It was for this reason that HBR wanted to explore ways of quantifying the impact of good versus poor customer experiences - and then see what the value was in delivering them. In order to do so, we gained access to experience and revenue data from two global, $1B+ businesses. One of these was a transaction-based business; the other, a relationship-based subscription business. What the found: not only it is possible to quantify the impact of customer experience - but the effects are huge. HBR looked at two companies with different revenue models - one transactional, the other subscription-based - using two common elements that are relevant to all industries: customer feedback, and future spending by individual customers. To see the effect of experience on future spending, we looked at experience data from individual customers at a point in time, and then looked at those individual customers’ spending behaviors over the subsequent year. While transactional businesses primarily care about return frequency and spend per visit, subscription-oriented industries focus on retention, cross-sell, and upsell. We used multiple regression to account for factors that might drive these outcomes other than customer experience - for instance, the fact that exercise enthusiasts might simply enjoy their gym membership more regardless of experience - and estimate how much of the behavioral differences were due to past customer experience. After doing so, it soon became clear: customer experience is a major driver of future revenue. The results: after controlling for other factors that drive repeat purchases in the transaction-based business (for example, how often the customer needs the type of goods and services that the company sells), customers who had the best past experiences spend 140% more compared to those who had the poorest past experience. Get the full story at Harvard Business Review