A new Temkin Group report, titled "The Customer Experience-Loyalty Connection," finds a strong connection between improved customer experience and increased consumer loyalty, leading to increased company revenue.
Based on a survey of 6,000 U.S. consumers, Temkin Group found that consumers who have a good customer experience are more loyal to companies across all 12 industries included in the study: airlines, banks, credit card issuers, health plans, hotel chains, Internet service providers, insurance companies, investment firms, personal computer makers, retailers, TV service providers, and wireless carriers.
According to Bruce Temkin, author of the report and managing partner of Temkin Group, "Great customer experience isn’t just a nice thing to provide for customers; it’s a critical component for improving the bottom line by increasing customer loyalty."
Key findings in the report include the following:
- A modest improvement in customer experience can generate a three-year revenue boost between $308 million for retailers and $179 million for health plans for every $1 billion in revenue.
- Customer experience leaders have 10.8 percentage points more customers who are likely to recommend them, compared to customer experience laggards.
- Customer experience leaders have 12.7 percentage points more customers willing to buy from them, compared to customer experience laggards.
- Customer experience leaders have 14.1 percentage points fewer customers looking to switch away from them,compared to customer experience laggards.