In today's fiercely competitive business landscape, customer experience (CX) has emerged as a key differentiator for companies looking to stand out from the crowd. However, many businesses struggle to measure their CX initiatives' return on investment (ROI), leaving them unsure whether their efforts are truly paying off.
To shed some light on this topic, we've gathered insights from 20 CX leaders who have shared their best advice and stories on how they measure the ROI of CX. Whether you're a seasoned CX pro or just starting out, these tips are sure to help you drive better business outcomes through customer-centricity.
In this article, I will share 10 expert success stories on the ROI of CX, abstracted from the detailed study of the ROI of CX by Clootrack where 20 CX leaders shared their success stories.
So, let's dive in!
1. Measuring Returns of Investments in Technology
Julie Ryan, Director, Patient Engagement & Customer Solutions at The Janssen Pharmaceutical Companies of Johnson & Johnson, says they have been working on delivering omnichannel solutions through investments in technology. In order to ensure successful technology deployments, they believed in taking a holistic approach. This includes standardizing processes, training and developing employee skills, and ensuring consistent data.
She says how they measured the ROI of customer experience initiatives -
“Our CX Program includes/requires quantification of the value of each initiative. There are three key business outcomes that we measure:
1) Growth of the Business (upsell, cross-sell, etc.);
2) Retention (loyalty, loss prevention, cost avoidance); and
3) Efficiency (savings, cost-to-serve, etc.)”
“Our CX Program includes/requires quantification of the value of each initiative. There are three key business outcomes that we measure:
1) Growth of the Business (upsell, cross-sell, etc.);
2) Retention (loyalty, loss prevention, cost avoidance); and
3) Efficiency (savings, cost-to-serve, etc.)”
2. Calculating the Outcomes of CX Optimization and Consistency Across All Channels
David Banks, Senior Director of Marketing at Bell Flavors & Fragrances, said his company had faced the challenge of maintaining a consistent look and feel across different devices and did not have a platform that optimizes the experience across different platforms. The company's goal is to ensure that the customer experience is continuous, whether they use an app or a laptop. A seamless and connected experience across devices can make the customer experience more enjoyable, and the company is focused on achieving this goal.
So they made adjustments to the formatting and worked with vendors to implement changes to the templates they had created. Check how he measured the success of this initiative.
"With the editions of the changes, we were able to increase our engagement by 20% overall. This was calculated based upon the click-through and view times that perspective customers had as they engaged with the platform,"
3. Calculating the Success of a Revamped Holistic Customer Experience
DeAnn Campbell, Retail Strategy & Insights at AAG Consulting | Armstrong Alliance Group, had to go through a big CX challenge, and she says,
"We discovered a major disconnect that was hampering sales. Customers would be caught up in the fantasy and delight of the performance, then be dumped out into a subpar retail experience that was out of sync with the magic of the show - and the price point of tickets."
From the customer's perspective, they may initially be thrilled with certain aspects of their purchase experience, but other factors can negatively impact their overall satisfaction.
DeAnn recognized these challenges and wanted to create a solution that would enhance the overall customer experience. They developed new retail fixtures and lighting options that were creative and visually appealing, helping customers maintain the sense of magic and wonder they felt during the show. This was a great solution!
DeAnn says,
"Our solution resulted in an immediate 30% lift in sales and a 58% increase in purchasing higher ticket items. And these results held steady throughout the entire run of the show and have become their retail standard."
4. Assessing the Result of Increased Search Agility and Boosted SEO
Ivette Godinez, Head of Category Management & Shopper insights & e-Catman, at Grupo AlEn, shared her company's eCommerce website had a problem where customers had a hard time finding the products they were looking for. This led to frustration and ultimately caused many customers to abandon their shopping carts before completing their purchases.
By making the search process more agile and SEO more efficient, customers are more likely to find what they need and complete their purchases, resulting in a better overall shopping experience.
"3 months after migrating to the new taxonomy, we saw a 50% increase in the mix of participation in the laundry care and cleaning categories and improved SEO positioning on Google in 3 months.
Building a customer-centric product category page helped the company to fasten the search process as it not only helps the customer understand your categories, it also helps the search engines key in on them."
5. Measuring the Success of Unified Customer Feedback Analysis Initiative
Hemanth Tothod, a former Business Head at Niyo Solutions, faced a significant challenge in his organization. He said,
“Generating actionable insights from the customer interactions at various touch points such as Sales, Social media, Customer service, NPS, etc. is a challenge.”
To overcome this, he introduced a system to consolidate various customer touchpoints using a CRM tool. He also established a regular cadence with the Product team to discuss customer feedback based on CSAT, NPS, and App ratings. As a result, the NPS increased by 15-20 points, and CSAT improved by 10-15%.
He shared how they calculated the ROI of CX initiative -
“ROI is calculated as
{(Benefits - Cost of Investments)/Cost of Investments}*100.
For example, benefits can be calculated as Revenue earned from customers. The cost of investments is co-related to the cost of Investments on CX function in managing these customers.”
6. Calculating the Outcome of a VoC Program
Dave Seaton, Founder & Principal Consultant at Seaton CX, found that while his client company's KPIs were good, the actual customer support experience was not aligned with customer values. KPIs like revenue, growth, and sales measure how customers benefit the company, but to become customer-centric, companies must also measure how the company benefits its customers.
