Research Shows Customer Experience Programs Deliver 356% ROI
Highlights
- Research limited to B2B companies found that every dollar invested in a Customer Experience (CX) program delivered $3.56 in additional company revenue.
- The data also revealed that the top cited business benefit of a CX program was increased customer share, commonly measured as customer lifetime value (CLV).
- The data surfaced 7 contributing factors to improved CLV. Targeting these levers as part of a CX program yields triple digit ROI.
A successful customer experience program requires C-suite sponsorship, enterprise-wide participation, active and continuous customer engagement, technology to achieve process consistency and automation, and analytics to measure results and make adjustments. It's a big effort for sure.
So, is the effort and investment worth it? We launched a customer experience research survey to find out.
The survey was designed to identify the top customer experience benefits, the drivers of those benefits and their financial impact.
Here are three takeaways from the survey results.
Customer Experience Benefits
Our first goal with the research survey was to identify the top benefits of CX programs. We asked survey participants, "What are the top benefits achieved from your CX program?"
The results are shown below.
CLV was cited as the top benefit. That's powerful as this metric is a leading indicator of customer revenues and retention. It's an efficient and highly effective measure of a company's relationship with its customers and future revenues and profits.
Customer Lifetime Value is influential because even small increases multiplied by the number of customers creates large revenue growth
Top Drivers of Customer Lifetime Value
Uncovering the benefits is one thing. Understanding how they are derived is another.
We wanted to understand the specific factors that improved this critical business performance measure. So, for respondents that cited this benefit, a follow-on survey question asked, "How did your Customer Experience Program Increase Customer Lifetime Value?"
The responses are shown below.
Knowing how to improve CLV gives the company controlling levers to systemically grow customer and company revenues.
Customer Experience ROI
To virtually 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 each participant to identify their customer experience ROI. The results are shown below.
The reported ROI figures were impressive. The median value was 356%. That means for every dollar invested into a CX program, the company earned $3.56 in additional revenue.
See the customer experience research study that shows every $1 invested into a customer experience program yields $3.56 in additional company revenues.
Click to TweetThere was one alarming find with the data. Only 39% 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.
The Point is This
The data reinforces that delivering superior CXs increases customer purchases, referrals, customer lifetime value and retention; all factors that deliver significant and sustained revenue growth.
Even more importantly, and as demonstrated by Forrester in several research studies, using data to deliver differentiated CXs is one of only four sustainable competitive advantages 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 31.
The survey was completed by 124 respondents in the United States.
The composition of respondents included the following firmographics and demographics:
Only business to business (B2B) companies were invited to respond to survey questions. Also, only participants with active CX programs were invited to respond to survey questions.
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.