The term "customer experience" has been gaining more and more attention in recent years. But is this just another marketing buzzword, or does it actually carry some merit for your brand image and bottom line?
Given the latest research, we can confidently say it’s the latter. Studies show that customers are willing to pay more for an item or service if it means getting a better experience. Customer-centric companies are more profitable than companies that aren’t invested in the customer experience. It helps them retain customers, increase referrals, and maintain an edge over competitors.
It’s no secret that customer satisfaction is one of the main factors that determine a company's success. A great customer experience at every touchpoint can make a huge impact on a customer's perception of a brand and whether or not they will return.
There are several key elements to creating a great customer experience, but the most important is simply understanding your customers. Here’s your guide to customer experience and how to apply it in your business.
Table of Contents
Definition: What is Customer Experience (CX)?
Common Customer Experience Misconceptions
Why Customer Experience Matters
Customer Experience as a Competitive Advantage
What Affects Customer Experience?
The Benefits of Customer Experience
The Challenges of Creating Good Customer Experiences
What is Customer Experience Management?
How to Measure Customer Experience - 5 Ways
Customer Experience Management Tools to Support Your Strategy
Definition: What is Customer Experience (CX)?
Let’s start with the definition of customer experience (CX) — what exactly does it mean?
The abbreviation for customer experience is CX.
We define customer experience as the totality of how customers interact with your brand or company. This includes everything from engaging with an employee to using a product to getting support to exploring your branded content online.
In terms of the customer journey map, the customer experience includes every touchpoint, from how they discover your brand to purchase to what happens post-purchase.
Common Customer Experience Misconceptions
Marketers often use CX interchangeably with similar terms, such as customer service, user experience, customer success, customer engagement, customer relationship, or brand experience. There’s some overlap with these terms, but their meanings differ slightly.
Let’s look at some nuances among them.
Customer Experience vs. Customer Service
Customer service is proactive. It involves someone representing your brand actively serving your customers. It’s part of the bigger customer experience picture.
On the flip side, customer experience can be active or passive. It “happens” regardless of whether your employees are involved.
Customer Experience vs. User Experience
User experience (UX) is a term usually reserved for digital experiences. It might refer to someone using your website. Or, in a case like Meltwater, it could refer to a platform or digital product.
UX is measured with metrics like abandonment rate, on-page time, time to complete a task, and the number of clicks required to complete a task, among many others.
Like customer service, user experience is a slice of the bigger CX pie.
Customer Experience vs. Customer Success
Customer success has some overlap with customer service and is also part of the total customer experience.
Customer success usually involves help from an employee to learn more about a customer’s goals and create an optimal solution or outcome.
Customer Experience vs. Customer Relationship
Customer relationships are built over time.
It’s the connection you build with each of your customers, starting with the initial discovery and lasting long after the sale or conversion.
In comparison to CX, a customer relationship is often defined by the quality of their experience.
Customer Experience vs. Customer Engagement
Customer engagement helps to strengthen a customer relationship, which ultimately shapes the customer experience.
We define customer engagement as the proactive effort to keep customers connected to your brand.
This might be via loyalty programs, social media content, email marketing, or user-generated content, for example.
Customer Experience vs. Brand Experience
Customer experience and brand experience (BX) share many characteristics. The main differences are the feelings they create and how each is measured.
For brand experience, the main goal is to make customers feel a certain way about your brand.
BX is measured through engagement metrics. CX is designed to make customers feel satisfied with your brand and is measured through customer satisfaction surveys, customer satisfaction (CSAT) scores, and NPS.
Why Customer Experience Matters
Customers are more informed than ever before. They’re entering the buyer journey at various stages of the traditional sales funnel, not just at the top. Digital technologies and the ability to discover, research, and compare brands have given buyers more power over their buying decisions.
Consumers now have more choices than ever. With so many brands competing for the same audience, a good customer experience can speak volumes.
By offering a great customer experience, you can help buyers take control over the customer journey. Make it easy for customers to explore their options, compare pricing, get answers to their questions, and discover new products and services. Being forward-thinking in this process can help you meet customers wherever they are in the journey and be ready to serve them before your competitors are.
Customer experience is also the key to earning repeat business and referrals. It’s no secret that customers share their great experiences with friends and family. But they’ll tell even more people about a bad experience. Bad news travels fast, and that doesn’t do you any favors when it comes to growing your business. When you intentionally create good experiences, you’re not only able to meet customer expectations, but also their glowing reviews and referrals!
Did you know? According to our latest Global Digital Report, getting recommendations from friends and family is one of the most important decision drivers for customers.
Customer Experience as a Competitive Advantage
Things like pricing, product quality, and customer service might come to mind when you think of your competitive advantages. But customer experiences should be part of that list, too.
That’s because CX can (and should) control the entire customer journey. Brands need to take charge in guiding customers to the desired outcome. Being intentional about this journey, including the emotions it triggers, can help brands reinforce why customers should do business with them.
What Affects Customer Experience?
