When you have a choice of where you do business, you tend to go with the company that you have had a better experience with. Many would refer to that as common sense. Any decent company tries to provide the best customer experience that they can. But when deciding what level of resources you can invest in customer experience, there is a question of how much it is actually worth to the company. What is the value of improving customer experience? That’s what Peter Kriss of Medallia and Vision Prize sought to quantify.
In an article for the Harvard Business Review, Kriss explains how they did it. They analyzed customer data at two different billion-plus dollar companies. One was a transaction-based business. The other was a relationship-based subscription business. Controlling for an assortment of factors that could skew the data, they took customer feedback and paired it with future spending by those same customers.