The document discusses three ways to calculate the ROI of customer experience initiatives: good, better, and best. The good approach uses secondary research and company CX data. The better approach leverages existing CX measurement and financial data. The best approach develops a customer equity framework linking CX to future growth. It provides examples of calculating ROI for a website redesign that improved satisfaction by 3%, finding an 83% ROI. The document advocates integrating CX and financial metrics to prove ROI and gain executive support.

1. Good, Better, Best: Three Ways to
Calculate the ROI of CX Initiatives
John Joba David Robbins
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customer centricity.
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4. About John Joba
John’s career defies the pressure of having to choose a single path. His stints across data sciences, insights
integration, customer experience, and delivery management are grounded in a business-first ethos.
Joining Gongos in 2016, John was highly integral in the development of the company’s customer experience
practice by helping clients extract value out of their data and applying consultative approaches to customer-
centered business transformation. He also is an active member of the company’s Innovation Think Tank.
John holds a B.A. in Comparative Cultures and Politics, International Relations, and Chinese and M.S. in Business
Analytics from Michigan State University.
About David Robbins
Through a self-professed mission to support companies on their journey toward enhancing customer centricity, David’s
18-year career sits squarely at the intersection of research innovation and customer experience transformation.
Through the development of customer equity models and methodologies that also support marketing, brand
management, and operations management decisions, David’s experience spans both B2C and B2B organizations
across a broad range of industry sectors. Formerly Global Director, Customer Experience with GfK, David was
instrumental in the company’s expertise across customer experience measurement and application, operational and
digital efficiency along the customer journey and marketing effectiveness. David holds a B.A. in Psychology from
Oakland University and M.S. in Developmental Studies from Purdue University.

5. GOOD. BETTER. BEST.
three ways to calculate
THE ROI OF CX INITIATIVES
D A V I D R O B B I N S
ACCOUNT STRATEGIST
GONGOS, INC.
J O H N J O B A
ANALYTICS TRANSLATOR
GONGOS, INC.

6. THE VALUE
of CX
$700 MILLION WITHIN 3 YEARS
OF INVESTING IN CX.
companies that earn $1 billion
annually can expect to earn,
on average, an additional
- TEMK IN GROUP

7. driving
RECORD SPEND
CX
INVESTMENTS IN CUSTOMER EXPERIENCE
+ RELATIONSHIP MANAGEMENT SOFTWARE
WITH ANNUAL GROWTH RATES RANGING BETWEEN
15%-20%+ OVER THE PAST SEVERAL YEARS
have grown to over 42 billion,
- GARTNER, 2018

8. TRANSFORMATIONAL INITIATIVES
(competitive advantage)
GOALS
serving
multiple
OPERATIONAL EFFICIENCIES
(cost to serve)
BUILDING CUSTOMER VALUE
(spend + loyalty)

9. WHICH OF THE
FOLLOWING
GOALS BEST
DESCRIBES YOUR
INVESTMENTS?
POLLquestion
a. Transformational initiatives that create a competitive advantage
b. Operational efficiencies that reduce costs to serve
c. Building customer value to increase customer spend/loyalty
d. All of the above
e. None of the above

10. Digital experience
In-store experience
Contact center
experience
INITIATIVE KPIEXAMPLES
MEASURING
on each
ROI TRANSFORMATIONAL INITIATIVES
(competitive advantage)
Customer satisfaction
Customer effort
NPS

11. OPERATIONAL EFFICIENCIES
(cost to serve)
AI personalization
Driverless delivery
Support + service
automation
Cost per transaction
Customer support cost
Delivery costs
INITIATIVE KPIEXAMPLES
MEASURING
on each
ROI

12. Loyalty program
Enhanced checkout experience
Personalized service
Touchpoint redesign
Basket size
Cross purchase
Purchase frequency
Retention rate
INITIATIVE KPIEXAMPLES
BUILDING CUSTOMER VALUE
(spend + loyalty)
MEASURING
on each
ROI

13. yet, companies are failing to realize
the potential of these promises,
WITH ONLY 20% OF COMPANIES
SEEING AN ROI ON CX PROJECTS
- CONFIRMIT, 2017

14. C X i n i t i a t i v e s
FAIL TO DELIVER
on key objectives
TWO REASONS
ROI is failing
the industry is lacking
A DISCIPLINED FRAMEWORK
to prove + communicate success21

