What is Customer Experience?

December 09, 2019 by Stefanini

Customer experience (CX) counts, especially when your company is looking to create new customer relationships while retaining existing ones. But before you can capture this key metric, it’s important to define customer experience and how you can measure it.

What is Customer Experience?

According to Gartner, one customer experience definition is “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.” Further, Forrester Research identifies customer experience as: “How customers perceive their interactions with your company.” While interactions with a brand encompass various touch points a customer might come in contact with – like talking to a customer support agent or getting aid via live chat – a customer’s perception is shaped by those interactions.

Hubspot even takes the consumer experience definition further, identifying the fact that the two primary focal points of customer experience tend to be people and product. In some cases, it is enough for people to be impressed with and raving about the product you offer. However, when coupled with a fantastic experience, the customer experience is only bound to improve.

Now, it is important to note that customer experience differs from customer service. Customer service is the support provided by a company to customers who are facing issues while purchasing or using its products or services. Conversely, customer experience is the overall perception of a brand that is a result of comprehensive interactions throughout the buyer’s journey. The biggest difference between the two involves the fact that customer service is reactive and only is called upon when a disgruntled customer contacts the company. While customer service is reactive, customer experience is proactive because the business can take action to optimize the customer journey before the customer calls, dissatisfied. This approach goes beyond the customer service department and is the responsibility of everyone in the company.

Now that we are in the digital age, customers’ needs and demands have changed. Customers expect service to be prompt, relatively error-free and easy-to-navigate. As a result, brands are turning to technology platforms more and more as a way to improve CX across channels.

 

Importance of Customer Experience

Hubspot notes that thanks to the internet, customers have many more options now. These options include your competitors, greater ease of switching power via subscription and freemium options, and more power to influence your business than ever before using social media and online reviews. Yet, Hubspot points out that a happy customer is your greatest source of publicity. When customers are satisfied, they spread positive reviews via word-of-mouth and social media, only serving to boost your business.

Organizations are investing in improving customer experience to reap the following customer experience benefits:

1.       Reinforce Brand Preference – to obtain a higher level of loyal customers, brands should personalize the experience for the consumer. Delight customers by focusing on improving the experience across all touchpoints.

2.       Reduce Customer Churn – it is more expensive to acquire a new customer than retain an existing one. Keep customers satisfied so they will stay with your brand and won’t leave for factors like product price.

3.       Inspire Customer Advocacy – happy customers appreciate a memorable customer experience. The best brand ambassadors or brand advocates are loyal customers.

4.       Boost Revenue – the organization is able to add more value in terms of new business sales when satisfied customers add to the revenue with incremental sales and positive word of mouth.

Customer Experience Funnel

Unlike some funnels, the customer experience funnel differs in a variety of subtle ways. The stages are as follows:

1.       Repeat – the biggest goal for any company is to make a repeat customer out of someone who has made an initial purchase. This requires the company to improve retention and nurture customers to make more and bigger purchases.

2.       Loyalty – in this stage, customers develop a preference for a brand, begin to identify with it and personalize products.

3.       Referral – once a customer is happy with and loyal to a brand, they are more likely to recommend the brand and its products to their friends, family, and others.

4.       Advocacy – new leads can be garnered by customer evangelism, which can take the form of writing product reviews, posting abut products on social media, and more. Prospects can be strongly influenced by having an external recommendation not connected to the brand. In order to develop their communities, companies can work to better support advocates, ask them to participate in case studies, or engage them around consumer-generated content on social media.

 

How to Measure Customer Experience

 

There are several ways to measure customer experience. Is your company putting the following measures into practice?

1.       Analyze customer satisfaction survey results. – the best way to measure customer experience is via the Net Promoter Score (NPS). NPS measures how likely your customers will promote you to their friends, family, and colleagues. However, there are several factors to consider when utilizing NPS. Consider data in cumulative terms due to the fact that multiple teams impact the customer experience, which comes from multiple data points. For instance, what is the NPS for in-product usage? What is the NPS for customer service teams across communication channels, such as phone, email and chat? Consider the NPS for sales or attending a marketing webinar as well. Analyzing these NPS from multiple touchpoints across the customer journey will inform you as to what you need to improve, where you’re doing well, and which customers can connect with and engage in advocacy and evangelism. However, be warned that it is easy to skew NPS results, so even though it might be difficult, take your data results at face value. Data that shows a poor customer experience might require you to be open to making changes. On the other hand, data that shows a great customer experience may urge you to take a deep dive into team-by-team performance to ensure you’re meeting standards across the board. Connecting with customers can deepen your relationship and improve your CX and loyalty outcomes.

2.       Identify rate and reasons for customer churn. – not sure what churn rate is? Hubspot defines it as the percentage of your customers or subscribers who cancel or don't renew their subscriptions during a given time period. Unfortunately, churn is a part of doing business. Keep an eye on if your churn rate is increasing or decreasing by doing a regular analysis of your churned customers so you can identify the reasons the customers churned and how your team can take action to prevent further churn in the future.

