ROI of Customer Experience Management

Investing in customer experience management is something every organization should do if they want to thrive. They should compete on customer experience. When the customer comes into contact with the organization they form an opinion about the experience- good, bad or neutral. Organizations try to win customer loyalty and build its reputation by positive and strong word of mouth. Investing in customer experience management is something every organization should do if they want to thrive. They should compete on customer experience. When the customer comes into contact with the organization they form an opinion about the experience- good, bad or neutral. Organizations try to win customer loyalty and build its reputation by positive and strong word of mouth.


1. Winning Customer loyalty

Building customer loyalty isn’t easy, but it’s worth the effort. The more a customer is satisfied, the more he/she is loyal to the organization and likely to retain in the long run, thereby reducing retention cost. Consumer Reports surveys have shown that nearly 91 percent of customers will not do business with you a second time if you botch the first encounter. A good customer experience helps an organization to win customer loyalty and bad customer experience is a step on to path of defection. The impact of CEM on customer retention and loyalty is illustrated in the diagram below.

“News of bad customer service reaches more than twice as many ears as praise for a good service experience.”

2. Reduced level of Defection

CEM program allows an organization to identify the risk of defection by closing the loop and change the detractor into a promoter by resolving his/her queries or problems in real time. Thereby, preventing bad word of mouth damaging the brand image. Promoters benefit your business. Detractors, on the other hand, can be a losing proposition. Detractors buy once and never again. Hence, they cost more revenue. Resolving complaints and improving the customer experience via feedback will have an immediate effect on business by reducing the level of defection and business at risk, as well as providing longer-term gains in loyalty and competitive differentiation.


3. Reducing Customer Churn

CEM allows organizations to differentiate good services from bad services, as good services retain customers and bad services turn them away. It allows companies to focus on weak areas where customers are dissatisfied and prevent them from alienating customers. It will reduce the customer attrition and increase ROI of the organization.

“Cost of acquiring a new customer is six times that of retaining one”


4. Employee Engagement

Employees are the most valuable assets for an organization. retaining them will be an add to the ROI in the end. CEM programmes allows an organization to measure satisfaction level among employees. A satisfied employee will refer friends and family to work and apply in the organization. This will reduce the cost of hiring and training people, thereby increasing ROI.


5. Value of referral

Many companies fail to take into account one of the most important sources of value differences between promoters, passives and detractors: the value of the positive and negative referrals they make. Word of mouth can bring in new customers or send them away. Organizations have understood that referral rates have continued to become a major growth factor for the companies. CEM programmes lets customers spread a positive word of mouth by providing them a platform to improve their experience and convert negative word of mouth. Individually, Detractors may even be more motivated for battle. That means you need to raise enough Promoters to outnumber them in order to achieve sustainable growth.

“In Word of Mouth, Negative Can Overpower Positive”

Chetna Jangid

Chetna is Customer Success Manager at Survey2Connect.

Chetna Jangid
Chetna is Customer Success Manager at Survey2Connect.
Posts created 3

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