Customer Experience

What is Customer Experience?

Customer experience (CX) is defined as the interactions and experiences a customer has with a brand or a business. It encompasses the quality of customer care, advertising, packaging, product and service features, pricing, ease of use, ease of doing business, and reliability. CX can be measured as a single interaction. For example, how was the ordering experience for your cup of coffee in the drive-through today? More often, businesses measure CX throughout the entire customer journey — from the first contact to subsequent interactions to becoming satisfied, loyal customers.

CX has moved beyond a corporate buzzword, and customer experience management has become the strategic focus for many companies. Companies understand that delivering excellent CX yields happy customers. Happy customers are more loyal and may ultimately recommend your products and services to potential customers. The rewards and financial gains from satisfied customers are hard to ignore.

Consider these valuable insights from a Zippia survey :

  • 42% of customers are willing to pay more when offered a friendly, more welcoming experience.
  • When given a positive customer experience, 72% of customers will share their experience with six or more people.
  • Improved CX can increase company revenue by 10-15%.
  • Following a poor customer experience, up to 89% of consumers have switched to a competitor.
  • When making a purchase, 64% of consumers consider experience more important than price.

But to achieve the nirvana of customer experience, you have to invest in understanding what it is and is not, why it matters, how to measure it, and most importantly, how to improve your CX 

What is Online Customer Experience? 

CX encompasses all of a customer’s touchpoints with a company, both online and off, for the entire duration of the relationship. Today, digital or online customer experience is critical to the overall experience. It refers to how customers interact with a company through various digital channels, such as websites, mobile apps, social media, and online chat.

Online CX is the Norm

There was a time when the preferred way of engaging with a company was to pick up the phone — both for the company and the customer. Today, customer interactions look much different than they did in the call centers of yesterday.

According to a recent Gartner survey, 62% of millennials and 75% of Gen-Z customers prefer self-service almost all the time, even when they have an option of contacting customer support. This compares to 19% of baby boomers and 43% of Gen X customers who report they would do the same. 

Online CX is not limited to online transactions but also encompasses the emotional and psychological aspects. A positive online experience can leave a lasting impression, foster customer loyalty, enhance customer relationships, and serve as a competitive differentiator.

AI as a CX Enabler

Infusing artificial intelligence (AI) into processes is top of mind for business leaders and managers in all industries and across all job functions. Generative AI technologies can change how we work and our ability to deliver stellar CX and exceed customer expectations.

Companies can benefit from incorporating AI into their customer-centric culture, including:

  1. Improving Workforce Management and Employee Engagement
  2. Decoding Customer Sentiment
  3. Streamlining Quality Management Processes and Coaching

What is Omnichannel Customer Experience?

Contact centers and customer service organizations have undergone digital transformation into omnichannel centers of integrated interactions where people, bots, and technology work side-by-side. In addition to the proliferation of all of these channels, consumers expect reliable and secure solutions, intuitive interfaces, prompt responses, and efficient problem resolution.

Omnichannel customer support connects customers’ interactions no matter where they take place. Zendesk reports that only one-third of contact centers are omnichannel, so offering your customers a more fluid experience is a real competitive advantage. 

Developing a successful omnichannel strategy requires both customer-centric design and infrastructure integration for a seamless experience.

What is the Difference Between Customer Service and Customer Experience?

It’s common to see the terms “customer service” and “customer experience” used interchangeably. While they are related, they are not the same.

Customer Service

Customer service is the support a business offers customers before, during, and after they buy products or services, with the goal of helping them have a beneficial experience. It’s one part of customer engagement and experience but not the sum of it.

Customer Experience

As defined above, customer experience encompasses the entire interaction with a brand and company. For example, when you buy a cup of coffee at the drive-through window, the customer service team takes and delivers your order, providing a positive or negative experience. They either provided or did not provide an acceptable level of customer service. But beyond that transaction, superior customer experience is impacted by the actual wait time, quality of the product (coffee, cup, temperature), rewards and incentives programs, the retail store location, and a host of other factors. 

Since the two are related, companies must prioritize customer satisfaction as part of their CX strategy.

Why Customer Experience Matters

Having a customer-centric approach goes beyond getting high customer satisfaction scores on customer surveys. A CX-focused strategy and culture yield:

  1. Increased customer satisfaction and loyalty – A positive customer experience increases customer satisfaction. When customers are satisfied, they are more likely to become loyal to a brand and make repeat purchases. Happy customers also recommend a brand to others, which can result in new business opportunities.
  2. Customer retention – Providing an exceptional customer experience reduces the likelihood of customers switching to competitors. It helps build trust and cultivates a sense of loyalty, making customers more likely to stay with your brand.
  3. Competitive advantage – Providing excellent CX can set your business apart from your competitors. Customers will often switch brands if they feel their experience is subpar. Likewise, companies prioritizing customer experience are more likely to retain customers and gain a competitive advantage.
  4. Increased revenue – When companies invest in improving customer experience, revenue can be directly impacted. Customers are willing to pay more for products or services if they have a positive experience. Additionally, satisfied customers tend to spend more and make repeat purchases, driving revenue growth.
  5. Brand advocacy – Happy customers with great experiences become brand ambassadors, telling others about your products and services. This is true for both business customers and consumers.
  6. Reduced costs – A strong focus on customer experience can lead to operational efficiencies and cost savings. When customers have a smooth experience, and their needs are met effectively, it reduces the need for costly support and troubleshooting.

What Makes a Great Customer Experience?

Simply stated, a great customer experience makes it easy and pleasant for customers to accomplish their goals. To some extent, CX is subjective, but there are some common elements of positive customer experience:

  • Speed or efficiency
  • Convenience
  • Consistency
  • Friendliness

The Impact of Bad Customer Experiences

A bad customer experience occurs when a company fails to meet customers’ expectations. This could be due to service quality, response time, or overall customer satisfaction. Poor customer service not only destroys existing customer relationships and leads to customer churn but can also negatively impact future prospects.

Even one bad customer experience is one too many. According to a PWC report, in the U.S., even when people love a company or product, 59% will walk away after several bad experiences, 17% after just one bad experience. In addition, 32% of all customers would stop doing business with a brand they loved after one bad experience.

How to Measure Customer Experience

You’ve set goals. Completed your customer journey map. Created an omnichannel customer service and support organization. Hired and trained your customer support team to deliver on the customer experience strategy.

So how will you know the CX strategies yield the desired business outcomes?

Since it’s impossible to talk to or gather a completed survey for every customer and transaction, it’s critical to analyze customer and service delivery (agent) data for insight.

Common customer experience metrics include:

  1. Net Promoter Score (NPS)
  2. Customer satisfaction (CSAT) scores
  3. Customer lifetime value
  4. QM scores
  5. Customer Effort Score (CES)
  6. First contact resolution (FCR)

In addition, customer support organizations can measure agent performance, contact inception, and contact center operations metrics.

How to Improve Your Customer Experience

When it comes to CX, there’s no silver bullet to create outstanding experiences. However, implementing these measures and best practices will improve customer experience, yield happy customers, and boost revenue. 

  1. Create a customer experience strategy and culture.
  2. Make employee experience an equal priority.
  3. Invest in the right technologies.
  4. Provide a seamless omnichannel experience.
  5. Understand customer needs, preferences, the customer journey, and related customer touchpoints.
  6. Use a quality framework for the development of your team.
  7. Deliver prompt and efficient customer support.
  8. Seek customer feedback.

Analyze and act on customer data for actionable insights.