10 min read
Dec 22, 2019

What Is Customer Experience?

Businesses need to focus on customer experience to succeed. A good customer experience will ensure greater customer retention, boost in customer loyalty, and lower customer churn.

Ankita SinghSpecialist Analyst

Customers today have a lot to bite into—too many options and too much information. They can be whisked away at the drop of a hat, and brands are always competing for customer attention with attractive pricing and alluring offers.

So what can make customers stick to your brand?

The answer is good customer experience (CX), which is the product of a strong and reliable relationship between you and your customers.

Like all relationships, the relationship between a customer and a brand solidifies over time.

This article will discuss all that you need to know, right from what CX means to how you can improve and measure it.

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What is customer experience?

Customer experience is defined as the customer's perceptions and related feelings caused by the one-off and cumulative effect of interactions with a supplier's employees, systems, channels, or products.

Simply put, CX is the impression and perception your customers form about your brand through their interactions across various touch points during the customer journey.

A customer carrying a positive impression and perception about a brand is more likely to stay with the brand and recommend it.

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Why is customer experience important?

Good CX ensures that a business is able to retain customers and lower customer churn through differentiated experience. Good CX can further turn customers into loyal brand advocates who help drive new customer acquisition through recommendations.

In a recent Gartner survey 86% of respondents revealed that over the two years they will compete on the basis of CX (full report available to Gartner clients).

The fact that businesses are going all out to compete for CX, as Gartner notes, only proves that it's going to be even more important in the years to come. But businesses can only expect to win with CX if they have absolute clarity about what it entails.

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What is the difference between customer experience and customer service?

Customer experience and customer service are two concepts that are often used interchangeably though they aren't the same. Let’s look at their core differences:

Customer service

  • It's one part of the overall CX.

  • It's reactive in nature. For instance, when a customer comes in with a complaint, customer service representatives try to help them with a solution.

  • Customer service interaction could be a one-time event.

  • A business may have a specialized customer service department to deal with customer queries and complaints.

Customer experience

  • It's the overall experience a customer has with your brand during the customer journey.

  • It's proactive in nature. For instance, businesses can reduce the number of steps between product selection and product purchase to close the loop faster and ensure that customers don't abandon carts.

  • CX is a permanent, ongoing experience and stays with the customer each time he/she interacts with the brand across touch points.

  • Delivering good CX is a responsibility shared between many departments, such as product, marketing, and sales.

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How to improve customer experience for your business

To get that competitive advantage and optimize CX as a brand differentiator, businesses need to lay out a good CX management strategy that is backed by data insights, customer-centric processes, and a clear vision.

Here are the measures you need to take:

Develop customer understanding

We recommend three steps that will help you understand your customers better:

Step 1. Make sure you are capturing customer interactions across all touch points, such as social media, website, and phone calls.

Step 2. Conduct surveys and interviews to understand what customers want. Use the insights to cater to customers better.

Step 3. Segment customers based on their behaviors, preferences, and needs. Use targeted and unique communication for each segment to ensure high customer engagement and satisfaction.

Additionally, business leaders need to ensure that all data and insights about customers and competition are available to all relevant teams.

Craft customer experiences using customer insights

Use insights to create personalized customer experiences. Here are the steps to do it:

Step 1. Develop audience archetypes using your knowledge about customer goals, behaviors, and preferences. Define these archetypes based on their demography (geography, income, and education), psychography (values, opinions, interests, aspirations, and attitudes), ethnography, technography (your customer's ability to use and approach technology), behavior, and transactions.

Step 2. Design and target customer experiences keeping in mind customer personas and the step of the journey that they are in. This will help them be more connected to your brand.

Each customer goes through the following journey with a brand:

  • The buy cycle: It starts when the “need" for a product arises but the prospect is not yet aware of your product/service. It ends with the prospect completing a purchase and becoming a customer.

  • The own cycle: It begins after the purchase and ends with the customer loving your product instead of just liking it, indicating the depth of the relationship with your brand.

  • The advocate cycle: It begins when the customer turns into a loyal advocate, positively impacting other prospects and making them aware of your product/service and all the way to their purchase.

Step 3. Ensure that your CX strategy is well aligned with the user experience of your product. In other words, the experience that you promise through communication must be delivered through your product, ensuring that there isn't a gap between customers' expectations and your delivery. This is only possible when the resources carrying customer knowledge are shared across departments and team members are constantly communicating and collaborating to meet customer expectations.

Step 4. Garner user opinion about what you deliver to your customers—it can be done during any phase of your CX initiatives. Find out user needs, goals, and expectations, and leverage your findings to optimize CX further.

Build a customer-centric culture

Here are the recommended steps to ensure this:

Step 1. Understand the barriers that prevent employees from focusing on customers in the first place.

Step 2. Have an enterprise-wide vision of the ideal CX. Keeping this vision in mind, communicate to your employees about the expectations from them and guide them to be able to model what customer-centric behavior looks like within the spectrum of their responsibility.

Here is what you can do to drive your vision:

  • Define and communicate the organization-wide customer-centric value system. Make sure that they are acted upon.

  • Make sure that marketing efforts are not only focused on growth but also on the customers' overall relationship with the brand. This would ensure organizational alignment and balance of initiatives.

  • Create cross-functional teams to discuss CX goals, performance, issues, governance, and issues.

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How to measure customer experience

It’s crucial to measure CX to understand the improvement areas, take corrective actions to resolve issues, and set fresh goals and targets for improvements. CX measurement also helps in validating business investments toward CX.

5 categories of CX metrics according to Gartner:

1. Customer Satisfaction Score (CSAT): This is the average score your customers give your brand based on their level of satisfaction. The score can be gathered using survey questions or product review ratings, timeliness of delivery statistics, and mystery shopping scores.

2. Customer retention rate and churn rate: Brands can capture metrics that demonstrate purchase frequency, loyalty program participation of customers, average order size, repeat orders, and return rates. These help in gauging customers’ engagement and satisfaction with the brand and indicate if a customer is likely to remain a customer or not.

3. Customer advocacy and loyalty: Measuring price sensitivity, sentiment scores on social media, trust ratings, and event participation can help brands in determining the level at which customers are willing to recommend and endorse the product, service, and organization. Net Promoter Score is a good example of this.

4. Quality and operations assessment: It’s important for a brand to assess the quality of its products, services, and operations. If customers don’t think that a brand has qualitative offerings and operations, the CX will be poor.

5. Employee engagement level: Employee engagement while delivering CX improvements is a major concern for many organizations. The higher the employee engagement in CX, the more successful the CX will be.

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