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Customer Experience Initiatives Lack Proven ROI Value

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Brands of all sizes are missing out on the business benefits of customer loyalty programs, according to a survey from Satmetrix: Fully two-thirds of those surveyed say they cannot prove or cannot measure the return on investment (ROI) from customer experience management (CEM) initiatives.

Among the companies surveyed, 40% say their CEM initiatives are unproven, and 27% say they do not know or cannot measure the ROI of CEM programs. By contrast, nearly one in five say their efforts have been strong (16%) or transformative (3%):

 

Below, additional findings from the Satmetrix Customer Experience Industry Survey 2012.

CEM Adoption 


Among the companies surveyed, large organizations (those with annual revenues over $500 million) have the highest adoption of CEM initiatives, at 63%, whereas smaller companies (less than $10 million in annual revenue) have far lower adoption rates: 34%, on average.

 

Some 20% of smaller companies have no CEM initiatives in place at all.

Most Systems Built In-House 

Most CEM systems are developed in-house: Among those with CEM initiatives in place, 58% of large companies have built their systems in-house, as have 73% of small companies.  

Challenges 

Asked to identify the biggest challenges in running customer experience initiatives, companies identified a range of issues including: 

  • Closing the loop with customers: 24% of larger companies and 21% of smaller businesses find it hard to close the loop with customers. (That means customers who give feedback may feel ignored.)
  • Aligning metrics: 11% of larger businesses and 14% of smaller ones struggle to find the right metrics to use.
  • Finding the right people: 12% of larger business and 14% of smaller ones find it hard to get employees engaged in CEM initiatives.
  • A strong vision: 15% of larger businesses and 7% of smaller ones have a lack of vision about how CEM will help the company. 

Social Media Adoption

Companies were also asked about their social media use: More than one-half are already using Twitter (55%), Facebook (59%) and LinkedIn (52%) to communicate with clients and prospects. In addition, fully 10% of companies are planning to adopt social media channels in 2012.

About the data: Findings are based on a survey of 1,000 companies of all sizes, conducted in March 2012.


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  • by Vishal Wed Apr 25, 2012 via web

    ROI in Customer Experience Initiatives?????????

    Precisely how have you measured this, may I ask? What parameters have been considered? Frankly, I am not convinced. You cannot compare the two so very easily. How precisely can you quantify the intangible benefits from these programs so as to get ROI figures? What is the basis used?

  • by Stephen King Thu May 3, 2012 via web

    Hmmmm ...

    No ROI? That's too bad. CEM is vital to accelerated growth. Even if a company is doing it poorly, they are way ahead of their competitors who don't do CEM at all. It's probably not that the CEM programs weren't "effective," so the title of the blog is misleading -- I actually expect the real results of this survey is that they weren't able to effectively measure and confused the linkage between customer loyalty and the most important operational initiatives and metrics.

    I'm CEO of TCELab.com. Disclaimer: we compete against Satmetrix's NPS loyalty score with our RAPID Loyalty measurement system that's part of our cloud-based CEM tools and big data architecture -- so please view these comments through that "competitive lens." Nevertheless, I've got some valid points (if I do say so myself :).

    Perhaps the issue is that these companies who are having poor CEM results have adopted Satmetrix's very-tired NPS (Net Promoter) as their Loyalty measurement; it measure only one third of the loyalty equation (recommendations to drive new customers). It misses out on measurements for retention (which is equated to churn) and purchasing (which equates to increased ARPU). That's what RAPID Loyalty is: Retention + Advocacy + Purchasing.

    I've used NPS in the past extensively, notably at a large successful public software company ... I learned the single dimension falls short in consistently delivering real actionable ideas that correlate customer loyalty with your most important operational metrics. Yes, it improved our organization(s). But, for my teams, NPS never seems like it offers much except small-delta incremental change. I dunno. Maybe we were one of those that didn't implement it properly.

    In any event, what we know at TCELab is that companies who's top management support the CEM initiatives find much greater results than those who don't.

    'Nuff said. I *do* know this for sure -- if you aren't a customer-centric company, you are missing opportunity and opening the door for competitors to come take your customers without you even knowing what's happening.

    Thanks for listening. What do you think?

    Cheers,

    Stephen King
    CEO, TCELab.com
    President, Stephdokin.com
    @stephdokin
    http://www.linkedin.com/in/stephenking13

  • by Mário R Quinteira Mon Jul 9, 2012 via web

    Stephen, I really don't know which one it's best, if your comment or the article itself. I'm new around CEM and have learned a lot with both!

    Hope that in a nearby future I can came back and properly comment with you.

    Best regards,

    Mário

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