UsableMarkets

Forrester has been putting together a Customer Experience Index for the past few years. The index is a ranking of 133 large companies across 14 industries, and the companies are ranked based on how well customers rated their last experience with the company. It’s not clear to me, at least from their methodology, or from Bruce Temkin’s blog post announcing this year’s index, what channel — click or brick — the customers were thinking of. But perhaps that’s the point: to get companies thinking about their total customer experience, and not just one piece of it.

Setting aside my cynical side (hard, very hard) which says that this is nothing but a ploy to get companies to sign up for UX evaluations from Forrester, there is something rather interesting here. Assuming that the use of the term index is meant to indicate that this index could be comparative to other market indexes, like the S&P500, would it be feasible to construct an index of companies that create superior user experiences for their products and services, and track them in comparison to the market?

Such an index might look something like this, where I’ve taken ten of the top rated companies from the index (which strangely, or perhaps not, doesn’t include Apple — Apple shows up in the 35th spot) and compared them against the S&P500 over the past year … admittedly, not a normal market. The results are:

One year price comparison of 10 top companies in the CE Index (equally weighted) vs. the S&P 500

The detailed data is:

This brief, somewhat haphazard, analysis seems to suggest that there could be some market value in UX, however many questions remain:

• While it seems intuitive, and perhaps proven, that UX should boost revenue, how do we know that superior user experience is indeed causing a rise in the company’s stock price?
• If so, what piece of the UX strategy generated the revenue? Is it temporary, or permanent?
• How much more revenue does the experience generate? Was it worth it?
• Can the company continue to innovate on that experience? Can that possibly be baked into the stock price?
• Does the customer experience differentiate their company in their industry? Does it matter? (As an example, one could say that booksellers tend to provide highly satisfactory customer experiences, whereas health insurance companies tend not to, therefore, a health insurance company who managed to provide a good user experience should be more highly valued than a bookstore that can).

In addition, the results displayed above could purely be happening by chance (although we sincerely hope not). They also only cover one year of time. Hardly enough to say anything conclusive.

NB Jon Picoult also did a similar analysis — Yes, Virginia, There Is A Return On Customer Experience Investments — and his results align with mine, which is to say: interesting results, but hardly scientific.

~alex