{"id":115487,"date":"2020-12-27T05:29:07","date_gmt":"2020-12-27T13:29:07","guid":{"rendered":"https:\/\/www.questionpro.com\/blog\/?p=115487"},"modified":"2024-05-23T22:50:39","modified_gmt":"2024-05-24T05:50:39","slug":"improve-the-roi-of-customer-experience-program","status":"publish","type":"post","link":"https:\/\/www.questionpro.com\/blog\/improve-the-roi-of-customer-experience-program\/","title":{"rendered":"How to improve the ROI of your customer experience program"},"content":{"rendered":"\n<p><span style=\"font-weight: 400;\">Customer Experience hasn\u2019t been in the spotlight for as long as sales or marketing, and curiously enough, things tend to get very anecdotal while we discuss the impact of CX!&nbsp;<\/span><\/p>\n\n\n\n<p><span style=\"font-weight: 400;\">Blake Morgan, author and CX futurist, describes <\/span><a href=\"https:\/\/www.forbes.com\/sites\/blakemorgan\/2020\/09\/07\/how-to-prove-the-roi-of-customer-experience\/?sh=4bf5fe7167f4\"><span style=\"font-weight: 400;\">customer experience as the \u2018softer part of the business<\/span><\/a><span style=\"font-weight: 400;\">\u2019. Measuring the impact of a sales program is rather obvious as it is directly tied to revenue growth, and marketing campaigns are linked to lead generation. But the ROI of customer experience is where things get grey. What are the metrics of CX? How do you convince the top-level that a CX program delivered? What exactly is the ROI of a CX program?&nbsp;<\/span><\/p>\n\n\n\n<p class=\"has-text-align-center\"><em><strong>LEARN ABOUT:<\/strong> <a href=\"https:\/\/www.questionpro.com\/blog\/time-to-value\/\">Time to Value<\/a><\/em><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><b>Why is it important to measure the ROI of a CX program?&nbsp;<\/b><\/h2>\n\n\n\n<p><span style=\"font-weight: 400;\">Great customer experience is priceless, we can all agree. However, for a CX program to find funding and gain future support from executives, it is vital for the Customer Experience prophets to submit proof. Hence, ROI!&nbsp;<\/span><\/p>\n\n\n\n<p><span style=\"font-weight: 400;\">Forrester reveals that CEOs care about these three verticals the most: revenue growth, profit growth, and stock price. Any program that doesn\u2019t contribute to these core goals immediately, is going to be on the chopping block soon- especially given the current economic and social uncertainties.&nbsp;<\/span><\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter\"><img decoding=\"async\" src=\"https:\/\/www.questionpro.com\/blog\/wp-content\/uploads\/2020\/12\/ROI-of-CX-program-2-450x269.jpg\" alt=\"Measuring ROI of CX\" class=\"wp-image-115531\"\/><\/figure><\/div>\n\n\n<p><span style=\"font-weight: 400;\">We already have studies reporting that companies providing excellent customer experience enjoy<\/span><a href=\"https:\/\/go.forrester.com\/blogs\/16-06-21-customer_experience_drives_revenue_growth_2016\/\"><span style=\"font-weight: 400;\"> five times <\/span><\/a><span style=\"font-weight: 400;\">more revenue growth compared to companies delivering poor customer experience. Stating the obvious, a successful CX program means more revenue, profit, and a very strong return of investment.&nbsp;<\/span><\/p>\n\n\n\n\t<div class=\"banner-section wf-section\" lang=\"\" >\n\t\t<div class=\"right-column-container\">\n\t\t\t<div class=\"bannerbg white\">\n\t\t\t\t<span class=\"h1-2\">Create memorable experiences based on real-time data, insights and advanced analysis.