How To Convince Your Boss To Invest In Customer Satisfaction


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Happy Customers Produce Profitable Companies
Happy Customers Produce Profitable Companies

Study after study shows that companies with satisfied customers outperform the rest of the market. Yet for some reason, investing in improving customer satisfaction is still a tough sell. In a recent interview, I chatted with Kerry Bodine, co-author of Outside In: The Power of Putting Customers at the Center of Your Business, about why, and how to overcome that challenge.

The Business Case for Customer Satisfaction

Kerry Bodine says that part of the problem is that customer experience “is not easy to put into a spreadsheet.” But there is plenty of data that can show a positive ROI from investing in customer satisfaction. Here are some things that might help persuade your boss:

1. Better Stock Market Returns

Researchers at the University of Michigan found that if, in the year 2000, you had invested $100 in the overall US stock market (as represented by the S&P 500 index), by 2012 you’d be down to $93, or a loss of 7%.

But if you had invested in a fund made up of companies that scored well on the American Customer Satisfaction Index over that same time, your $100 would have turned into $490, or an increase of 390%! 

They saw similar results in the UK.

American Customer Satisfaction Index_Stock Returns
Companies with happy customers massively outperform the S&P 500

2. Avoiding Waste

One of the biggest sources of customer dissatisfaction is being passed from person to person when trying to get help or solve a problem. This doesn’t just waste the customer’s time, it wastes your staff’s time and costs you money.

If you examine your processes you will almost always find that there are inefficiencies that have crept in over time. Streamlining the process will save your organization time and money, because fewer people and less paperwork will have to be involved.

By reducing those “handoff” points within your company, you’ll have fewer places were errors can happen.

Fewer errors means fewer unhappy customers.

Fewer unhappy customers means less staff time and money spent handling problems. It’s a virtuous circle.

3. Market Share

Continuing on from point 2, fewer problems means that customers will be more likely to buy from you again, and more likely to recommend you to their friends and colleagues.

That leads to more sales.

Not only will it lead to more sales, if more of them come from repeat and referral business, the cost of making those sales is much lower than it would be if you were chasing new or unreferred customers.

In the social media era, the potential for gaining new business from positive word of mouth is magnified. It’s no longer “you tell 2 friends and they’ll tell 2 friends…”. Now it’s more like “you Facebook post to 200 friends and they’ll Tweet to 2,000 followers.”

The downside is that negative word of mouth can hurt you faster than in the pre-Internet world too. But that’s all the more reason why your company needs to invest in improved customer experiences.

Calculate what a 1% drop in market share would do to your business. Compare that to the cost of a customer experience initiative, even a small one, that will offset negative word of mouth and help stabilize or gain market share. You will find that it doesn’t take much to justify that investment.

What Else Can Convince The Boss?

Kerry suggests a few non-financial things that tend to work well in making the case for investing in improved customer satisfaction.

  1. Show case studies. Show them what’s been done by some of their peers. Companies the boss can relate to. If they can do it, maybe we can too.
  2. Bring in the voice of the customer (VOC). Get the doubters to listen in on some customer service calls, to watch the results of usability testing of your website, to read the actual words used by customers on surveys. As Kerry says, “Hearing the voice of the customer is tough… but it is one of the most effective things you can do.”
  3. Start with a small pilot project that can show quick results. It doesn’t take much. Even something as small as changing how call center representatives show empathy with the customer can have big and fast effects.

Once executives see success, they are more likely to buy in. For that matter, your staff will also be more likely to buy in. And your customers will be more likely to buy agin. (Sorry, couldn’t resist the rhyme!)

This is a version of an article that first appeared on the Frank Reactions website. To hear the interview with Kerry Bodine or download a transcript of it, visit or find the Frank Reactions podcast on iTunes or Stitcher.

Tema Frank
Tema Frank, Chief Instigator at Frank Reactions, is a pioneer in assessing multi-channel customer experience. She was testing omni-channel customer service with her 1st company, Web Mystery Shoppers, before "omnichannel" was a thing! Hers was one of the world's 1st companies to do real-world testing of online and offline customer service & usability. A best-selling author & highly rated international speaker, she hosts the Frank Reactions podcast, and is the author of the new book PeopleShock: The Path to Profits When Customers Rule. Get the 1st chapter free at .


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