Report: The Customer Experience-Loyalty Connection

We just published a new Temkin Group report, The Customer Experience-Loyalty Connection.

The report examines the connection between customer experience, loyalty, and revenues across 12 industries: airlines, banks, credit card issuers, health plans, hotel chains, Internet service providers, insurance companies, investment firms, personal computer makers, retailers, TV service providers, and wireless carriers.

Here’s the executive summary:

Temkin Group analyzed the correlation between customer experience and loyalty across 12 industries: airlines, banks, credit card issuers, health plans, hotel chains, insurance carriers, Internet service providers, investment firms, computer makers, retailers, TV service providers, and wireless carriers. Customer experience leaders enjoy a double-digit advantage in customers willing to buy more from them, reluctant to switch business away from them, and likely to recommend them. A modest improvement in customer experience can drive between $179 million (for health plans) and $308 million (for hotel chains) of incremental revenue over three years for every $1 billion in annual sales.

Download report for $195

Here’s a figure from the report that shows the correlation between cusotmer experience and loyalty for 143 companies:

We built a model based on this correlation that identifies the increase in revenues from good customer experience in three areas: more products being purchased by existing customers, fewer customers switching their business away, and new business generated by word of mouth. Here’s an overview of those findings from the report:

Download report for $195

The bottom line: Improving your customer experience makes good business sense.

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.

3 Responses to Report: The Customer Experience-Loyalty Connection

  1. Hey Bruce,

    Great research here – thanks for giving us an insight into your wonderful work.

    I teach a course on institutionalizing ‘user experience’ in large organizations for Human Factors International. I would love to be able to show the graph titled ‘Good Customer Experience Generates Revenues’ during our discussion of the ROI of good user experience. Would you mind if I used a screen shot of that graph? I would, of course, show the source as well as your URL on the slide and mention the research that you do.


    Jeffrey Easton

    • Bruce Temkin says:

      Hi Jeffrey: Glad to hear that you like the research. You can use the figure in your class. But you don’t need to take a screen shot. If you right mouse click on the graphic then you can save the picture file and insert it in your slides. By the way, we’ll be publishing an update to that report in the next month or so.

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