The pulse of every strong business — the customer experience should be the driving force behind every decision you make. Yet so many businesses still don’t fully understand it, let alone the importance of it.
That’s why in this guide, we’re covering everything you need to know about the customer experience. We’ll be talking about:
- What is the customer experience?
- Why is customer experience important for your business
- Customer experience vs customer service?
- What makes a good customer experience?
- What causes a bad customer experience?
- Customer experience examples
- Measuring customer experience
- Customer experience tools
- Customer experience strategies
What Is the Customer Experience?
Also known as CX, customer experience can be defined as an all-encompassing term that refers to the many different ways customers interact with and experience your brand.
This really does mean every single interaction. From browsing your website to other people’s opinions of your brand to talking to an agent on the phone, the customer experience encompasses all of these interactions and more.
Customer Experience Vs Customer Service
Many people get customer experience mixed up with customer service, so we’ll take a quick pause to clarify here.
As we said above, the customer experience is the whole process a customer has with your company. Whereas your customer service is one aspect of this process. So it’s just one piece of a larger puzzle.
That’s not to downplay the importance of great customer service. Without it, you’ll struggle to deliver a great customer experience. In fact, more modern interpretations of customer service in the 21st century include things like self-service on your website, as opposed to solely interactions with employees from your company. So the lines are becoming more blurred between the two.
Why is the Customer Experience so Important?
It should be apparent from the above, but it’s not an overstatement to say the customer experience is everything for your business. In fact, according to reports, the customer experience will outshine price and product as the key brand differentiator by 2021.
It’s how your customer understands you, perceives you and ultimately, it’s what helps them decide whether to buy from you.
It’s pretty straight forward — the better customer experience you can deliver, the more likely customers are to buy from you. Not only this, but the better the customer experience, the more likely customers are to leave reviews, recommend you to a friend and buy from you again.
Every business can benefit from trying to improve customer experience, regardless of industry or niche. Putting importance on the customer experience allows businesses to become more customer-centric and empathetic learning organisations that are more productive and profitable.
There’s really no downside to it. Putting customers first is good business.
What Makes a Good Customer Experience?
Unfortunately, there are no set guidelines for a good customer experience. They will vary from business to business and industry to industry. For example, a B2B business will likely have to invest more facetime with clients early on to create a good customer experience. Whereas an online fashion retailer shouldn’t need any human touch points to deliver a great customer experience.
This said, all businesses who deliver a great customer experience do share some commonalities. These include:
- Prioritising listening to customers
- Utilising customer feedback tools
- Analysing and acting on customer feedback
- Reducing friction points in the customer journey
As you can see they’re all - unsurprisingly - focused around customers.
All good customer experiences start with making listening to your customers a top priority. After all, they’re the ones who can give you the unique, authentic insight into what it’s like dealing with your business. You can prioritise this by utilising customer feedback tools like surveys, reviews, heat maps and session recordings.
But all this information you gather is pointless if you don’t analyse and act on the insights gained. Actually making changes to your business processes improves your customer experience so you gain new insights as you continue to gather feedback. This process allows your business to continually improve, putting you ahead of the competition.
What Causes a Bad Customer Experience?
Just like the above, there’s no clear rules for what causes a poor customer experience as it will vary by each industry slightly. However, in general, bad customer experiences are associated with:
- Poor customer service
- Too much automation
- Failure to resolve issues
- Lack of customer feedback
There are lots of different causes for poor customer service. From frustrated, overworked employees to long wait times to speak to someone. In fact, too much automation is often a feature of poor customer service. Think about how frustrated you’ve been when you’ve had an issue and it’s taken what feels like hours of pressing numbers to get through to an actual human.
Similarly, failure to resolve issues can also be a feature of poor customer service. Issues crop up for all customers and businesses, but it’s how well they deal with them that defines how good an experience customers will have. If you can resolve issues at the first touchpoint, most customers will have a positive impression of your business. But businesses who fail to do this at the first or second touchpoint are likely delivering a negative customer experience.
Ultimately though, businesses who fail to deliver a good customer experience won’t be making customer feedback a priority. They see the negative reviews and see them as a cost of doing business, as opposed to an opportunity to improve the customer experience.
These businesses will suffer from a high churn rate due to low brand authority and loyalty. They’ll lose out on valuable word of mouth marketing and spend more on acquiring new customers. They’ll also suffer in terms of business productivity as the teams will be bogged down dealing with issues, instead of proactively growing the business.
Minimise a bad customer experience after a major disruption
A business impact analysis (BIA) considers what would happen to business performance following a major disruption. By considering both the current and future business weaknesses, business gets a much more complete picture of their business risks and opportunities for improved business performance, and how best to allocate resources.
Being aware of both the internal and external factors that can impact business growth both today and tomorrow, improves business decision making.
Business disruption comes in many forms whether that’s due to competition, technology, the economy or regulation, amongst many other possibilities. Businesses seldom die from a single disruption but more commonly from lots of mini disruptions that perhaps go unseen and unknown.
