Companies that take customer experience seriously are those that are actively trying to engage their customers. They are trying to interact with them to build a sense of friendship and loyalty to the brand. Some areas or departments such as UX or service support understand the value of this well. Sometimes for more senior team members this can sometimes be hard to comprehend and for those advocating customer experience difficult to elucidate to them the value of investing.

When customers experience your processes, polices and systems they get a feel for what and how your company operates and treats its customers. This is important as a good experience can help increase your reputation, customer value and revenue, when a bad experience can have a negative effect on your brand, products, services and revenue.

Article Diagram 1_Customer-Desired-Experience

Most of us have experience the a poor rhetoric of customer experience, poorly communicated understandings of what the journey is or what value or benefit is being added. An example of bad customer experience is being sat on the end of a phone going round in circles while your passed from one person to the next who doesn’t seem to be any more able than the last to answer your question. I call this the customer experience spiral.

So how do we make sure that our customers don’t have a poor customer experience and make sure we have a customer journey that puts the customers experience at the top of the list of priorities?

Firstly we need to get buy in from the key stakeholders. Most of these people will be senior individuals within your business. This can be achieved by quantifying the impact of customer experience. Peter Kriss published in the Harvord Business Review his finding on how much value good customer experience can add.

Peter was able to get access to two $1B+ businesses customer experience and revenue data. One was transnational and the other relationship based subscription business.

In the transnational business they found that customers who had the best experiences in the past spent 140% more compared to those who had a poor experience


Peter also found that in the subscription business there were also impressive results. The subscriptions business is interested in customer loyalty, finding in the study showed that those customers that had a poor experience only had a 43% chance of renewing their subscription. Compare this to the customers who had a good experience which had a 74% chance of remaining a customer and renewing their subscription.customermembership

The difference on average found by Peter between the good experience and the bad was that those customers that had a bad experience tended to only stay for just over a year. Those with a good experience tended to stay on average for six years.

There are clearly major differences in the value of customers that have had a good customer experience to those that have had a bad one.

Any business can carry out this exercise. Look at your customer feedback and link that back to customers history. Then look at the difference between those customers that are having a positive and negative experience or even carry out a survey using a 1-10 satisfaction scale. Look at how long customers have been with your business and use these to build a picture of the customer experience landscape.

You can then look at your customers and see how many customers sit in the upper part or the lower part of customer value. This should give you enough insight to prove whether those that are experiencing good customer experiences are more valuable to the business.

The next challenge is to analyse those that have had a bad experience and try and build a plan to improve the process, policies and systems to make sure that those customers next time experience that excellent level of service which then has an impact on your customer value and their experience.

Peter Kriss HBR publication

3 thoughts on “Quantifying the value of Customer Experience and how to get buy in.

    • No problem. I’m glad you found the content of value. Customers are the heart of any business the more we under stand them , their experience and their journey the easy it is to make sure that it’s the right one.


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s