The Quantifiable Impact of
Customer Experience
Driving Business Success in Healthcare
In today's fiercely competitive healthcare landscape, the pursuit of new patients often takes precedence, with practices celebrating each new acquisition as a significant victory. However, this focus on patient acquisition can overshadow an equally vital aspect of sustainable success in healthcare: nurturing and enhancing relationships with existing patients. While the significance of patient experience may initially seem intangible, recent studies have illuminated its profound and quantifiable impact on overall healthcare performance.
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Impact Across Business Models
Traditionally, the value of customer experience was viewed as subjective, based on the belief that it was simply "the right thing to do." However, recent research has taken a data-driven approach to quantify its impact on revenue growth.
This groundbreaking study published in Harvard Business Review analyzed two $1 billion+ businesses with different revenue models, demonstrating how exceptional customer experiences substantially influence future spending. By analyzing businesses with different revenue models, researchers have uncovered the measurable value of customer experience, offering insights applicable across industries, including healthcare.​​​
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Transactional Businesses: Boosting Repeat Purchases
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For businesses focused on return frequency and spend per visit, customers with the best past experiences spent 140% more compared to those with the poorest experiences (after accounting for variables that typically influence repeat visits such as how often the customer needs the type of goods and services that the company sells). This stark difference highlights the crucial role of customer experience in driving repeat purchases. ​
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Subscription-Based Businesses: Enhancing Customer Loyalty
The results for the subscription-based business were equally impressive. In subscription-based industries, customer retention, cross-selling, and upselling are paramount. The study revealed that customers rating experiences poorly had only a 43% chance of remaining subscribers after one year. Whereas, those giving top experience scores had a 74% chance of staying loyal for at least another year
Furthermore, top-rated experiences correlated with an average six-year subscription length, emphasizing the long-term impact of positive customer interactions.
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The Cost of Customer Experience
While this study clearly demonstrates the quantifiable, positive impact on business performance, many business leaders still struggle to justify investments in customer experience, citing the potential cost. But executives from leading CX organizations agree that delivering great experiences actually reduced their cost to serve customers.
Unhappy customers are expensive - they are more likely to require additional support and more likely to complain to others, negatively affecting your ratings and reviews. By systematically addressing the root causes of dissatisfaction, companies can not only enhance customer loyalty but also reduce the costs associated with serving those customers.
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For instance, Sprint has reported that their focus on improving customer experience led to a reduction in customer care costs by as much as 33%. This highlights the importance of investing in customer satisfaction initiatives, as resolving issues proactively can lead to significant savings and a more efficient service model.
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Implications for Healthcare Practices
For healthcare practices, especially those operating on a cash-based model, these findings have profound implications. The data suggests that investing in exceptional patient experiences can significantly boost both short-term revenue and long-term practice sustainability.
Patients who have positive experiences are likely to spend substantially more on services, return more frequently for care, and remain loyal to the practice for extended periods. In a cash-based setting, where patients have more freedom to choose their providers, this translates to higher per-visit revenue, increased patient retention, and a more stable patient base. Furthermore, satisfied patients are more likely to opt for additional services (cross-selling) or premium treatment options (upselling), further enhancing the practice's financial performance.
In addition to the obvious revenue benefits, investing in customer experience can also reduce operational costs. Addressing the root causes of patient dissatisfaction not only fosters loyalty but can reduce staff burden and improve the financial efficiency.
By prioritizing patient experience, cash-based healthcare practices can create a virtuous cycle of patient satisfaction, improved health outcomes, extend the average patient relationship to several years and create outstanding financial success.​​​
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