3.       Ask customers for product or feature requests. – by doing this, you’re getting a full view of what your customers want and can start to prepare to fill these needs for them. Hubspot recommends creating a forum for your customers to request new features or products. These forums can be an email survey, on social media, or on a community forum. You don’t have to take all customers’ input into account, but if trends emerge in customers’ feedback, they may be something you want to pay attention to.  

4.       Analyze customer support ticket trends. – your customer support team is handling a flurry of tickets each day – why not analyze that data? This way, you can pinpoint whether or not there are recurring issues that irk your customers over an extended period of time, so you should take the effort to try to resolve them.

 

Customer Experience Management

Hubspot defines customer experience management as the process of surveying, analyzing, and enhancing customer interactions with your business. The system evaluates how you can improve customer experience by monitoring different customer touchpoints.

Why is customer experience management so important? Well, it demonstrates a clear investment in customer needs by being a fundamental component of a customer-first strategy. Your company will consistently bring more value to users by monitoring and enhancing different touchpoints along the customer flow chart. This is an important for existing customers as well as new customers. Hubspot notes that new users expect speed when making their first purchase. Additional value needs to be added over time or customers may lose interest and look for benefits they initially saw in their first purchase by looking elsewhere. This is where customer experience management comes in – by identifying these consumers and providing programs and features to prevent potential churn.

How to Improve Customer Experience

There are several factors that must be in place to make a positive customer experience. In order to do so, Hubspot recommends the following:

·         Build a customer experience map and buyer personas, thereby understanding customer experience and solving their challenges

·         Build a positive connection with your customers

·         Ask for and act on feedback from customers and employees on how to improve

·         Create engaging educational content

·         And finally, build communities for your audience

When it comes to online communications and the ever-evolving shift toward online customer support systems, a requirement has arisen for a seamless and efficient customer experience, which has become a crucial part of every business’ customer retention strategy.  There are several ways to improve the customer experience:

1)      Create a personalized, seamless user experience – by utilizing in-browser communication, customer support agents can get comprehensive insights into customers’ purchasing habits and prior interactions with the brand. A personalized service is provided through product recommendations based on the visitor’s previous shopping history. Visitors are able to easily navigate the website thanks to on-site customer support options and get that much closer to making a purchase. By having solutions available, peoples’ purchasing intent will increase, as will their satisfaction rates.

2)      Place the customer at the center of the business strategy – the customer is at the center of each and every business decision. Organizations should plan and implement a CX strategy with relevant tools and technology to achieve a holistic customer view and analyze customer sentiment and social indexes across customer interaction history to deliver superior customer experience.

3)      Build trusting customer relationships – to gain people’s trust and establish a loyal customer base, consider face-to-face interactions. These can be enabled by real-time communication technology, which makes it easy to cater to customers’ needs. Now, they are able to contact your business through voice or video web call, whenever they need help, which allows customers to communicate problems to customer support reps in a much quicker and more efficient way.

4)      Establish clear cross-functional accountability – extraordinary customer experience connects front office functions with back office functions. With cross-functional accountability, seamlessness and speed can be maintained across the customer query resolution process by identifying the bottlenecks hampering SLAs. Any changes or updates in the customer query is then captured and tracked across the systems on a real-time basis.

5)      Improve response rate and decrease hold times – Offer multiple contact options across different communication channels to reduce the amount of callers who will hang up after 1 minute and 55 seconds of hold time. It is important to note that the quality of communication should be maintained to the same level on every platform. Real-time communication will make it easier to navigate between the communications channels your customers contact you from and simplifies your customer support solutions. There are several components to a positive customer experience. Firstly, it is determined by whether customers’ issues receive personalized and attentive service by customer support reps who provide quick and proactive solutions. Further, features like the video and voice web calls ensure the business is transparent and approachable while catering to the customers’ needs. By making the buyer feel a part of the business’ team, their satisfaction will increase – and those who have cultivated brand loyalty are much more likely to return for future purchases, potentially spending more too.

6)      Empower employees with customer insights and knowledge – when customer service agents – the face of the company – access the single view of customer interaction history across the channels, they are more able to understand the customer’s perception and expectations from the brand. This places them in a better position to deliver a seamless, personalized and dynamic experience.

 

Customer Experience Management in the Online Realm

It is more and more common these days for customer experiences to occur online, so it’s becoming increasingly important to build relationships through digital channels. Hubspot notes that the online or digital customer experience management refers to the experience your business creates online or through a mobile app. There are a few details to keep in mind when measuring the customer experience:

1)      Mobile Experience – the experience customers have by using mobile to access your business should be the same as though they’re using standard desktop devices. One of the first things you should consider in addition to having a website is having a well-functioning, comprehensive app. If you choose to go without an app, your website should be mobile-responsive and user-friendly across multiple devices. Further, your app or mobile site should be as well-working as your desktop version, allowing users to accomplish the same amount of tasks they would using a mobile or traditional device. Research shows that customers truly value an omni-channel experience, or a multi-channel approach to marketing, selling, and serving customers in a way that creates an integrated and cohesive customer experience no matter how or where a customer reaches out.

