CX isn’t an area of a business – it IS business
Business is about buying things, selling things, and engaging with customers. CX is about providing experiences that make people want to engage with you, buy from you, and buy again.
Welcome to the ultimate guide to customer experience (CX). In today’s fast evolving business landscape, delivering a positive CX is no longer a nice-to-have, it’s a must-have.
The stakes are high, as customers have come to expect seamless and personalized experiences across all touchpoints.In this comprehensive guide, we’ll explore the ins and outs of CX and equip you with the tools and strategies you need to deliver exceptional experiences to your customers.
From understanding the core principles that drive CX success, to measuring and improving your customer experience efforts, this guide will leave no stone unturned. We’ll delve into the anatomy of CX, highlight the impact of poor customer experience on businesses, and discuss the latest trends and innovations shaping the future of CX.
So whether you’re a seasoned CX professional or just starting to explore this critical area, this guide is for you.
Get ready to up your CX game and deliver the exceptional experiences your customers deserve.
Business is about buying things, selling things, and engaging with customers. CX is about providing experiences that make people want to engage with you, buy from you, and buy again.
The best way to create a happy customer is to deliver a customer experience focused on satisfaction.
Let’s say that again: to make a happy customer concentrate on their happiness.
There’s no risk to investing in customer experience because for as long as you operate a business, the strength of CX will always be fuel for success.
If it feels overwhelming to figure out where to start, take a deep breath, sit back, and allow this article to equip you with the ideas, tools, rationales, and motivation to put CX at the center of your mission.
Customer experience (CX) is defined as the holistic perception a customer has of a company and its products or services, encompassing all interactions and touchpoints throughout the customer journey. It’s a dynamic and constantly evolving concept that encompasses a wide range of customer emotions and perceptions, from the rational and functional to the emotional and psychological.
“Brand is not what you say it is. It’s what they say it is.”—Marty Neumeier
Customer experience is how interactions with your brand or product make your customers and prospects feel. That can be a business (B2B) or a person (B2C). The spirit of honoring their journey is the same. It’s their experience, and if you plan for it, it will be satisfying for them.
It’s easy to assign customer experience to a single moment — the transaction at a cash register, or the first use of a product. Unfortunately, that limits your ability to impact customer experience truly. Customer experience is everything, from being in a store, speaking with an operator, viewing a commercial, or even hearing about another person’s experience. All of those things are fused to form the customer experience.
What does this mean to you? It means that you have to look at things from the customer’s perspective. When you realize that customers don’t see departments, but rather a whole entity, you understand that you need to be strong on all fronts.
It begins with asking questions, which some companies are afraid or unwilling to do. The reality of how customers feel about you is not something to stick your head in the sand about. Knowledge is power. The takeaway: even if you don’t ask the question, the customer still has the feelings. Give yourself the tools to improve CX.
Customer experience strategy
Step 1: Start
What should you start doing? Could it be listening? Understand that you can be doing things that will help retain customers.
American Express deconstructed their view of customer service from a cost center to investment and allowed the effort to focus on relationship building. This switch, in effect, allowed customers to inform the process, technology, and policy actions. It shortened the distance between improvement and satisfaction and led to a 400% increase in customer retention.
Step 2: Stop
What should you no longer be doing? Are there efforts that don’t create revenue or drive customer loyalty? Stop doing them.
Things to stop may not always be service or product-related, but they can influence customer experience if they reflect poorly on your company. In February of 2018, after the Parkland school shooting, a dozen companies severed their ties with the N.R.A.
Step 3: Continue
What’s working? How can we build on that? Commit to cultivating the efforts that provide benefits.
Many organizations are realizing they exponentially increase profitability by focusing on CX and increasing customer lifetime value.
The components that shape a customer’s experience are a dynamic, multifaceted, and include a variety of factors, from the quality of customer interactions to the ease of a company’s products or services, to the emotions that linger long after each touchpoint.
Customer experience is made up of components which can include a variety of factors such as:
These are just a few examples of the many components that can make up a customer’s experience. The specific ones will vary depending on the customer, the company, and the products or services being offered. Embrace the challenge and elevate your CX game!
A seamless customer experience is a priority for brands today, with 84% of companies that improve their CX seeing increased revenue.
The evolution of customer experience (CX) has been shaped by a number of factors, and has emerged as a top priority for businesses in recent years, driven by the increasing expectations of customers and the rapid pace of technological change. Today, CX is seen as a strategic differentiator and a key driver of customer loyalty and satisfaction.
In the past, customer service was seen as the primary measure of a company’s success. However, as customers have become increasingly sophisticated and demanding, the focus has shifted to delivering a seamless and enjoyable experience that extends beyond simply solving a customer’s problems.
