Businesses thrive when their customers are happy. Why? Because those people spread the word about the good customer experiences they've had, becoming brand ambassadors. They also return to spend more money.
Customer experience (CX) is vital to your brand's success. Let's take a deeper dive into why it matters and what you can do about it.
What Is Customer Experience?
Customer experience is a holistic perception that pertains to your entire organization. Elements such as customer relationship management (CRM), customer service, sales and other areas where people engage with or observe a brand feed into it.
Online chats with chatbots, calls to representatives, billboards, pop-up ads, trips to brick-and-mortar stores, social media posts and visits to your website — all of these accumulate to create CX.
Customer experience boils down to the sum total of all the interactions a customer has with your brand and how that customer views the company as a result.
Customer Experience vs. Customer Service
Many people hear the phrase "customer experience" and conflate it with customer service. While customer service is a vital part of CX, it’s not the whole kit and caboodle.
Customer service refers to the touchpoints within the customer journey when a shopper reaches out for help. They might want a refund or to exchange a product that wasn’t quite right. Perhaps they want to complain about a poor experience with a company representative or need help understanding how a product works.
All of those interactions feed into customer experience, but they are only a part of a much greater whole.
Customer experience and customer service both share the goal of keeping customers happy. CX, however, expands across a wider range of customer-brand interactions, encompassing:
- Marketing: Brands use marketing communications to interact with customers through various mediums, like email and social media.
- Advertising: Consumers see and engage with brand ads they encounter online.
- Supply chain issues: Shopper perceptions are affected by product availability, backorders and shipping times.
- Inventory changes: Customers want to know about what products are available, especially if a previously sold item is being discontinued.
- Product designs: A customer's experiences with a product ultimately affect whether they will buy that product again or recommend it to others.
- Hiring decisions: Employees that are thoughtful and knowledgeable can serve up memorable and helpful customer experiences.
Beyond that, CX also includes elements beyond a company’s control, like reviews on third-party websites, videos of customers using your products and media coverage of your brand. Still, these pieces all fit into the CX puzzle.
Why Does Customer Experience Matter?
Great customer experience matters because it sets the overall path to success for a business.
Key benefits of good CX include:
- Increased profit potential: Customers who’ve had good customer experiences will spend 140% more than those who’ve had negative experiences (Deloitte).
- Increased customer loyalty: 73% of consumers say a good customer experience is significant in influencing which brands they’re loyal to, according to PwC.
- Word-of-mouth advertising: 49% of people who've had a positive customer experience said they’d share it on social media or via a positive review (Sitel Group).
- Reduced churn rate: 85% of customers stop interacting with or purchasing from a brand because of poor customer experiences that could’ve been prevented, according to Esteban Kolsky, Chief Evangelist for CX at SAP.
- More data collection opportunities: 63% of consumers said they’d share more information with brands that offer great experiences (PwC).
Excellent CX allows companies to stay close to customers, monitor their behavior and expectations and adapt to meet them.
If you’re thinking your company must be doing okay because you don’t hear a lot of complaints, here’s something to keep in mind: 91% of customers with complaints never voice them, according to Kolsky. They just leave and don’t return.
Fortunately, it’s easy to define the elements that make up customer service and develop goals to nurture them.
How to Measure Customer Experience
While customer experience may seem subjective, companies can use a number of metrics to evaluate it.
Let’s take a deeper look at what information can prove invaluable to your brand:
Customer Effort Score
The CES measures the amount of effort your customers feel they have to expend to get a satisfactory resolution to an issue. It's an objective measurement of subjective emotion.
CES is typically measured by asking customers, "How easy was it to...?" about various actions. Customers respond on a scale that ranges from "very difficult" to "very easy."
By placing these quick surveys at various points along the customer journey, you can identify points of difficulty.
Related Article: How Do You Make Customer Effort Score Data Actionable?
Customer Satisfaction Score
CSAT is typically captured through surveys that ask customers to rate how satisfied they are with specifics regarding products or services. These surveys can use binary (yes/no) answers or ask customers to rank satisfaction along a scale, like the commonly used five-star system.