2)      Usability – websites and apps should be intuitive, meaning that the user should be able to determine which steps they need to take to achieve their goals. Usability testing is crucial here, which evaluates how easy it is to operate your product or service. These tests allow you to build a website design that’s easy-to-use and makes sure every customer achieves their goals on time.

3)      Users Onboarding – in some cases, onboarding is necessary to make non-tech-savvy users comfortable with products or services. When implemented properly, customers can get value from your business right away rather than going through a time-consuming learning curve. In some cases, a representative from the company’s customer success team works with the user to make sure they understand the purpose and value of their purchase. In this case, software can be used to simplify the process for your team. Fortunately, there are tools available that can analyze areas to improve and monitor customer experience, such as HubSpot, Khoros and Whatfix.

 

Future of Customer Experience

With the new decade incoming, there is much speculation as to what the future of customer experience looks like. Here are some of the next big trends in customer experience…

1.    Customer Experience Still Wields a Lot of Power – more customers are demanding better treatment and are willing to pay for it. According to a study conducted by PWC, 73 percent of all people point to customer experience as an important factor in their purchasing decisions. As a result, 68 percent of business-to-business marketers agree that delivering a consistent, high-quality customer experience is very important in today’s marketplace. However, only 49 percent of U.S. consumers say companies provide a good customer experience today. So, the time is now to get on board the customer experience train. If your organization can address this issue, you’ll be one step ahead of your competition. Don’t wait!

2.       Employee Experience Will Continue to Influence Customer Experience – investing in employees can mean two things – one, your organization will create an environment that retains top talent and two, satisfied employees provide a better customer experience. According to the State of CX Management 2018, organizations who earned “good” or “very good” employee engagement ratings are more likely to be ranked as customer experience leaders.

3.       Customer Experience Will Continue to Be An Unpredictable Part of Business Operations – too many organizations today are still unsure of how to treat customer experience as a part of business strategy. Rather than assigning it to leaders like Chief Marketing Officers or Retail Operations leaders, companies should take a step back and truly configure how to start operationalizing customer experience. Business 2 Community recommends starting a loop of gathering customer feedback, assigning real responsibilities, and treating customer experience the same way we do marketing, sales and technology. It predicts that we are on the way to moving into this phase, but most companies have a long way to go when it comes to incorporating this strategy.

4.       CX Innovation Will Rely on Agile Principles – as organizations continue to incorporate customer experience into their strategy, the speed and agility with which they do so will be a huge factor. Business 2 Community makes the point that organizations that prioritize quick improvements while using agile principles will rise to the top. These customer experience principles can be used to harness change on behalf of customers, allowing organizations to hit customer experience KPI examples such as NPS, customer effort score (CES) and churn rate, among others. When you calculate these customer experience metrics, you can see how well they influence your actions, which can have a big impact.

5.       Robots Will Replace Some Jobs, Necessitating the Creation of New Ones – if your business is not using chatbots, it might be time to get with the times. According to a study by SalesForce, roughly 23 percent of service organizations used chatbots in April of 2019. However, an average of 53 percent expect to do so by 2020, a 136 percent growth year-over-year. Lasting changes to the contact center structure and overall org charts of many brands will be driven by artificial intelligence (AI) and machine learning. SalesForce also cites the prediction that there will be a 136% increase in the number of organizations that use AI chatbots from 2019 to 2020. Hearing this fact may be intimidating, as it might convince employees that robots are coming for their jobs. In actuality, the role of these technologies will provide better experiences for customers by helping customer service agents and others. If used correctly, human agents will be able to leverage this technology to access customer histories and relevant data served at the appropriate time. As a result, the agent can provide more personalized, relevant experiences in a faster, more convenient way to customers. As bots are created, humans will be needed to train and supervise the automated experiences created by these bots. Humans have skills that bots never will. For instance, humans still need to be available to connect with customers when needed. Further, these types of technologies are only made possible by the humans behind them, creating them and designing so that the customer is truly put first.

6.       Customers Have No Patience for Outdated Technology Processes or Communications – customers are on the lookout for digitally savvy brands rather than those old school brands with legacy systems and antiquated processes. Customers have access to so much information that brands can no longer rely simply upon press releases or advertising. Consumers are looking for brands that respond to their needs, but also the needs of the world as a whole. Business 2 Community cites the examples of brands like Uber and AirBnB, which are providing seamless experiences. These types of brands have updated the way they speak to consumers – instead of relying on industry-specific terms and acronyms, they work to be in a conversation with their customers, creating customer experience. This means reducing jargon and replying as human-like as possible. Most crucially, it requires organizations to review their communications for outdated terms around our shared humanity, with terms referring to gender, race and ability, among others.

7.       Soft Skills Will Become the Important “Empathy Toolkit” Needed in CX - what is good customer experience? Well, soft skills – such as listening well, responding with empathy and understanding, proactively reading the emotional state of a person or situation – are absolutely necessary for great customer experiences. These skills should be applied both in and outside the organization. Not only should your customers be on the receiving end of soft skills, but you should also apply them toward your colleagues and partners. While soft skills may seem unnecessary, future CX leaders will prioritize them when hiring, training and empowering employees.

Learn More about CX with Stefanini

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