation achieved through brand management, lean manufacturing, efficient distribution, and IT are all now only table stakes.

Consumers top decision-making criteria have evolved to wanting innovative products and services, brands that know how to engage and build relationships with them, and brands that know how to deliver consistent, rewarding and memorable consumer experiences.

According to a Salesforce study, 80% of customers say the experience a company delivers is just as important as its products or services.

Customer experience management has become the newest battleground for customer patronage, is one of only four sustainable competitive advantages and is a leading indicator of company revenues.

But that doesn't make it easy. Most executives get the CX concept, but struggle to define CX in a way that it can be designed, implemented and measured in the financial statements.

CX requires a lot of moving parts – Voice of the Customer analysis, customer segmentation, consumer personas, customer journey mapping, customer experience analytics and even changes to the business model, all of which cascade into changes to the company culture.

Make no mistake, consistently delivering rewarding CXs that drive financial performance measures is no easy task. But also recognize that unlike your locations, branches, products and almost every other consumer evaluation factor that can be quickly copied by your competitors, CX is one of only four factors that cannot be easily copied. Which is why it is a sustainable competitive advantage and is often referred to as the final competitive advantage.

In fact, consistent CX delivery creates a competitive advantage that can withstand disruptive technologies, competitor encroachment and the erosion of other competitive advantages.

Research Methodology

This research was conducted using an online survey from March 1 through March 30.

The survey was completed by 139 respondents in the United States.

The composition of respondents included the following firmographics and demographics:

Customer Experience B2C Research
Customer Experience B2C Research Firmographics and Demographics

Only business to consumer (B2C) companies were invited to respond to survey questions. Also, only participants with active CX programs were invited to respond.

Respondents were given the option to not respond to questions they deemed not relevant or did not know the answer.

The total number of questions may differ among respondents as based on a given survey response, a participant may be posed additional or cascading questions. The total number of responses for each question is published with the result. Certain questions permitted multiple responses; therefore, response totals may not sum to 100 percent.

This research report is independently produced by Johnny Grow, Inc. Johnny Grow research does not permit vendor funding, advertising or sponsorship. The content is free of direct or indirect influence by third parties.