Incredible Customer Experience Examples
Though as we’ve pointed out, there’s no clear rules for good or bad customer experience, there are some companies absolutely killing it when it comes to improving the customer experience. So let’s learn from their amazing customer experience examples.
Hard to believe when it feels like there’s a glowing M on every corner, but McDonalds was once struggling with sales. This was as their image as a supplier of hugely unhealthy, fatty junk foods was peaking in the early 2000s.
So they listened to their customers.
They began providing a more streamlined experience. Simpler menus, improved order accuracy and better quality ingredients became a priority, alongside improved store interiors with digital self-service kiosks. This reduced wait times, made ordering easier and improved their public image as they made commitments to reduce their impact on the environment.
Overall, it’s allowed them to stay as the market leading fast food chain in the world.
Just like the above, in the early 2000s Microsoft was stalling in terms of business growth as competitor Apple took off. Much of this revolved around their stuffy, bureaucratic image compared to their fun tech competitor.
Instead of pouring money into marketing budgets to patch the hole in growth, Microsoft changed tactics. The company started partnering with B2B companies to share best practices to build new products. It gave them a great boost in growth as they empowered other businesses to use the right technologies they needed to increase their own productivity. Especially compared to their competitor Apple, that was criticised for creating an incompatible ecosystem, it gave them the great PR boost they needed.
Now probably one of the most famous marketing campaigns going, the “share a coke with” campaign was a great example of how adding personalisation to the customer experience can improve it.
For those out the loop, back in 2011, Coke wanted to increase revenue and drive engagement. To do so they released coke bottles and cans with the 250 most popular names in each country. Their customers loved it. Picking out a bottle from a shelf that has your exact name on it worked wonders for the company’s sales and the campaign was incredibly successful.
How to Measure Customer Experience
As with everything in business, it’s so important you benchmark and measure customer experience so you can analyse previous improvements and inform future improvements.
Customer feedback is the most obvious way to achieve this, and the best news is, you’re probably already collecting customer feedback without realising. You just need to measure it to ensure you’re using it to its full potential.
You can do this with CX metrics. These metrics allow you to track how your CX develops overtime to see how effective your customer experience strategy is. The most popular CX metrics include:
- Customer Effort Score (CES)
- Net Promoter Score (NPS)
- Customer Satisfaction Score (CSAT)
- Time to Resolution (TTR)
This metric measures the customer experience in terms of how easy or hard it was for your customers to complete an action. You gain this data from sending out feedback, usually after an interaction with the customer service team. You’ve probably received one before, with questions like “Please rate on the scale how easy it was to get your issue resolved today” and so on.
The net promoter score is a loyalty score. Like the above, it’s based on customer feedback surveys. This is the question that goes along the lines of “On a scale of 1 to 10, how likely would you be to recommend us to a friend?”
The customer satisfaction score does what it says on the tin. It measures customer satisfaction through survey feedback by using scales or closed question answers.
CSAT focuses on specific touchpoints to give good insights into satisfaction levels at key moments in the customer experience. It’s a powerful tool for gaining valuable information about where to improve the customer experience.
Last, but by no means least, time to resolution is the average length of time it takes for a customer’s issue to be resolved. It’s measured in business hours or days. Just add up all the times to resolution and divide the result by the number of tickets resolved.
As we mentioned above, a huge factor for poor customer experience is failure to resolve issues, so the TTR metric can be a great tool for tracking how your customer service is improving (or not!).
Digital Customer Experience Tools
Direct customer feedback isn’t the only way you can collect data on how your customers are experiencing your brand. As with all things digital now, there are analytical tools that can give you great insights into the digital customer experience. The most popular of these include heat maps and session recording tools. They’re both used to show you how customers interact with your website.
Heat maps show you the “hot” and “cold” points on any given webpage. This can help you see where customers are missing out on CTAs or struggling to navigate. It can help you identify areas for improvement when you spot patterns in usage.
Similar to the above, session recording tools allow you to watch anonymous recordings of users interacting with your website. This can reveal helpful, specific insights into where users are and aren’t enjoying your website.
Develop Your Customer Experience Strategy
Improving customer experience shouldn’t be an ad hoc thing, based on random feedback and not measured. To achieve continual improvement you need a customer experience strategy.
Again, CX strategies will vary from industry to industry. But they should include as a minimum the plans, actions and guidelines your business will take to create, maintain and measure your customer experience.
Successful customer experience strategies will involve every department, because your customer experience will span across all of them.
A great customer experience strategy is formed in a customer-centric company and led by customer feedback. It aims at creating memorable, human experiences for every customer.
Make CX a Top Priority
The customer experience should be a top priority for everyone in your business. Especially in the digital world, it is the only thing that sets you apart from your competitors and allows you to stay ahead in terms of productivity and profitability.
We can help you improve your customer experience. It’s one of the core aspects of our business improvement programme. Find out more.
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