Returning To Forrester

Paul Hagen

I’m delighted to return to Forrester and its Customer Experience team after eight years of running my own business and technology strategy consulting practice.  

I’m returning to the same group in which I worked before with Harley Manning and his team. It was in that group that I helped develop and implement Forrester’s Web Site Usability methodology, wrote reports like “Must Search Stink?” and “Smart Personalization,” promoted the use of customer data intelligence and CRM systems to drive proactive interactions that I called “Tier Zero Customer Service,” and reported on the uses of early community-based tools for customer service (today it's "social CRM").

A frequent question that I've been asked in the scores of phone calls over the past several weeks since my return has been: What are you going to cover? The short term answer is primarily four topic areas: 

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CxPi vs. Stock Performance

Harley Manning

We recently posted the results of a Watermark Consulting study that showed a correlation between Forrester’s Customer Experience Index (CxPi) rankings and stock market performance.

We asked our researcher Andrew McInnes to run the numbers again and see whether they held up to close scrutiny. Here’s what he did:

  • Reviewed the 2007 CxPi rankings.
  • Identified the 10 highest-ranked public companies (CXP Leaders) and the 10 lowest-ranked public companies (CXP Laggards). 
  • Calculated the average annual total returns of the Leader group and the Laggard group
  • Compared the results for each group to the  S&P 500 index for years 2007 – 2009.


Andrew’s  analysis confirmed Watermark’s findings: The customer experience leaders consistently outperformed the other two groups; the customer experience laggards consistently fell short.

Does this prove that good customer experience leads to good stock performance (or that the CxPi picks hot stocks)? No. Stock performance relies on many factors, including human irrationality.

However, the correlation does highlight a relationship we all intuitively understand: Companies that treat their customers well perform better than companies that don’t.  (And it sure looks like treating your customers poorly is a very bad idea, especially in an economic downturn.)

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