The company's customer support metrics were rated highly, but customers were still leaving due to dissatisfaction with service and support.
He says,
"We performed rapid VOC research to understand what customers valued in the support experience, using qualitative interviews to identify customer values and validating the results with a quant study. Based on the findings, we re-prioritized the product roadmap and re-designed the service experience."
They achieved a 66% decrease in customer churn and an increase of $991K in Annual Recurring Revenue (ARR). They measured the ROI of their customer experience projects by typical metrics such as reduced churn, increased share-of-wallet, or changes in customer behavior that make it less costly to serve them.
7. Finding the Returns of Marketing Initiatives
Kaela Kucera, E-commerce Manager at Pierce Manufacturing, observed a challenge related to their company's soft loyalty mobile club program. The company's sign-up experience for the program was not optimized, which led to a decrease in the number of people signing up. The company wanted to increase sign-ups, conversion on deals, and the average basket size for their loyalty program.
Kaela says,
"We initiated a plethora of new marketing initiatives such as the In-store signage, Direct mail advertising, Website digital advertising, and Newspaper ads to drive messaging on the value and benefits of the program."
Kaela and her team were able to achieve some significant results on their CX projects. The team observed a 5% increase in monthly sign-ups compared to the previous months. Additionally, they noticed that the conversion rate for deals went up from 1% to 4%, indicating a significant improvement.
To measure the ROI of customer experience projects, Kaela and her team looked at the monthly and yearly statistics, depending on the duration of the projects.
8. The Impact on ROI of Hyper Personalized Experiences
Shweta Srivastava, the Chief Customer Experience Officer at Tata CLiQ, stated that providing hyper-personalization to millions of customers was a big challenge. The company extensively used data analytics and technology to overcome this challenge. Based on data analytics and advanced technology, they tailored unique recommendations, marketing campaigns, communication, and experiences for each unique group of customers.
This led to an NPS of specific customer cohorts jumping to 88+ levels and a significant improvement in repeat purchase rate. To assess the success of these initiatives,
“We identified a set of metrics (called Success Measure) that should directly get impacted post implementation of CX improvement projects.
The metrics are across 3 dimensions:
Efficiency
Effectiveness
Experience.
Upon project completion, this set of metrics is tracked for pre-post analysis.”
9. Impact of Reducing Cost Per Cancellation
Brett Frazer, the former Vice President of Customer Service at Sunbasket, was tasked with finding a solution to the problem of the meal cancellation process, which was complicated and resulted in negative feedback from customers. This led to a decrease in NPS and an increase in cost. Additionally, over 50% of customers who were "Saved" never purchased another full-priced Sunbasket meal.
To solve the problem, the company created a self-service cancellation process with targeted "save" opportunities.
The results were impressive. The company saw a 73% reduction in cost per cancellation, from $15 to $4, and a 45% reduction in total revenue discount offers.
He says about how did they measure it -
"Identified the outcome metrics that expect to be impacted if they do not directly include a financial metric (cost, revenue), then determine the correlation between that experience outcome and either cost reduction or revenue increase.
- Reduced Costs: ROI was primarily measured by a reduction in customer service costs to handle the total volume.
- Positive impact on profitability: Reduced the number of discounted boxes that were given in unsuccessful "save" situations.
- Revenue: Recorded and measured the higher resubscribe rates.
Once you have the measurements established, ensure that all cost factors of implementing the solution are accounted for (including labor hours, technology fees, ongoing costs, etc.).
Determine the offsetting cost reduction/ revenue attainment that needs to be achieved for the ROI calculation and a timeframe within to reach that goal.”
10. Evaluating the Impact of an Insights Analysis Initiative
Sean Crichton-Browne, Head of Global Partnerships & Customer Engagement, MarketCulture Strategies, shared that it's important to gain buy-in from the client company's executives to launch a successful CX improvement strategy. The biggest challenge is convincing leadership that the proposed idea is worth investing in.
Sean says,
"We developed the Market Responsiveness Index (MRI) to provide insight to leadership on the strengths and weaknesses of the employees in the company being able to deliver a superior customer experience."
The MRI assesses the customer culture of an organization and provides feedback to leadership through a benchmark score and open-ended comments. This feedback helps leadership understand their strengths and weaknesses across 8 key business practice disciplines and enables buy-in and understanding.
"The result of using the MRI was a 5% increase in NPS score over a 2-year period for a large enterprise client. There was also a major change in employee retention and engagement, and the NPS score was proven to have a direct link to overall business performance."
The main metrics he used to measure the ROI of CX projects are customer retention, gross profit, revenue, and employee retention.
Final Thought
Measuring the ROI of CX can be challenging, but with the right strategies, success stories, and advice from CX leaders, it becomes much more manageable. From focusing on the right metrics to embracing technology and automation to building a customer-centric culture, the insights shared by these experts provide a wealth of valuable guidance for any organization looking to improve its CX and see a positive impact on its bottom line.
So take heed of these 10 pieces of stories and start measuring your ROI of customer experience today!
Need to learn from more CX experts?
Download the full CX ROI study report to explore all 20 expert success stories in detail.