What is customer experience?
Unlike customer service or customer relationship management, customer experience does not map neatly to a single area of your business. Essentially, customer experience (CX) refers to how a customer perceives your brand based on their exposure to it.
Customer experience is an increasingly popular term in business, especially when it comes to long-term strategy and planning. You set the overall context of a customer’s experience: your product or service, messaging, and interactions at the sale and post-sale stage. But the perception of how these touchpoints are experienced is the customer’s. It is not something you control (although you can certainly influence it). Instead, it is defined by your customers and their journey.
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The importance of customer experience
Most organizations recognise the importance of customer experience at its core: delivering consistently on your brand promise, and providing customers an optimized experience, brings financial rewards. But that represents a shift from previous years, where brands chased after higher Net Promoter Score (NPS), without connecting it to financial performance or competitive advantage.
We see our customers as invited guests to a party. And we are the hosts. It’s our job every day to make every important aspect of the customer experience a little bit better.
– Jeff Bezos, Amazon
As organizations evolve their CX mindset, they’ve recognised that CX is a means to an end. High CX metrics mean little without an associated uplift in financial performance.
5 benefits of improving CX:
- Drive revenue and customer lifetime value
- Increase brand value
- Boost customer loyalty and advocacy
- Keep close to customers and changing behaviors
- Reduce costs and invest in the right things
How CX leaders outperform CX laggards:
- #1 – By 2020, customer experience will overtake price and product as the key brand differentiator – Walker
- 86% – of those who received a great customer experience were likely to repurchase from the same company; compared to just 13% of those who received a poor CX – Temkin Group
- 6x – Between 2010-2015, CX leaders grew 6x faster than CX laggards – Forrester
Customer experience versus customer service
It’s worth taking a moment to differentiate customer experience from the better-known idea of customer service, since it’s not unusual to see the two terms used interchangeably. This is understandable, since customer service and customer experience management have an important shared goal – making customers happy.
However, rather than simply being a new label for an old idea, customer experience is a much wider concept that includes customer service and much more besides.
Customer service is the quality of attention and care you provide for your customers, whether over email in a contact center, face to face on a shop floor or across a reception desk. It can be provided through customer touch points with staff, or via service-based tools such as website support pages and customer service chatbots.
As a department or job title, customer service is a customer-facing role that has the remit of answering queries and dealing with routine aftercare and any complaints that arise. It is a component part of customer experience, albeit a crucial one.
Customer experience encompasses customer service quality and also marketing, advertising, merchandising, product design, hiring decisions, logistics, brand purpose, in-store aesthetics, supply chain choices and just about every other part of your business operation that affects customer outcomes. It also extends beyond your sphere of control, drawing from third-party reviews and opinion, press and media coverage and even popular culture if your brand has a high enough profile.
Long story short – CX is vast in scope, and customer service is a relatively small part of it.
What is a good customer experience?
We’ve touched on the fact that a customer’s experience isn’t totally within a brand’s control. There are a couple of reasons for this.
- Customer experience is made up of a wide range of factors, some of which are outside of the company’s direct influence (for example user-generated social media content, third party reviews).
- Customers create their own journeys, rather than following a prescribed process. They stop and start, move from one platform or channel to another, and sometimes retrace their steps. Customer experience derives from the journey as a whole, not the quality of each touchpoint.
So with this in mind, what does a positive customer experience look like, and how can you as an entire company know when you’ve met your goals for customer experience management?
As is often the case, the answer to understanding your customer experience is to ask your audience. In the upcoming sections we provide a range of customer experience metrics and a starter-list of foundational elements to a good customer experience management program.
In addition to tracking quantitative metrics like CES, CSAT and NPS, make sure you are set up to gather and act on qualitative experience data from customers, as this can be a valuable source of insights and can offer you a deeper understanding of what customers want and expect from you. As a result, you can better avoid a poor customer experience by understanding the drivers of customers’ perceptions.
Successful customer experience management
A successful customer experience management strategy will put customers at the heart of its strategy and day to day decisions. This benefits your business as well as your customers, with improved customer satisfaction with their experiences leading to brand loyalty and reduced cost to serve.
Below are suggested methods for building a framework for customer experience management, as well as the necessary steps for making CX management a business priority.
Build an experience management framework
If customer experience is your customers’ perception of your organization, customer experience management (CXM) is your strategy for controlling those perceptions. It’s gone out of fashion as a term as practitioners have shifted to thinking about customer experience as something you don’t just “control” but track on a constant basis and make a central part of everything you do. It remains in use mainly because of Forrester’s use of the term in their Wave ranking of SaaS customer experience providers.
