The value of customer experience can be quantified – here are some results from a recent study.

People recognize the value of a great customer experience when they receive it, but a business must be able to quantify the organizational benefits in order to justify the additional costs that accompany.

As consumers, brands that deliver exceptional experiences are the ones that we want to interact with, that we become loyal to, and that we recommend to our friends and family. However, for executives leading businesses, the value of delivering such an experience is often a lot less clear and harder to quantify. Rationales for focusing on customer experience tend to be driven by a gut belief that it’s just “the right thing to do.” The problem with this mindset is that often, the question of whether experience is a priority or not simply becomes a battle of opinions rather than facts.

When measuring the ROI and impact of the customer experience, it becomes clear how significant the effects are. To understand the extent of the impact, let’s consider the basics of a company’s bottom line – revenue vs. expenses. The best solutions will grow revenue and reduce expenses. Here’s how experience commerce plays a role with these functions:


Increase Revenue

Transaction Based Businesses (Ex. Retail/Restaurants)

Using two common elements that are relevant to all industries: customer feedback, and future spending by individual customers.


After controlling for other factors that drive repeat purchases in the transaction-based business (for example, how often the customer needs the type of goods and services that the company sells), customers who had the best past experiences spend 140% more than to those who had the poorest past experiences.  The difference between a score of 9, which all businesses would celebrate, and 10 is 50%!

Subscription Based Businesses (Ex. Gym Memberships)


On average, a member who gives the lowest score will likely only remain a member for a little over a year. Comparatively, the average member that gives the highest score is likely to remain a member for another six years.


Decrease Expenses

We often talk about great customer experience as a means to unlock revenue: you retain customers, realize more of their lifetime value, and mobilize an army of word-of-mouth marketers. However, there’s another significant benefit to the customer experience that is less talked about.

Could investing in great experiences actually end up costing you less over the long run? This might seem counterintuitive; a cost to eliminate costs. But over time, the costs that customer pain points create often exceed the cost of delivering a great experience.

Think about how much an unhappy customer (before they churn) costs you. They call your help lines. They file support tickets. They return products. Each of these instances is a touchpoint that represents a real cost to you. Depending on how you choose to resolve these instances (through refunds or discounts, for example), that cost could end up being quite high.

In the meantime, these same unhappy customers are likely to be telling others about their dissatisfaction. The White House Office of Consumer Affairs reports that unhappy customers will tell an average of 9 to 15 people about their experience — and 13% of those tell more than 20. As these unhappy customers ward off potential new customers, you may be forced to invest more in your marketing and advertising, which means less to invest in your customer experience and, therefore, more unhappy customers. It’s a vicious cycle that could end up costing you big time.

When you solve these pain points, you don’t just make customers happy — you end up reducing the cost to serve your customers, too.


Data Supports Experience Commerce

It’s time to stop the philosophical debate about whether investing in the experience of your customers is the right business decision. This isn’t a question of beliefs — it’s a question about the behaviour of your customers. Connect the right data and not only is it possible to quantify the impact of the difference between delivering a great experience and delivering a poor one, but it will also demonstrate to everyone in your organization just how big that impact can be.