Customer experience is critical to business success. According to Gartner’s report, Creating a High-Impact Customer Experience Strategy, "CX drives over two-thirds of customer loyalty, outperforming brand and price combined. Delivering an easy and convenient interaction experience creates a good impression, but not one that lasts."
Brands expect their teams to deliver first-rate customer experience and outperform competitors, according to the report.
“Moreover,” it added, “63% of business leaders believe that to build customer loyalty, their CX teams must be primarily focused on creating new and innovative experiences for their customers.”
Why Customer Experience Matters
Your CX strategy has an immediate impact on customer retention and customer satisfaction metrics. A great experience increases customer satisfaction organically and leads to repeat business. Over time, that satisfaction turns into loyalty, which, in turn, leads to word-of-mouth promotion and increased brand awareness.
Great customer experiences also reduce churn. Satisfied customers don't complain, they don't leave and they contribute to financial gains. Research from Bain & Company showed that increasing customer retention by 5% can boost profits by 25% to 95%.
As we follow the customer experience pipeline, it's easy to see how increased customer retention leads to a boost in customer lifetime value, which results in increased sales and greater profitability.
As a bonus, employees are more likely to be engaged and aligned with your organization's goals when you deliver a great customer experience. The satisfaction of the customers they deal with provides a boost to their own morale.
A thoughtful, dynamic strategy is critical to the success of any organization’s CX effort.
Elements of a Great Customer Experience Strategy
Your customer experience strategy combines your company's customer service priorities and practices with your overall business goals. It provides a framework to manage, measure, understand and analyze customer service.
Forrester has analyzed the elements that go into a strong customer experience strategy. These elements include:
- A vision shared across departments
- A deep understanding of the company's customers
- A gap analysis that incorporates areas and plans for improvement
- A road map to get you from where you are to where you want to be
- Accountability procedures that keep all team members in alignment
- Defined key performance indicators (KPIs) for measuring and analyzing success
With a well-defined CX strategy, your organization is well-positioned to meet customers' needs and deal with pain points. Your teams have the resources needed to align customer service with your business goals and, as a result, you're able to exceed customer expectations.
Let's look at eight tips for building a successful CX strategy.
Related Article: The Most Important Components of the Customer Experience
1. Promote Customer Retention
"A clear articulation of the heart of the company’s approach to customer experience is the critical initial component of a business' CX strategy," said Ali Cudby, founder and CEO at Alignmint Growth Strategies.
Customer retention centers around how people feel about their experiences with a brand, according to Cudby, adding that this area is essential.
“Companies that prioritize growth must implement churn reduction strategies, so they keep the customers they’ve worked so hard to win,” she said. “Churn is the ultimate leaky bucket. No matter how many new customers go into a bucket, if there are holes that lead to churn, it will be hard for any company to fill the bucket and hit key revenue targets.”
Churn can happen at several levels. A customer who bought from you once and doesn't repurchase isn't a concern. That's different than a customer who has been loyal for years and suddenly leaves. It's important for you to identify the specifics of the churn you're experiencing as part of your customer experience strategy.
You could solve high churn rates among new customers (something that’s common) by upgrading the speed of your customer support. You may also want to ensure you're marketing to the right audience.
If repeat customers are churning, you should focus your CX strategy on customer interactions. Look for upselling and cross-selling openings. You might also think about loyalty programs and incentives to keep valuable customers in the fold.
2. Look at the Customer's Perspective
“The customer experience is defined by the customer — not some executive or institutional belief in what it is,” noted Howard Pyle, founder of ExperienceFutures.org.
“I’ve heard so many leaders say they know their customers, but really they just know their business,” he added. “Once you objectively look at each customer through a lens of data and research, CX metrics become points of alignment — a common objective that short circuits internal politics.”
One way brands can better understand their customers is to map out their journeys. Start by asking yourself questions, such as:
- How do customers become aware of your company?
- What channels do customers use to reach you?
- What research do prospective customers perform when deciding between your company and competitors?
- What objections do prospects have to your competitors?
- What makes customers decide to commit to a purchase?
- What touchpoints turn your customers into repeat customers?
- What pain points might customers encounter with your company and how do you address them?
