April 3, 2013
/PRNewswire/ -- Companies that deliver a great customer experience are rewarded – by Main Street
That's the conclusion from customer experience advisory firm
, based on its 6-year analysis of stock market returns for companies that lead in customer experience versus those that lag.
"From 2007 to 2012, customer experience leaders outperformed the broader market, generating a total return that was three times higher on average than the S&P 500," explained
, Founder of Watermark Consulting.
The analysis, which focused on model portfolios of the ten highest ("Leaders") and ten lowest ("Laggards") ranked public companies in Forrester Research's annual Customer Experience Index study, provides a compelling testament to the business value of a great customer experience.
The customer experience Leaders handily beat the S&P 500 market index, while the Laggards trailed it by a wide margin:
As Picoult put it, "Many business leaders pay lip service to customer experience excellence, reflecting a deep-seated skepticism about the value of such differentiation. The benefits are often viewed as soft and difficult to quantify, so companies continue to subject consumers to complicated sales processes, cluttered websites, dizzying 800-line menus, long wait times, incompetent customer service, unintelligible correspondence and products that are just plain difficult to use."
This analysis – covering over
half a decade
of performance – suggests that there are very real benefits to delivering a positive, memorable and differentiated customer experience. Companies that do this well enjoy stronger customer retention, greater wallet share, lower price sensitivity, better word-of-mouth and a more competitive cost structure.
"Whether you're a public or a private company, the message here is clear," noted Picoult. "A great customer experience pays off, paving the way for higher revenues, lower operating expenses and better overall financial performance."