Customer loyalty is a hot commodity these days. Brands have responded to customer needs throughout the pandemic by offering virtual fitness classes or curbside pickup. And after months of adapting to the demands of buyers who are doing almost everything from home, building brand loyalty through customer satisfaction is more important than ever.
So what makes a loyal customer? The answer is a good customer experience, 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, from what customer experience means to how your business can manage, improve, and measure it.
Customer experience—or CX—is defined by Gartner 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, customer experience is the impression and perception your customers form about your brand through each touchpoint they encounter during their customer journey.
A customer who has had a positive experience with a brand is more likely to stay with the brand and recommend it to others.
While CX is defined from the perspective of the customer, Gartner defines customer experience management, or CXM, as “the discipline of understanding customers and deploying strategic plans that enable cross-functional efforts and customer-centric culture to improve satisfaction, loyalty, and advocacy.”
In other words, you’ll need to build a CX strategy that leverages customer feedback to meet the full spectrum of each of your customers’ needs. CX is not the place for a one-size-fits-all approach.
According to Gartner’s 2020-2021 CMO Strategic Priorities Survey (full content available to Gartner clients), 73% of the chief marketing officers (CMOs) who responded expressed that their plans for recovery and renewal in 2021 will focus on existing customers. However, the challenge with this cross-functional effort is that each team, department, or group may have its own CX strategy, unaware that it’s misaligned with other views across the organization.
It is critical, then, that your team is unified in its CX efforts in order to retain customers and lower customer churn. Businesses can only expect to win with CX if they have absolute clarity about what it entails.
Customer experience and customer service are two concepts that are often used interchangeably even though they aren't the same. Let’s look at their core differences:
|It's one part of the overall customer experience.
|It's the overall experience a customer has with your brand during the customer journey. It is impacted by many factors, including but not limited to ease of website navigation, variety of products or services, shipping speed, etc. Customer experience is not dependent on interaction with a customer service representative.
|It's reactive in nature. For instance, when a customer comes in with a complaint, customer service representatives try to help them find a solution.
|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 their online shopping carts.
|Customer service interaction could be a one-time event.
|Customer experience is a permanent, ongoing experience and occurs with each touchpoint.
|A business may have a specialized customer service department to deal with customer queries and complaints.
|Delivering good customer experience is a responsibility shared between many departments, such as product, marketing, and sales.
To get that competitive advantage and stand out from other brands, businesses need to lay out a good customer experience management strategy that is backed by data insights, customer-centric processes, and a clear vision.
Let’s talk about the following measures you need to take:
There are three steps that will help you to 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 your 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.
The following steps demonstrate how you can use customer insights to create personalized experiences for your customers.
Step 1: Develop audience archetypes using your knowledge of 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 they’re in. This will help them feel more connected to your brand.
Each customer goes through the following journey with most brands:
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 all the way to their purchase.
Step 3: Make sure the experience you promise your customer is what’s actually delivered through your product or service. 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: Gather customer feedback about what you deliver to your customers—it can be done during any phase of your customer experience initiatives. Find out user needs, goals, and expectations, and then leverage your findings to optimize customer experience further.
It’s easy to say that your customers come first, but make sure your actions match your intentions. The following steps will help ensure that your customers and their needs are your business’s top priority:
Step 1: Work to understand the barriers that prevent employees from focusing on customers in the first place.
Step 2: Have an enterprise-wide vision of the ideal customer experience. Keeping this vision in mind, communicate to your employees about your expectations of them and guide them to be able to model what customer-centric behavior looks like within the spectrum of their responsibility.
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 sales but on the customer journey as a whole. This would ensure organizational alignment and balance of initiatives.
Create cross-functional teams to discuss customer experience goals, performance, issues, governance, and issues.
It’s crucial to measure customer experience to understand the areas of opportunity, take corrective actions to resolve issues, and set fresh goals and targets for improvements. CX analytics also help in validating business investments toward customer experience.
Here are the five categories of customer experience 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, customer participation in loyalty programs, average order size, repeat orders, and return rates. These help in gauging customer satisfaction and engagement 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 (NPS) is a good example of this: Its score is based on responses to the question, “How likely is it that you would recommend our offering (product, service, or company) to a friend or colleague?”
4. Quality and operations assessment: It’s important for a brand to assess the quality of its products, services, and operations. If your customers feel that your offerings and operations are anything less than excellent, the customer experience will reflect that.
5. Employee engagement level: Employee engagement while delivering customer experience improvements is a major concern for many organizations. The higher the employee engagement in customer experience, the more successful the customer experience will be.
CX analytics provide invaluable insights for brands looking for ways to improve customer experience.
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