You’ll need to touch base with multiple departments to gather this data, but it pays off in big ways. You’ll also need to consider:
- All touchpoints through which customers contact you
- Your customers' needs
- Any barriers or obstacles to customer service
- Your customers' attitudes toward your brand
- Customers' motivations for choosing your brand
- Customers’ perspectives on each action they might take
- Customers' emotions surrounding your products and services
- Customers’ pain points
- The problems customers need to solve by using your products
A related tool is the empathy map, which contrasts customers' internal attitudes and mindsets. Here, you'll focus on what your customers think and feel about their pains and aspirations, mapping to actual customer interactions. By understanding how your customers feel, your customer-facing employees can empathize with and serve them better.
3. Align Your Internal Teams
Those involved in developing and maintaining CX invariably come from across an organization. They're not unique to the customer experience or even the wider marketing team.
“Teams that align themselves with the customer journey are by definition cross-functional,” said Pyle. Think about most CX in a digital era — there are apps, social media platforms, websites and more, all built with common data and designs. The customer experience isn’t one of those teams — it’s all of them together.
While your marketing department may take the lead in customer experience, other teams should also be involved. Your sales team will certainly want to weigh in. In addition, your IT team is vital to developing and implementing the technology to provide optimum experiences.
“Clients can improve the customer experience by working with their CX provider to journey map the experience from beginning to end, '' said Julie Casteel, chief sales and marketing officer at ibex.
“Consider what is the path the customer has to go down to get their issues resolved,” she continued. “What tools and technologies does the customer service agent have to solve that issue? Often they’re mismatched. To fix those breakage points and begin to deliver an optimal experience in which the customer feels truly valued, those need to be mapped together.”
4. Be Consistent and Reliable
"A company’s CX strategy should include consistency and reliability in customer service," said Vivek Astvansh, assistant professor of marketing at the Kelley School of Business at Indiana University.
“Reliability refers to customers having the same experience, regardless of the day and the time, whether they're in a physical store or the web store, whether they're in pre-purchase or post-purchase stage, whether they are interacting with a live agent or a bot, etc.,” Astvansh noted.
"Customer experience is mostly driven by employees, who are bound to have idiosyncrasies,” he added. “That means CX is inherently far less reliable than what companies and customers want it to be. What makes reliability critical is companies’ gradual adoption of robots and AI apps for serving customers.”
Unlike a live agent, a chatbot doesn't experience emotional labor while responding to an angry customer. Instead, the bot can learn from the caller’s past conversations. As it learns, it can speak in a way most likely to offer a superior experience to the caller.
"A single tone of voice can be used throughout the entire customer interaction with advanced solutions,” added Jennifer Kline Shernoff, former ADA senior vice president of product and design.
"If the conversation needs to be transferred to a live agent, the hand-off is seamless and efficient,” she continued. “Whether it’s a human agent or advanced AI responding, customers and prospects will feel that they’re getting 100% of the brand’s attention throughout the interaction.”
Related Article: My Top 3 Lessons Learned as a CX Leader
5. Offer Employees the Right Resources
Closely related to consistency and reliability is availability, according to Astvansh. Customers want their issues handled quickly, efficiently and correctly, or they'll seek a competitor.
“Availability refers to how much effort a customer must make to receive information from the company,” Astvansh said. “The company must be available at 'all times' to serve customers. The fluidity of workdays/hours in contemporary times makes availability in time critical.”
Brands also need to be available where their customers are, he said, whether that’s social media, email or a messaging app. He added that “a company’s chatbot must reside at these apps and not on its own app or website.”
The Gartner report also emphasized the need for a CX strategy to be mindful of their customers’ time and needs. Touchpoint innovations should allow automated completion of many CX needs.
To deliver great customer experiences, your customer-facing teams need the right tech. Consider adding live chat, an AI chatbot and a mobile app to the mix. Social listening on your social media platforms is an excellent way to determine how your customers feel about your brand.
Teams also need to have all the information necessary to answer customer questions and solve problems. Knowledge about products and services is key, so you should plan on training whenever upgrading or introducing new offerings. Keeping your knowledge base fresh also helps your teams feel supported.
Training can also equip your customer-facing employees to deal with customer complaints. Communication training that emphasizes patience, positivity and empathy allow your team to make customers feel heard.
6. Empower Employees to Boost CX
"It’s important to empower agents to raise their hand and volunteer their ideas, so they can spark positive change," Casteel said. These employees see the same issues over and over again, and they often have great suggestions to improve the customer experience.
Word of mouth from an unhappy customer can do real damage to your brand. And customers are more likely to leave reviews and share their experiences when that experience is bad. If your customer-facing employees aren't empowered to make things right, you could reap some unpleasant consequences.
