Customer Experience Improves, Generates $100's of Millions in Revenue, According to New Temkin Group Study
Research Shows Significant Correlation Between Customer Experience, Customer Loyalty and Increased Revenue Across 20 Industries
WABAN, Mass., Oct. 25, 2016 /PRNewswire/ -- A new research report published by Temkin Group, ROI of Customer Experience, 2016, finds a strong connection between improved customer experience and increased consumer loyalty—leading to increased company revenue. The research is based on a study of 10,000 U.S. consumers and 294 companies across 20 industries.
Logo - http://photos.prnewswire.com/prnh/20161024/431666LOGO
The research shows that a modest increase in customer experience at a typical $1 billion company can earn an average of $827 million in additional revenues over three years.
The research examined the connection between loyalty and all three elements of customer experience —success, effort, and emotion—and found that emotion has the largest impact.
According to Bruce Temkin, Managing Partner of Temkin Group, "Customer experience isn't just a nice thing to provide; it's a critical component for improving the bottom line. Creating a positive emotional connection with customers is the secret sauce for building loyalty."
Temkin Group found that a modest increase in customer experience can generate between $646 million and $967 million in additional revenues over three years for every $1 billion in annual revenue. Here are the additional revenues generated over three years for a typical company in each of the 20 industries in the study:
- Rental car agencies: $966.9M
- Fast food chains: $966.3M
- Hotels: $931.1M
- Supermarkets: $916.3M
- Parcel delivery services: $903.0M
- Airlines: $891.0M
- Software companies: $879.8M
- Computers & tablets: $873.4M
- Retailers: $859.4M
- Banks: $853.7M
- Appliances: $849.4M
- Credit card issuers: $833.9M
- Investment firms: $801.4M
- Insurance carriers: $794.7
- TV service providers: $754.6
- Wireless carriers: $711.4M
- Auto dealers: $699.6M
- Internet service providers: $683.5M
- Health plans: $650.1M
- Utilities: $645.5M
Looking across all 20 industries, the research finds that:
- The Pearson correlation coefficient between customer experience and the likelihood to repurchase is very high (0.86).
- There's a significant gap in loyalty between consumers who have an excellent experience and those who have a very poor experience. Those with a positive experience are 16.5 percentage-points more likely to make additional purchases, 16.7 points more likely to trust the company, 10.3 points more likely to forgive a company if it makes a mistake, and 7.1 %-points more likely to immediately try a new offering. They also give companies 22-point higher Net Promoter® Scores.
This research report can be accessed from the blog, Customer Experience Matters, at ExperienceMatters.wordpress.com or at the Temkin Group's website, www.TemkinGroup.com.
For more information about Temkin Group, visit www.TemkinGroup.com.
About Temkin Group: Temkin Group is widely recognized as a leading customer experience research and consulting firm. Many of the world's largest brands rely on its insights and advice to steer their transformational journeys. Temkin Group combines customer experience thought leadership with a deep understanding of the dynamics of organizations to help accelerate results. Rather than layering on cosmetic changes, Temkin Group helps companies embed practices within their culture by building four critical competencies: Purposeful Leadership, Employee Engagement, Compelling Brand Values, and Customer Connectedness. The firm's ongoing research identifies leading and emerging best practices across a wide range of activities for engaging the hearts and minds of customers, employees, and partners. For more information, contact Bruce Temkin at 617-916-2075 or send an email to [email protected].
About Bruce Temkin: Bruce is widely recognized as a customer experience visionary and is a CX Transformist and Managing Partner of Temkin Group. He is also the author of a very popular blog, Customer Experience Matters (ExperienceMatters.wordpress.com). Prior to forming Temkin Group, he was a VP at Forrester Research for 12 years, where he led their CX practice and created the CX Index, and was the most-read analyst for 13 consecutive quarters. Bruce is a highly demanded speaker and regularly quoted in the press. He is also the co-founder and Emeritus Chair of the Customer Experience Professionals Association.
Net Promoter Score, Net Promoter, and NPS are registered trademarks of Bain & Company, Satmetrix Systems, and Fred Reichheld.
Customer Experience Matters is a registered trademark of Temkin Group.
SOURCE Temkin Group
Share this article