If you Google customer experience you’ll get about 2,340,000,000 results—articles, videos, reports—with in-depth information about the space. All these resources promise to offer the one right solution to delivering a great customer experience (CX), but there’s one problem: that one right solution is actually different depending on the source. This leaves you with more uncertainty about CX than you had at the start of your research.
This article is inspired by our own frustrations with getting to know the CX space. We too had to plunge into this mysterious world and learn to navigate it. Heck, we’re still learning. My point is, we know what it’s like to spend weeks, months even, looking for clarity on the right CX approach to only end up more confused by the endless information that’s out there on the topic.
Think of this content piece as the starting line of your CX journey—here you’ll find straightforward answers to the most popular questions. You’ll get clarity on the different components of this space, without getting lost in the details. (We publish new resources on the regular, so stay in the loop by signing up for our CX newsletter.)
Our industry had done a fairly poor job explaining this new space. We want to fix that. So hold on to your hats—you might actually learn something about CX today.
What is customer experience?
This one’s easy.
Customer experience is how your customers perceive their interactions with your company.
What is great customer experience?
This one is not so easy to define. In fact, you’ll find many articles dance around this question. We’ll go into more detail below as to why, but for now, here is our definition:
Great customer experience means meeting or exceeding the expectations of your customer during all interactions with your company.
Yes, you can steal that definition. We won’t mind.
Why is customer experience important?
The short answer: Customer experience determines whether your organization succeeds or fails.
Think about the last time you had a great experience with a brand.
Now think about the last time you had a really bad experience with a brand.
If you’re like most, you probably had a much easier time recalling a poor experience than a good one. That’s because a bad customer experience interrupts our day. We don’t expect it as consumers—we anticipate that brands will always meet our needs and wants. So when bad customer experiences happen, the news of it spreads on social channels and by word-of-mouth.
On the other hand, if customers feel they have a good relationship with your brand, they’ll stick around. Satisfied customers don’t look elsewhere for services or products, and they will surely miss you if one day you suddenly disappear. In other words, delivering great customer experience makes you irreplaceable. And being irreplaceable helps your company’s bottom line.
If you’re more of a facts person, here are some selling points:
- Poor customer experience is costing U.S. companies $136.8 billion per year due to avoidable churn. (CallMiner)
- 73% of U.S. customers say CX is the key factor in their purchasing decision. (PwC)
- 95% of customers have taken action as a result of one bad experience. (Zendesk)
Why do companies struggle to meet customer expectations?
Various elements are needed to deliver great customer experiences (which we will go over in future articles), but the one that most companies seem to forget the most is an individual’s perception. It’s the element that is most personal and difficult to pinpoint. That’s because perception is often based on emotion and differs from person to person.
Two customers can view the same experience in completely different ways due to many factors that influence their interpretation of events—their upbringing, cultural background, motivations, and much more.
That’s why most companies struggle to meet the expectations of their customers. But once you understand this, the solution to delivering great customer experience is simple: relationship building. This means building trust with your customer, understanding their needs, and adapting to nurture that bond.
In other words, treat your customer like a person and not a persona. (Yes, it’s cheesy but very true).
What is customer experience management (CXM)?
This term is often used interchangeably with customer experience program. That’s because, at least to us, it is the same thing. To be clear, we’ll be using CX program in this article.
Also, if you see this term on a CX solution’s website, you’ll find that its definition varies. That’s because companies define great CXM by the type of solution(s) they can provide. You can’t blame them for it, but it’s good to be aware of it.
Anyway, we took the complexities out and came up with our own simple (and unbiased) definition for CXM:
Customer experience management (CXM) is the process of designing and optimizing customer interactions to meet or exceed customer expectations.
What this actually looks like will vary by company, but the goal of CXM is always to increase customer satisfaction, loyalty, and brand advocacy while cutting costs.
For CXM to be successful, you need two components: real-time feedback (across the entire customer journey) and data analytics to close the gap between what customers expect and their perception of the experience that is currently being delivered.
What are the customer experience maturity levels?
