Why should I invest in improving the Constituent experience at my nonprofit?

It is reasonable to ask, if my nonprofit invests in the constituent experience, will it work? If you are in the C-Suite, that is the question.

I only know of one nonprofit that uses something like the Forrester Customer Experience Index to measure things so I don’t have any benchmark data. I would love to learn there are more nonprofits using this measure and I would give anything to analyze the data. Here is what we know from the for profit world.

This question drove Watermark Consulting to evaluate the macro impact of customer experience excellence. They’ve accomplished this over the years by studying the total returns for two model stock portfolios comprised of the Top 10 (“Leaders”) and Bottom 10 (“Laggards”) publicly traded companies in Forrester Research’s annual Customer Experience Index ranking. The results are stunning.

For the 6-year period from 2007 to 2012, the Customer Experience Leaders in their study outperformed the broader market, generating a total return that was three times higher on average than the S&P 500 Index. Furthermore, while the Customer Experience Leaders handily beat the S&P 500, the Laggards trailed it by a wide margin.

Keep in mind, this analysis reflects more than half a decade of performance results.  It spans an entire economic cycle, from the pre-recession market peak in 2007 to the post-recession recovery that continues today. The Customer Experience Leaders in this study are clearly enjoying the many benefits that happy, loyal customers deliver:  better retention, greater wallet share, lower acquisition costs and more cost-efficient service.

And the Laggards?  They are being crushed under the weight of high customer turnover, escalating acquisition costs and an uncompetitive cost structure that is inflated by each customer complaint and avoidable inquiry.

 

Do you want to be a leader or a laggard?