To understand how to manage customer experience, you need to first understand experience management – the discipline of measuring and improving the four core experiences of a business: customer, employee, product, and brand.
As customer experience is part of experience management, companies should adopt the experience management Operating Framework, which is built on a combination of technology, culture, and six competencies. While each of these elements are important, focus most of your attention on the six competencies and their 20 associated skills.
6 experience management competencies
Using the six experience management competencies to manage customer experience
- Lead – Architecting, aligning, and sustaining successful customer experience efforts across different people and projects over multiple years
- Realize – Identifying and tracing the right metrics to ensure customer experience efforts achieve well-defined business objectives
- Activate – Making sure your organization has the appropriate skills, support, and motivation to achieve the desired customer experience results
- Enlighten – Capturing, analyzing, and distributing actionable insights
- Respond – Building organizational mechanisms to continuously take action based on insights
- Disrupt – Identifying and creating experiences that differentiate your organization from competitors
The XM Institute offers a Customer Experience Maturity Assessment that you can use to identify your organization’s strengths and weaknesses across the six experience management competencies. Improve your market share and commit to business growth by identifying where you stand now, and where you could be.
Create a reciprocal customer experience strategy
Once you’ve developed a business-wide framework to support your team and provide a customer experience that meets your customer expectations, you’ll then need to create a customer experience strategy that takes advantage of this framework. Your CX strategies should be able to not only collect feedback, but turn it into actionable insights to create positive experiences for customers.
There are three key pillars to this customer experience strategy, as listed below:
Listen to and understand your customers’ perspectives
Rather than waiting for the customer to initiate their discussions about their customer experience with your brand, be proactive and source feedback. It’s not just about sending customer surveys to measure customer satisfaction – you’ll also need to examine the valuable data in conversations they’re already having with you, such as with when a customer calls customer support or engages with your website chat function. You can use customer experience tools such as omnichannel conversational analytics to help you gather experience data and understand what it means, no matter where customers are sharing it.
Customer conversations are everywhere
Build customer profiles for better customer satisfaction
When your audience interacts with your brand, they expect a consistent experience and recognition at each customer touchpoint in the customer experience. From marketing preferences to discussions with your customer service teams, your customers want your brand to provide a personalized experience.
Building in-depth customer profiles, complete with data on every customer interaction, allows you to personalize every detail of a customer’s experience. Rather than offering a generic customer journey that feels impersonal, your audience has an experience that’s tailored to customer needs and customer expectations. This in turn increases customer satisfaction.
Customer data is often collected in disparate silos across a business, but with an experience management framework in place, aligning teams and departments and sharing customer information across your operations becomes an in-built process. Build strong customer profiles with details on every interaction they’ve had, how they felt about it and the likely behavior they’ll display next, and you’ll be able to create customer experiences with real impact.
Act with empathy to quickly improve experiences
Your audience is continuously providing you with customer information, as well as their money. A positive customer experience strategy makes customer relationships a two-way street, with the brand giving as much as it gets.
Collecting customer feedback is important, but demonstrating to your audience that you’ve listened and have implemented change is key to becoming a CX leader. In our research, 62% of consumers said businesses needed to care more about them, indicating the opportunity for CX leaders to move to the forefront of customer preferences.
When you harness the customer data you collect, analyze customer experience data and take action on the insights you surface, you’re able to show customers that they, and their views, matter. Real time insights allow you to make changes at lightning speed to ensure customers have a positive experience every time.
In return for demonstrating action and care, you’ll get more than just a great customer satisfaction score – you’ll get customers that consistently show brand loyalty in the face of market and economic change. They know they can trust your brand for a positive experience, no matter their customer needs.
Integrate customer relationship management into your CX strategy
Often an organization’s priority is customer relationship management, ensuring customers convert from browsers into buyers. It can often focus on the quantitative facets of customers’ experience, rather than the qualitative aspects that drive customer experience. It’s sometimes more focused on transforming a poor customer experience after the fact, rather than delivering a positive customer experience right away.
With an improved customer experience and a customer-centric approach, customer relationship management becomes simpler and more effective. Meeting new, evolving expectations for customer relationships best supported by a customer experience management strategy that turns valuable data into vital customer insights.
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Key elements of your customer experience strategy
Delivering great customer experience drives improved business performance. And understanding customer expectations of your brand – and what is crucial to their satisfaction – will help you set priorities and de-risk your investments. Here are some of the core foundations of any good customer experience strategy:
1. Customer journey mapping
The first step in understanding the current experience is often customer journey mapping: understanding the experiences your customers are having at each touchpoint in their customer journeys. Often businesses deliver well on components of that journey, but without a customer-centric view they may fail at distinct points of customer interaction.
