What is customer experience? The ultimate guide to CX
Today, more and more business leaders are talking about customer experience and prioritizing it as one of their key investments. If you’re new to the CX world, this guide covers everything you need to know about customer experience. We’ll explore what it is, why it’s important, how to measure it, and how to improve it.
What is customer experience?
Before we dive into the depths of customer experience, you first need to understand what it actually is. Customer experience (CX) refers to a customer’s overall perception of your brand based on their interactions with it. These interactions can include clicking on an ad, buying your product or service, or engaging with a customer support representative. Every interaction – no matter how big or small – affects how customers feel and the relationship they have with your brand.
Customer experience vs customer service vs customer support
Sometimes people make the mistake of using customer experience and customer service interchangeably. While both share an end goal of making customers happy, they are different.
Customer experience is the bigger umbrella term that encompasses the entire customer journey. Customer service and customer support are just two parts of that journey.
Customer service is the act of helping customers before, during, and after a transaction. It covers all the direct interactions they have with your company. Customer support is a subset of customer service. It focuses on troubleshooting any technical issues customers might have with your product or service.
Why customer experience matters
Customer experience is crucial for businesses, especially since customers are no longer making decisions based on price and quality alone. A great customer experience can have a direct impact on your bottom line. In fact, businesses can grow revenues between 4% and 8% above their market when they excel at customer experience.
While business growth is one of the key benefits of customer experience, there are many other reasons to prioritize it.
Customer retention
Customer experience plays a huge factor in customer retention. According to Forrester, customers who have a high-quality customer experience are 2.7 times as likely to continue doing business with a company than after a bad experience.
Retaining customers is also extremely cost-effective. Did you know it’s five to 25 times more expensive to attract a new customer than retain an existing one? This stat on its own proves just how impactful the customer experience is on retention rates.
Customer loyalty
Customer loyalty comes from having consistently positive experiences with your business. Loyal customers not only value the products or services you sell, but they also enjoy their interactions with your brand. They develop a connection and sense of trust, which leads them to choose you over your competitors.
Brand advocacy
The loyal customers you retain will eventually become brand advocates, spreading positive word-of-mouth about your brand to new audiences. According to KPMG, 86% of loyal customers will recommend a brand to their friends and family.
Delivering a great customer experience pays off. It not only helps generate revenue but also helps you build relationships with existing customers and gain new ones.
Learn more: Watch how leading brands are approaching customer trust, knowledge management, and brand loyalty.
Characteristics of great customer experience
Characteristics such as ease of use and up-to-date technology aren’t just isolated benchmarks. Combined they ladder up to play a much larger role in shaping how your brand is perceived. Let’s break down some of the main characteristics that make up customer experience.
Characteristics that make an immediate impact
These characteristics are visible to your customers and can significantly influence their initial perception of your brand.
Relevance – Does your product fill a gap in the market? Does it deliver real value?
Ease of use – Is your product or service easy to use? What’s the level of effort associated with using your product?
Convenience – When customers need help, can they get it easily? Do they have to go digging to find your knowledge base? Are your support queues impossibly long when they reach out and contact you?
Efficiency – Is the speed of your service meeting expectations? How available are you?
Personalization – Do customers have to repeat their issue every time they contact support? Do you know their preferences without asking?
Omnichannel access – Are you available to help customers across multiple channels?
Brand image – What are customers saying about you? Do they recommend your product to friends and family?
Characteristics that develop trust
These characteristics are part of the operational, behind-the-scenes work. They cover all aspects of the experience that customers feel but don’t necessarily see.
Product design – Is your product designed well? Does it work well and is it intuitive for users to figure out?
Technology – Do you offer self-service or live chat options? Does the experience integrate across the entire platform?
Knowledgeable service – How well does your team know your product? Are agents able to effectively solve the issues that arise, and escalate ones they can’t?
Friendly service – How do your agents make customers feel? Like a burden for calling, or like a friend being looped in on some key information?
Analytics – You’re supporting your customers, but are they supporting your product? Are you collecting support data to improve the support experience, as well as the product itself?
How to create a customer experience strategy
Creating a customer experience strategy might seem daunting. With so many touch points throughout the customer journey, it’s hard to know where to begin. If you’re just getting started, here are three core foundations to consider as you build your own CX strategy:
1. Define your values
The first step in building any CX strategy is to determine the kind of company you want to be. Patagonia, for example, is driven by environmental advocacy. Their core values are building good products, causing no unnecessary harm to the environment, and using business to protect nature. Their commitment to doing good strongly resonates with their customers and helps make their customer experience authentic.
2. Understand your customers
If you want to offer your customers a meaningful experience, you have to know who they are. This allows you to find the sweet spot where their wants and needs intersect with drivers of change and innovation.
You can do this by segmenting your ideal customers into different profiles, and building personas around each. For example, ‘Billie’ is 23 years old and a digital native, so she’s able to access self-service portals and follow basic instructions on her own. On the other hand, ‘Kenny’ is 53 and needs a bit more hand-holding when it comes to support. Giving names and stories to your customer profiles can help your product and support teams understand them better.
