GUIDE 2022

What is the Customer Experience?

 Curious to know what the customer experience entails?

Then look no further.

For many companies, a good customer experience is often at the forefront of their business goals. Hotjar reports that 37% of mature companies consider delivering an outstanding experience as their number one goal.

In this article, we explore the metric of customer experience and all the features which make it relevant to the company’s ability to gain a competitive advantage.

Let’s dive right into the discussion.

 

What is Customer Experience?

Customer experience, or CX for short, is a term that describes how a business engages with its customers, often at multiple levels. In other words, it is the totality of customer interactions with a company. 

Customer interactions are either direct or indirect. Direct customer experience refers to any interactions the customer initiates, such as purchases, use of products, and any contact with customer service teams. Indirect customer experience refers to the efforts companies make toward beginning customer journeys, such as marketing and reviews, to name a few.

These interactions take every customer touchpoint into account. Customer touchpoints refer to every point of the buying journey and span from the moment a customer makes a purchase, uses the product, and advances to repeat purchases. It also encompasses marketing, sales, and customer service through digital channels or otherwise.

The company’s response to each customer touchpoint, whether they make improvements or not, has a significant influence on how successful the business is. This is because the customer experience depends on the customer’s perspective and how customers feel about said business. 

A positive customer experience increases the likelihood of buyer loyalty and retention. This happens when a brand meets or exceeds customer expectations. Therefore, it is understandable that the customers are the ultimate arbiters.

 

What are the Main Customer Experience Touchpoints?

Credit: interaction-design.org

CX encompasses the customer journey. To keep track of the buyer’s journey, brands use the following touchpoints:

Touchpoints Before a Purchase

These are central to brand discovery and call into question the customer’s initial encounter with the brand and the ease with which it happens:

  • Social media accounts
  • Online advertising and digital marketing 
  • Company events
  • Peer referrals

Touchpoints During a Purchase

These account for testing and actual purchasing of products, whether in-store or online:

  • Interactions with the customer service and support team
  • Product catalogs (images and descriptions)
  • Product reviews
  • Point of sale

Touchpoints After a Purchase

These encompass the overall post-sales experience for the customer:

  • Product feedback surveys
  • Thank you letters
  • Billing actions
  • Subscription renewals

Touchpoints in Customer Service

These are a direct reflection of interactions between the customer and customer service teams:

  • Customer support channels
  • Customer loyalty programs
  • Customer onboarding (assuring them that their decision to purchase was right)
  • Self-Service resources (for example, troubleshooting walkthroughs)

 

The Difference Between Customer Experience and Customer Service

The use of these terms is often interchangeable. However, it is important to note that although they have similarities, they are not synonymous. In short, customer service is an aspect of the customer experience because it refers to providing support to customers.

A customer service team manages the direct interactions between the business and the customer. This method of communication occurs in two ways, first, in person, such as within office spaces or physical shops. Second, via digital channels such as email, telephone, social media, website support pages, and chatbots.

While good customer service is key to fostering a good customer experience, it is not the only factor to consider. CX doesn’t just focus on positive customer interactions. Instead, it spans the entire organization from more complex aspects like product design to music playlists at brick-and-mortar stores.

 

Why Does Customer Experience Matter?

Whether or not a customer chooses a product varies, and some key factors they consider are price, necessity, and peer recommendations. The role of CX, in this instance, is to establish more concrete reasons for choosing a particular company or brand.

A major deciding factor for customers is their connection to their favorite brands and the extent to which the companies respect and understand their needs. CX is, by far, the main differentiator, and as such, it is beneficial that every business has a CX strategy that prioritizes customer needs and ensures favorable interactions at every customer touchpoint.

Good customer experience has an impact on the overall customer perceptions of the brand. Some influences on how customers feel about the company are:

  • Attractive marketing campaigns
  • Ease of navigation on websites
  • Strength of sales and service tactics at business-to-business (B2B) and business-to-customer (B2C) levels
  • Ease of access to customer information

 

How to Manage Customer Experience

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At the forefront of customer experience management (CEM) is the customer experience strategy. The objective is to improve every interaction between the company and the customer to foster customer loyalty and retention.

A customer experience strategy is a plan that outlines the requirements for delivering a positive customer experience. It considers certain business elements, including consumer research, company objectives, and value statements.

Here are four steps for creating a CX strategy:

  1. Understand the customer needs and behaviors to allow for accurate use of marketing techniques.
  2. Create a customer journey map. Customer journey mapping involves creating visual representations of customer interactions and touchpoints (across various mediums) and compiling this data for further analysis. This is essential for measuring the customer experience.
  3. Develop an emotional connection between the company and the customer by tailoring the brand in such a way that it fosters a long-standing relationship between the two parties.
  4. Obtain customer feedback through qualitative methods such as surveys. Capturing the Voice of the Customer (VoC) is a direct approach to getting feedback and enables companies to make customer-centric decisions. 

It is also necessary to include all departments across the entire company to ensure the alignment of goals and that they remain central to the customer experience. 

 

The Importance of Customer Experience to Business Success

The degree to which companies meet customer satisfaction is vital to business growth and success. Many companies choose to prioritize a positive customer experience because of its impact on brand loyalty and customer expectations.