Use these surveys to measure specific reactions to various customer service teams or protocols or to gain insights into your product designs or service offerings.
Net Promoter Score
NPS measures how likely a customer is to recommend your products, services or company to someone else. In essence, it delivers a score representing customer loyalty.
The fundamental question asked in the NPS is: "How likely are you to recommend X?" X might be one of your products or services, a marketing video or your brand’s educational forum.
By aggregating the data you collect, you can determine if you're delivering positive CX across every customer touchpoint. You can also compare CX across various teams to see how their performances measure up.
One of the biggest frustrations that factor into poor CX is long wait times. In a survey from TimeTrade, 75% of respondents said wait-related issues were their number one reason for losing customers, and 70% said consumers would wait five minutes or less before abandoning a purchase.
Therefore, it makes sense to assess your CX through the length of average problem resolution time. Be sure to measure and compare resolution times across channels, including phone calls, chatbots, email, social media and forum support tickets. You should also look at common trends in support queries and ticket reopen rates.
Retention and Churn Rate
Retention looks at how many customers you’ve kept over a given period — a number that doesn’t factor in any new customers gained during that time. If a high percentage of customers keep coming back, that means you’re doing something right.
Remember, customers who have a poor customer experience often don’t say anything to the company. They just stop coming back — or churn. Churn rate, also called attrition rate, is the rate at which customers stop doing business with a company.
If you have a high churn rate, consider soliciting feedback from customers who churn to discover why. Their answers will give you insight into bigger problems you may need to address.
It’s easy to rely on numbers when it comes to measuring CX. However, it’s important not to neglect feedback from customers. Look at online reviews, calls to customer helplines, incoming emails and messages on social media platforms.
You can also solicit customer feedback. For example, you could send out post-purchase emails requesting feedback on the shopping experience. You could also post surveys on social media and on your website.
When you spot issues mentioned in customer feedback (especially when you see the same issue raised multiple times), respond right away. Make targeted changes to procedures and ensure managers are well trained.
Related Article: Improve Customer Experience & Your Brand With Feedback
7 Elements of Good Customer Experience
Good CX will look different for each business. However, there are some commonalities that exist across brands and industries.
1. Listening to Your Customers
To deliver excellent CX, you must understand who your customers are and what they want.
Develop a system that will collect feedback across all channels. For instance, you might push out a post-sale email that requests reviews, set up a response form on your website or post a survey on social media.
Customers want to be seen and heard. By seeking feedback and listening to customer stories — positive and negative — you can key in on what they want you to know. If you stop listening to your customers, they don’t stop talking — they just share their experiences online or in person with friends and acquaintances, and they’re often negative.
The feedback alone isn’t enough, however. It’s also important to analyze that feedback and act on it. As you design a listening program, seek to incorporate feedback at all touchpoints. Use relationship tracking studies to understand how customers feel about your brand. Passive listening to "always-on" channels such as social media can also be fruitful.
2. Solving Customer Problems (Quickly)
According to a report from PwC, 17% of customers said they’d walk away from a brand they love after just one bad experience, and 59% said they’d do so after several bad experiences.
Fortunately, most bad experiences can be prevented with a little problem-solving. Brands should go out of their way to take care of customers, listen to concerns or frustrations and offer real solutions — at every touchpoint.
A solution might mean offering a refund, explaining how to use a product or even just lending a sympathetic ear. It could also mean working out complex long-term changes, such as product design optimization or further employee training.
And remember, when a customer does reach out with a problem, they want a solution quickly. Almost 66% of consumers expect a response within 10 minutes to any inquiry, and 82% of customers say immediate responses from a business are very important (HubSpot).
In this 24/7 world, that means your live customer support team should always be available, easily accessible and quick to offer solutions.
Related Article: How to Solve a CX Crisis in 5 Steps
3. Offering Self-Service Avenues
Most customers prefer to be self-sufficient. Research from Zendesk shows that 69% of consumers try to resolve issues on their own before reaching out to a company — but less than 33% of companies offer self-service options.
