Customer Experience

Does Customer Experience Pay and Pay and Pay?

July 16, 2012
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One of life’s more pleasant rewards is discovering that the work you are doing is valuable. And in some cases, discovering it is extremely valuable.

So for those working towards creating enjoyable Customer Experiences, there is good news.

 A recent Customer Experience Stock Performance Analysis reveals that Customer Experience Leaders outperform the S&P 500 Index by 27%, creating value for customers, their companies, and investors.

Watermark Consulting, who did this research, explains how the analysis works:
“We look at the cumulative stock returns for the Top 10 and Bottom 10 publicly traded companies in Forrester Research’s annual Customer Experience Index ranking (Watermark defines these two groups as the Leaders and Laggards, respectively).

We compare the total return from investing in an equally-weighted, annually readjusted portfolio of customer experience Leaders to that for customer experience Laggards and the broader market (as reflected by the S&P 500 index).

 The Results

For the five-year period from 2007-2011, the customer experience Leader portfolio outperformed the broader stock market, generating cumulative total returns that were 27% better than the S&P 500 Index and 128% better than the customer experience Laggard portfolio.

 This pecking order of performance held true even on an annual basis.  In all but one of the five years, the Leader portfolio outperformed the index, which in turn outperformed the Laggard portfolio.”


Now obviously there are several caveats to point at this research; five years is not a long enough time to prove this out, the sample size is relatively small, and embracing a customer experience strategy is not the same as executing well. Nor is this an invitation to not cost-justify each customer experience project, you must.

But what it does suggest is that companies that successfully deliver enjoyable comprehensive customer experiences are rewarded by both customers and investors.

Why are Customer Experience and Service Design such hot topics? For many companies it is because it is important, it is complex, and it is broken.

Perhaps this is even true at your company but maybe you are not sure how to get started.

Begin with building a business case for superior customer experience, use the Customer Experience Stock Performance Analysis to start the conversation. Trust me, it gets people to sit up and take notice.

Then take a look at some case studies of companies that are effectively improving their customer experience. In August, a book that I highly recommend is coming out and I suggest you buy several copies for your team. Outside In: The Power of Putting Customers at the Center of Your Business, by Harley Manning and Kerry Bodine provides powerful, compelling case studies that can be used in conversations around customer experience within your organization and with customers.

In it you’ll find customer experience success stories from USAA, Office Depot, Fidelity, Sprint, EMC, Canada Post, and Holiday Inn, all of which will be helpful in building your business cases for customer experience improvements. These are powerful, insightful stories that will inspire you and other business leaders in your organization to ask, “Is this something we can be doing here?”

For the leaders on the Customer Experience Index, the answer is “yes”.

And for you, the answer can also be “Yes”.

Is Customer Experience just a fad?

 

Recommended Reading: Looking For An Improved Customer Experience | The Blog

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