Other advantages of good CX are:

  • It results in higher conversions and guarantees a return on investment (ROI) from marketing efforts.
  • Existing customers are not reluctant to make purchases even when there are increases in prices. This is evidence of high rates of customer retention.
  • Increases in word-of-mouth recommendations. Studies show that when consumers are happy with a product, they recommend it to friends and family.
  • A better understanding of customers due to gathering customer data at every touchpoint.
  • It improves brand value by creating a good reputation because there is an understanding of how to foster positive customer perceptions.
  • It regulates the cost of production because the company has insight into what features provide value and address customer needs.
  • It reduces customer complaints since their experience is positive, which means less customer churn. This refers to when customers stop using a company’s products.

 

What Causes a Bad Customer Experience?

The quality of customer experience the company creates is a primary measure of whether the business has happy or unhappy customers. Negative experiences are bad for business, and therefore, it is essential that companies know what warrants a bad experience and how to avoid them.

Some of the most common causes of failures in customer experience are:

  • Lack of cooperation across the organization. This occurs when different departments don’t align their strategies to work toward similar CX goals.
  • Unclear customer journey. Having a customer journey map encourages brands to understand and connect with their customers.
  • Lack of technology. Using technology for collecting customer feedback enables brands to analyze customer data and deliver greater customer satisfaction.
  • Extensive wait and response times from the customer support team.
  • The brand’s inability to resolve issues and queries.
  • Impersonal or unfriendly customer service teams.
  • Slow loading times and unresponsiveness on digital platforms.
  • High influx of emails and notifications
  • Websites that are difficult to navigate
  • Products that do not meet customer expectations

Take note that in today’s market, customers prefer a customizable approach to brand interactions rather than the impersonal approaches of the past. It is a simple demand, considering the wealth of information they provide, whether intentional or not.

 

Key Components of Good Customer Experience

Credit: marketingweek.com

There are numerous elements that contribute toward providing a superior customer experience. Keep in mind that the purpose is to meet or exceed customer expectations. 

Here are four business components that characterize a quality customer experience:

1. Listening to Customers

Monitoring the customer journey is vital to obtaining information about customers, and the intent is to use this information to gain a better understanding of the customer’s needs. When a company prioritizes these needs, it places them in a better position to provide a pleasant customer experience.

2. Using Feedback to Learn About Customers

Obtaining customer feedback is a useful metric for learning who they are, what they need, and their genuine perception of the organization. With this knowledge, companies have an important tool that ensures they provide a better experience and increase customer lifetime value.

3. Automating Data Collection

In order to have a consistent method of collecting and analyzing customer feedback, automation is a practical choice. It ensures quick and accurate replication of the systems that companies use to obtain information.

4. Simplifying the Customer Journey

A primary indicator of business success is ensuring that the customers follow through with their purchases to the end. Understanding the customer personas and their experience is a helpful avenue for determining whether they encounter issues during the journey that influence their desire to continue.

 

How to Measure Customer Experience

There are several metrics available that allow companies to measure CX. The intent is always to use these analyses to increase customer satisfaction.

Net Promoter Score (NPS)

This is one of the most common customer experience metrics. It measures brand loyalty by posing a question to customers about the likelihood of them recommending the company, product, or service to a friend. Customers then provide a rating on a scale of 0 to 10, with 10 being the most probable. 

To calculate the overall net promoter score, subtract the percentage of lowest ratings (detractors) from the percentage of highest ratings (promoters).

Customer Satisfaction Score (CSAT)

This is another common metric that gauges the customer experience by asking how the customer rates their overall satisfaction with the service or product. In this instance, a 1 to 5 rating is suitable, with 1 representing total dissatisfaction and 5 representing complete satisfaction.

Customer Churn Rate

An alternative term for this metric is customer attrition, which refers to the number of paying customers who fail to become repeat or loyal customers. To calculate the churn rate, divide the number of users or customers lost during a period by the number of customers at the beginning of the same period.

 

Best Practices for Delivering Great Customer Experience 

Business customers expect to have a positive experience when they decide to embark on their customer journey. It is the company’s duty to ensure that they fulfill the customer’s needs.

Here are three business practices for delivering a great customer experience:

1. Be Customer-Centric

The customer is the focal point of every business venture, so it is important to prioritize the business strategy, products, and services in accordance with their needs. The goal is to increase brand loyalty and attain customer advocacy and satisfaction.

2. Use technology 

Tracking customer experience data to analyze trends is possible at several levels: individual, device, and account, to name a few. The idea is to use this data to personalize the customer experience. Leveraging technology to track these patterns at scale ensures more accurate deliverables. Some helpful platforms include customer data platforms (CDP), data management platforms (DMP), and other customer management platforms such as email automation.

3. Be Consistent

CX is a dependable experience when engaging with a company or product. Providing consistent customer experiences throughout all channels, digital or face-to-face, is a definite way to drive positive experiences.

 

Customer Experience: Key Takeaways

The objective of any company that engages in direct or indirect customer interaction is to ensure that the customer’s experience is favorable. To achieve this, it is important to establish a customer experience strategy that solicits real-time feedback that allows the organization to measure customer satisfaction.

CX is important to business success because it determines whether a brand converts customers into loyal customers while also attracting new customers. Using the appropriate technology and marketing materials demonstrates that the company understands its priorities and the customer journey well enough to streamline and achieve a high-value sales process.

 

Josh Fechter
Josh Fechter is the co-founder of Product HQ, founder of Technical Writer HQ, and founder and head of product of Squibler. You can connect with him on LinkedIn here.