Customer Experience ROI - Tips to Measure and Improve Metrics

It’s often tricky for CX leaders to show how delivering an exceptional customer experience (CX) creates value. The challenge of proving CX ROI is due to several reasons, like the complex customer journeys and subjective metrics that are difficult to translate into financial benefits.

This guide will show how CX directly contributes to business growth and drives tangible business outcomes. We’ll also provide a step-by-step process for measuring your customer experience ROI.

Maximizing your CX ROI starts with understanding what your customers truly think and feel.

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What Is Customer Experience ROI?

Customer experience ROI refers to the return on investment you can expect from delivering a positive customer experience.

Let’s look at practical examples of CX ROI:

• A SaaS company personalizes the onboarding process and sees a boost in the customer subscription length, boosting the customer lifetime revenue by 30%.
• An e-commerce brand redesigns its support system and reduces churn by 18% in three months, boosting lifetime value.

Why Does the ROI of Customer Experience Matter for Growth?

CX ROI is directly linked to business outcomes, including increased sales, enhanced customer loyalty, and reduced costs. But how does it fuel business growth?

Here are the top 4 ways CX ROI matters for growth:

1. Drives Innovations: A business can pinpoint and scale the specific initiatives that produce greater revenue to further increase the profit margins.
2. Improves Employee Morale: A high CX ROI gives employees a greater sense of purpose when they see the tangible results of their customer interactions, further enhancing their productivity.
3. Proves Financial Impact: CX ROI data helps leaders justify their budget and prove the value of their programs, securing the investment needed to improve customer experiences.
4. Improves Planning: Insights from CX ROI can help your team predict the revenue you can expect over time from your customer experience improvements.

What Customer Experience Leaders Do Differently?

There is a strong link between strong CX leadership and profitability. Let’s explore what exactly these leaders do differently:

Use Customer Feedback to Implement Strategies

CX metrics like the Net Promoter Score (NPS) don’t show the whole picture.

That’s why successful CX leaders use data analysis to review every interaction at every customer journey touchpoint, including call recordings, chat logs from support tickets, and social media comments.

Using an AI research assistant tool, they get recurring themes, trends, and sentiments from these channels. These insights enable leaders to resolve customer issues and provide more tailored experiences.

Create a Customer Experience Strategy

A McKinsey & Company report found that businesses with an increased customer experience program had 15% to 20% higher sales conversions.

This means that successful CX leaders create a CX strategy that enables everyone to consistently deliver the best customer experiences. This strategy streamlines processes, leads to more satisfied customers and motivated employees, and provides personalized and valuable customer interactions.

Encourage Cross-Functional Collaboration

Customers interact with a business across various touchpoints. Therefore, different departments, including sales, marketing, customer service, and product development, must collaborate to deliver a consistent and seamless customer experience.

CX leaders work closely with C-suites to create systems, align their KPIs toward the customer, and implement cross-functional customer experience. The executives then encourage the employees to deliver exceptional experiences.

Leverage Technology and AI

Winning CX leaders implement technology that streamlines repetitive tasks and provides personalized experiences. An example is AI-powered chatbots that offer quick responses to customer queries.

These leaders ensure a seamless transition in automation and that the technology matches customer needs. They also don’t over-rely on AI but instead incorporate the human touch in the interaction, especially when an issue is complicated for AI-driven chatbots.

Invest in Employee Training

CX leaders understand that if there’s a disconnect in employee training and actual customer needs, it can lead to a poor CX overall. So, they implement programs aimed at helping employees gain product knowledge and excel in customer service, making them more confident and competent in their roles.

The training will also likely boost employee morale and increase job satisfaction, positively impacting customer interactions.

How the Value of Customer Experience Impacts Business Outcomes

An optimized customer experience doesn’t just benefit your customers, but it also provides tangible business outcomes such as:

• Increased Revenue: According to Forbes, businesses that offer a great customer experience generate 5.7 times more revenue than those that neglect it. This is because CX directly builds trust and loyalty, making it easy for customers to make purchases.
• Increased Repeat Purchases: When you deliver exceptional experiences, your customers will likely stick around. Satisfied customers are likely to purchase again and may even spend more.
• More Referrals: When customers are happy, they can spread positive word of mouth, helping you attract new clients and offsetting the acquisition costs.
• Lower Costs: CX improvements, such as streamlining processes and making interactions intuitive, can reduce costs related to recovery efforts, such as handling customer complaints.

How to Measure the Customer Experience Across Touchpoints

Every customer interaction with your brand shapes their loyalty, advocacy, and the perception of your business.

So, how do you effectively measure these experiences? Follow these steps:

1. Map Your Customer Journey

The first step is to visualize the steps your customers take to engage with your organization and purchase your products and services. 

The common customer journey stages are awareness, consideration, conversion, post-conversion, and advocacy. Each of these stages requires a different approach to measure customer experience.