Given that CX is the sum total of all of a customer’s interactions with your brand, there are plenty of objectives for marketers to focus on. Some of the areas that affect customer experience include:
- Price
- Customer Service or Support
- Availability
- Convenience
- Response Time
- Options
- User Friendliness
- Branding
We'll talk about each of these points more in detail:
Price
Price affects experience because it immediately communicates the value of your product or service. It’s not the only thing that signals value, but it does set the tone for the experience. That's also why it is part of the marketing mix.
For instance, if you were to walk into a store and notice all the handbags costs hundreds of dollars, you’d know you were in a high-end luxury goods store even if you weren’t familiar with the brand. In this case, you might expect personalized service, refreshments, gift wrapping, or large dressing rooms, for example.
If you walked into a large mass merchandise store with sale signs everywhere, you would expect to find some great deals on everyday items. You’d trade expectations of personalized service and refreshments for self-service and convenience.
Customer Service or Support
A brand’s service and support options can help a customer feel confident about their purchase and even encourage them to pull the trigger. They know that if they have questions or issues, there’s someone they can reach out to for help.
In some cases, the presence of free support is a competitive advantage in its own right, but the type of support available can also create good or bad customer experiences.
For instance, brands may offer support via phone, live chatbot, email, or a self-help resource center. Each of these set unique expectations for customers, and each has the power to reinforce a brand’s commitment to customer centricity.
Availability
Is a product available to order, or it is often out of stock or on backorder? If it’s a digital product, such as a website or platform, is it available 24/7 or does it frequently crash? Does your e-commerce site offer fast shipping options?
When a customer needs an item, they want it to be available to them immediately. A lack of availability at critical moments can lead to a poor customer experience.
Convenience
Convenience refers to how easy it is for customers to take advantage of your offer, product, or service.
Do they have to jump through hoops or meet several criteria, or can they quickly access your product?
Generally speaking, the less friction and fewer access restrictions, the more customer-focused the experience.
Quality
Quality impacts the customer experience by making customers feel they either got their money’s worth or completely wasted it. Price is often a sign of quality to customers, so they can feel even more disheartened when they pay a premium price for an item whose quality doesn’t line up.
Likewise, customers might feel pleasantly surprised when they spend less on an item that’s high in quality and lasts a long time. When customers feel like they got their money’s worth, they’re more likely to share their experience with others.
Response Time
Similar to customer service and support, response time can quickly change a customer’s perceptions for better or worse.
For instance, if a customer has a question and reaches out to your company, following up in a timely manner can boost your image. But not responding or waiting days or weeks to offer resolution can do the opposite.
Options
Customers like having options when it comes to purchasing.
From sizes to colors to styles to price points, having different options allows you to meet individual customers’ needs at the right time. These choices allow customers to feel more in control over their purchasing experience.
User Friendliness
No amount of customer service, pricing, or quality can compare with user-friendliness.
A poor user experience can delay customers from reaching their ultimate goal. If a product is too complicated to use, customers are likely to search for better options.
Branding
All brands carry value that make customers feel confident in their buying decisions. A high brand equity is usually the result of all of the above factors. Consistency helps you build your reputation and makes it easier for customers to say yes.
When brands focus on the customer journey, customers are automatically put at the heart of every decision. From messaging to processes to services to marketing, the customer is at the center of your business strategy. Customers know when they’re being treated as a priority, and a high level of service stands out compared to brands that aren’t as customer centric.
Tip: Read our full guide about branding and brand management to learn more about this topic.
The Benefits of Customer Experience
Improving customer experience is the key to increasing sales, retaining customers, and improving satisfaction. On average, companies that have invested in their customer experiences report:
- 42% increase in customer retention
- 33% increase in customer satisfaction
- 32% increase in upselling and cross-selling
Likewise, 78% of consumers admit they’ve backed out of a purchase due to a poor customer experience.
It’s clear that CX isn’t something to leave to chance. Granted, customer experiences happen with or without your intentional effort. But if a strong CX means increasing sales, loyalty, referrals, and brand image, it makes sense to take control of the process. Great CX doesn't happen on its own.
The Challenges of Creating Good Customer Experiences
CX is a huge mountain to climb, especially if you don’t have an existing CX strategy or plan already in place. Deciding to make it a priority is the first step, but that step is quickly met with a number of challenges.
Lack of Insight
Creating a strong customer experience is about catering to your customers’ needs. To achieve this goal, you first need to understand what kind of experiences your customers want, expect, and will be attracted to.
A lack of insight around these questions can prevent brands from creating optimal experiences. According to a McKinsey study, 93% of CX leaders rely on CSAT scores to inform their CX strategies. But the majority aren’t happy with their evaluation methods, particularly because the results are limited.
Brands can’t assess experiences in real time or before a purchase with survey-based feedback. It’s a highly reactive approach that doesn’t use all available data and channels.
Lack of Culture
CX leaders know that customer experience is only as powerful as the culture it’s embedded in. A customer-first experience is something that all employees, departments, and stakeholders must adopt. Companies should be willing to place themselves in the customers’ position and see their challenges, needs, and goals through the customers’ eyes.
