The XM Institute recently published a new report, The ROI of Customer Experience, 2019. It examines the connection between customer experience and loyalty across 20 U.S. consumer industries: Airlines, auto dealers, banks, car rentals, computers, credit cards, fast food, groceries, health insurance, hotels, insurance, investments, Internet/TV service, parcel services, retailers, software, streaming media, TVs & appliances, utilities, and wireless.
To understand the relationship between CX and loyalty, we examined feedback from 10,000 U.S. consumers describing both their experiences with and their loyalty to different companies. The CX scores used in this model come from the 2019 XMI Customer Ratings - Overall (Customer Ratings), which evaluated 294 companies across three areas of the customer experience — success, effort, and emotion.
Here’s one of the 11 figures in the report, showing the correlation between CX and Net Promoter Score (NPS):
The research shows that CX strongly influences how likely customers are to:
Recommend a company. Ninety-five percent of consumers who rate a company’s CX as “very good” are likely to recommend the company, compared to the only 15% of those who rate a company’s CX as “very poor.”
Repurchase from a company. Ninety-four percent of the consumers who give a company a “very good” CX rating report being “very likely” to repurchase from that company, while only 18% of those who gave a company a “very poor” CX rating say the same.
Trust a company. While 90% of the consumers who gave a company a “very good” CX rating say they are “very likely” to trust that company, only 15% of those who gave a company a “very poor” CX rating say the same.
Forgive a company. Seventy-five percent of consumers are “very likely” to forgive a company for a mistake if they think it delivers “very good” CX, whereas only 14% of consumers are “very likely” to forgive a company if they think it delivers “very poor” CX.
Try a new offering right away. Of the consumers who gave a company a “very good” CX rating, 64% of them report being “very likely” to try that company’s new product or service immediately after it’s introduced. Meanwhile, only 12% of consumers who gave a company a “very poor” CX rating feel the same.
The report also shows that:
Small changes count. Even modest improvements in CX performance corresponds to improvements in consumer loyalty. In particular, likelihood to recommend a company and intention to make future purchases can be significantly impacted by even modest improvements in CX. On average across the 20 industries, modest improvements in CX performance correspond to a 34-percentage-point increase in future purchase intentions.
Emotion really, really matters. Emotion is the component of the customer experience that has the biggest impact on consumer loyalty behavior. Consumers who gave a high rating in emotion to a company are more likely to purchase more from, recommend, forgive, try, and trust that company than consumers with a high rating in success or effort.
Grocery stores have the highest potential. While all industries see improvements in consumer loyalty by increasing CX quality, Grocery Stores see the largest difference in when examining modest changes in CX. Across the five loyalty metrics, Grocery stores have on average a 33-percentage-point difference in loyalty likelihood between consumers giving “good” and “bad” CX ratings.
There’s a lot more detail in the research, including industry-specific data, so make sure to download the free report, ROI of Customer Experience, 2019.
The original article was posted here.