Calculating the ROI of Customer Experience

I wanted to share my thoughts on a subject I think is very relevant for all of us and our clients, especially in the current economic environment. We are all well versed with User Experience (UX) and Customer Experience (CX) and acknowledge its importance, but how do we prove its value ($$$) to an organisation?

There is an inherent problem that leaders of Customer Experience programs face; how do you prove that an investment in UX and CX programs made today will yield a return on investment (ROI)? More specifically – how exactly do you translate and communicate the ROI of Customer Experience?

I wanted to pass on a summary of an article titled ‘How to prove the ROI of Customer Experience’.

The article delves into how and why you should tie customer-focused initiatives to revenue and data and that the ROI is truly compelling when you see it:

• Customer-centric companies are 60% more profitable than companies that don’t focus on customers
• Brands with superior customer experience bring in 570% more revenue than competitors that lag in customer experience
• 84% of companies that work to improve their customer experience report an increase in revenue

These numbers are impressive, but the issue lies with being able to tell a story convincing enough to ensure that investing in CX is much more than “a good idea … eventually”.

Compared to sales and marketing, which can be tied directly to revenue growth, the number of leads converted and customers acquired, CX can sometimes be an afterthought and the reason can be attributed to using anecdotal proof and not actual data to tell this story.

The article then talks about defining the right metrics and properly analysing the data. For example, apply a metric to key points in your customer’s journey e.g. either a profitability indicator or an efficiency indicator, to demonstrate the ROI of CX.

Prevent Future Issues by having:

1. Customers tell you what they want, so you can build it for them (saving huge on wasted resources building things nobody wants); and
2. Feedback loops between customer support and digital teams so that you are fixing issues that are annoying customers


Build Long-term Customers by:

1. Knowing how much each customer is worth to you; Customer Lifetime Value (CLV) which connects a dollar amount to each person of how much they will bring in (revenue)
2. Knowing how loyal each person is (simple customer survey of how likely they are to make a return purchase or refer a family member or friend)


This all leads to understanding your customer better, which drives personalisation, which (when done right) can deliver 5 to 8 times the ROI and lift sales by 10% or more (according to McKinsey).

The article concludes with a practical list of strategies to prove and communicate the value of CX to gain funding:

• Lead with the financial benefit to the company; people tend to focus on the first number you present – so present the savings & earnings of your CX program before the cost
• Show benefit over time – it is important to show that the return will keep coming for years to come
• Be clear and concise – show what you want to do, how much it will save and/or earn, and the cost; in a one-sentence business case (McKinsey)
• Yes detail money, but also present a timeline as you need to detail the urgency required (e.g. how much money is the company losing each month on negative support calls and lost sales).


Ultimately, to keep funding and gain future support for new programs, leaders must be able to link customer-focused initiatives to financial metrics.

Remember, there is no such thing as standing still; to do little or nothing relative to the competition is to fall further behind. Thus digital investment is also about loss avoidance.

Reference –

Until next time,
Tony – Lead Experience Strategist

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