The rise of the internet and digital technologies has also played a major role in the evolution of CX.
With the ability to access information and make purchases from anywhere at any time, customers have come to expect a level of convenience and personalized experiences that simply wasn’t possible in the past.
Additionally, increased competition in the market has placed more pressure on businesses to stand out from their competitors. CX has become a key differentiator and a top focus as businesses look to build lasting relationships with their customers.
To meet these changing demands, businesses have begun to adopt a more holistic approach to customer experience management. This involves considering the customer experience at every touchpoint, from product design and development to marketing and customer support.
Companies are investing in advanced technologies, such as artificial intelligence and machine learning, to better understand their customers and deliver personalized experiences. Companies that prioritize CX are seeing increased customer retention, higher customer satisfaction, and a stronger bottom line.
Customer experience is often confused with customer service and customer satisfaction, but there are significant differences between these concepts.
Customer service refers to the direct interactions between a customer and a company, such as phone or email support, in-person visits, and online chat. It focuses on resolving specific customer problems and ensuring that customer needs are met.
Customer satisfaction, in contrast, is the customer’s overall assessment of a company and its products or services. It takes into account the customer’s experiences with a company, including the quality of customer service, product quality, and the overall value of the company’s offerings.
CX, on the other hand, encompasses the entire customer journey, from the first touchpoint to post-purchase interactions. It considers the customer’s emotions, perceptions, and experiences across all touchpoints, and seeks to create a seamless and enjoyable experience for the customer.
In short, customer service and customer satisfaction are important components of CX, but CX is a more comprehensive and holistic approach to understanding and improving the customer experience. By focusing on customer experience, companies can build lasting relationships with their customers and drive business success.
More than pricing, and even the product itself, customer service is a huge driver of customer loyalty. Discover all you need to know about customer service in this deep dive.
Experiences involve emotions. People may feel included or excluded, seen, or ignored, catered to, or rebuffed. If we focus only on the transactional moments for us as companies, we overlook the most important exchanges, those that sit with the consumer. Adopting customer experience into the conversations in the board room, the break room, the sales room, and the warehouse is how customers stay centered in our work.
The customer experience is the culmination of all interactions a customer has with a brand.
It’s the foundation of perception and the driving force behind business success. Companies that prioritize CX reap rewards such as increased customer loyalty, a boost in brand reputation, and greater revenue streams.
Let’s explore the business benefits of CX, the consequences of poor CX, and the essential role technology plays in shaping the customer experience.
From increased customer loyalty to improved brand reputation and increased revenue, following are the benefits of a strong CX strategy:
Joana de Quintanilha, VP Principal Analyst for Forrester, says that CX leaders need to be prepared to balance quantitative and qualitative research to excel at key customer experience competencies. The ability to adapt as customer behaviors changed was critical during the global pandemic. Moving forward, it will be equally important. De Quintanilha also stresses the value of empowering employees to deliver excellent customer experiences.
Bad customer experiences often arise from a customer’s belief that a company isn’t recognizing their individual needs, lacking empathy towards them, or making things hard for them. These negative perceptions or emotions resulting from specific interactions with a business can lead the following negative outcomes:
Zappos has long been a beacon of exceptional customer service. Tony Hsieh, Zappos CEO, created a culture that put customers first and elevated the employee experience. His untimely death shocked the world, but his irrepressible spirit and clear views on corporate promises to consumers and employees will not fade.
The company operates using a holacracy structure, which decentralizes management and spurs self-organizing teams with decision-making capabilities. This echoes, in many ways, the idea of allowing customer input to inform process, strategy, and qualities of success measurements.
Ritz-Carlton Hotels have a legendary policy of allowing employees up to $2,000 to address a negative guest experience. As part of their unwavering commitment to top-tier service and enduring relationships with their guests, they recognize their employees’ potential to influence customer experience. The human aspect of service is too valuable to risk.
An example of poor CX on business outcomes is the case of United Airlines. In 2017, United Airlines made headlines for all the wrong reasons when a video of a passenger being forcibly removed from an overbooked flight went viral. The incident caused widespread outrage and resulted in a significant drop in United’s stock price.
The negative publicity from the incident also led to decreased customer loyalty and negative word-of-mouth, further damaging the company’s reputation and bottom line.
Another example is Blockbuster, the once-dominant video rental chain. Blockbuster failed to keep up with the changing landscape of the entertainment industry and didn’t respond to the growing demand for online streaming services. As a result, Blockbuster’s customer experience became outdated and unappealing, leading to decreased customer loyalty and lost revenue. Blockbuster eventually went bankrupt, unable to compete with the new entrants in the market.
