- 67% of customers who had a great experience with an employee said they would buy again from that organisation, compared to 11% who had a bad experience.
- 63% of customers who had a great experience with an employee said they would recommend that organisation, compared to 10% who had a bad experience.
ROI Toolkit
Investing in service improves customer satisfaction, drives retention, and ultimately boosts revenue.
The methodology
The following outlines the recommended steps to implement this metric:
- Collect your CSAT/NPS data ā Gather all your customer satisfaction (CSAT) or Net Promoter Score (NPS) data, ensuring it is directly linked to individual customers.
- Analyse the correlations ā Track customer retention and churn over time, identifying statistical relationships between CSAT/NPS improvements and changes in retention rates. Isolate an improvement and see how this has impacted CSAT/NPS and retention.
- Establish the business impact ā Quantify the effect of higher CSAT/NPS on retention specifically, demonstrating how an increase in satisfaction leads to a reduction in churn and an increase in customer loyalty.
- Calculate the financial consequenceĀ ā Determine the revenue impact of improved retention, translating increased customer lifespan into additional business revenue.
- ROI Calculation ā Compare the financial benefit of increased retention-driven revenue against the initial investment in service improvements.
An example of how an organisation might use the CSAT and Retention metric
A subscription-based company wanted to understand how customer satisfaction (CSAT/NPS) impacted retention. They tracked CSAT scores alongside churn rates over six months, identifying a clear correlationāhigher CSAT led to lower churn.Ā By quantifying this link, they found that a 10-point NPS increase reduced churn by 5%, translating to Ā£4M in retained revenue. With a Ā£1M investment in service improvements, their net ROI was Ā£3M.
This analysis proved that investing in customer experience directly drives retention, revenue, and long-term business growth.
Things to consider
This method is most effective in sectors with recurring revenue, such as Insurance, Energy, and Telecoms, where customer retention and churn significantly impact long-term profitability.
While proving this metric demonstrates the business value of improving CSAT, it does not pinpoint which service strategies will drive the greatest improvement. Additional analysis is required to identify the most effective initiatives.
Key research/insight from us
Research from post card
The Customer Knows (2016)
The Customer Knows (2016)
Productivity UK
Productivity UK
With almost 80% of UK GDP generated by the service sector, there is an urgent need to define, develop and measure productivity in a service context.
This Breakthrough Research examines the perspectives of senior managers, employees and customers on productivity in a service context.
The research looks at how organisations have sought to improve both their productivity and customer satisfaction, and recommends a framework to enable organisations to improve and measure their performance.
Building the Service Nation
Building the Service Nation
The research is based on interviews with senior executives (including Chief Executive Officers, Chief Operating Officers and Customer Service or Customer Experience Directors) and online surveys with 751 employees in a variety of roles, across organisations and sectors, 929 consumers and 500 young people aged between 16 and 21. The research was conducted between December 2022 and February 2023.
Around 67% of UK employees spanning a wide range of roles, departments or functions, spend significant amounts of time in their job dealing with customers. Therefore, for many organisations, the profession of customer service is about embedding a service culture to deliver the organisationās commercial and customer experience objectives, as well as developing appropriate skills in specific roles.Ā The research identifies that there is a growing requirement for broader and more advanced skills and lays out in detail what these skills and capabilities will be.
Customer service provides a challenging and rewarding career with genuine pathways to develop skills and experience but potential employees are not always aware of the breadth of career opportunities and many are more likely to see customer service as a foundation for other careers than a respected profession offering good career opportunities.Ā The research presents 5 main pathways for careers in customer service.
To conclude, our research highlights 9 areas to improve the perception and recognition of roles and careers in customer service as well as practical recommendations to aid organisations in addressing them.
A connected world?
A connected world?
Key themes of the research include:
- Which technologies and applications will be most important for customer experience
- What is required to implement technologies successfully and achieve business performance and customer service objectives?
- How best to achieve optimum blend of human and technology-based experiences?
- What should organisations do to reduce the risk of digital exclusion ?
- From an AI, data or personalisation perspective are there technologies that are āoff limitsā?
