News

A positive customer experience may lead to stock market gains

April 3, 2013

Companies that deliver a great customer experience are rewarded — on Main Street and on Wall Street.

That's the conclusion from customer experience advisory firm Watermark Consulting, based on its six-year analysis of stock market returns for companies that lead in customer experience versus those that lag.

"From 2007 to 2012, customer experience leaders outperformed the broader market, generating a total return that was three times higher on average than the S&P 500," said Jon Picoult, founder of Watermark Consulting.

The analysis suggests that there are notable benefits to delivering a positive, memorable and differentiated customer experience. Companies that do this well enjoy stronger customer retention, greater wallet share, lower price sensitivity, better word-of-mouth and a more competitive cost structure, according to the news release.

"Many business leaders pay lip service to customer experience excellence, reflecting a deep-seated skepticism about the value of such differentiation," Picoult said. "The benefits are often viewed as soft and difficult to quantify, so companies continue to subject consumers to complicated sales processes, cluttered websites, dizzying 800-line menus, long wait times, incompetent customer service, unintelligible correspondence and products that are just plain difficult to use."

Read more about customer experience.