Great customer experiences are well rewarded
CX leaders out-perform laggards 3-to-1
Over the past eleven years, Customer Experience leaders have delivered a total cumulative return that was nearly three times that of CX laggards, according to the cross-industry Customer ExperienceROI Study from Watermark Consulting, which also includes several sector-specific editions focused on the Airline, Insurance and Wealth & Asset Management industries.
The study, which examines the aggregate stock performance of Customer Experience Leading and Lagging firms, provides compelling evidence for the business value of a great customer experience. The industry-specific analyses showed a similar pattern, with Leaders far outperforming Laggards.
While customer experience has garnered greater C-Suite attention in recent years, companies still often resist investing in it, viewing the benefits as soft and intangible, the payoff uncertain. The Watermark study suggests those investment judgements could be very shortsighted.
What CX Leaders Do Differently
As for Customer Experience Leading firms, what do they do differently to achieve their out-performance? The study identified some basic operating principles that help distinguish these companies from their competition:
- They aim for more than customer satisfaction.
- They nail the basics, and then deliver pleasant surprises.
- They understand that great experiences are intentional and emotional.
- They shape customer impressions through cognitive science.
- They recognize the link between the customer and employee experience.
"There are obviously many factors that influence a company's stock price," noted Jon Picoult, Founder & Principal of Watermark Consulting. "However," he continued, "the results of this study - covering over a decade of data - indicate that, over the long-term, a great customer experience helps build business value, while a poor customer experience erodes it."
Picoult went on to stress that latter point, noting that Customer Experience Laggards grossly underperformed the broader market: "This study underscores not just the benefits of customer experience excellence, but also the risks of customer experience mediocrity. Many companies excel at frustrating their customers, and what we're seeing here is, eventually, they pay the price for that."
White papers describing the study's results (and further explaining the aforementioned secrets to CX Leaders' success) been made available from Watermark's web site, as follows:
- CX ROI Study (Cross-Industry Edition): http://www.watermarkconsult.net/cx-roi
- CX ROI Study (Airline Industry): http://www.watermarkconsult.net/cx-roi-airline
- CX ROI Study (Insurance Industry): http://www.watermarkconsult.net/cx-roi-insure
- CX ROI Study (Wealth Management Industry): http://www.watermarkconsult.net/cx-roi-wealth
Sources: Watermark Consulting / The Marketing Factbook.
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