Uber and Lyft really tripped up with their drivers. The ride-share companies had a meteoric rise as people ditched traditional cabs for the app-driven model. Both seemed to weather accusations and instances of sexual assault and harassment on behalf of both riders and drivers.
But their refusal to recognize drivers as employees led to legal action and plaintive cries from drivers and tarnished the company. What was once seen as an equalizer and an opportunity for people to make a living mutated into more corporate greed and callousness.
Your employees are inextricably linked with your customers; mistreat one, and it impacts the other. Customers are turned off by the poor treatment of employees, putting their loyalty at risk.
Publix, a company that consistently rates in the top ten for customer experience, gets it. Their tagline, “Where shopping is a pleasure,” speaks more to experience than a product, almost as if CX is the thing they’re selling. Another aspect of their lead-with-friendliness ethos is that customers and employees are their most important focus.
“First, take care of your customers. Second, take care of your associates. They will in turn take care of your customers.”– George.W. Jenkins, Founder – Publix
As companies, we have sales goals. We tend to think long term and use incremental goal setting to achieve our objectives. For customers, it’s something else entirely. Customer expectations are in the moment. If that timing doesn’t align with a company’s pursuit of their goals, chances are the customer experience will nosedive. We can aim higher.
A positive employee experience helps drive the success of a company, from both a financial and social point of view.
The rapid pace of technological advancement is having a profound impact on customer experience. From AI and machine learning to chatbots and virtual reality, technology is revolutionizing the way customers interact with brands and businesses.
Here are five ways technology is shaping the future of customer experience:
Technology must be adopted in a way that meets the needs of the customer. The best way to do this is to start by understanding the customer’s journey, and then using technology to enhance that experience at every touchpoint. Moreover, technology is constantly changing, and as a result, businesses must be continuously looking for new and innovative ways to enhance their customer experiences.
Finally, technology must make information more accessible, not less. From self-service portals to chatbots and virtual assistants, companies should use technology to empower their customers and provide them with easy access to the information they need.
Learn about CX agility, the benefits for brands that deliver agile customer experience, and examples of brands that have moved fast to meet customer needs.
Measuring customer experience is a critical aspect of any successful CX strategy. Understanding how customers perceive and interact with your brand is essential to making informed decisions and driving business growth.
With the right metrics in place, you can gain valuable insights into customer behavior and preferences, identify areas for improvement, and track the success of your CX initiatives over time. In this section, we’ll explore the key metrics and measurement techniques used to assess and improve customer experience.
Measuring CX can be a challenging task, but there are a variety of methods and metrics available to help companies assess their performance. These can tell you how easy or difficult it is for customers to use your products, which has a direct impact on whether customers will refer you to their friends and colleagues or stay with your business.
Customer experience experts across various industries cite the following eight metrics for measuring CX:
Customer Satisfaction (CSAT)
Customer satisfaction, or CSAT, is a commonly used metric for gauging the level of happiness and contentment that a customer experiences after interacting with a brand or product. This metric provides valuable insights into the customer experience and helps organizations make informed decisions about how to improve their offerings and services.
The calculation is typically based on a simple survey question asking the customer to rate their experience on a scale of 1-10, with 10 being the highest level of satisfaction. This question is often followed by an open-ended prompt asking the customer to elaborate on their experience. The results of the survey are then aggregated and analyzed to determine the overall CSAT score for a particular product, service, or brand.
Customer satisfaction is an important metric for organizations to track as it provides a snapshot of how well they’re meeting the needs and expectations of their customers. This information can then be used to inform decision-making and improve experiences, leading to increased loyalty and advocacy. Additionally, CSAT scores can be compared over time to track progress and monitor the impact of any changes made to improve CX.
Net Promoter Score (NPS)
Net Promoter Score (NPS) is a widely used customer satisfaction metric that measures the likelihood of a customer recommending a company’s products or services to others. It’s a simple yet powerful tool that provides valuable insights into customer loyalty and satisfaction.
NPS is calculated by asking customers a single question: “On a scale of 0 to 10, how likely are you to recommend our products or services to a friend or colleague?” The results are then divided into three categories: Promoters (9-10), Passives (7-8), and Detractors (0-6). The NPS score is calculated by subtracting the percentage of Detractors from the percentage of Promoters.
NPS is used by companies to track and measure customer satisfaction over time. It provides a quick and easy way to gauge customer loyalty and identify areas for improvement. Companies can use NPS results to make informed decisions on product development, customer service, and marketing strategies. It also helps companies understand the impact of customer feedback on their bottom line. By tracking NPS scores regularly, companies can make data-driven decisions to improve CX and drive long-term business success.
