Magazine article CRM Magazine

To Grow Revenue, Increase CX Scores: Study Finds a Distinct Link between CX Index Scores and Revenue Potential

Magazine article CRM Magazine

To Grow Revenue, Increase CX Scores: Study Finds a Distinct Link between CX Index Scores and Revenue Potential

Article excerpt

Forrester Research recently uncovered a direct connection between the quality of customer experience (CX) that businesses provide and their revenue growth.

The research, which applies Forrester's CX Index data to model how CX improvements drive revenue growth across 13 industries, found that for banks, a one-point improvement in CX Index scores could result in $124 million in increased revenue. For mass market auto manufacturers, which derive higher per-unit revenue due to the high cost of a single vehicle, a one-point improvement in their CX Index score could result in $873 million in increased revenue. Even the credit card industry, which has the lowest revenue potential related to CX Index scores, had an advocacy revenue potential that is five times greater than other industries, accounting for 15 percent of companies' total CX-driven revenue potential.

Forrester's research also found three distinct patterns in the relationship between revenue potential and CX quality. The first occurs when revenue potential and CX quality exhibit a sustained correlation. In this scenario, each one-point CX improvement yields the same increase in revenue. Industries that exhibit this linear relationship include TV and Internet service providers, big-box retailers, rental car providers, and auto and home insurance providers.

According to the study, there is a business benefit to improving all experiences in these industries, whether those improvements are focused on fixing problems to raise low scores or investing in innovation to raise high scores even higher.

The second pattern is when increases in revenue potential from improved CX get progressively smaller. For example, wireless service providers see the effect of improved customer experiences on revenue taper off strongly at the higher end of their CX Index score range; airlines and credit card providers see similar, though not quite as dramatic, diminished returns. …

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