What is Customer Experience?
Customer experience, also referred to as CX, is your customer’s impression of your business based on their interactions through the entire customer journey from first contact to, hopefully, advocacy. Your CX strategy is an actionable plan put in place defining just how you will use those interactions to create a meaningful, positive experience.
When thinking about your customer strategy, it’s important not to limit yourself to just your customer-facing team members.
Your business’s customer experience is a vital ingredient in generating revenue in a reliable and predictable way. After all, customers who have a negative experience when buying a product or service are hardly likely to renew memberships, buy more products or recommend the company.
Customer experience vs. customer service
Customer service is the answers, advice and support you provide to your customers before, during and after their purchase.
While they sound similar, customer experience is not the same thing as customer service.
Customer service is an important driver of overall CX, but it is only one of many interactions that can determine a positive or negative customer experience.
Customer experience includes customer interactions such as navigating your website, consuming content, receiving and/or using their purchase, account onboarding and (hopefully) leaving reviews. Contacting your customer service team is one such interaction - and an important one! - but there are several others that must be considered in your CX strategy.
Why Do You Need a Customer Experience Strategy?
Simply put, the customer experience will determine how hard you’ll have to work and how much you’ll have to spend to acquire new customers coming in and keep old customers from leaving. Having a good customer experience lowers increases customer lifetime value, lowers customer acquisition costs and reduces churn.
All in all, providing your customers with a positive and satisfying experience can mean the difference between sustained growth and missing the mark on your revenue goals.
As with most things in today’s marketplace, customers begin their journey through the purchasing process with certain expectations. Thanks to new technologies and better access to data, customers expect a personalized experience that’s tailored to their needs and interests.
However, without a strong customer experience strategy in place, you risk creating an ad-hoc experience that provides customers with a disconnected and ultimately negative view of your company. And without a strategy in place to help you track performance, you might not even know your CX is impacting your sales and retention.
In fact, a survey by Bain & Company discovered a vast difference between what businesses think about their customer experience and what their customers actually think: 80% of businesses believe they deliver a “superior experience” for their customers. However, only 8% of customers think companies actually deliver such an experience.
Bain also found that this “delivery gap” exists despite the fact that 95% of surveyed management teams describe themselves as “customer-focused.”
Good customer experience can also have a direct impact on your bottom line: a survey by American Express found that 60% of consumers indicated they are willing to pay a higher price for a better customer experience. Research from Oracle found that 74% of senior executives said their customer experience impacted their company’s ability to convert customers into advocates.
In view of this data, designing and implementing an effective CX strategy is one of the most effective ways you can differentiate your business from its competitors.
How to Create Your Customer Experience Strategy
Before we get into the process of creating a customer experience strategy for your business, it’s important to cover the key best practices for digital CX strategies. Following best practices for digital experience allows you to move forward with a frictionless, omnichannel experience without adding unnecessary and unwanted complexity.
There are six key best practices for creating a digital CX strategy:
- Be reachable: What channels do your customers use to consume and communicate with brands? If you’re not available on the channels your audience prefers to use, you’re creating a roadblock to engagement.
- Make service convenient: This goes hand in hand with reachability. Your customers should be able to find solutions to their problems when and where is best for them.
- Make purchases convenient: The process by which people give your business their money should be as smooth and frictionless as possible. How this actually happens will depend heavily on the size, type and complexity of your business, but it could be as simple and easy as accurate product descriptions and prices on your website.
- Make it personalized: As we touched on earlier, customers now expect their experiences with brands to be personalized. The good news is that your business now has nearly unprecedented access to data that will allow you to design and build a customer experience that is tailored to your individual customers.
- Be simple: Your company’s customer journey should involve as few steps as possible from discovery to purchase confirmation. This encompasses aspects of CX such as website navigation, ease of checkout (think Amazon Prime’s 1-Click feature) and the ability to find specific information about products, services or pricing.
- Be flexible: Or, rather, create an omnichannel experience for your customers. Again, this is driven by modern expectations customers have of starting an interaction on one channel or device and seamlessly completing it on another. At the same time, your business needs to consider all channels when measuring and evaluating its customer experience strategy.
Create a vision and decide on KPIs
Before you start, you must decide where you want to go and how you will measure progress and success.
Your first thought might be to say simply “My goal is to increase revenue”. However, a vision of “making more money” is too vague to be effective for your customer experience strategy.
Instead, decide on a more specific goal such as “I want to acquire more new customers” or “I want to retain and upsell more existing customers.”