<\/span>\n\t\t\t\t<a href=\"#userliteForm\" data-toggle=\"modal\" class=\"button w-button\">Request Demo<\/a>\n\t\t\t<\/div>\n\t\t<\/div>\n\t<\/div>\n\t<div class=\"userlite-modal modal fade\" id=\"userliteForm\" tabindex=\"-1\" role=\"dialog\" style=\"display: none;\">\n\t\t<div class=\"modal-dialog\" role=\"document\">\n\t\t\t<div class=\"modal-content\" role=\"document\">\n\t\t\t\t<div class=\"modal-body\">\n\t\t\t\t\t<div class=\"modal-header\">\n\t\t\t\t\t\t<button type=\"button\" class=\"close\" data-dismiss=\"modal\" aria-label=\"Close\">\n\t\t\t\t\t\t\t<i class=\"material-icons\">close<\/i>\n\t\t\t\t\t\t<\/button>\n\t\t\t\t\t<\/div>\n\t\t\t\t\t<div class=\"contact-us-form-wrapper contact-box\">\n\t\t\t\t\t\t<div class=\"userlite-form-wrapper\">\n\t\t\t\t\t\t\t<iframe src=\"https:\/\/www.questionpro.com\/userlite-form-blog-en.html?product=Surveys&amp;referralurl=https:\/\/www.questionpro.com\/blog\/wp-json\/wp\/v2\/posts\/115487&amp;lang=en&amp;cat=klantervaring-nl\" style=\"display: block;\" ><\/iframe>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<div class=\"demo-form-wrapper success-message-div\" style=\"display:none\">\n\t\t\t\t\t\t\t<p class=\"success-message-para\"><\/p>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t<\/div>\n\t\t<\/div>\n\t<\/div>\n\n\n\n<h3 class=\"wp-block-heading\"><b>What can you do to improve the ROI of your customer experience program?<\/b><\/h3>\n\n\n\n<h4 class=\"wp-block-heading\"><b>1. Make a habit of measuring the CX ROI&nbsp;<\/b><\/h4>\n\n\n\n<p><span style=\"font-weight: 400;\">\u201cIf you can&#8217;t measure it, you can&#8217;t improve it\u201d, Peter Drucker famously said. Like everything else, you cannot improve on something without knowing where you stand first.&nbsp;<\/span><\/p>\n\n\n\n<p><span style=\"font-weight: 400;\">Customer experience management is rooted in research and metrics like <a href=\"https:\/\/www.questionpro.com\/blog\/types-of-customer-experience-management-surveys\/\">Net Promoter Score (NPS), Customer Effort Score (CES), and Customer Satisfaction Score (CSAT)<\/a> are flexible scores to measure customer satisfaction, check the quality of CX, and benchmark your performance against that of your competitors or industry standards.&nbsp;<\/span><\/p>\n\n\n\n<p><span style=\"font-weight: 400;\">However, while these metrics shed light on the state of your customer experience program, they don&#8217;t necessarily tell you the impact that each one has on your business. Does a higher NPS result in a lower churn rate? How alarming is a declining CES to your business?&nbsp;<\/span><\/p>\n\n\n\n<p><span style=\"font-weight: 400;\">There is another list of metrics that are particularly impactful when you wish to measure the ROI of your customer experience program. We\u2019d advise you to find the ones that make the most sense to your kind of business and routinely check them because, how else will you know your progress?&nbsp;<\/span><b><\/b><\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter\"><img decoding=\"async\" src=\"https:\/\/www.questionpro.com\/blog\/wp-content\/uploads\/2020\/12\/ROI-of-CX-program-300x180.jpg\" alt=\"roi of cx and how to improve it\" class=\"wp-image-115545\"\/><\/figure><\/div>\n\n\n<ul>\n<li><b>Customer Lifetime Value (CLV)<\/b><\/li>\n<\/ul>\n\n\n\n<p><span style=\"font-weight: 400;\">Customer Lifetime Value is a metric that indicates the total revenue a business can reasonably expect from a single customer account. It projects how valuable a customer is to your company, not just on a purchase-by-purchase basis but across the whole relationship. CLV is calculated by multiplying customer value by average customer lifespan.<\/span><\/p>\n\n\n\n<p><span style=\"font-weight: 400;\">CLV proves the value of increasing a relationship with each customer. Measuring customer loyalty can be as simple as a survey that asks customers how likely they are to make a return purchase or refer the company to friends. While a customer with a high CLV and a high degree of loyalty directly highlight long-term financial gains for the company, the key is to invest in building and strengthening that relationship.&nbsp;&nbsp;&nbsp;<\/span><\/p>\n\n\n\n<ul>\n<li><b>Churn Rate<\/b><\/li>\n<\/ul>\n\n\n\n<p><span style=\"font-weight: 400;\">Churn rate is the rather unpleasant rate at which customers stop doing business with your company. Your churn rate represents the percentage of customers that will cancel or leave your business within a given period. Take the number of customers that you lost last quarter and divide that by the number of customers that you started with last quarter. The resulting percentage is your churn rate.