Viewing the journey as whole via a customer journey map – not just the touchpoints – helps to frame the experience from the customer’s perspective. A customer journey map not only outlines the entirety of the customer journey as it stands, but assists you in creating a new path for customers for better conversions and improved customer experiences.
Customer journey mapping example
2. Cross-functional collaboration
Consistent delivery across the journey can be a challenge, often increased by a business’ siloed operations. Until every part of the business understands its impact on customers’ experience, progress will be limited. For example, billing and credit operations might see themselves as removed from frontline delivery – but to a customer, difficult billing experiences can override positive store or digital experiences.
Cross-functional experience governance helps a business to break down those silos and improve the customer journey experience in meaningful ways. Committing to a customer-centric view helps to realign existing processes and allows the business to deliver improved experiences. An effective and productive customer experience strategy is built on that multi-disciplined engagement; making certain that employees understand that each person in some way touches customer experience.
3. Always-on listening
In order to design a customer experience strategy that is fully customer-centric, businesses need to understand where they currently are in delivery on the customer journey and to identify effective means of improvement. CX programmes can deliver that real-time insight into what customers are experiencing and how those experiences impact their engagement with the brand.
In order to deliver consistently on the elements of the brand experience that customers most value, it is extremely productive to listen continuously. Soliciting – and reporting – real-time customer feedback across the range of touchpoints and experiences helps to identify and prioritize things to improve.
It’s not just about soliciting feedback, however. Customers will tell their stories both positive and negative whether you are listening or not, meaning you need to capture every mention of your brand and turn it into usable data.
Unsolicited data can take many forms, such as conversations on social media platforms or comments on third-party review sites. It can also be hidden in phone calls to your contact center. This information can provide extra context to customer interactions, illustrating customer sentiment, emotion, effort, and intent.
Using a platform that can identify every signal from all communication channels and turn all data into meaningful insights is critical for getting the full customer picture. Equipped with text analytics powered by natural language understanding (NLU), you can automatically collect and collate data for insights with context.
Conversation analytics with sentiment analysis
Communication of actions taken to improve the experience is essential: customers want to know that you are not just listening, but acting. And the positive word-of-mouth that results from direct customer engagement on communication channels, as well as problem resolution, is a huge contributor to how the business is seen by both current and potential customers. It’s vital for improved customer acquisition, as well as lowered customer churn.
Customer loyalty is earned by consistently delivering on your brand promise, as experienced by your customers. Doing well on what your customers most value is the key to CX success. And acknowledging and resolving experience failures builds trust in the brand.
Measuring customer experience
Getting the full picture
The most important thing to remember about measuring customer experience is it’s not about the metrics themselves. Chasing a higher NPS or CSAT isn’t the purpose. The purpose of measuring your customer experience efforts is to:
- Track progress on actions taken
- Identify improvement areas
- Calculate the ROI of CX
- Prioritize your actions and invest in the right things
It’s crucial to combine any X-Data metrics like NPS with O-Data metrics like average spend and customer retention. Because your NPS could be sky-rocketing, but that may be because unsatisfied customers have deserted you. Getting the full picture with all your data is critical to see what drives the feedback you receive.
Hear the voice of the customer, and track your improvements
Here are some of the most common ways of soliciting customers for their views directly:
Net Promoter Score (NPS)
There is a heated debate on the value of NPS, but at a basic level NPS gives you a snapshot of overall customer advocacy. However, within your entire organization you need to set expectations around its use and limitations. It doesn’t work as well at a transactional level, and there are issues with cultural differences and a lack of alignment between scores and interpretation (e.g. if someone gives you a ‘6’ rating, are they really a detractor?).
Customer Effort Score (CES)
The Customer Effort Score can help you understand the basic functionality of your digital offering and its relevance to your customers’ needs. This metric focuses on the ease with which a customer can complete any given task.
Customer Satisfaction Score (CSAT)
CSAT helps you understand how satisfied your customers are with your company’s products and/or services. When you collect this data at various touch points, you can start to identify key drivers of positive or negative experiences at different points in the customer journey.
See the context with indirect CX data
Using direct customer feedback from surveys is useful, but indirect customer feedback as mentioned can also be a vital tool for getting context. It also allows you to give customers options to reach out in ways they prefer, such as video feedback, social media direct messaging, review site comments and more. By using both indirect and direct feedback, you’re able to take action with full knowledge of customer motivations and emotion.
