Customer Experience Improvements Can Be Worth Billions — Yeah, “Billions” With A “B”

Forrester just published Megan Burns’ new report that models the business impact of an improved customer experience. I’m proud of this report because it:

  • Quantifies the correlation between a rise in a company’s Customer Experience Index score and the corresponding increase in three loyalty metrics that every company cares about: purchase intent, likelihood to switch business to a competitor, and likelihood to recommend.
  • Makes conservative but realistic assumptions about the business fundamentals of companies in 13 different industries.
  • Produces eyepopping projections of increased annual revenue as a result of realistically attainable improvements in customer experience — by industry.
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Customer Experience Defined

If you’re reading this post, you’re someone who cares about customer experience. You might even be one of the professionals who works in the field of customer experience full-time.

So I’m going to go out on a limb here and guess that you occasionally get the question, “What is ‘customer experience?’”

Now maybe when you’re asked that question, it isn’t phrased so directly (or politely). For example, I get asked, “Isn’t customer experience just marketing?” And, “How is customer experience different from customer service?” But the bottom line is that people are looking for a definition that’s crisp, useful, and distinct from the definitions of other things that companies do. They are right and reasonable to ask for this — but collectively those of us who work to improve customer experience have failed to answer them.

I mean no offense to the many people out there who have tried to define “customer experience.” I’ve read many of the attempts that are out there, and the ones I’ve seen tend to be longer and more convoluted than necessary.

Not that customer experience is an easy concept to define. The customer experience team at Forrester has been debating the definition of customer experience for a while now, and it took us until recently to reach consensus. We now define customer experience as:

“How customers perceive their interactions with your company.”

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