The ROI of a Fantastic Customer Experience

The ROI of a Fantastic Customer Experience

“A great customer experience can deliver tremendous strategic and economic value to a business, in a way that’s difficult for competitors to replicate.”

Customer-first marketers are more successful when you look at the big picture

It’s understandable why some companies and marketers don’t practice customer-first marketing: “We need just a few more leads to meet this month’s target. Have to squeeze out just a little more revenue to meet Wall Street’s expectations on the next earnings call.”

However, this chart clearly shows the benefits of putting the customer at the center of your organization.

When looking at the top 10 and bottom 10 companies, according to Forrester Research’s 2007-2014 Customer Experience Index studies, Watermark Consulting showed companies that were customer experience leaders generated a cumulative total return over this seven-year period of 77.7%. To benchmark that return, the S&P 500 Index generated a 51.5% cumulative total return during the same time period.

Even more surprising, customer experience laggards generated a -2.5% return. That’s not a small difference. Don’t compare this number to zero. Again, during this time, the S&P 500 Index had a more than 50% return — a whopping difference for companies that don’t prioritize the customer.

A customer-first business looks like…

Marketers and Customer Experience folks are at the forefront of this work.

When you use A/B testing, data analysis, user experience testing, social media listening, pre- and post-purchase surveys, customer service inquiry tracking, marketing automation and other quantitative and qualitative data-driven approaches, you have the tools necessary to make the business case for prioritizing the customer.

What does that look like in an organization? This will vary by industry and product type. For example …

“We avoid something retailers dread — customer ‘out of stock’ disappointment. This also helps us to further showcase the in-depth knowledge we have of the wines we sell by providing the right product to the right customer at the right time online,” said Richard Weaver, eCommerce Director, Majestic Wine.

In Picoult’s Barron’s article, he gave the following examples:

  • Costco proactively notifies its members of product recalls.
  • Amazon alerts customers when they’re about to make a duplicate purchase.
  • L.L. Bean exercises its no-questions-asked return policy for duck boots that aren’t holding up a year after purchase.

Living up to the company’s value proposition

For Majestic Wine, it’s knowledge. For Costco, membership value. Amazon — tech-enabled shopping experience. L.L. Bean — quality.

The value proposition for each is different, but the approach is the same — showing the value proposition promised through marketing in the actions of the company.

This is where we, as marketers, must protect the brands we build.

A good copywriter wrote “Built to Last” and “Wicked Good Slippers” for L.L. Bean. However, it took a great company to deliver on it.

“You can’t market your way to a great customer experience,” Picoult said. “While marketing plays a critical role in the customer experience, people’s impressions about a business will ultimately be forged by the personal interactions they have with that business.”

“For this reason, it’s important that marketers think broadly about their role — seeking to influence not just the articulation of a company’s brand promise, but also the fulfillment of that promise,” Picoult concluded.


Watermark Consulting



Por Daniella Matutes – Managing Consultant, User Experience Architect, Customer Experience Specialist

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