How to improve customer experience
Measurement is just one step towards creating a brilliant customer experience every time. CX metrics can give you a solid indication of where action needs to take place in the customer experience and what you need to improve, as well as how. However, collecting customer experience insights isn’t enough – direct action is what will bring customers back time and time again.
1. Focus on delivering what your customers value most
It’s crucial to understand your customers’ view of your brand and the moments that matter most to them. A consistent, day-to-day delivery on your brand promise is crucial to retaining customers, cementing brand loyalty, and growing your base.
Understanding what elements are crucial to your customers helps you prioritize action and investment. In any list of experience elements, there will be ones that fall to the bottom. The key is to be sure that the lowest-performing elements are also the least important ones to your customers. That alignment – typically derived from key drivers – helps keep the business focused and KPIs relevant.
By identifying the loyalty behaviors you’re trying to improve, you can build models that will help you demonstrate to leadership how those behaviors drive changes in key CX metrics. This will help you secure buy-in for ongoing CX spend and ensure continued improvement.
Your most unhappy customers are your greatest source of learning.
– Bill Gates
2. Listen carefully to what your customers tell you – and then act on that feedback
One very productive approach is to use closed-loop processes to respond directly to customer concerns. In B2B CX, it’s even possible to follow up with customers who give low satisfaction scores or are NPS detractors. Given you’ll usually get fewer responses than in B2C, and have a closer relationship with each customer, this kind of approach can be highly productive.
In B2C, you’ll often have a much higher response rate to any customer feedback surveys you send out. So while you should absolutely fix anything customers raise as an issue, following up with low-scoring individuals is often unproductive. Especially if your managers haven’t been trained and coached for those discussions.
Also listen to what your employees are saying. Often employees can identify problems and opportunities faster and with more depth than what you will uncover through your customer feedback programs. In fact, companies that have mastered the employee experience by listening and acting on the voice of employees have the best CX.
3. Show you’ve taken action
Customer experience programs are ongoing discussions between a brand and its customers. As such, it’s crucial to demonstrate you are taking action on the feedback, even for those respondents who have not specifically asked for contact. Including a simple message alongside customer-led initiatives – e.g., “You spoke. We listened.” – demonstrates that providing feedback is not just a tick-box exercise within the business. Customers are far more willing to provide experience feedback if they believe the business takes it seriously and acts on it.
4. Focus on improvements, not measurements
Customer experience isn’t a metric; it’s an ongoing program that delivers substantial business benefits. And that means you shouldn’t chase numbers. Use measurements to drive improvements in your CX program that will result in tangible outcomes. Whenever presenting or reviewing CX metrics, pair them with key learnings and resulting action items.
To gain momentum for your CX program, make and share quick wins.
5. Build upon your success
XM Institute offers research and tools to help you design, deliver, and mature your CX program. If you’re just getting started, the Fundamentals of Customer Experience Launchpad provides helpful tips and resources. For those who are further down the path of CX maturity, the XM Institute Blog offers insight into key trends and best practices on all four elements of experience management – customer, employee, product, and brand.
Do what you do so well that customers will want to see it again and bring their friends.
– Walt Disney
Considerations for the digital customer experience
Businesses can improve their integration of the digital channel and optimize the brand experience by understanding key digital components. Here’s a few ways to approach digital CX optimization.
It’s the less sexy side of digital CX, but understanding page loads and purchase process barriers are crucial to digital conversion. Even if you offer a positive customer experience through your service and products, if customers aren’t able to quickly and smoothly get through the customer journey, they’ll feel negative about their interactions with your brand.
The approach is diagnostic in focus and often will use metrics like customer effort scores (CES). That is, how difficult is it for your customers to use your digital channel effectively and whether they were able to complete their task.
Understanding the role your digital channel plays in the overall customer experience (from consideration to purchase) is more difficult – but absolutely crucial. Businesses often look at basket abandonment as a failed conversion. But understanding that a customer is not wholly abandoning, but may actually be mid-purchase can be strategically essential. Particularly in consumer products, customers may go online to review potential purchases but then go into a store to test or experience the specific product. That customer might purchase in store – but their digital experience would have had a significant impact on their purchase behavior.
Understanding the role each channel plays is crucial to maximizing the overall brand experience. Your customer doesn’t typically think in channels; they want to solve problems and find options. Multiple channel contact may be essential in conversion. Appreciating the different role each channel plays reorients your business to be more customer-centric.