I recently read about a study done by the world famous company, Peer Insight (you’ll find them in Businessweek on a regular basis), that reinforced my philosophy that focusing on the customer and their entire experience of doing business with you will yield better long-term results.
They did a three-year study of 40 Fortune 500 companies — and the results clearly make a case for the ROI a company can realize by focusing on being purposeful about the customer experience.
The study showed that companies that focused on customer experience design outperformed the S&P 500 by a 10-1 margin.
Want a concrete example? 80% of Starbucks’ revenue comes from customers who visit their stores an average of 18 times a month.
This Starbucks example also reminds us that when you have created a desirable customer experience, you can also charge a premium price for your product!
No one is going to argue that a better bottom line is a powerful motivator. (Note: Their data was drawn prior to the economic crunch we’re in the middle of.)
But, I would argue that ROI is just one of many ways to measure the value.
Here are some other valuations you need to consider:
- Employee retention.
- Customer retention.
- More of word of mouth. (Which is the most effective marketing tool out there.)
- Fewer surprises. When you’ve planned the customer experience, you can anticipate problems before they sneak up on you.
And that’s probably just the tip of the iceberg. So why don’t more businesses really do it well?
Building great consumer experiences is a complex undertaking involving strategy, integration of technology, orchestrating business models, brand management, and CEO commitment.
It’s harder than you think — but well worth the effort.