Once you have a specific vision of where you want your business to be as a result of your strategy, establish relevant KPIs that will help you track your progress toward success.
Metrics relevant to CX success usually include:
- Overall revenue growth: Satisfied customers spend more and are more likely to encourage others to become customers.
- Customer retention rate: Effective CX strategies engage people with your business and keep customers coming back for more. A good strategy should increase your customer retention rate.
- Cross-sell and up-sell success: Satisfied customers are more likely to buy more products or upgrade their accounts.
- Customer satisfaction rating: This is the hardest data to track, but possibly the most mandatory. Using a metric such as net promoter score allows you to tie improved customer satisfaction to tangible business results.
Your customer experience strategy, logically, starts with understanding just who your customers are, what they want, what they need, what challenges they need help to solve and what expectations they have of a business like yours.
Your customer service team is the ideal group to collect this data. They are the ones interacting with customers on a daily basis and should, ideally, be able to keep records of common customer questions, comments and complaints.
You can also use surveys on your website or sent post-purchase to customers to get their direct input.
Out of this research, you will create buyer personas that represent generalized categories of customers. Just how many buyer personas you have and how you separate them will depend heavily on your business, products, industry, etc.
Map your customer journey
Once you fully understand your customers it’s time to map the customer journey for your business. Customer journey mapping is the process of articulating (and often visually illustrating) your customers’ needs and expectations when it comes to their experience with your brand.
Your customer journey map should include everything your customer does, whether it’s an interaction with your business or not. So, for example, if your audience traditionally starts the buying process with a Google search, your company’s customer journey map starts that search not when they click through to your website from the search results.
For each step in your map, you should seek to include the following information about your customers:
- Customer behavior: What is your customer trying to do, or what behavior does this interaction trigger in the customer?
- Customer attitudes: What is the person thinking and feeling in this moment?
- Direct interactions: Who or what is the customer interacting with directly in this moment? For example, this could be a TV advertisement, search engine results, social media feed or a conversation with a friend.
- Indirect interactions: What or who is the customer interacting with without their knowledge? For a TV advertisement, for example, this would be the ad agency and marketing team that created the ad campaign.
Alternately, if creating a visual map isn’t the best way your business works, you can create a customer journey map using the 5 As framework:
- Attract: What attracts customers to seek out a product, service or information?
- Accept: What is the mechanism through which a person becomes a customer of your business (purchasing a product or creating an account on your website, submitting a contact form, etc.)?
- Adopt: What are the touchpoints or interactions customers have with your business at each step of the purchase?
- Amplify: How does your customer feel about their interaction with your business at the end of the process? What emotions are you trying to evoke in your customers?
- Advance: How do you build on the initial purchase to create a lasting and valuable relationship with your customers? Do you regularly follow up with them or leave them to their own devices as soon as they complete the purchase?
Build your technology stack
Thanks to advances in data technology, businesses are able to build CX strategies that delight and retain their customers. However, this requires the right kind of tools and technology to achieve.
Adding shiny new tools with fancy bells and whistles but don’t fit in with the rest of your tech stack, or aren’t really fit to purpose, will only add unnecessary complexity and frustration for your team.
However, in general, technology is your friend when it comes to creating and executing an effective customer experience strategy.
The key to building an effective CX tech stack is to look back at your buyer personas and customer journey map. Both of these outputs should specify the customer’s expectation for each interaction they have with your business.
For example, does your customer expect to be able to complete their entire purchase through your website, or would they prefer to speak with a salesperson to learn more about their options? Or do they expect to be able to find answers to their pre-purchase questions through a chat widget on your homepage?
The answers to these questions will determine if your business’ technology stack should include features such as:
- An AI-powered chatbot
- Contact form, phone number or click-to-call button
- Ecommerce and/or payment processing platform
- A detailed knowledge base for self-service customer support
Just like with building your marketing technology, integrating your CX tools into your overall tech stack will result in improved efficiency, better data quality and accessibility, and improved capabilities.
Customer Success Strategies Require a Long-Term View
Once you’ve created a CX vision, established KPIs, built your buyer personas, mapped your customer journey and built and integrated your tech stack, the job isn’t done. In fact, you should be monitoring and analyzing your customer experience strategy (via your CX KPIs) so you can constantly optimize and improve your performance.
The fact is, creating and implementing a customer experience strategy very well might result in some short-term gains for your business. However, the real goal to keep in mind is long-term, sustainable and predictable revenue growth
The good news is that the longer your CX strategy is in place, allowing to you to collect and analyze customer data, the better your strategy will become and the more likely you will be to achieve your goals.