15. SPEAKING THE
of the c-suite
L ANGUAGE
CX METRICS ARE
a proxy for
FINANCIAL
performance
not all
METRICS
ARE CREATED
equal

16. f o r g i n g
A NEW PARTNERSHIP
adopting
CORPORATE
STANDARDS2
integrating
DATA STREAMS1
BEST-IN-CLASS
organizations are…
with finance

17. LOOKING BACK
(realized impact)
LOOKING FORWARD
(forecasting impact)
USE CASES
USE CASES
for ROI
EVALUATING PROGRAM SUCCESS BUILDING A BUSINESS CASE
A YEAR IN REVIEW
BUDGETING ALLOCATION
STRATEGIC GROWTH PLANNING
COMPANY VALUATION

18. BUT HOW
do we do this?

19. good:
SECONDARY RESEARCH
+ COMPANY CX DATA
better:
COMPANY CX +
FINANCIAL DATA
best:
CUSTOMER EQUITY
FRAMEWORK
THREE APPROACHES
to calculating ROI

20. good: SECONDARY RESEARCH + COMPANY CX DATA
Lack of both
customer + financial
data
Gather + apply
outside
information
Couple results with
internal data to create
forecasts + begin the
conversation
SITUATION APPROACH OUTCOME

21. Minimal exploration of internal
financial data
Low CX measurement
sophistication necessary
Expedited results
Financial impact is not tailored to
the specific company – accuracy
may vary substantially
PROS: CONS:
good: SECONDARY RESEARCH + COMPANY CX DATA

22. better: COMPANY CX + FINANCIAL DATA
Integrated customer
+ financial data
Leverage existing
measurement
platform + financial
data
ROI calculations
tailored to the
organization to drive
better decisions
SITUATION APPROACH OUTCOME

23. better: COMPANY CX + FINANCIAL DATA
Tied directly to the firm’s key financial outcomes
Simple and intuitive calculations that can be
vetted by key stakeholders
Base model is easily flexible and extensible to
meet situational needs
Efforts here are a stepping stone towards the
Customer Equity framework
Some alignment of stakeholders with how
metrics are calculated may be required
Greater data integration and measurement
sophistication required
PROS: CONS:

24. best: CUSTOMER EQUITY FRAMEWORK
Organizational
buy-in to CX ROI
+ strong
collaboration with
the data science
and finance
teams
Develop a tool
backed by machine
learning that
implements the
Customer Equity
framework
Link multiple aspects
of the customer
experience to future
growth
SITUATION APPROACH OUTCOME

25. best: CUSTOMER EQUITY FRAMEWORK
VALUE EQUITYDRIVERS OF VALUE EQUITY
DRIVERS OF BRAND EQUITY
DRIVERS OF RELATIONSHIP EQUITY
BRAND EQUITY
RELATIONSHIP EQUITY
CUSTOMER EQUITY
- Quality
- Price
- Convenience
- Brand Awareness
- Attitude toward the
brand
- Brand ethics
- Loyalty programs
- Special recognition treatment
programs
- Affinity programs
- Community-building programs
- Knowledge-building programs

26. All-encompassing framework capable
of linking seemingly “small” aspects to
the experience to the bigger picture
Most robust in terms of which data is
factored in and which scenarios can
be explored
Requires advanced analytical capabilities
to create models
Sophisticated data pipelines
May need additional customer
information in addition to CRM/CXRM
Implementation requires a partnership
with IT
PROS: CONS:
best: CUSTOMER EQUITY FRAMEWORK

27. WHICH OF THESE FEEL
MOST RELEVANT FOR
YOUR ORGANIZATION?
a. Good: Secondary Data
b. Better: Internal data
c. Best: Customer Equity Framework
d. None of the above
POLLquestion

28. better: COMPANY CX + FINANCIAL DATA
SATISFACTION BY3%boost
SITE REDESIGNE-COMMERCESAY IT!

