Customer Experience 101: Everything You Need to Know About CX
Customer experience (CX) refers to the interactions between a brand and its customers that each customer’s overall perception is based on. It encompasses the customer journey from initial engagement to post-purchase evaluations, and CX aims to create positive emotions by meeting (and exceeding) customer expectations to build customer loyalty.
Everything from a customer’s first interaction with a brand — such as seeing an advertisement or visiting a website — to receiving support after a purchase are considered touchpoints part of customer experience.
What is Customer Experience? The Basics of CX Explained
Customer experience covers the entire customer journey, starting with awareness and extending through post-purchase evaluation.
As a glossary term, here’s the definition of customer experience:
Customer experience, also known as CX for short, is customers’ perception of their experience with a brand or organization over time, which results from every interaction they have.
Professionals throughout an organization should be familiar with customer experience’s definition. It allows employees to align expectations and understand where their respective departments make an impact on CX, and the silos between those departments begin to break.
Customer experience is different from customer service, however. Whereas customer experience is the sum of all interactions a customer has with a brand, customer service is just one part of the equation. Customer service is the direct interaction between a customer and a brand through channels related to the contact center such as live agent chats, artificial intelligence (AI)-powered chatbot conversations, phone calls, and emails.
Customer Feedback: The Data-Rich Direct & Indirect Signals
In every industry, the driving force behind an organization’s decisions is customer feedback. What customers say paints a complete picture of the perception a brand has. Brands that listen to and act on customer feedback adapt to exceed expectations, and brands that only listen to themselves typically fall out of favor quickly.
Feedback exists everywhere, and all of it is relevant to understanding how customers feel and what they’re experiencing. But it’s not always easy to obtain.
CX professionals examine direct feedback and indirect feedback. Direct feedback is shared through channels specifically designed for the purpose of gaining insights, such as a survey sent via email after a purchase. Indirect feedback, however, is shared through channels that a brand doesn’t own — think of a customer discussing a product or service openly on social media.
Both direct and indirect feedback are important for a brand to receive and analyze. Organizations should strive to gather both types of feedback in order to have a complete understanding of the customer experience.
Why Customer Experience is Important to Every Business: Benefits of Making CX a Priority
Customer experience is a top priority for all of the world’s industry-leading brands. The goal of improving CX is to create happy, satisfied customers who continue to engage with a brand and recommend its products or services to others.
When an organization chooses to make CX a top priority, successful brands can achieve the following benefits:
- Increased customer satisfaction: When customers have positive experiences, they’re more likely to be satisfied with a brand and recommend its products or services to others.
- Strengthened loyalty: Happy customers are more likely to return and make repeat purchases.
- Higher sales: Between repeat purchases from existing customers and repeat purchases from new customers referred to by brand ambassadors, a brand generates larger sales revenue.
- Competitive advantage: A differentiated and exceptional customer experience sets a brand apart from the competition and gives it a competitive edge in the market.
- Improved brand reputation: A positive customer experience enhances a brand’s reputation and helps build brand equity.
- Enhanced employee engagement: Employees who are proud of their organization’s commitment to customer experience are more likely to be motivated and engaged in their work.
In order to achieve all or at least some of this, it’s important to understand what customers want, expect, and need from interactions with a brand; therefore, leadership in an organization needs to establish the tools, methods, and processes to deliver extraordinary experiences at every touchpoint.
Ultimately, investing in customer experience means you’re able to collect, analyze, and act on customer feedback that optimizes the business for favorable outcomes.
Plan & Launch a Customer Experience Program
A customer experience program is a structured approach to managing and improving the interactions between a brand and its customers.
Whether a brand is getting started from scratch or seeking to upgrade an existing program, here are the key elements of a successful customer experience program: Signals, Insight, Engagement, and Action.
Remember this, though: CX programs are not one-size-fits-all. As a customer experience program develops, the intricacies of a brand and its industry come into play. Every organization is unique with its stakeholders guiding the CX program’s goals, objectives, and processes. Once tailored for specific needs, a CX program is positioned for success.
By implementing a CX program, leading organizations demonstrate a commitment to delivering exceptional experiences to the most important person — the customer.
How to Improve Customer Experience
Customer experience is an always-on effort. ‘Set it and forget it’ certainly doesn’t ring true for any CX practitioner who’s achieved success in building and maintaining a program. Customers have unique wants, needs, and preferences that shift rapidly, and a customer experience program that doesn’t adapt to meet those leads to freefall for brand reputation.
Looking to improve CX? Here’s an overview of what brands can do to renew customer experience strategy as a priority with significant impact.
