- May 25, 2017
- Posted by: Allen Kruse
- Category: Customer Experience, ROI
Some Stats to Think On
In a recent post, TrueCx CFO Bernie Hollinger highlighted the connection between customer experience and ROI. This is an important topic – and can be difficult to communicate up the corporate food chain. So I’m providing some numbers that backs up Berni’s important message. If you’re trying to convince someone who thinks in terms of “show me the money”. Then these stats should help.
On average across ALL industries, over 10 percent of consumers have had a very bad experience within the previous six months. After that bad experience, 37 percent of consumers cut back on their spending. As a result, 3.7 percent of revenues across ALL industries were at risk after a very bad experience.
The greatest percent of decreased spending following a very bad experience occurs in fast food and rental cars (Over 50 percent). Followed by credit card companies, airlines (or worse for United) and hotels at all over 40 percent. Obviously, bad customer experience doesn’t discriminate. The smallest amount of decrease (there was a decrease across all industries) was for health plan customers, and we can probably assume that’s because most consumers don’t have much choice in this area.
Customer Experience = ROI + Major Driver of Future Revenue
Harvard Business Review completed a study; they reviewed data from two global, $1B+ businesses. One a transaction-based business, the other a relationship-based subscription business. The research looked at two common elements, customer feedback and future spending by individual customers. The researchers concluded, “After doing so, it soon became clear: customer experience is a major driver of future revenue.” In the transaction-based business, customers who had the best past experiences spend 140 percent more compared to those who had the poorest past experience.
The results for the subscription-based business were similar. A member who rates as having the poorest experience, 43 percent chance of being a member a year later. Compare this to a member who gives one of the top two experience scores. They would have a 74 percent chance of remaining a member for at least another year.
At this point, it should start becoming clear that investing in customer experience should not be a question of “if,” but rather “when.” With many experts predicting that customer experience will be (in fact, it already is) THE competitive differentiator.
To learn more about how TrueCx can help move your company forward with customer experience solutions that encompass your entire organization, contact us today.