Take Stock In Customer Experience Leaders

Jon Picoult, the Founder of Watermark Consulting, just published a blog post called Yes, Virginia, There Is A Return On Customer Experience Investments. He looked at the stock performance of companies based on how well they did in Forrester’s Customer Experience Index (CxPi).

It’s great work! Here’s a graphic from his post that shows how customer experience leaders outperform customer experience laggards in the stock market. His analysis used the results from our 2007 CxPi.

My take: Picoult’s work complements my findings from research called customer experience boosts revenue in which I analyzed last year’s CxPi. Here’s the difference in loyalty that I found between companies in the top quartile of customer experience (when measured against industry averages) and the companies in the lowest quartile:

  • 14.4% more customers willing to buy another product
  • 15.8% more customers reluctant to switch
  • 16.6% more customers likely to recommend

The bottom line: There’s good reason to be bullish on customer experience

About Bruce Temkin, CCXP
I'm an experience (XM) management catalyst; helping organizations improve results by engaging the hearts and minds of their employees, customers, and partners. I enjoy researching and speaking about these topics. I lead the Qualtrics XM Institute, which is the world's best job. We're igniting a global community of XM Professionals who are inspired and empowered to radically improve the human experience. To achieve this goal, my team focuses on thought leadership, training, and community building. My work is driven by a set of fundamental beliefs: 1) Everything starts and ends with human beings, so you need to understand how people think, feel, and behave; 2) XM is a discipline that needs to be woven throughout an organization's entire operating fabric; and 3) Building the XM discipline requires a combination of culture, competency, and technology.

15 Responses to Take Stock In Customer Experience Leaders

  1. hey bruce, spot on again, thank you. Any merit in the rumour regarding Forrester banning Analyst blogs like yours? would be a terrible loss for us all.


  2. Pingback: Read: Take Stock In Customer Experience Leaders @ Customer Experience Matters « Fredzimny's Blog

  3. Kudos to Jon Picoult and to you, Bruce. The financial performance payoff for customer experience is too often intuitive (“We THINK this should payoff”) and not often tangible (“We KNOW this improves performance”). We’ve found similar results in our national research: organizations that define a target experience are nearly twice as likely to beat their profit targets than those who do not. Yes; twice as likely.

    We also found that the more consistently customer experience is used as a driver for decision making across an organization, the better the organization performs. you might like this post on finding profit: http://tinyurl.com/findprofit. For more on the research: http://www.ceforprofit.com/evidence.html

    Great discussion!

  4. Pingback: Improving Customer Experience Drives Total Shareholder Return « Need More Input

  5. jpdenison says:

    Damian Kernahan — if it happened that would be a good reason to move on I suspect.

  6. Bruce Temkin says:

    Great conversation everyone…

    Damian: Thanks for your feedback and support for my blog. I have a policy about not commenting on Forrester’s policies.
    Linda: Thanks for the links and sharing your insights.
    jpdenison: I hope that noone ever has a reason to move on from my blog. 🙂

  7. Bruce, so happy you posted the link to this work. We (customer service zealots) seem to struggle articulating the quantifiable benefits of delivering superior service. Facts like these demonstrate that customer service should no longer be thought of as an necessary evil, but as a way to sustain and grow a business. Long live the customer!

  8. Sorry to re-post, the Forrester blog Commenting did not seem to work.

    As Jon points out there is not enough samples to draw predictability argument. As you can see from the dip in 2008 there are many other factors that are important and most importantly we need to ask what is the lurking variable here.

    The question we need to ask is, after accounting for all other variables (like size, market, competition, etc) what percentage of changes in stock growth is explained by CX?

    I disagree with any causation or predictive power attributed to CX.

    • Bruce Temkin says:

      Hi Rags: I agree with your observation about the inability to draw too many conclusions about causation and predictiveness from this data. Take a look at my most recent post. I’ll be I can guess your response to the poll. Thanks for sharing your thoughts.

  9. Pingback: On measuring the return on Customer Experience… | Buzz-Tank

  10. Pingback: experience matters » Blog Archive » Weekly Points of Interest

  11. Leigh Durst says:

    Hi Bruce,

    Like Rags, I also left a comment that hasn’t shown up. I didn’t want to leave a super long comment, so here’s my response… I feel you left two points out specific to cross-channel management and coordination of the enterprise. Full comment is here:


    • Bruce Temkin says:

      Hi Leigh: I’m sorry if your comment was somehow lost; not sure what happened. I have noticed that some “good” comments have been caught in the spam filter which I had never checked prior to about a week ago. I’ll start looking at that folder more frequently. Rest assured, however, that I approve every comment that is on topic as long as it isn’t attacking anyone. So please continue to leave posts — and let me know if something doesn’t show up. Thanks!

  12. Pingback: I bet you can’t prove ROI on Customer Experience Investments… | Beyond Philosophy

  13. Pingback: Amdocs | Blogs: John Oswald » On measuring the return on Customer Experience

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