Customer Effort Score (CES)
Customer Effort Score (CES) is a metric that measures the level of effort a customer has to put into resolving a problem or getting a request fulfilled. It’s a critical indicator of customer satisfaction, as it reflects the ease of doing business with a company.
The CES score is calculated by asking customers a single question: “How much effort did you have to put into resolving your issue?” Responses are typically given on a scale of 1-5, with 1 being “very low effort” and 5 being “very high effort.” The average score is then calculated, giving businesses an overall understanding of their customers’ experiences.
CES is used by businesses to understand the ease of doing business with them and identify areas where they can improve the customer experience. A high CES score indicates that the customer had a smooth, effortless experience, while a low score highlights areas where the company can improve its processes and systems to make it easier for customers to do business with them.
By understanding the level of effort customers are putting into their interactions with the company, businesses can make data-driven decisions to improve the customer experience.
Customer retention rate
Customer retention rate is a metric that measures the percentage of customers who continue to do business with a company over a specified period of time. This metric is critical for businesses as it provides insight into the success of their customer relationships and the effectiveness of their customer experience strategy.
Calculating customer retention rate is a straightforward process. It’s determined by dividing the number of customers at the end of a specified period by the number of customers at the beginning of that same period and multiplying by 100. This gives you the percentage of customers who have stayed with the company during that time.
Customer retention rate is a valuable tool for businesses as it helps to assess the overall health of the company. A high retention rate indicates that customers are happy with the products or services and are likely to continue doing business with the company. On the other hand, a low retention rate signals that there may be issues with the customer experience and that steps need to be taken to improve it.
Customer churn rate
Customer churn rate is the measure of the percentage of customers who leave a company or service over a given period of time. Understanding and monitoring your customer churn rate is critical for any business looking to grow and retain its customer base.
To calculate the customer churn rate, divide the number of customers who have left during a specific time period by the total number of customers at the beginning of that period. The resulting percentage provides a snapshot of how many customers are leaving and can help you identify trends over time.
Businesses use customer churn rate to evaluate the effectiveness of their retention strategies, improve customer satisfaction, and ultimately reduce churn. The churn rate can also be used to benchmark performance against industry standards and compare performance over time, helping companies enhance the customer experience.
First Contact Resolution (FCR)
First Contact Resolution, or FCR, is the ability of a business to resolve a customer’s issue or answer their question during the first interaction. Calculating FCR involves determining the percentage of customer inquiries or support requests that are resolved on the first attempt.
FCR is an important CX metric because it provides insight into the effectiveness of a company’s support processes and the ability of its support staff to address customer needs quickly and effectively. High FCR rates indicate that customers are having positive experiences with a company and are likely to remain loyal, while low FCR rates may indicate areas for improvement in a business’s support processes.
By tracking FCR, companies can identify trends and patterns in customer interactions and make data-driven decisions to improve their support processes and overall CX. This can result in increased customer satisfaction, reduced customer frustration, and improved customer loyalty.
Average Resolution Time (ART)
Average Resolution Time (ART) – also known as mean time to resolution (MTTR) – is the average amount of time it takes for a customer service team to effectively resolve a customer’s issue or inquiry. ART is a key metric in measuring the efficiency and effectiveness of a company’s customer service operations.
To calculate ART, the total time spent resolving all customer inquiries or issues is divided by the number of inquiries or issues resolved. This calculation provides an average resolution time for all inquiries or issues, giving a clear picture of the overall performance of the customer service team.
ART or MTTR is a valuable metric for companies to assess the performance of their customer service operations. A low ART indicates that the customer service team is able to resolve customer inquiries or issues quickly and efficiently, while a high ART may indicate a need for improvement in the customer service process.
Companies can use ART to identify areas for improvement, such as bottlenecks in the resolution process, or to benchmark their performance against industry standards. By monitoring ART, companies can ensure that their customer service operations are delivering a positive experience for customers.
Customer referral rate
Customer referral rate is simply the number of customers who have referred new business to your company, divided by the total number of customers. This can be a powerful indicator of the level of satisfaction and loyalty your customers have towards your brand.
Customer referral rate can provide great insights into the overall health of your CX program. A high referral rate suggests that your customers are highly satisfied and likely to continue doing business with you. On the other hand, a low referral rate may indicate areas for improvement.
In today’s competitive market, it’s more important than ever to focus on creating a superior customer experience. Customer referral rate is just one of many metrics that can help measure your success.
“You can’t transform something you don’t understand. If you don’t know and understand what the current state of the customer experience is, how can you possibly design the desired future state?” – Annette Franz, Founder CX Journey, Inc.