Before you launch a CX program, you’ve got to know which CX maturity level stage you’re currently in. Similar to other topics in the CX space, you’ll find different interpretations of CX maturity levels based on the source. However, below is the most commonly used scale:
Stage 1—Ignore: Your company doesn’t view CX as a crucial competitive differentiator.
Stage 2—Explore: Executives in your company are keen on understanding how CX can improve your business. They start investigating what the organization needs to do to improve its customer experience.
Stage 3—Mobilize: Executives are on board with improving experience and begin to build a CX coalition team. At this level, you’re also working on developing a customer experience strategy.
Stage 4—Operationalize: You begin to re-design your company’s operational processes based on customer insight and other customer experience metrics. At this stage, the cross-functional CX coalition team is also working on engaging the entire workforce in the strategy.
Stage 5—Align: Being customer-centric is the norm in your company at this stage. You’ve set structures in place to reinforce and maintain this CX priority. You do this through the hiring process, performance management, and incentives.
Stage 6—Embed: Your company is delivering great customer experiences. This is possible because CX has been integrated into everyday decisions and practices.
What are the four pillars of a successful CX program?
How do you keep your CX program from crumbling down? There are four pillars that serve as the stabilizing foundation of any customer experience program:
- Purposeful leadership: Leaders within a company need to be aligned on the importance of CX and must agree on the proposed strategy. This means they operate consistently based on a clear set of values, holding themselves and their teams accountable for their particular ownership of the customer experience.
- Employee engagement: Employees have to be fluent in the company’s CX goal and strategy. They’re also empowered with the necessary tools and encouraged to actively contribute to the customer experience.
- Customer-centric culture: Your company’s brand values must align with putting the customer’s needs first and fostering customer sympathy. And your programs and processes should reinforce customer connectedness.
- Customer insight: Customer data should be captured across the entire journey to identify trends, issues, and take action in real time. Those insights must then be immersed across the organization, activating all teams to improve customer experience.
How do you launch a CX program?
Here’s the thing, there isn’t a secret formula that every company can implement and suddenly, poof! You’re delivering great customer experiences.
CX programs will vary by industry and particular business goals. However, there are four components that are not negotiable. Before we get to those, I want to be sure the following points are very clear:
- A customer experience program lays out the plan to produce great customer experiences across the entire customer journey.
- The goal of a CX program is to identify and analyze key CX improvement opportunities and establish long-term customer loyalty.
- In order for the program to work, the entire organization must be on board.
Now on to the really important stuff—here are the four necessary components to launching a CX program:
- Voice of the Customer (VoC): A Voice of the Customer (VoC) program, also known as customer voice and Voice of Customer, captures, analyzes and reports on all feedback (expectations, likes, and dislikes of your customers) associated with your brand. Basically, it gives you real-time insight into your customers’ experiences. From this feedback, you can identify trends and opportunities to improve customer experience. The VoC is the heartbeat of any customer experience program. That’s because the way a company gathers and responds to customer feedback reflects the CX maturity of the organization.
- Customer journey map: A customer journey map summarizes the key interactions that a customer experiences with your brand. When it’s developed right and optimized, any employee should be able to understand the key touchpoints in the customer’s journey and what is related to their particular role in the CX program. This map will help you align your experience strategy across your company and identify areas of improvement.
- CX leadership coalition: The VoC program and customer map fuel a company’s customer experience program, while the employees are the engine—they take this data and act on it. Regardless of your company size, there must be a cross-functional group of leaders assigned the task to ensure your CX program is implemented properly. In order to be successful, this coalition should represent every major customer experience touchpoint across the customer journey.
- Employee experience: Happy employees cultivate happy customers. Your employees should not only have a customer-centric mentality, but they should also believe in the brand that they represent. A big part of providing a positive work environment is providing the tools to empower employees to do their job well. As it relates to your customer experience strategy, it means streamlining customer insight across the organization, providing the right technology, and ensuring every employee can confidently talk to your CX program.
How do you measure the success of your CX program?
This question deserves a lot of consideration and time to properly answer. We promise we will show this topic more love in future content pieces but here we’ll stick to the basics.
