Customer feedback has immense value.
We’ve been saying that (and, might I add, proving it) for years. And its immense value is only ever realized once insights have been extracted and strategies have been executed to create a powerful customer experience. Anyone who’s worked with Mindshare should recognize the process I just described.
The service we provide our clients has worked well in the past, it’s working wonderfully now, and, according to the numbers, it will work even better in the future. That’s right, some new big numbers have come across my desk in the recent weeks, and it’s sharing time!
In a report titled “The Business Impact Of Customer Experience, 2012,” Forrester writer Megan Burns presents extensive research and the latest findings to reaffirm and quantify the revenue advantages that a company like Mindshare Technologies can offer today’s service companies.*
As usual, Forrester is following all the best practices you’ve come to expect from them, using a sample size of nearly eight thousand U.S. consumers and accounting for gaps between the number of people who say they will do something and the number of people who actually do. In short, the numbers I’m about to share represent a very realistic representation of the full market opportunity for companies who employ a dedicated Voice of the Customer (VoC) service provider.
The report presents detailed portrayals of 12 different industries, including airlines, retailers, TV service providers, hotels, banks, wireless service providers, and medical insurers. Using Forrester’s own customer experience index (CXi), statistics bear out the fact that U.S. businesses maintaining above-average CXi scores make millions, if not billions, more each year than businesses maintaining below-average CXi scores.
In the report, the revenue advantages enjoyed by these top companies are attributed to three areas strongly tied to the customer experience and customer loyalty (this is where the money is):
1. Additional purchases
Forrester found a high correlation between consumers’ CXi rating of a company and their willingness to buy from the company again. Similarly, they found an inverse correlation between a brand’s CXi score and customers’ likelihood to switch business away, which means that the better the customers’ experiences, the lower the number of customers looking to defect.
2. Churn reduction
Forrester models show that revenue lost by low CXi, and retained by good CXi, can reach up to $825 million for hotels, where customer volume is extremely high.
3. Word of mouth
Forrester found that firms can see incremental sales from positive word of mouth that range from $2 million for retailers to $65 million for airlines (where a variety of social media sites, such as Flyertalk.com, help create extensive word of mouth).
It’s also important to remember that the Forrester models in this report only account for revenues gained from having a better customer experience. As shown in previous Forrester reports, other significant bottom-line gains can be achieved through improved operations that save millions in excess sales and service costs.
For companies to build a top service experience in their industry—and to claim the available revenue—they must be in tune with their existing customers, and aware of their operations at every level.
Mindshare Technologies continues to partner with companies who understand these principles, and we’re happy to see real revenues resulting from increased attentiveness to customers. Across the business world, good behavior is being reinforced and rewarded. Hooray for that!
*For a full copy of the report, visit the Forrester site.