Customer experience is highly correlated to loyalty in both the U.S. and the UK, according to a new research report published by Temkin Group, The ROI of Customer Experience, uncovers the connection between customer experience and loyalty for 272 large companies.
Temkin Group’s analysis shows that a $1 billion U.S. company can generate between $141 million and $382 million over three years if they make a modest improvement in the customer experience they deliver. Likewise, a 1 billion GBP UK company can generate between 145 million GBP and 263 million GBP.
The research report identifies the connection between customer experience and three areas of loyalty across multiple industries.
In the U.S., where Temkin Group analyzed 18 industries, fast food chains, retailers, and supermarket chainsexperience the largest gains from customer experience improvements. In the UK, where Temkin Group analyzed six industries, the largest gainers are retailers and credit card issuers.
The research compared customer experience leaders, those companies that significantly outperform their industry peers, with customer experience laggards that have poor customer experience ratings.
Customer experience leaders enjoy an advantage
Companies that are customer experience leaders in both countries enjoy at least a 16 percentage point advantage over customer experience laggards in key loyalty areas like the willingness of consumers to buy more products from them, the reluctance of consumers to switch business away from them, and the likelihood of consumers to recommend them to friends and colleagues.
“Our research quantifies what many people intuitively understand: customers are more loyal to companies that treat them well,” states Bruce Temkin, author of the report and managing partner of Temkin Group.
In the U.S., the research uses a survey of 10,000 consumers to examine loyalty to 206 companies across 18 industries: Airlines, appliance makers, auto dealers, banks, car rental agencies, computer makers, credit card issuers, fast food chains, grocery chains, health plans, hotel chains, insurance carriers, Internet service providers, investment firms, parcel delivery services, retailers, TV service providers, and wireless carriers. In the UK, the research uses a survey of 3,000 consumers to examine loyalty to 66 companies across six industries: Banks, computer makers, credit card issuers, grocery chains, insurance carriers, and wireless carriers.