Unnamed 1, The DiJulius GroupThe companies that don’t invest in CX have leaders who don’t understand the financial impact it can have. A customer satisfaction survey (which can include a biased sample of survey responses) or a customer loyalty program will not provide enough insight into this key metric. Rather than methods that can result in skewed “vanity statistics,” executives and investors need a complex metric to which people can be held accountable, one which can provide data that is objective and, therefore, solid.

Every organization needs to create a Return on eXperience (ROX) dashboard. A ROX dashboard helps you determine precisely what victory looks like over time and offers insight into customer churn rates. It should contain three to four key performance indicators (KPIs) directly tied to the level of customer experience delivered by every customer-facing employee and department.

Typical KPIs which can appear on a ROX dashboard are:

  • Customer retention rate
  • % of new customer acquisition (advertising vs. referrals)
  • First-time call resolution
  • Customer complaints

Does Your Organization Know the Difference Between Bought Sales vs. Earned Sales?

I have always felt that the most undervalued metric businesses can track, obsess over, and build awareness of is customer referrals. In Fred Reichheld’s new book Winning on Purpose, and in my podcast interview with him on the same topic, he shares a critical new metric for measuring recurring revenue—the revenue growth generated by returning loyal customers and their referrals, i.e., those enjoying superior customer service experiences. He calls this complementary metric Earned Growth Rate (EGR).

Unnamed, The DiJulius GroupEGR was inspired by First Republic Bank, which had quantified how much of its growth resulted from customers returning for more and bringing their friends, as potential customers, along. The bank showed that its customer base accounted for 50% of its sales growth, with an additional 32% from current customer referrals, meaning 82% of the bank’s growth resulted from customer loyalty. In other words, it has a high percentage of customers who are happy enough to become brand evangelists. Another noteworthy example is Warby Parker, the direct-to-consumer pioneer in prescription eyeglasses and apparently, a stellar relationship builder. Nearly 90% of its first-time customers are earned through referrals!

It’s a valuable conversation to have. Are you struggling with high customer acquisition costs? The Harvard Business Review reports that customer acquisition costs can be up to 25 percent greater than those for holding onto existing customers. Rather than overly focusing your marketing efforts on new customers who may or may not “pay off” (e.g., one-time customers), more of those dollars might be better to keep your current profitable customers happy.

*Related – How to Attract a Bunch of Tesla-Driving, Peloton-Riding, Starbucks-Drinking, Apple-Using, Lululemon-Wearing Customers

Calculating Earned Growth Rate

It is more straightforward than it may sound to include this metric in your overall marketing strategy. First, a company needs to capture where each new customer came from accurately—advertising or referral. Then reports can be run based on the percentage of sales from each customer segment: repeat customers and referred customers vs. bought customers (via marketing campaigns, incentives such as discounts, etc.).

Calculating Earned Growth Rate

Tracking EGR can demonstrate how each team and location are performing by keeping track of how much growth results, in any given period, from customers and their friends coming back for more and extending their customer lifetime. Once your EGR tracking is in place, there’s even a formula for determining customer lifetime value. Divide gross annual sales by the total number of the year’s unique customers, and you’ll know the average amount from any one customer. For customer lifetime value, multiply that result by average customer lifespan (how long your typical customer sticks around, in terms of years). This data can offer valuable insight into recurrent customer experience themes and potential tweaks to your current customer service training.

*REGISTER for the 2022 Customer Service Revolution Conference

Episode 79 of the CSRevolution Podcast – Improve Communication to Retain Your Top Talent in an Employee Market


Quote of the Week

“Serving others is the meaning of why we are alive,

not what we do when it is convenient or can come back to benefit ourselves.”


CX Video Clip of the Week

Is it time to hire a CXO (Chief Experience Officer)?

We have added a New CXO Academy Class starting this fall

As a result of our 2022 Customer eXperience Executive Academy (CXEA) selling out, we have added a second class that will start in September 2022. The CXO Academy is a 12-month part-time program. The CXO student is required to attend quarterly 3-day intensive training sessions in Cleveland and participate in virtual meetings twice a quarter. Quarter 1 is September 13th – 15th.

Having worked with the top Customer Service organizations globally, The DiJulius Group’s CXEA course gives you both theoretical and practical experience on how to elevate the levels of service at your company. With the increasing need for the Customer eXperience Executive in businesses today, the CXEA teaches the X Commandment Methodology, which covers all facets and responsibilities that fall under Customer Experience. Unlike any other institution, the CXEA’s focus, strictly on the Customer and Employee experience, prepares leaders to champion change at any company, regardless of industry.

SEO Earned Growth Rate E1650398671983, The DiJulius Group





About The Author

John DiJulius

John R. DiJulius is a best-selling author, consultant, keynote speaker and President of The DiJulius Group, the leading Customer experience consulting firm in the nation. He blogs on Customer experience trends and best practices.