Set up an AI-backed chatbot to answer common questions. Create a forum community where customers can interact and problem-solve with each other. You can also share product materials, such as manuals, educational videos and more, on your website.
As a bonus, by giving customers what they want, you free up staff to focus on more human-centric interactions.
4. Prioritizing Department Collaboration
If your company's operations are highly siloed, departments won’t know about CX problems that don’t directly affect them. This setup can impede the consistent delivery of excellent CX across the entire customer journey.
For example, a customer who's frustrated with their billing experience might never convey that to an in-store salesperson. But that frustration could still lose you the customer.
Build a multifunctional CX strategy that promotes inter-departmental CX collaboration, ensuring all touchpoints are covered and aligned with customer satisfaction.
5. Using the Data You're Collecting
Data is useless if you don't analyze and act on it. Use it to look for changes in customer behavior, customer satisfaction with brand interactions and customer service efficiency.
This information will be a starting point for refining your customer-facing processes across the board. It will also illuminate if you’re expending efforts on collecting data that you don’t need.
6. Upping Your AI Game
Servion Global Solutions predicts that by 2025, 95% of all customer interactions will involve artificial intelligence (AI). They also claim that humans will eventually prefer interacting with machines over humans.
You can implement AI solutions, such as chatbots and mobile messaging, to assist customers with general inquiries or frequently asked questions. These systems should be smart enough, however, to turn customers over to human representatives when needed. In turn, this system frees up employees to focus on complex and creative tasks.
7. Personalizing Interactions With Customers
According to a report from McKinsey & Company, 71% of consumers expect companies to serve up personalized experiences, and 76% get frustrated if it doesn’t happen. That means personalization could very well mean the difference between a customer who returns and one who doesn’t come back.
Ask customers about their preferred methods of communication. Give customer service representatives access to customer history, including past purchases, previous support communications and engagement patterns. You can also use customer personas to design cohesive support initiatives.
Related Article: Enhancing Your One-to-One Personalization Efforts
Customer Experience Management
Customer experience management (CXM) is how you control your customers’ perceptions of your business. Through CXM, you can measure, manage and improve CX, employee performance and products and services.
CXM allows you to integrate all factors involved in CX and figure out which ones are improving (or not). You can then develop strategies for further optimization. Looking at the CX pie as a whole allows you to see how each element affects and interacts with the others.
CXM prioritizes your customers' needs, which means they're always at the forefront of your plans. By figuring out how to provide more value to customers, you build loyalty and attract new prospects, including through word of mouth.
Bring Your Whole Company Into the CXM Discussion
Your whole company plays a part in customer experience management. Be sure to include representatives from the following departments when creating a CXM plan:
- Customer Service: This department is vital to overall customer experience. Post-sale, they often have the most contact with customers, making them key for collecting feedback. Use agents in this department to gather information on how the customer base interacts with products and services and how they’ve evolved over time.
- Marketing: Your marketing team often creates first impressions of your brand. They reach prospective customers through advertising, social media, personalized outreach and public awareness. Even word of mouth is within marketing’s wheelhouse. Employees in this area will be key for crafting and implementing personalization.
- Product Development: Customers won't pay for products that don't meet their needs — and often, those needs are emotional. Members from this team will be essential regarding expectations around ease of use, reliability, design and price.
- Sales: This department likely spends the most time thinking about the customer journey. They’re often on the front lines interacting with customers, which makes their insights invaluable. Bring them into CXM discussions revolving around touchpoints, follow-up needs, customer retention and churn reduction.
Building a Positive Customer Experience Going Forward
The great news about customer experience is that it’s always possible to make improvements. Whether your feedback has been spotty or you’re concerned about retention rates, you can always move forward.
Keep in mind that making improvements to CX will benefit your company in every way. By ensuring your customers are happy and coming back, you’ll boost employee experience, grow your profits and expand your overall reach.