In a recent white paper, “The Business Impact of Customer Experience 2011,” Forrester showed the potential results of an improved customer experience in 11 industries.
The research was conducted among 7,728 US consumers about their interactions with brands in a range of different industries. The data was used to model the effect that better customer experience might have on companies in 11 industries.
Analysis showed a high positive correlation between customer experience and loyalty with people willing to buy from the company again (R2 = 0.66), likelihood to recommend the company (0.70) and less likely to defect (-0.40).
The strong correlation between customer experience and loyalty means that companies with higher customer experience scores tend to have more customers who:
- will buy from them again;
- will not take their business elsewhere; and,
- will recommend their products or services to a friend.
All of this generates more revenue. In fact, here is how much increment revenue Forrester projects for each industry based on their projections:
- Wireless service providers = $1,574 million
- Hotels = $1,068 million
- Airlines = $784 million
- Insurance providers = $260 million
- Credit card providers = $245 million
- Banks = $217 million
- Investment firms = $149 million
- TV service providers = $81 million
- Health plans = $70 million
- Internet service providers = $70 million
- Retailers = $27 million
I worked on a customer satisfaction measurement and improvement program for a wireless service provider several years ago. By reducing churn by 29% we saved $16.2 million in potentially lost revenue.
How much are you investing to provide a better customer experience?
I would bet it has a much greater ROI than your other marketing activities.