Proof That It Pays To Be America’s Most-Loved Companies

The key to demonstrating Customer Experience ROI is to look at long-term performance...

Bloomberg Businessweek ran an article a few days ago (“Proof That It Pays To Be America’s Most-Hated Companies”) that claims to demonstrate customer service performance has no relevance to stock market returns.

They took the most recent American Customer Satisfaction Index (ACSI) scores for publicly-traded companies and plotted them against the firms’ 2013 year-to-date stock returns.

Yes, you read that right.  Bloomberg based its conclusion on stock market data covering less than one year of performance!

Leave it to a Wall Street-centric publication to mistake short-term stock movements with long-term value creation.

If you look at customer experience rankings and stock market performance over a longer time horizon, as Watermark Consulting does in its annual Customer Experience ROI analysis, the data tells a very different story:

 

 

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 index.

This isn’t to say that a great customer experience guarantees stock market outperformance, or that a poor experience will surely undermine it.  Customer experience is critically important, but it is just one of many factors that drive business results.

However, what this 6-year stock performance analysis does demonstrate is that on average, over the long-term, a great customer experience will be rewarded by consumers and investors alike.