2. Choose the CX Metrics for Each Stage

Measure the right experiences at each stage of the customer journey. Remember to choose metrics that align with your business goals.

Some of the CX metrics to consider: 

• Awareness: Measure metrics like reach, impressions, click-through rates (CTR), navigation, and form experience score.
• Consideration: Track the time spent on the page, lead generation, focus rate, and multiclick behavior.
• Conversion: Check the conversion rate and average order value.
• Post Conversion: Track the Customer Satisfaction Score (CSAT), retention rates, customer sentiment, and churn rate.
• Advocacy: Measure the Net Promoter Score (NPS) and Customer Effort Score (CES).

3. Determine All Your Touchpoints

Next, examine all your customers' touchpoints with your brand in each phase of the customer journey, from the first point of contact to purchase and post-engagement.

Here’s a quick breakdown of the common touchpoints:

• Awareness Stage: Social media, organic search, landing pages, ads, and blogs
• Consideration Stage: Website, product demos, product comparisons, and pricing pages
• Conversion Stage: Checkout, and product activations
• Post Conversion Stage: Welcome emails, product walkthroughs, community forums, and live chat
• Advocacy: Reviews, referrals, surveys, and social posts

When you know all the touchpoints, you can collect holistic feedback and get the full picture of your customer experience.

4. Leverage an AI Analytics Tool

Once you’ve chosen the metrics and touchpoints to track, use our AI qualitative data analysis tool, Marvin, to:

• Consolidate feedback from various sources, including your CRM, social media channels, customer feedback, sales conversations, and online reviews, into a single, AI native platform.
• Tag and categorize the data to reveal how customers feel at every step and detect trends at scale.
• Make the insights available organization-wide so your team can make faster and profitable decisions.

Ready to start discovering what your customers are saying? Request a demo now.

5. Compare Against Benchmarks

Once you’ve done your customer insights analysis, benchmark your CX metrics against your past performance and industry standards.

Remember to also account for economic conditions, changes in consumer tastes, and market trends.

Tips to Improve CX ROI Strategically

At a time when customer expectations are constantly rising, you must go beyond the surface to invest in CX initiatives that play a crucial role in driving profitability.

Let’s explore the 6 strategies to improve the CX ROI:

1. Know Your Customers: Understand your customers' specific needs and pain points to deliver a tailored experience. Use these insights to improve your products, services, and overall customer experience.
2. Focus on Personalization: Tailor the experiences to meet customer preferences and boost loyalty.
3. Empower Employees with Skills and Tools: Invest in training your employees and equip them with tools to deliver exceptional customer service. Well-trained employees are more likely to provide excellent customer service and enhance the overall CX.
4. Leverage AI Tools: Implement analytics, CRM, and AI-driven tools to customize customer interactions and increase efficiency.
5. Create an Omnichannel Experience: Ensure a seamless transition across your digital, mobile, and in-person interactions.
6. Optimize Your Customer Journey: Shorten the time to your customers' outcomes by delivering products early, personalizing recommendations, and onboarding them quickly.

Frequently Asked Questions (FAQs) 

Before wrapping up, explore quick answers about measuring and improving your customer experience ROI:

What Is the Best Way to Measure Customer Experience?

The best way to measure customer experience is through the use of both quantitative and qualitative metrics across every stage of the customer journey. These include metrics like:

• Net promoter score (NPS)
• Customer satisfaction score (CSAT)
• Customer effort score (CES)
• Customer lifetime value (CLTV)
• Sentiment analysis

What Is the Value of Customer Experience in B2B and B2C Markets?

Customer experience is essential in both B2B and B2C markets, but it differs due to the unique needs of each type of customer, the sales cycles, and the decision-making process.

• In B2B, CX builds trust, drives customer retention, and maintains long-term relationships. Therefore, the value created is: differentiating your brand from the rest, boosting customer lifetime value (CLV), and improving brand reputation.
• In B2C, CX drives positive word of mouth, improves retention, and impacts brand reputation. Therefore, the value created is: improved customer advocacy and loyalty, reduced churn, and revenue growth.

What Is the Link Between Customer Satisfaction and CX ROI?

Customer satisfaction is crucial to the CX bottom line because it leads to increased customer retention and loyalty, lower churn and customer acquisition costs, and a positive word of mouth.

Conclusion

In summary, the more positive your customer experience is, the more beneficial its impacts will be on your business. It’s undeniable that CX drives growth and impacts several business outcomes.

So, understand the strategies successful CX leaders use and follow the steps to measure your CX ROI. Additionally, implement employee customer service training and leverage technology to positively impact CX.

Extracting insights from customer feedback is a crucial step in measuring CX ROI.

With Marvin, you can uncover insights that you may otherwise miss. Additionally, the data is accessible across teams, empowering everyone to deliver positive customer experiences.

Sign up for a free account to quickly analyze your CX feedback data.