<\/span><\/p>\n\n\n\n<ul>\n<li><b>Cost of Support<\/b><\/li>\n<\/ul>\n\n\n\n<p><span style=\"font-weight: 400;\">Support costs are expenses that don&#8217;t directly relate to production or manufacturing. Factors like quality assurance and customer service programs fall under here. These costs should be compared closely to your other <a href=\"https:\/\/www.questionpro.com\/blog\/metrics-to-measure-customer-satisfaction\/\">customer satisfaction metrics<\/a> to draw conclusions.<\/span><\/p>\n\n\n\n<ul>\n<li><b>Average Transaction Size<\/b><\/li>\n<\/ul>\n\n\n\n<p><span style=\"font-weight: 400;\">Divide the total revenue acquired during a given time by the total number of sales made during that same period, and you have the size of your average transaction. This gives you an idea of how your customers shop and which products they most prefer.<\/span><\/p>\n\n\n\n<ul>\n<li><b>Average Contract Value<\/b><\/li>\n<\/ul>\n\n\n\n<p><span style=\"font-weight: 400;\">If you&#8217;re a subscription-based company, then average contract value will make more sense to you than the average transaction size. It\u2019s similarly calculated by dividing the total value of contacts you&#8217;ve signed during a period by the total number of new customers you&#8217;ve acquired.<\/span><\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><b>2. Put your customer journey map to good use<\/b><\/h4>\n\n\n\n<p><span style=\"font-weight: 400;\">Your <a class=\"wpil_keyword_link\" href=\"https:\/\/www.questionpro.com\/blog\/customer-journey-mapping\/\"   title=\"customer journey map\" data-wpil-keyword-link=\"linked\"  data-wpil-monitor-id=\"29\">customer journey map<\/a> is a gold mine of insights! <\/span><a href=\"https:\/\/www.questionpro.com\/blog\/how-to-create-a-customer-journey-map\/\"><span style=\"font-weight: 400;\">Creating a customer journey map<\/span><\/a><span style=\"font-weight: 400;\"> is a unique opportunity for businesses to get into their customer\u2019s heads and gain valuable insights on how a brand is perceived.<\/span><\/p>\n\n\n\n<p><span style=\"font-weight: 400;\">If you don\u2019t have one already or if you don\u2019t use it enough, you are missing out on an opportunity to understand how to better fulfill customer needs. If I don\u2019t tell this enough, identifying gaps in customer experience leads to fixing it, making the customer stay with you longer, and grow your revenue by leaps. As long as it boils down to revenue growth, your ROI game is strong.<\/span><\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter\"><img decoding=\"async\" src=\"https:\/\/www.questionpro.com\/blog\/wp-content\/uploads\/2020\/12\/ROI-of-CX-program-1-300x180.jpg\" alt=\"roi of customer experience program\" class=\"wp-image-115538\"\/><\/figure><\/div>\n\n\n<h4 class=\"wp-block-heading\"><b>3. Reduce customer churn<\/b><\/h4>\n\n\n\n<p><span style=\"font-weight: 400;\">Customers reward a smooth experience by staying loyal to the brand. This is a direct swell on profitability as retaining customers means reduced defections. It\u2019s business 101- acquiring a new customer costs way more than keeping an existing customer.&nbsp;<\/span><\/p>\n\n\n\n<p><span style=\"font-weight: 400;\">You can easily monitor customer loyalty with a CRM system and measure the value of a CX program in <a href=\"https:\/\/www.questionpro.com\/blog\/customer-churn\/\">reducing customer churn<\/a> and increasing <a href=\"https:\/\/www.questionpro.com\/blog\/retention-rate\/\">retention rates<\/a>.&nbsp;<\/span><\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><b>4. Rebrand your CX program as an expense control mechanism&nbsp;<\/b><\/h4>\n\n\n\n<p><span style=\"font-weight: 400;\">The best thing about a successful CX program is that it is a gift that keeps on giving! Apart from reducing the <a href=\"https:\/\/www.questionpro.com\/blog\/predict-customer-churn\/\">customer churn<\/a> and getting them to stay with the company longer than they otherwise would\u2019ve, a superior customer experience also results in significantly lesser expenses.