June 22, 2009

Customer Experience Boosts Revenue

Modest Improvements Can Bring In $177 Million To $311 Million Per Year

by Bruce D. Temkin

with Moira Dorsey, William Chu, Angela Beckers

Executive Summary (This is a document excerpt)

Forrester's previous research has shown a high correlation between customer experience and three key elements of loyal behavior: willingness to buy more, reluctance to switch, and likelihood to recommend. But how does that affect a company's bottom line? To answer that question, we looked at the percentage of loyal customers within the customer bases of more than 100 companies. It turns out that customer experience leaders have an advantage of more than 14% over customer experience laggards across all three areas of loyalty. The annual revenue gains from a modest difference in customer experience can total $311 million for a large hotel. Banks and hotels garner the largest gains from their current customers, while airlines get the most from an increase in positive word of mouth. Customer experience professionals should use this information to build customized business plans.

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