Part 1: What is return on experience and why is it important?

In this 3-part series, I’m going to discuss what we mean by return on experience, the link between customer and employee experience, and how to operationalize great experience in a way that is repeatable and adaptive to change. These concepts are taken from my book, The Center of Experience, available in print and digital versions.

Before we get to return on experience, let’s define what we mean by both customer experience and employee experience. To do that, let’s briefly discuss what each is and is not.

Customer experience isn’t only customer service, or a company’s net promoter score (NPS), or the usability of the company’s website or mobile app. It does, however, consist of all of that and more taken as a whole. Customer experience is the consumer’s perception of their entire experience with a brand, from the very first moment, to the moment they decide to either buy again, or quit buying from that company.

Similarly, employee experience isn’t your benefits and retirement program, your vacation or remote work policy, or even your training and development programs. It is, instead, the overall perception of the employee’s experience applying, onboarding, growing, and ultimately leaving a company.

What is return on experience?

Return on experience would be easier to measure if it was simply based on one of the dimiensonios I mentioned above. Instead, though it is the return on investment in creating the overall experience that leads to either the customer or employee’s perception of their experience.  While this is more difficult than calculating individual touchpoints such as the effectiveness of an e-commerce checkout process, or measuring completions of an engagement survey, it is ultimately more rewarding and provides better insights on how you can create long-lasting customer and employee relationships.

While I will mainly focus on the customer experience portion of return on experience, it is important to understand the relationship between customer and employee experience as well. This is something I’ll discuss in a little more detail in the next article in this series.

Why is return on experience so important?

Let’s start with the obvious. Return on experience is important, just like it is critical to show a return on investment on any initiative in any organization. Diving deeper, however, there are several dimensions to its importance.

Who doesn’t love their customers?

I bet if you asked just about any company if they love their customers, their answer would be a definitive “yes.” After all, what kind of company doesn’t appreciate the individuals and organizations that bring them revenue and more customers through word of mouth?

While everyone says they love customers, many companies have a hard time justifying the expense of creating delightful experiences that go beyond selling a product or service for a reasonable price. One could argue that some companies have a hard enough time delivering on that.

The reasons behind why so many companies are still lagging behind in providing great customer experience are vast, and we certainly can’t go into detail about each rationale in this article. We can, however, say that companies that don’t invest in creating great experiences are losing out in an area that has become the primary differentiating factor between brands.

Return on experience helps both the customer and the company

This brings us to return on experience, and why it is so important to companies in a world where consumers want and expect personalized service, and are surrounded by choices from other brands willing to go the extra mile to compete on experience.

The first step in creating great experiences is the intent to do so, but unless you’re able to measure it, you won’t know how or where iit needs improvement. Being intentional about measuring and optimizing your return on experience initiatives helps you do just that. 

This helps your company to better allocate resources to areas where they are needed most, and it helps your customers by emphasizing the importance of a holistic approach to customer experience throughout the organization. It is only when customer experience is thought of in this way that you can create a win-win for both your customers and your internal stakeholders.

In the next article, I’m going to discuss the link  between customer and employee experience, as  well as how to measure return on experience.

You can read more about all of these topics and more in my book, The Center of Experience, available in print and digital versions.