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New Research from Qualtrics Shows CX Quality Impacts Stock Performance

Companies with Best CX Saw Their Stock Value Rise; The Opposite was True for Low-CX Firms

Customer experience performance and stock market performance

New research from Qualtrics, the experience management (XM) provider, reveals a direct correlation between a company’s CX quality and its stock market performance. Companies with top-rated CX drove greater shareholder value than peers within their own industries, the research findings show, while the stock performance of organizations with poorly rated CX underperformed when compared to their cohorts in the same sector.

The research, conducted by the Qualtrics XM Institute, sought to understand how customer experiences could impact business performance. Using data from the institute’s Q2 2019 Consumer Benchmark Survey—an online study of 10,000 US consumers representative of age, income, ethnicity, and geographic region according to the most recent US Census—Qualtrics identified the 20 publicly traded companies with the highest and lowest XM Institute customer ratings. The business performance for all 40 companies was then normalized by comparing their stock prices against a representative industry index for each company, using the most appropriate S&P 500 or S&P 1500 industry index. To determine the normalized change for each quarter, Qualtrics subtracted the percent change of the industry index portfolios from the percent change of the company portfolios.

According to the results, companies with highly rated CX saw their stock performance increase 45% between 2019 and 2022. Conversely, the stock returns of companies with low CX ratings declined 21% during the same time period.

In another metric, the difference between stock prices of top-rated companies and their S&P industry index doubled between the end of 2019 and the end of 2021. And the difference between the stock performance of the companies with the highest and lowest CX ratings witnessed the biggest quarterly change between Q4 2019 and Q1 2020, just as COVID-19 started to impact the US.

The graph below shows the stock performance for XM leaders and laggards in 2019 compared to industry indices.

As more commerce is done digitally and customers are able to ask more of the companies with which they do business, leading organizations are making a strong customer experience an essential part of their strategy. A recent Qualtrics study shows that 73% of executives expect customers to become more demanding, up from 67% a year ago.

“Today’s customers have higher expectations of the brands they do business with, and these numbers show that investing in the customer experience and meeting those expectations can really pay off,” says Bruce Temkin, head of Qualtrics XM Institute. “Organizations that get it right can address customer feedback in a quick and meaningful way to set themselves apart in uncertain times.”  

Qualtrics, with co-headquarters in Provo, Utah, and Seattle, Washington, is the creator of the category now known as XM, which the company defines as the process of monitoring every interaction that people experience with a company in order to spot opportunities for improvement. In 2020, Qualtrics launched the Qualtrics XM Institute, a community and resource destination that offers members around the world access to original research and thought leadership insights on XM best practices. XM Institute also leads XM Pros, a global community of more than 6,000 XM leaders who participate in an ongoing calendar of monthly events.

Author Information

Alex is responsible for writing about trends and changes that are impacting the customer experience market. He had served as Principal Editor at Village Intelligence, a Los Angeles-based consultancy on technology impacting healthcare and healthcare-related industries. Alex was also Associate Director for Content Management at Omdia and Informa Tech, where he produced white papers, executive summaries, market insights, blogs, and other key content assets. His areas of coverage spanned the sectors grouped under the technology vertical, including semiconductors, smart technologies, enterprise & IT, media, displays, mobile, power, healthcare, China research, industrial and IoT, automotive, and transformative technologies.

At IHS Markit, he was Managing Editor of the company’s flagship IHS Quarterly, covering aerospace & defense, economics & country risk, chemicals, oil & gas, and other IHS verticals. He was Principal Editor of analyst output at iSuppli Corp. and Managing Editor of Market Watch, a fortnightly newsletter highlighting significant analyst report findings for pitching to the media. He started his career in writing as an Editor-Reporter for The Associated Press.

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