Measuring customer experience is a crucial aspect of any business, as it helps organizations understand their customers’ needs, preferences, and level of satisfaction with the products or services they offer.
Each of the metrics described above provides insights into a different aspect of customer experience, and businesses can use these metrics to improve their products and services. For example, CES measures how much effort customers need to put into completing a task, while CSAT measures how happy customers are with the overall service.
Understanding and measuring these metrics regularly can provide valuable insights into areas for improvement. In today’s competitive marketplace, organizations that prioritize CX and invest in tracking and improving it are more likely to stand out from their competitors and attract new customers.
The importance of measuring CX cannot be overstated, as it’s key to providing customers with the exceptional experiences they deserve and, in turn, driving business success. However, accurately measuring CX can also pose some challenges that businesses must overcome.
One of the biggest challenges is collecting accurate and relevant data. Businesses must determine the right metrics to track, as well as the right methods for collecting that data, such as customer surveys, feedback, and Net Promoter Scores. It’s important to have a good understanding of the data being collected and to ensure that the methods used accurately reflect the customer’s experience.
Another challenge is ensuring consistency in data collection and analysis. This means ensuring that the same metrics are being used and that the data is being analyzed in the same way over time. This helps businesses to identify trends and make informed decisions.
Finally, businesses must also overcome the challenge of effectively communicating the results of their CX measurements to the relevant stakeholders. This requires a clear and concise presentation of the data, as well as the ability to explain the results in a way that is easy to understand.
To overcome these challenges, businesses must invest in the right tools and resources, such as customer experience management software, and ensure that they have a dedicated team responsible for CX measurement. They must also continuously review and refine their methods to ensure that they remain relevant and effective. By doing so, businesses can gain a deeper understanding of their customers and use that knowledge to drive growth and success.
Creating better, proactive customer experience is the next phase of customer data management as brands connect CDPs to back-office ERP systems.
Improving customer experience requires more than just delivering a good product or service. It requires a deliberate effort to design customer-centric processes, improve customer interactions, and leverage technology to create personalized, omnichannel experiences.
According to a survey conducted by PwC, 86% of customers are willing to pay more for a better customer experience. Additionally, a study by Forrester found that companies that deliver a superior CX grow their revenue 5.1 times faster than companies that do not. These statistics demonstrate the importance of prioritizing CX as part of your business strategy.
Exceeding expectations positively influences customer experience, but how do you do that? Improving how you deliver customer service and enhance customer experience can transform your organization, improving employee morale, boosting your bottom line, and strengthening customer retention.
When you broaden the definition of sales and service, it’s easier to approach. Instead of a transaction, it’s multi-dimensional. We cater to what they’re interested in (our product or service) and more — whatever they might wish to have for the duration of their travel, for excitement, or any number of factors that influence their emotional state. When we allow for the eventuality that they may have additional needs or unexpected requests, it does two things: prepares us to handle requests, and elevates our usefulness.
“The challenge of a leader is looking around the corner and making the change before it’s too late.” — Indra Nooyi, former CEO PepsiCo, Inc.
“Building a good customer experience does not happen by accident. It happens by design.” — Clare Muscutt, Founder of CMXperience
But wait, there’s more. Let’s look at a few more angles. The Americans with Disabilities Act celebrated 30 years of advocacy in July. There are more than 1.3 billion people in the world with mobility or vision-related disabilities. The number with invisible disabilities takes that number over the 3 billion mark.
Brands need to go beyond checking the compliance box to true inclusion in their accessibility efforts. Learn how to build a more inclusive customer experience.
https://twitter.com/HashtagHeyAlexa/status/1325823564814147584
And what about businesses? The concept of business-to-business CX needs its due. While it’s true that people tend to downgrade B2B exchanges as needing less, shall we say jazz hands and pixie dust, and more cut to the chase, give-me-what-I-need without the frills.
But at the end of the day, it’s still people making the decisions. Making someone’s life easier, facilitating a smoother exchange of goods, or offering efficiencies and perks can make the difference between a prospect and a customer.
The gestation period for B2B maybe longer, but the effort will be rewarded.
You came here to read about CX; maybe you were hoping to get it figured out and dive into a new way of doing things. We’ve offered a comprehensive guide on customer experience (CX), with tips and resources for creating a framework of action and measurement. Hopefully, you’ve picked up the current beneath it all: you and your team have all the makings of a superior customer experience squad.
Your willingness to listen and formulate responses based on what you hear, rather than what you assume, creates an incredible channel for insight. You can make small adjustments to language and process to convey to customers that you are invested in their happiness. It’s one of the most potent things we can do as human beings: the act of seeing and valuing.