Finding the ROI of Customer Experience

Many of us are familiar with a request to justify any project from the return on investment (ROI) perspective.

Metrics are an important topic when it comes to customer experience (CX). They identify the value of good CX and provide a quantitative foundation for CX efforts to compete for funding with other areas of the business.

Here are a few case studies investing in CX provides a great ROI.

ASDA allows CX to drive the mobile technology

• Mobile now accounts for 18% of all grocery home shopping sales and 90% of this is from the app. ASDA App shoppers are twice as likely to become loyal, repeat customers.
• Shopping frequency for mobile is 1.8 times higher than desktop. The app had achieved more than 2m downloads by March 2013.
• As a result ASDA reported a 16% rise in online sales in the first quarter of its financial year. The company said its multichannel strength helped drive a 1.3% rise in sales.

Allianz shows high NPS equals high revenue growth

• Allianz Group has developed techniques for mastering their discipline using the Net Promoter Score (NPS).
• Making NPS a centerpiece of its growth agenda, Allianz Group launched its Customer Focus Initiative (CFI) as an integral part of its effort to implant a strong customer-service ethos throughout the organization.
• Allianz operating units with a high NPS have a higher overall compound annual growth rate than those with lower overall NPS scores.

Triumph creates an interactive retail environment

• Triumph created an interactive retail environment. The ‘Triumph Essence Fantasy Mirror’ is housed in a specially designed ‘Fantasy Booth’.
• The Fantasy Booth enables shoppers to experience the collection without removing any clothing merging offline and online.
• Around 125 consumers attended the launch event and a 50% uplift sales was achieved in the first week after campaign launched as well as more than 1,600 app downloads during launch period.

Northwestern University links satisfaction to customer spending

• Northwestern University study in hotel chain showed that, for “the extent to which employees try to satisfy customers”, a 10% increase in this factor resulted in a 22.7% increase in customer spending over 3 years and 20.3% increase in the amount customers spend per one visit.

Sears correlates employee attitude to revenue

• Study in 800 Sears stores showed that a 5% documented improvement in employee attitudes toward their jobs and commitment to the company directly resulted in a 1.3% increase in customer perceptions toward the retailer and a 0.5% increase year-over-year revenue.

Walgreen’s reward program is helping drive sales

• Walgreen’s Balance Rewards loyalty program led to sales growth, as consumers made repeat purchases in order to accumulate points.
• Balance Rewards take members beyond the standard points-per-purchase program, and encourages/rewards members for healthier life style.
• The total Q3 2013 revenue stood at $18.34 billion, up 3.3% over the same period last year.

Hertz plans for a tablet in every car

• Hertz’s NeverLost system allows drivers to plan their trips online at home, then plug a USB device with directions into the navigation system. NeverLost can also automatically instruct a driver how to return to an airport.
• Thanks to strong equipment rentals last year Hertz’s revenue increased more than 10%.
• Hertz investment in mobile has generated $500,000 in additional revenue since giving customers the ability in December 2012 to swap or upgrade cars via mobile devices.

Maersk improves the line experience

• Maersk provided the regional divisions with the option of putting regional CX councils in place. The 55 regions that set up such councils received a three-day training in CX improvement methods.
• Then the company run a study comparing regions with and without a council. The result: participating offices score 10 points higher on their NPS than offices that opted out.
• As a result of these efforts, Maersk NPS has improved from -10 to +30.
• Maersk correlated a 4 point increase in NPS with a 1% increase in additional volume shipped by customers.

iiNet hits customer service bulls-eye

• Current managing director of iiNet revealed that a 1% increase in NPS equated to a $1.6m increase in iiNet’s net profit after tax.
• Meanwhile, he explained that iiNet’s customer service team are the company “heroes” — iiNet claimed that a 0.1% improvement in customer churn added up to 20% recurring improvement in sales.

British Airways aims for customer care excellence

• Research at British Airways indicated that over 20% of its customers were dissatisfied with the service they received but did not complain.
• It is estimated that for every 1% of additional dissatisfied passengers that the company could get to complain, it could win back between £200,000 and £400,000 in revenue from potential defectors.

Heineken links revenue to NPS

• Polish subsidiary Grupa Zywiec has used enterprise feedback management to monitor and improve the customer experience of its retailers.
• Analysis has shown that an average spending increases almost 1.5 timeswhen a detractor becomes a passive and nearly 2.5 times when theirsatisfaction increases to the point of being a promoter.

Hermann Hospital improves patient satisfaction

• By 2007 MHHS had a terrible track record: 33 straight years of being unprofitable with 5% patient satisfaction.
• MHHS recognized that loyalty is built in large part on great patient satisfaction and began a mission to improve its patient experience. As a starting point it piloted revamping its 1) cancer and 2) heart & lung service lines.
• Immediately, they began to see the effect of the approach. They bested the plan to break even in 2015 by becoming profitable by $18million in 2011! Patient satisfaction improved up to 65%.