Ken McLoughlin · 760-802-5426 · LinkedIn · Talk with Ken

The math sizes the opportunity. The math is not the product. The product is embedded fractional CXO leadership that makes Visionary CX™ real inside the business.

The model is built to be conservative and transparent, not gimmicky. Every assumption is shown so leadership can audit it.

ePS and NPS are gauges, not the strategy. The strategy is building the company that makes those scores rise organically.

The CX3 Flywheel

The CX3 model is built on a well-researched causal chain. Each link has decades of data behind it.

The Causal Chain

ePSNPSRetentionEBITDAValuation

Employee engagement drives customer loyalty. Customer loyalty drives retention. Retention drives profitability. Profitability drives valuation. The cycle repeats.

CX3 Score to Industry Quartile Mapping

Your CX3 score maps to industry quartile performance based on Gallup Q12 engagement benchmarks and Bain NPS research. The projections are interpolated based on your position within the range, not fixed increments.

CX3 Score Zone Industry Quartile ePS Range NPS Range
0-20 Siloed CX Bottom 25% -10 to +10 -5 to +10
21-35 Fragmented CX 25-50% +10 to +25 +10 to +25
36-50 Aligned CX 50-75% +25 to +45 +25 to +45
51-58 Visionary CX™ Top 25% +45 to +60 +45 to +70

The Formulas

Here's exactly how we calculate each component of your projected ROI. No black boxes.

1. EBITDA Lift from Employee Engagement (ePS)

EBITDA × (ePS improvement ÷ 10) × 5.25% = EBITDA Lift

The logic: For every 10-point improvement in ePS, we apply a 5.25% EBITDA lift. This is approximately 25% of Gallup's documented 21% top-quartile premium, making it a conservative estimate.

Research: Gallup meta-analysis of 276 organizations shows top-quartile engagement delivers 21% higher profitability.

2. Revenue Acceleration from NPS Improvement

Revenue × (NPS improvement ÷ 10) × 2.5% = Revenue Acceleration

The logic: For every 10-point NPS improvement, revenue accelerates by approximately 2.5% through referrals, expanded accounts, and reduced friction in the sales cycle.

Research: Bain & Company research shows NPS leaders grow 2x faster than competitors. LSE study confirms correlation between NPS and revenue growth.

3. Churn Reduction Value

Revenue × Churn Rate × (NPS improvement ÷ 10) × 7.2% = Retained Revenue

The logic: Every 10-point NPS improvement reduces churn by approximately 7.2%. We multiply this by your annual revenue lost to churn to calculate retained revenue.

Research: Bain research shows 5% retention improvement can increase profits 25-95%. NPS-to-churn correlation validated across industries.

4. Employee Turnover Savings

Employees × Avg Salary × Turnover Rate × Replacement Cost × Reduction % = Savings

The logic: Engaged employees stay longer. We calculate current turnover cost (typically 50-200% of salary to replace) and apply engagement-driven reduction rates.

Research: Gallup shows engaged teams have 43% lower turnover. SHRM estimates replacement costs at 50-200% of annual salary.

5. Valuation Impact

(Improved EBITDA) × (Industry Multiple + Premium) = Enterprise Value Lift

The logic: Companies with high ePS, high NPS, and predictable revenue command higher valuation multiples. Lower churn means lower risk. Engaged teams mean sustainable performance.

Research: PE and M&A data consistently shows 1-2x multiple premiums for companies with strong customer and employee metrics.

Research-Backed Multipliers

Every multiplier in the model is grounded in published research and recognized industry benchmarks. We use conservative estimates, typically 25-50% of documented top-quartile performance.

5.25%
EBITDA lift per 10-pt ePS gain
~25% of Gallup's 21% premium
2.5%
Revenue acceleration per 10-pt NPS
Bain NPS-to-growth research
7.2%
Churn reduction per 10-pt NPS
Bain retention economics
43%
Lower turnover (engaged teams)
Gallup Q12 meta-analysis
21%
Higher profitability (top quartile)
Gallup 276-org study
2x
Growth rate (NPS leaders)
Bain & Company

Research Foundation

The CX3 methodology draws from published research, recognized studies, established business evidence, and industry benchmarks.

Gallup

Q12 engagement research, 276-organization meta-analysis, productivity and profitability correlations

Bain & Company

Net Promoter System, NPS-to-growth correlation, retention economics, customer lifetime value

McKinsey

CX-driven growth rates, operational efficiency gains, digital transformation ROI

Harvard Business Review

Service-profit chain research, employee-customer-profit linkage, organizational alignment studies

Why we show the math

Transparency builds trust. Every assumption here is visible so leadership can audit it. The CX3 Impact Report applies this same math to your company's numbers, and the work is making Visionary CX™ real through embedded fractional CXO leadership.

What would these assumptions produce on your numbers?

Size the opportunity inside your company

The CX3 Impact Report uses this same math to model what movement toward Visionary CX™ could mean for your company. The work is making Visionary CX™ real through embedded fractional CXO leadership.

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