Capture a Wide Range of Signals
Feedback is essential to the success of improving customer experience, so it’s key to incorporate several types of signals that allow customers to provide feedback throughout the customer journey.
Going beyond traditional surveys alone allows an organization to gain a full understanding of CX along the customer journey. Other forms of customer signals include transactions, chats, voice calls, website visits, and social media.
Leverage Mapping Across the Customer Journey
Considering the vast number of touchpoints between a brand and its customers, it’s important to map out the customer journey.
Customer journey mapping involves figuring out all the different touchpoints that customers have with a brand and making sure that each touchpoint is as positive as possible. When mapping out the customer journey, CX practitioners see where there may be potential problems or areas for improvement.
Brands can then address any issues or tackle any opportunities to make customer experience even better.
Invest Efforts in Social Listening
The easiest way to understand customers is by listening to what they say in public channels. From social media platforms (such as Twitter and Facebook) to review sites (like Google Reviews and Tripadvisor), most brands have a lot being said about them online. So there’s a wealth of information available publicly that’s worth gleaning from.
Social listening is a simple (and yet very effective) method to monitor public comments and gain insights into the perceptions of a brand’s customer experience.
Improve Analytics to Understand Customer Sentiment
Knowing what customers say is one thing. But knowing how they feel is completely different. Customer sentiment — their views, attitudes, and opinions — goes beneath the surface to explain the ‘why’ behind the ‘what.’
Analytics powered by artificial intelligence (AI) and natural language processing (NLP) pinpoints the deeper meaning behind customers’ words.
In a survey, a customer may outline how they experienced an issue with entering a promotional code at checkout. The feedback in their survey says exactly this, but what’s their mindset from this experience? AI and NLP can examine the survey response to pick up that they’re feeling disappointed and frustrated.
So not only do AI and NLP unlock insights every business craves, but both technologies also create significant efficiencies. There’s no need to task employees with manually sifting through survey responses, live chat conversations, and a bevy of social media posts.
Provide Actionable Feedback to Employees
Employees throughout an organization hold the responsibility of orchestrating experiences that should delight customers, which is why employee experience (EX) is as important as CX. Brands want employees to feel engaged, motivated, and happy in order to replicate the same array of feelings for customers.
Actionable feedback is the feedback that empowers employees — they learn from its insights and take action ultimately benefiting the organization.
If agents on the front lines discover customers struggle with navigating a mobile app, the feedback should be shared outside of the contact center and with the marketing and app development teams for optimization.
In this example, customers left feedback with the contact center and opened the door for appropriate teams to take action. It’s proof of how CX needs to permeate throughout an organization — free of silos — to create better experiences.
Organizations with a strategy bringing together both customer experience and employee experience are often the most recognizable brands across industries. Beyond running a CX strategy that attracts and retains customers, these organizations also attract and retain top talent under a successful EX strategy. And, as any business leader knows, retention is key to establishing growth.
Net Promoter Score: Monitoring Overall Customer Satisfaction & Loyalty
Net promoter score (NPS®) is a customer loyalty metric that measures customers’ likelihood to recommend a brand’s products or services to others.
It’s based on a single question: “On a scale of 0-10, how likely are you to recommend Company XYZ to a friend or colleague?”
Responses are typically grouped into three categories: Promoters (9-10), Passives (7-9), and Detractors (0-6). Using the net promoter score formula, NPS is calculated by subtracting the percentage of Detractors from the percentage of Promoters.
NPS measures satisfaction and loyalty, which are key drivers of customer experience. A high NPS indicates that a brand is providing a positive customer experience while a low NPS suggests improvements are needed.
By regularly measuring NPS, brands track the impact of their CX initiatives and make data-driven decisions to improve customer experience overall.
Top Customer Experience Metrics
CX leaders use a variety of customer experience metrics along with net promoter score to monitor performance and inform decisions. Choosing customer experience metrics depends on an organization’s priorities and goals, but each is a useful key performance indicator (KPI) to gain an understanding of how changes to CX strategy are making an impact on customers.
Aside from NPS, here are popular customer experience metrics to consider:
- Customer satisfaction (CSAT): CSAT measures how happy customers feel about a given company, product, or service compared to their expectations.
- Customer effort score (CES): CES measures how easy it is for a customer to complete a given activity.
- Customer retention rate: Customer retention rate measures the percentage of customers who are retained or remain active over a given period of time.
- Average handle time (AHT): AHT measures the average time it takes agents to interact with a customer from the start to the conclusion of the interaction.
- Customer lifetime value (CLV, LTV, or CLTV): CLV measures the total amount of revenue a business expects to generate from a customer over the course of their relationship.