First, you need to create a CX metrics program. It will vary by company, but here are the five steps that we recommend for all companies to evaluate the success of their program over time:
- Decide on a primary CX metric that will be used to measure the overall customer experience performance across your organization.
- Set realistic goals of your key CX metric based on how it relates to business results.
- Identify the key drivers (interactions, customer journey touchpoints, etc.) that make the most impact on your main CX metric.
- Establish metrics to evaluate how well the organization performs on those key drivers.
- Turn your metrics into actionable results—put in place a CX strategy plan for employees across the organization to make improvements based on your CX metrics.
How do you measure the Voice of the Customer (VoC)?
Voice of the Customer deserves its own section in this article. We’ll say it again: it’s the heartbeat of any customer experience program. We’re not being cheesy here. Think about it—without customer feedback, you won’t know where to begin to improve your customer experience.
For a VoC program to work, you must identify the most important metrics to measure. There is an array of metrics to choose from, but three that you will see come up time and time again are Net Promoter Score (NPS), Customer Effort Score (CES), and Customer Satisfaction Score (CSAT).
These metrics are measured in a survey format and they’re referred to as structured feedback because you’re proactively using them to retrieve customer data.
We promise to provide you with step-by-step instructions on how to use each of these metrics in future content, but for now, here’s a very high-level view:
- NPS is a great metric to measure long-term customer satisfaction and loyalty. It’s the big picture metric of customer experience.
- CSAT is used to measure the customer satisfaction of a specific interaction or event. It’s a short-term satisfaction metric for customer experience.
- CES is used to measure the level of effort that a customer experiences when they interact with your brand. It’s a transactional, short-term metric for customer experience.
While surveys are key to any VoC program, they shouldn’t be your only source of truth. You need to also create listening paths that tap into unstructured feedback. This includes feedback from all client-facing channels, such as call centers, social media, events, etc.
The customer’s voice from these different channels should be centralized into one Voice of the Customer dashboard accessible to all employees. That way you’re supporting the cross-functional alignment of your CX strategy.
How do you demonstrate the return on investment (ROI) for your CX program?
Demonstrating economic value for a customer experience program will vary by industry and individual company. But there are two major benefits that any CX leader can demonstrate:
- Increase in revenue.
- Reduced costs.
You can prove an increase in revenue through customer retention and sales optimization.
- Customer retention: It’s easier to sell to existing customers than generating new business. And focusing on retaining existing customers is smart given that loyal customers spend 67% more than new ones. So, to prove that customer retention improves the bottom line, you have to first set up a solid customer feedback program (in other words, a VoC program). This means listening to customers across the key journey touchpoints to understand what behaviors, outcomes, and interactions are making the biggest financial impact on your organization. Once you’ve identified these opportunities, you take action. This could mean reducing customer wait time for speaking with a support agent, improving the product or website UX to remove pain points, etc. Over time, you’ll be able to identify trends and predict what the customer will do next, which will amplify your financial impact.
- Sales optimization: Identifying areas of improvement for the sales team can also lead to an increase in revenue. As a CX leader, you should analyze the current selling process and determine what is driving customer spend–it could be as simple as a sales associate taking more time to get to know the prospective customer during their initial interaction. When it comes to upselling and cross-selling, you can increase revenue by identifying the most satisfied customers–through customer feedback–and targeting them the most.
You can reduce costs by acquiring new customers through referrals and serving existing ones.
- Acquiring new customers through referrals: Loyal customers can become brand advocates. And brand advocates are four times more likely to refer your product or service to friends and family. This means that increasing customer referrals will reduce the effort and cost for marketing and sales to acquire new customers. In other words, a great CX program can lower acquisition costs
- Serving existing customers: If you don’t have the right CX program in place, supporting existing customers will not be cheap. If you get the experience right the first time around, you’ll be able to reduce support time, increase success rates for solving issues, and reduce the third-party tech-service need. In short, you’ll be improving efficiency across all existing customer interactions.
In conclusion, we hope you’re less confused now
Customer experience is a complex space with many facets. However, with time and the right information, you’ll find clarity. We hope this article helped answer some of your questions on customer experience.