Developing a CX-driven mindset throughout the company culture can help all employees think like a customer, regardless of their role. Even roles that don't engage customers face to face can create a cross-functional approach by tying everything they do back to the customer.
Infusing CX Across All Channels
Traditional corporate structures can make it hard to create a cohesive customer experience, especially in an omnichannel environment.
Departments are largely self-driven and have complete ownership over various parts of the customer journey. Shifting to a more holistic approach is easier said than done, which makes creating a culture of customer centricity all the more important.
What is Customer Experience Management?
Customer experience management (CXM) is the process of actively shaping and managing the customer experience strategy across all touch points.
Best-in-class customer engagement and satisfaction are the main goals of CXM. This involves documenting processes and steps to take to collect customer insights and quantify their experiences. From there, CX managers will proactively adjust elements of the customer experience to achieve the desired outcome.
Tip: This is the best customer experience management software on the market. There are also helpful customer experience software, platforms, and tools in general.
How to Measure Customer Experience - 5 Ways
Brands have a few options for measuring customer experience. Using dedicated customer experience measurement tools can help brands create a continuous cycle of data collection and improvement.
Learning how to measure customer experience is two-sided: You want to know what you’re doing well and where you can improve.
Here are five ways to figure out both:
1. Use Customer Satisfaction Surveys
2. Look at Customer Churn Rate and Reasons for Churn
3. Review Customer Support Tickets and Trends
4. Gauge Consumer Sentiment
5. Analyze Social Media Data
1. Use Customer Satisfaction Surveys
Customer satisfaction surveys are simple and effective ways to get insights into your customer experience analysis. Brands commonly send surveys after a customer makes a purchase to get their feedback.
Survey results can be used to calculate a brand’s CSAT. Customers can rate the brand on a scale of 1 to 5 (or 1 to 10), then average the results to generate the score.
Another way to gauge customer satisfaction is via net promoter score, or NPS. NPS measures how likely a customer is to recommend a brand to their friends or family.
You can measure NPS via customer surveys with questions like, “How likely are you to recommend us to a friend, on a scale of 1 to 10?”
If your average result falls between 9 and 10, your customers are likely to be loyal and engaged. They interact with your brand frequently and are likely to be long-term happy customers.
Results that fall between 7 and 8 are more passive. They’re not dissatisfied, but they’re not as enthusiastic, engaged, or loyal.
Results that are at or below a 6 are considered detractors. You’re at risk of losing them, and they may do damage to your brand by telling others not to do business with you.
Reading Tips: How to measure customer experience (CX), The greatest customer experience trends
2. Look at Customer Churn Rate and Reasons for Churn
Churn rates and reasons can be revealing about your customers’ experiences.
A high churn rate could indicate dissatisfaction with your product or service, or it could mean a competitor is doing something better than you.
Make sure you’re routinely asking your churning customers why they’re leaving and what you could do to earn their business in the future.
3. Review Customer Support Tickets and Trends
Reaching out to customer support is a great opportunity to build your brand and earn customer loyalty. Granted, customers who open support tickets are usually experiencing an issue. But their experience with your resolution of the issue could make all the difference in how they feel about your brand.
Review support tickets and look for patterns or trends. If you notice a number of repeat occurrences, you can focus your efforts there to prevent those issues from recurring.
4. Gauge Consumer Sentiment
Customer sentiment analysis can help you learn more about how people feel toward your brand. This is a particularly important piece of the CX puzzle because it doesn’t rely just on customers or surveys. It takes into account what your target audience is saying, even if they haven’t done business with you.
Platforms like Meltwater measure consumer sentiment at scale across multiple channels to give you a holistic snapshot of your target audience. Learn more about our media monitoring solution.
5. Analyze Social Media Data
Similar to consumer sentiment, social media data allows you to go beyond customer feedback and see what others are saying.
Today’s customers are more forthcoming about their feelings towards brands because social media gives them a place to share their thoughts. You can monitor brand mentions and conduct social listening to stay in touch with conversations.
Customer Experience Management Tools to Support Your Strategy
If you’re seeking ways to improve the customer experience, the right tools and technologies can make a difference. In many cases, you’ll need to make changes across multiple departments and channels, and that means getting everyone on the same page.
Let’s look at a few customer experience management tools that can improve this process for you:
Zoho One
Zoho One is an all-in-one solution that combines Zoho CRM with the brand’s other apps, including a help desk, data collection, and more.
Since it’s all integrated into a single solution, brands can stay on top of various conversations without having to toggle between systems and departments.
Tip: Take a look at more Zoho Social alternatives.
HubSpot Service Hub
HubSpot Service Hub combines multiple customer experience features into a single platform, including a help desk and customer feedback surveys to determine NPS.
Anchor all of your customer data and channels to manage the entire customer journey.
Meltwater Radarly
AI-powered Meltwater Radarly helps you understand your customers in real time.
It turns social listening into social intelligence by creating usable insights from the data it collects.
Radarly aggregates data collected from social media conversations, online reviews, media mentions, and customer feedback, then delivers actionable insights to help you take the next step in the right direction.
Simply fill out the form below to get a free tour today!
