Our clients are often asked by their executives, “How do we know improving the customer experience is important? How do we know it is worth it to our business?” Is improving customer experience worth it? To answer those questions, we commonly conduct “linkage studies”. These studies examine the relationship between measures of customer experience and downstream business metrics such as customer retention, increased sales, and higher profits.
This article discusses:
- The potential pitfalls when interpreting data results
- The results and examples of specific linkage analyses across multiple sectors
- The relationship between improving the customer experience and producing positive business outcomes
- The types of relationships, models, and indicators that lead to an accurate assessment of customer experience
- What companies need to know about proving customer experience ROI for your executive team
Sometimes linkage analyses can produce counterintuitive results if researchers or businesses are not careful to account for all of the nuances in the data. Factors such as underspecified models, the direction of causality, third variable problems, and putting too much distance between the predictor variable and the outcome variable all have deleterious effects. However, when done thoughtfully, a positive relationship between customer experience metrics and business outcome variables is almost always found.