EXECUTIVE SUMMARY

To understand the connection between customer experience (CX) and loyalty, we examined feedback from 10,000 U.S. consumers describing both their experiences with and their loyalty to different companies. The CX scores used in this model come from the 2018 Temkin Experience Ratings (TxR), which evaluated 318 companies across 20 industries. Our analysis shows that:

• The correlation between CX and repurchasing is very high (R= 0.82).
• There’s a 21-point difference in Net Promoter Score between consumers who’ve had a very good experience with a company and those who’ve had a very poor experience.
• CX is made up of three components – success, effort, and emotion. While all three elements impact customer loyalty, an improvement in emotion drives the most significant increase in loyalty.
• We built a model to estimate how a modest improvement in CX would impact the revenue of a typical $1 billion company across 20 industries. On average, companies can gain $775 million over three years. Software companies stand to earn the most ($1 billion over three years), while utilities stand to earn the least ($476 million over three years)
• We also describe a five-step process for calculating the ROI of CX for your organization.

This report was originally published by Temkin Group prior to its acquisition by Qualtrics in October 2018. It has been reformatted, but no substantive changes have been made to the content.