Ken McLoughlin · 760-802-5426 · LinkedIn · Talk with Ken
The Flywheel Effect
ePSNPSEBITDAValuations
Engaged employees drive customer loyalty. Loyalty drives profitability. Profits reinvest in people.

The research supports the direction of the flywheel. The CX3 Impact Report applies the model to a company's current state. Embedded fractional CXO leadership is the work that moves the company.

Employee Engagement (ePS)

Gallup. "The Benefits of Employee Engagement." Top-quartile engaged teams show 21% higher profitability, 17% higher productivity, 24-59% lower turnover.

gallup.com/workplace/236927/employee-engagement-drives-growth.aspx

Gallup. "The Relationship Between Engagement at Work and Organizational Outcomes." Meta-analysis of 276 organizations. Business units in the top half on engagement nearly double their odds of success.

workcompprofessionals.com/.../MetaAnalysis_Q12_ResearchPaper.pdf

Gallup. "Well-Being in the Workplace and Its Relationship to Business Outcomes." Top-quartile engaged units produce 1-4 percentage points higher profitability.

media.gallup.com/.../whitepaper--well-beingintheworkplace.pdf

Gallup. "Employee Engagement on the Rise in the U.S." Organizations with highly engaged employees achieve earnings-per-share growth 4x that of competitors.

news.gallup.com/poll/241649/employee-engagement-rise.aspx

Customer Loyalty (NPS)

Bain & Company. "How Net Promoter Score Relates to Growth." NPS leaders outgrow competitors by 2x or more. NPS explains 20-60% of variation in organic growth rates.

netpromotersystem.com/.../how-net-promoter-score-relates-to-growth

Bain & Company. "Net Promoter 3.0." Harvard Business Review. NPS leader firms delivered median total shareholder return 5x the US median over a decade.

bain.com/insights/net-promoter-3-0

McKinsey & Company. "Experience-Led Growth: A New Way to Create Value." CX leaders achieved 2x+ revenue growth vs. CX laggards (2016-2021). CX improvements increase sales 2-7% and profitability 1-2%.

mckinsey.com/.../experience-led-growth-a-new-way-to-create-value

Forrester Research. "2024 US Customer Experience Index." Customer-obsessed organizations report 41% faster revenue growth, 49% faster profit growth, 51% better retention.

forrester.com/.../forrester-2024-us-customer-experience-index

McKinsey & Company. "Customer Experience: Creating Value Through Transforming Customer Journeys." CX optimization delivers 5-10% revenue growth and 15-25% cost reduction within 2-3 years.

mckinsey.com/.../customer-experience-creating-value-through-transforming-customer-journeys

EBITDA & Financial Performance

Bain & Company. "The Economics of Loyalty." Increasing customer retention by 5% increases profits by 25-95%. Referenced across Bain publications and Harvard Business Review.

Harvard Business Review. Markey, Rob. "Are You Undervaluing Your Customers?" January 2020. Short-term profit tactics erode loyalty and reduce customer lifetime value.

hbr.org/2020/01/are-you-undervaluing-your-customers

McKinsey & Company. "Best of Both Worlds: Customer Experience for More Revenues and Lower Costs." Improving customer journeys increases revenues 10-15% while lowering cost to serve 15-20%.

mckinsey.com/.../best-of-both-worlds-customer-experience

Forrester Research. "How Customer Experience Impacts Company Stock Performance." March 2021. Top 20% of CX Index brands had higher stock price growth and total returns than bottom 20%.

forrester.com/.../how-customer-experience-impacts-company-stock-performance

Harvard Business School. Hallowell, Roger. "The Relationships of Customer Satisfaction, Customer Loyalty, and Profitability." International Journal of Service Industry Management, 1996.

hbs.edu/faculty/Pages/item.aspx?num=4428

Which of these published links is your company capturing?

See your numbers

The CX3 Impact Report applies this research to your company's current state. The work is making Visionary CX™ real through embedded fractional CXO leadership.

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