The ROI on customer experience

The ROI on customer experience

In today’s competitive business landscape, companies across industries recognize the paramount importance of providing exceptional customer experiences. Customer experience (CX) has evolved into a strategic differentiator, with organizations investing significant resources to cultivate and enhance it. However, as businesses allocate funds toward CX initiatives, it is crucial to understand the tangible return on investment (ROI) that can be derived from these endeavors.

But first, let’s define what CX is. This refers to the overall perception a customer has during their interactions with a company across multiple touchpoints throughout their journey. It encompasses every aspect of the customer-business relationship, including pre-purchase interactions, the actual purchase experience, and post-purchase support and engagement. CX is shaped by factors such as product quality, customer service, user interface, convenience and personalization.


Investing in CX initiatives is requisite as an exceptional CX fosters customer loyalty, leading to repeat purchases and higher customer retention rates. When customers have positive experiences, they are more likely to become brand advocates, spreading positive word-of-mouth and attracting new customers.

CX also becomes a key differentiating factor in highly competitive markets, where products and services may be similar. Businesses that deliver outstanding experiences gain a competitive edge and stand out from their rivals.


A superior CX leads to an increased customer lifetime value. When customers feel valued and appreciated, they are more likely to engage in upselling or cross-selling opportunities, leading to increased revenue over their lifetime as a customer.

That’s why investing in CX can positively impact a company’s bottom line. But determining the ROI on CX initiatives can be challenging due to the difficulty in quantifying intangible benefits. However, several metrics and indicators can provide insights into the impact of CX investments.


Two of these metrics are the customer satisfaction scores and net promoter score. Regularly measuring and tracking these help gauge the impact of CX efforts on customer perception and loyalty.

Another metric is customer churn rate. By monitoring customer churn rate, businesses can assess how well their CX strategies are retaining customers. A lower churn rate indicates that customers are more satisfied and less likely to switch to competitors.

Lastly, are revenue growth and cost savings. There is a positive correlation between superior CX and revenue growth. Higher customer satisfaction often translates into increased sales, as satisfied customers are more inclined to make repeat purchases and spend more. In addition, improved CX can lead to cost savings by reducing customer complaints, minimizing returns or refunds, and decreasing customer service interactions due to better overall experiences.


This is an apparent business case to invest in CX. But to maximize ROI on CX investments, businesses should consider implementing a number of strategies.

One is personalization. Tailoring products, services and interactions to meet individual customer needs and preferences enhances the overall experience and fosters loyalty.

Omnichannel experience is another. Providing a seamless experience across various channels, such as in-store, online and mobile, ensures customers can interact with the company effortlessly and consistently.

Employee engagement is likewise an important strategy. Engaged and empowered employees are more likely to deliver exceptional customer experiences. Investing in employee training and development, and aligning their goals with CX objectives, can significantly impact customer satisfaction.

Lastly, continuous improvement is key in ensuring an ROI on CX. Regularly collecting customer feedback, analyzing data and acting upon insights help identify pain points and areas for improvement, enabling businesses to evolve their CX strategies.


Investing in CX is not just a cost but a strategic investment with tangible returns. Organizations that prioritize CX stand to gain customer loyalty, increased revenue and cost savings.

The author is the founder and CEO of Hungry Workhorse, a digital, culture and customer experience transformation consulting firm. He is a fellow at the US-based Institute for Digital Transformation. He is then chairman of the IT Governance Committee of Finex Academy. He teaches strategic management and digital transformation in the MBA Program of De La Salle University. The author may be emailed at