After you’ve created your personas, you can then map out their customer journeys (we’ll dive more into this later). Each persona will have a different experience with your brand so it’s important to capture all of them.
3. Involve your support organization
Customer support is a key aspect of customer experience, yet many companies fail to prioritize it. Support agents are out on the front lines interacting with your customers every day. They probably have more influence on CX than any other member of your company! It’s critical to factor your support team into your strategy. You also should ensure they’re equipped with the right tools to provide positive customer experiences.
Measuring customer experience
Once your customer experience strategy is in place, you then need to measure its success. There are a few ways you can measure customer experience to determine what’s going well and what can be improved.
Send post-interaction surveys
One way to measure customer experience is to get feedback from customers directly. Collecting and analyzing your customers’ pain points, allows you to create more meaningful solutions.
This can be done through regular surveys to capture any gaps in customer satisfaction (CSAT) and Net Promoter Score (NPS). Send follow-up emails or surveys to every customer after a support interaction. Doing this gives you a better view of the customer experience, as well your support team’s performance.
Analyze customer effort score (CES)
A key customer experience metric that many organizations fail to track or even understand is customer effort.
Customers want to spend as little time and effort as possible when it comes to completing transactions or resolving issues. The customer effort score shows the amount of effort it took for a customer to get a resolution.
Make sure to analyze your CES alongside churn rates, expansion rates, and customer lifetime value. If customers are churning less, you know your support team is creating a good experience.
Interview customer-facing employees
For some companies, internal employee feedback loops are key to measuring success, especially from employees in customer-facing roles. They are regularly interacting with customers so they have their fingers on the pulse of their wants and needs.
How to improve your customer experience
Creating a great customer experience doesn’t happen overnight – it takes time to refine your CX. Why? Because it requires your entire company to put customers’ interests at the heart of everything your business does. Here are some ways to improve your customer experience and become a more customer-centric brand.
Map your customer experience journey
Customer experience journey mapping helps you get inside the mind of your customers. A customer journey map is a visual representation of every touchpoint customers have with your brand (e.g. social media channels, website, call center). It captures how people perceive your product or service in the broadest sense.
A good customer journey map charts a path through the following stages of conversion:
Awareness – When a customer discovers your brand through social media, an online search, word-of-mouth recommendation, or an advertisement
Consideration – A customer evaluates or considers your brand with online research, testimonials, competitor comparisons, or third-party review sites
Purchase – A customer completes a transaction or converts to a paying customer
Service – Once a customer receives your product or service, they have access to your customer service and support resources
Loyalty – A customer becomes loyal and decides to make another purchase and advocate for your brand
When you iron out the customer journey, you can make more value-driven decisions and better optimize your customer experience.
Tap into the voice of your customer
There are so many ‘voices’ that go into creating a great product or service. Because of that, it’s easy to forget the most important voice of all – your customer! Companies that are truly customer-centric implement a Voice-of-Customer program to ensure this voice is never left out.
A Voice-of-Customer (VoC) program gathers and analyzes all the customer feedback you receive. A good VoC program turns the customer's perspective into a North Star. It offers guidance to marketing, product, and support teams so they can enhance and align all components of the customer experience.
The insights generated from VoC programs help you identify what is and isn't working with your existing customer experience. They also show how customer expectations are evolving in your field, and where your industry might be heading.
Listen to customer feedback
Customers are always willing to provide feedback. You can’t always control if it’s good or bad, but you can control how you listen to that feedback. Show you’re listening by replying to a customer review or following up on a survey response.
Customers that feel heard will have a stronger relationship with your brand and keep coming back. According to Wayfair’s Chief Technology Officer, Jim Miller, listening is key to a great customer experience:
“What’s the problem [customers are] really trying to solve? They might be expressing their needs in a tactical problem, which is part of a much bigger problem that adds more value to the customer experience and the company.”
Offer self-service resources
When your customers need help, give them a quick win by making it easy to get answers with self-service. Making your knowledge accessible empowers customers to help themselves rather than wait minutes (or hours) to speak with support. You can also use self-service to make your support team more efficient. Take fitDEGREE for instance.
fitDEGREE is a cloud-based management software for yoga and fitness studios. They use self-service articles to reply to customer queries quickly and effectively. They also use feature requests to get a better sense of what customers are missing and how to improve products.
Focus on the employee experience
Customer-facing employees play a significant role in your customer experience. How they engage with customers can make or break your CX. When employees feel supported in what they do, they’re empowered to help customers feel supported in their difficult moments. If you can build that energy into your business, your customers will feel it — and they’ll want to stick around.
Build a customer community
Communities build trust between customers and brands, but they also provide opportunities for customers to interact with each other. Many businesses will create a community forum on their website or groups on social media channels. They give customers an outlet to share their thoughts and experiences and provide valuable feedback about your product or service.
It’s time to elevate your customer experience
Since CX touches every aspect of a customer’s interaction with your brand, understanding and improving it is crucial for success. So ask yourself, is your customer experience where it needs to be?