Think of dealing with unhappy customers as just another aspect of customer retention. It's more cost-effective to nurture your existing customers than to convert new ones — that also goes for the dissatisfied ones. Create processes that make it easy for customer-facing employees to solve problems. Even more, give those employees the freedom to create their own solutions when the guidelines don't provide an answer.
Part of empowering employees means ensuring they’re engaged in their work. According to a blog post from West Monroe Partners, a management consultant firm, “a 5% increase in employee engagement has been shown to lead to a 3% jump in revenue. And companies with happy employees also see 81% higher customer satisfaction. Knowing that, it’s no surprise employee satisfaction is a priority for many executives.”
A customer’s experience is ultimately tied to employee actions. Even in an automated world, employees must have a path to deliver a great experience to customers so that the relationship grows over time.
7. Track Customer Experience Metrics
"The CX strategic plan should include ways to measure the success (or lack thereof) of the strategy. Otherwise, a company could continue to follow a strategy that isn’t working," said Rick Kelly, chief product officer at Fuel Cycle.
“Develop CX metrics to evaluate the quality of your experience. By setting goals and objectives for constant improvements, you’ll be able to meet customer needs,” he added.
As part of measuring your CX strategy, you should take a look at your company's objectives. They might prioritize winning new customers or retaining your existing customer base while broadening the revenue stream. Or you might focus on introducing new products and services into your marketplace or entering new markets. Now is the time to assess whether your CX strategy aligns well with those goals.
Among the metrics you should consider are:
- Net promoter score (NPS): Measures whether customers are likely to tell others about your brand
- Customer satisfaction score (CSS): Measures customers' happiness with your products and services
- Customer loyalty: Measures whether customers stay with you or move to competitors
- Customer effort score (CES): Measures ease of customer experience
- Employee satisfaction: Helps you assess whether employees are likely to deliver a positive customer experience
- Visitor intent: Helps you understand why a customer is visiting your business and helps you optimize your website
- Cart abandonment rate: Pinpoints areas for improvement in the customer experience.
- Sentiment: Measures how customers feel about your brand
- Average time resolution: Measures how well your company is dealing with customers' issues
- Customer churn rate: Measures how many customers you're losing
- Customer retention rate: Measures how many customers are developing loyalty to your brand
- Customer lifetime value (CLV): Helps you pinpoint the customers and customer personas that are of the greatest value to your company
You should also review your branding to ensure you're fulfilling the promises your brand makes. Measuring how customers respond emotionally to your products, services and brand image can help you expand product lines and improve customer service processes. It can also help you assess how customers view your company compared to competitors.
8. Keep Your Strategy Flexible
Market conditions change, a factor demonstrated by the COVID-19 pandemic as companies went to remote or hybrid customer service support. Many businesses also shifted to ecommerce and other types of digital interactions.
A pivot as radical as the one caused by the pandemic isn't a common occurrence. Nevertheless, the marketplace changes constantly. Keeping a balance between the needs of your customers and the steps your competitors are taking requires a great deal of flexibility.
Once you have a solid customer experience strategy, you can't relax and feel you've solved everything for all time. Your customers will change, your competitors will change and the market for your products and services will change. That means you have to be dynamic.
Keep an eye on your website and your mobile app, making improvements as soon as they're needed. These might include changes to your layout, landing page, page load times, forms, user interface or calls to action.
You’ll find you’ll likely need to make frequent improvements to your messaging as well. Pay attention to visual consistency and how customers interact with new campaigns.
“Businesses need to ensure their CX strategy is agile and adaptable because the market and customer demands are constantly changing,” said Katrina Klier, former CMO at PROS and founding member of Chief, a women’s executive leadership network.
“Technology needs to play a critical role in any CX strategy, as online selling has opened up a large amount of new data to marketers,” said Klier. “Successful marketing leaders must take advantage of insights from AI and data analytics to understand their evolving customers from as many angles as possible.
Talent that can manage within the uncertainty and fluidity that is the new market normal is also key. Employees who are digital natives or have learned digital fluency will continue to be a necessary asset to organizations.
Related Article: Agility Is No Longer Optional in Business
Building a Successful Customer Experience Strategy
Customer experience has a huge impact on business performance. Customers that have great experiences with a brand spend more, come back again and again and spread the good word to those they know.
Such an important factor shouldn’t be left to chance. It should be a multi-pronged strategy that businesses continually refine and optimize.