29. $50.45
$25.68
$15.45
$21.26
$0.00
$10.00
$20.00
$30.00
$40.00
$50.00
$60.00
SATISFIED CUSTOMERS UNSATISFIED CUSTOMERS
CUSTOMER'S FINANCIAL STATE
SPEND
60%
better: COMPANY CX + FINANCIAL DATA
COST TO SERVE
SAY IT! satisfaction.
SATISFIED
UNSATISFIED
40%
1 MILLION
customers

30. better: COMPANY CX + FINANCIAL DATA
SATISFIED = 1M x 40% x $15.45 = $6,180,000
TOTAL = $35,590,000
UNSATISFIED = 1M x 60% x $25.68 = $15,410,000
SATISFIED = 1M x 40% x $50.45 = $20,180,000
$35,590,000 - $18,938,400 = $16,651,600
UNSATISFIED = 1M x 60% x $21.26 = $12,758,400
TOTAL = $18,938,400
spend
cost
profits

31. SATISFIED = 1M x 43% x $15.45 = $6,643,500
better: COMPANY CX + FINANCIAL DATA
TOTAL = $36,3333,000
UNSATISFIED = 1M x 57% x $25.68 = $14,693,500
SATISFIED = 1M x 43% x $50.45 = $21,693,500
$36,3333,000 - $18,763,980 = $17,569,020
UNSATISFIED = 1M x 57% x $21.26 = $12,120,480
TOTAL = $18,763,980
spend
cost
profits

32. CURRENT PROFITS
DELTA PROFITS
REDESIGN PROFITS
NEW PROFITS
A $500K UI INVESTMENT DRIVES
a 3% increase in satisfaction,
WHICH YIELDS AN 83% ROI
better: COMPANY CX + FINANCIAL DATA
$917,420 - $500,000= $417,020
$17,569,020 - $16,651,600 = $917,420
$417,020 / $500,000 = 83%
new profits
one-year new profits
ROI
($16,625) ($500)
$917 $417
$17,569
NEW PROFITS

33. REELING
IT HOME
for you
NOT IN CX?
No problem. This framework can
utilize your KPIs too
THINK THE PROJECT WILL TAKE MORE THAN A
YEAR TO COMPLETE OR SHOW VALUE? Extend
it into a multi-year ROI
DO YOU THINK THAT HAVING MORE SATISFIED CUSTOMERS WILL
INCREASE THE RATE AND EASE OF CUSTOMER ACQUISITION?
Add customer attraction to the equation and consider altering the
cost of acquisition for new customers
IS YOUR COMPANY FOCUSED MORE ON CHANGES
ON A 10-POINT SCALE THAN A YES OR A NO?
This framework can be expanded to include those
changes as well
Q.
Q.
Q.
Q.

34. PUTTING THE
CUSTOMER FIRST
doesn’t mean
putting the
BOTTOM LINE
SECOND
KNOW THE MINDSETS OF YOUR FINANCE + C-SUITE AS WELL
AS YOU KNOW THE MINDSETS OF YOUR CUSTOMERS1
MEASURE FINANCIAL PROGRESS AS DILIGENTLY
AS YOU MEASURE CUSTOMER TOUCHPOINTS
SOCIALIZE ROI ACCOMPANYING CUSTOMER FEEDBACK
ANTICIPATE YOUR STAKEHOLDERS
NEEDS AS YOUR “OTHER” CUSTOMERS
BE AN ADVOCATE FOR YOUR BUSINESS AS
MUCH AS YOU ARE A CUSTOMER ADVOCATE
2
3
4
5
KNOW THE MINDSETS OF YOUR FINANCE + C-SUITE AS WELL
AS YOU KNOW THE MINDSETS OF YOUR CUSTOMERS1
MEASURE FINANCIAL PROGRESS AS DILIGENTLY
AS YOU MEASURE CUSTOMER TOUCHPOINTS
SOCIALIZE ROI ACCOMPANYING CUSTOMER FEEDBACK
ANTICIPATE YOUR STAKEHOLDERS
NEEDS AS YOUR “OTHER” CUSTOMERS
BE AN ADVOCATE FOR YOUR BUSINESS AS
MUCH AS YOU ARE A CUSTOMER ADVOCATE
2
3
4
5

35. Q&A
David Robbins
With: With:
Analytics Translator, Gongos, Inc.
LinkedIn page: /in/john-joba
Twitter ID: @_gongos
Website: https://gongos.com/
John Joba
Account Strategist, Gongos, Inc.
LinkedIn page: /in/davidwrobbins
Twitter ID: @_gongos
Website: https://gongos.com/
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