&nbsp;<\/span><\/p>\n\n\n\n<p><span style=\"font-weight: 400;\">To begin with, satisfied customers tend to have lesser issues with the product\/service and require minimal support. There is also an enormous scope of new business deals with customer referrals. We haven\u2019t even counted all those free advertising, raving customer reviews, and great PR into the mix. Yes, good CX is also about cutting down costs on advertising because we already have the real deal for free!<\/span><\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter\"><img decoding=\"async\" src=\"https:\/\/www.questionpro.com\/blog\/wp-content\/uploads\/2020\/12\/ROI-of-CX-program-3-300x180.jpg\" alt=\"improve roi of customer experience\" class=\"wp-image-115524\"\/><\/figure><\/div>\n\n\n<h4 class=\"wp-block-heading\"><b>5. Cross-sell and upsell the heck out of it<\/b><\/h4>\n\n\n\n<p><span style=\"font-weight: 400;\">While we\u2019ve already discussed how CX programs increase customer retention and convince them to stick around longer, what we haven\u2019t counted is the endless opportunities to upsell and cross-sell.&nbsp;<\/span><\/p>\n\n\n\n<p><span style=\"font-weight: 400;\">It goes without saying that customers who are particularly thrilled with their experience are highly likely to say yes to additional products and services. Want to improve the CX ROI? Just ensure that no chance to upsell or cross-sell is missed!&nbsp;<\/span><\/p>\n\n\n\n<p><span style=\"font-weight: 400;\">On top of all this, it is inevitable that unhappy customers cost more to maintain because they require more time and dedicated resources to even try to retain them. Instead of spending money to recover from a bad experience, proactively spending money to create positive experiences with solid CX programs pays off incredibly.<\/span><\/p>\n\n\n\n<p><span style=\"font-weight: 400;\">If you ever second-guess yourself, just remember that even with a seriously limited study, Avanade and Sitecore reported a <\/span><a href=\"https:\/\/www.avanade.com\/~\/media\/asset\/white-paper\/sitecore-customer-experiences-whitepaper.pdf\"><span style=\"font-weight: 400;\">$3 ROI<\/span><\/a><span style=\"font-weight: 400;\"> expected for every $1 invested in the customer experience. To think that it\u2019s only a start!&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\"><strong>QuestionPro offers some of the most advanced <a href=\"https:\/\/www.questionpro.com\/blog\/customer-experience-software\/\">customer experience tools<\/a> available.<\/strong> Gain valuable insights into your customers\u2019 thoughts and feelings using\u00a0<\/span><a class=\"_e75a791d-denali-editor-page-rtfLink\" href=\"https:\/\/www.questionpro.com\/cx\/\" target=\"_blank\" rel=\"noopener noreferrer\"><span data-preserver-spaces=\"true\">QuestionPro CX software<\/span><\/a><span data-preserver-spaces=\"true\">\u00a0today.<\/span><\/p>\n\n\n\n<p class=\"has-text-align-center\"><span style=\"font-weight: 400;\"><a class=\"square-cta secondary-lined-cta\" href=\"https:\/\/info.questionpro.com\/meetings\/kenneth-peterson\" target=\"_blank\" rel=\"noopener noreferrer\"><strong>Book Demo<\/strong><\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Customer Experience hasn\u2019t been in the spotlight for as long as sales or marketing, and curiously enough, things tend to [&hellip;]<\/p>\n","protected":false},"author":87,"featured_media":115488,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[1402],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v20.4 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>How to improve the ROI of your customer experience program | QuestionPro<\/title>\n<meta name=\"description\" content=\"A successful CX program means more revenue, profit, and a very strong return of investment. 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