Beyond this list, there are other customer experience metrics that may be important to an organization in its pursuit of attaining business outcomes. These are just some of the most popular CX metrics that leading organizations pay attention to.
Good & Bad Experiences: What the Best Customer Experience Looks Like
Brands rise to the occasion and delight customers, or they fall flat and give customers a one-way ticket to the competition.
Customers are unique, right? While most organizations target specific buyer personas and market segments, the reality is that every customer is different. What they like (and dislike) — based on their preferences — depends on the individual; therefore, what makes a good experience varies. But there are a few general areas in which good customer experience separates itself from bad customer experience.
What good experiences for a customer look like:
- Personalized: An experience tailored to meet the individual needs of each customer, understanding their unique preferences.
- Convenient: An experience designed to be efficient, accessible, and easy to use so that customers complete actions without any issues.
- Responsive: An experience in which an organization responds quickly and effectively to customer inquiries or concerns.
- Empathetic: An experience considering the customer’s needs and emotions.
- Consistent: An experience consistent across all touchpoints and channels, reducing friction.
What bad experiences for a customer look like:
- Lacking personalization: An experience that doesn’t take the individual needs of customers into account.
- Inconvenient: An experience inefficient, difficult to navigate, or otherwise frustrating.
- Poor responsiveness: An experience in which an organization responds slowly to a customer or not at all.
- Lacking empathy: An experience failing to consider the customer’s needs or emotions, resulting in higher dissatisfaction or stress for the customer.
- Inconsistent: An experience disconnected and varying greatly across all touchpoints and channels, confusing customers.
Organizations need to deliver good experiences frequently in order to build customer satisfaction, loyalty, and advocacy. On the other hand, bad experiences lead to frustration, dissatisfaction, and churn. Rarely is there an in-between, which emphasizes the importance of customer experience.
B2C vs B2B: The Difference in Customer Experience
Organizations operate within the business-to-consumer (B2C) or business-to-business (B2B) transaction types. B2C organizations target consumers while B2B organizations target other businesses.
Customer experience exists in both B2C and B2B, but how CX is strategized and executed by an organization differs.
Here are the unique characteristics of the B2C customer experience:
- Emotional connection: B2C organizations aim to create an emotional connection with customers to drive loyalty and repeat purchases in short periods of time or long term.
- Wider audience: B2C companies serve a diverse customer base with varying needs and preferences, making personalization critical.
- Convenient, seamless experiences: B2C organizations strive to make products and services easy to access and use.
Here are the unique characteristics of the B2B customer experience:
- Complex buying process: B2B sales often involve several decision-makers over the course of a longer sales cycle.
- Focus on personal relationship-building: B2B organizations prioritize building strong, long-term relationships with clients on a personal level between salespeople and stakeholders.
- Tailored experiences: B2B organizations usually offer customized products and services to meet the specific needs of clients.
Both types of organizations benefit significantly from investing in customer experience. It’s just a matter of the approach taken that differentiates customer experience for brands in B2C and B2B.
Customer Experience Management: The Best Software for CX
CX leaders need customer experience management, also known as CEM, to take concepts of what experiences should look like for customers and implement them throughout the customer journey.
Customer experience management is the practice of how an organization approaches CX. In short, customer experience is the outcome of a customer’s interactions with a brand while customer experience management is the practice of actively shaping and improving the experiences.
Several CEM software platforms are available to capture feedback, uncover insights, and guide action to improve business performance. But they’re not all built the same, and choosing the wrong software as the central hub for CX could be a costly error that derails broader efforts.
Here are the key features and capabilities to look for in a CEM software platform:
- Feedback management: Collect, organize, and analyze feedback with the ability to track the resolution of customer complaints and issues.
- Data collection and analysis: Gather and analyze data from a variety of sources, such as survey responses, social media posts, website analytics, and more to provide a comprehensive understanding of customer experience.
- Customer journey mapping: Map out the customer journey including all touchpoints, channels, and interactions to identify pain points and opportunities for improvement
- Personalization: Use customer data to personalize CX, such as by suggesting products or services based on previous purchases.
- Integration with other systems: Provide the connections to integration with other systems, such as customer relationship management (CRM) software, to display a complete view of the customer journey individually and broadly.
- User-friendly interface: Have a user interface that makes it easy for employees — frontline staff, managers, and even executives — in multiple departments to use effectively in their roles.
- Scalability: Scale to meet the changing needs of an organization and the growing volume of customer data.
- Security and privacy: Meet industry and regional security and privacy standards to protect sensitive customer data.
- Cost-effectiveness: Offer value to the organization to provide a return on investment.
By evaluating these factors, an organization can choose customer experience management software that best meets its specific needs and goals — setting up long-term success for the business.