“What’s a great, differentiated customer experience really worth to a company?”
Isn’t that the question all of us, as business leaders, ask ourselves? I know it’s the (sometimes unspoken) question at the heart of the decision making process whenever an organization is evaluating its customer service operation. Sure, conceptually, we know that treating our customers well is the right thing to do. But how do we quantify the value difference between customer service that creates an extraordinary, 5-star experience vs one that’s just ok? Is great customer service an expense to be managed or is it an investment that will generate superior returns? (It’s both!)
Watermark Consulting recently asked these questions. Now, they are sharing the answers in their 2019 “Customer Experience ROI Study.” Using the language and framework of investing, Watermark lays out one of the most straightforward, compelling arguments I have seen yet for making a sustained, robust investment in CX.
I found their approach particularly illuminating. The study – spanning a full decade of results – examined the cumulative total stock return for “equally weighted, annually readjusted model portfolios” comprised of companies that Watermark designated as either “CS Leaders” or “CS Laggards.” (They established the Leader/Laggard categorization using Forrester Research’s CX Index from 2007-2015 and Temkin Group’s Experience Ratings from 2016-2018. Both of these sources are publicly available, third-party rankings based on surveys of ten thousand or more U.S. Consumers.)
According to this expansive study, those companies who consistently rank as customer experience Leaders outperformed the market, generating total returns 45 points higher than the S&P 500 Index – and nearly 3x the returns of the Laggards.
by Bobby Matthews
Senior Vice President, Sales and Marketing
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