John Oswald John Oswald Consulting Manager - Amdocs

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On Customer Experience, ROI, and 'Return on Customer'

  • I wrote a blog post recently on Buzz-Tank, which is a blog I contribute to, along with some of my colleagues. I wanted to express a bit of encouragement about an interesting trend emerging so far in 2010: Customer Experience actually delivering bottom line results. Proof points about the real-world returns in hard financial terms are crucial in making the message of good customer experience more tangible...

    Most recently was a rather excellent post by Jon Picoult: “Yes, Virginia, There Is A Return On Customer Experience”, which makes the fundamental point that Customer Experience leaders outperform others in pure stock performance terms: “From 2007 through 2009, through the best and worst of times, the customer experience Leader portfolio outperformed the broader stock market, generating cumulative total returns that were 41% better than the S&P 500 Index and 145% better than the customer experience Laggard portfolio.”

    Bruce Temkin quickly followed this up with proof points from his own extensive, much-quoted, and brilliant research on the returns of getting the customer experience right.

    Anyway, very soon after I published my post, Don Peppers of the Peppers & Rogers Group posted a very good comment highlighting that yes, it's all good that people are thinking in hard financial terms about customer experience, but that still doesn't help with day to day operational planning or hard investment decisions in the medium to long term. Very good point, and I couldn't agree more.

    It all comes down to the fact that to get customer experience right, it has to be thought through, designed, and measured in operational metrics that actually reflect what people are doing to support the customer experience. ROI is all very well, but Don Peppers' helpful concept of 'Return on Customer' is another interesting way to go.

    It all plays back to conversations I had with a Customer Experience director at a large British telecommuncations firm I worked with for a long time. He used to say that the only reason people are paid to do process jobs or improvement campaigns was because customers paid for services. Obvious but true. How many subscriptions to voice and data packages actually pay for your role and your resources? Simple concept, but easy to forget...

    Comments on a postcard... (I'm also @Guehenno on Twitter)

    John Oswald
    About John Oswald John Oswald works as Consulting Manager at Amdocs
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