Study Shows Customer Experience is Path to Profit

ST. PAUL, Minn., Jul 14, 2008 (BUSINESS WIRE)

Companies that have a definition for customer experience and use this definition in everyday decision-making are more likely to exceed profit and revenue goals than those that don't, according to a new study.

"Finding the Performance Payoff in Customer Experience" surveyed 644 business leaders at all levels of leadership, organizational areas and across industries, from health care to manufacturing. The research was designed and conducted by Aveus, a St. Paul-based global strategy and operational change consultancy.

Definitions of customer experience vary widely. The study breaks new ground by surveying business leaders about how their organizations define customer experience and which definitions yield the biggest performance payoff.

"Perception still hasn't caught up to reality," says Linda Ireland, Aveus partner. "When asked if their focus on customer experience is costing the company money, many business leaders still say 'yes.' But our findings show a clear difference between those who have an organization-wide definition of it and those who haven't. Customer experience is a path to improved profitability, not a trade off from it."

The survey showed that 26 percent of companies with a definition of customer experience report exceeding profit targets, while only 14 percent of those without definitions can report the same.

Furthermore, the survey showed that organizations with the strongest use of customer experience in daily decision-making report the strongest operating results. "Of these elite organizations, 67 percent report meeting or exceeding revenue targets; 65 percent meet or exceed profit targets," says Ireland. "Simply put, these organizations use customer experience as a strategy for achieving performance. And it's working."

Aveus released a first round of customer experience research in 2006. Both rounds consisted of online surveys for leaders at management level and above. Functional quotas were set so the sample was not over-represented by sales and marketing professionals. With more than 1,000 respondents combined, these two unique studies establish a baseline for the payoff from customer experience use in the United States.

"We believe that by examining the use of customer experience and its link to financial and customer performance, business leaders will be able to make the operating decisions that hold the strongest potential for performance payoff in their organization," Ireland says.