What Is Customer Experience
Everything you need to know about customer experience, why it’s so important, and how it can help your company succeed.
Understanding Customer Experience:
Customer experience (CX) refers to the overall impression customers have of a company based on their interactions with it along different touchpoints. As the sum of all the experiences people go through when engaging with a business, it encompasses every point of contact, from the initial awareness and research phase to post-purchase support and beyond. While 86% of companies believe they provide a superior customer experience, only 11% of customers agree that they do.
A great customer experience doesn’t just happen by accident – it needs to be anticipated and designed with customer satisfaction in mind. Every interaction along every touchpoint, no matter how small, can be a meaningful component of the overall experience. But in the end, you can boil it down to just one simple idea: make it easy for people to do business with you. CX is more about being dependable, friendly, and making things effortless for people than always presenting them with big “wow” moments. A good experience minimizes friction, maximizes efficiency, and leaves people feeling helped, heard, and appreciated.
CX touchpoints can be categorized into two domains: customer service and user experience (UX). Customer service is the assistance and advice provided to consumers via human interactions before, during, and after they purchase or use your products & services. UX refers to how people interact with products or systems such as websites, apps, or automated phone systems.
Customer service touchpoints generally take place in-store, via email, or over the phone. UX touchpoints are usually digital and include the usability & design of your website, app, automated emails, etc. However, the UX delivered via your store layout, automated phone systems, marketing emails, and signage are also important components of the overall customer experience.
It is important to understand that customer experience is highly subjective. While companies do exert significant control over the touchpoints they provide, how these interactions are perceived can vary from person to person. Customer service interactions may not consistently be the same, resulting in two similar people having entirely different experiences. Plus, not every customer may allocate equal importance to individual components of the overall CX due to differing needs, wants, likes, and dislikes.
Customer experience rarely lives in the middle of the spectrum. People remember terrible or amazing experiences, but anything in between is easily forgotten. We expect to have good experiences, so only the extremes tend to stand out. This is precisely why emphasizing CX is so important: most companies offer average, forgettable experiences, and by consistently providing a superior customer experience you can stand out in a sea of competitors.
At the same time, it’s near impossible to truly wow your customers every time they interact with you. In the end, people expect speedy, convenient interactions that provide value and satisfy their needs. You should strive to always provide above average quality interactions first and foremost, and then truly go above and beyond to delight customers when the opportunity arises.
Managing your CX is not just about building great experiences; it’s also about avoiding bad ones. 63% of people would immediately switch to a competitor after just one bad interaction, and they’re highly likely to share these experiences with their friends, family, or on social media. The downsides of failing to meet the expectations of some customers far outweigh the advantages of delivering a positive customer experience to others. Always focus on eliminating frequent pain points before you contemplate improving the rest of your experience.
The customer experience often starts long before a customer buys from you and frequently ends long after the transaction is complete. It may begin with a potential customer assessing the user experience of your website. Does it load promptly? Is it pleasant to look at? Can they conveniently find all the information they need?
What diminishes the customer experience:
1. Long response times: 46% of customers expect a reply within 4 hours
2. Not understanding customer needs: only 44% of customers believe support staff properly understand their needs
3. Not enough human interaction: two-thirds of customers want more human interaction with companies
4. Poor customer service: 47% of people have switched brands due to bad customer service
Poorly designed websites, frustrating automated phone systems, or being unable to talk to a human when reaching out to a company can discourage potential customers and cause them to abandon their journey long before they’ve had a chance to a fully assess your core offering.
The potential buyer’s CX continues in your store, with customer service coming into play. Does your staff promptly offer assistance, are they pleasant and empathetic, and are they knowledgeable enough to answer all inquiries to the buyer’s satisfaction?
Customer service remains one of the most important components of CX for most companies. Regardless of how good your core offering is, the customer service surrounding it is an excellent way to add value and is often what people will remember you by.
Even after a financial transaction is completed, the customer experience endures. People continue to enjoy the benefits of the services or products they’ve bought long after they’ve paid. A good customer service interaction can make someone’s day, a useful service might make you feel great for a week, and a superior product can continue to provide happiness for weeks, months, or even years after it was purchased.
Why Is Customer Experience So Important?
As products and services become increasingly commoditized, customers differentiate you from your competitors based on the experiences you provide more so than what you sell. This is particularly true if you are a small or medium business that competes locally. The average grocery store, drycleaner, cannabis dispensary, or coffee shop provide a fairly generic core offering. While the typical consumer may evaluate these companies based on price, promotion, or location, differences tend to be minor and are generally not substantial enough to generate a significant competitive advantage.
Customer experience is important because it’s what people remember you by. Your dining experience at an ordinary restaurant can be taken to new heights by an incredibly charming waiter. Your drycleaner might create a seamless experience by emailing you an invoice instead of handing you a barely legible receipt, orby texting you when your clothes are ready to pick up. A specialty cheese store can immediately make your experience more memorable by offering a variety of delicious samples and having caring and knowledgeable staff assist you with picking the perfect cheese for your palate.
Offering outstanding experiences drives a sustainable competitive advantage that is difficult to replicate. In today’s hypercompetitive economy, customers can always choose to go somewhere else if they can’t reach you on the phone, if your website doesn’t answer their questions, or if your employees don’t offer good customer service. Two decades ago, switching brands after a bad experience would have been an inconvenience. Today, it can be done in a matter of seconds on your phone.
Customer experience statistics:
1. Customer-centric companies are 60% more profitable than companies that aren’t
2. 81% of customers say they’ll make another purchase after a great experience
3. 63% of customers would switch to a competitor after just one bad experience
4. Customers are willing to pay a price premium of 17% for receiving a great experience
5. Satisfied customers generate up to 2.6x more revenue than somewhat satisfied customers
How to Improve Your Customer Experience:
Empathy: Building a good customer experience starts with demonstrating empathy. Stop selling and start helping. Stop viewing customers as just numbers and start seeing them as people whose lives you can make better. Stop viewing your arrangement with them as transactional and start building meaningful and reciprocal relationships. Your customers don’t just come to you to buy something – they come to you for experiences, support, and solutions.
Customer-centricity: The most successful companies are the ones that stop siloing departments and build a customer-centric organization that focuses on helping people instead of just selling them things. Listen to your customers to understand what their needs are, and then focus on delivering what they value most. Your customers are constantly telling you how to improve your experience, but most companies aren’t ready or willing to listen. Alas, crucial feedback rarely makes it past the customer service department to the management responsible for taking action to improve the customer experience.
Customer service: Providing excellent customer service is by far the most straightforward way to improve your CX. Most small and medium businesses still primarily engage with shoppers via traditional human interactions, and improving your customer service is generally inexpensive, if not free. Hiring genuinely friendly and empathetic customer-facing staff with a great personality is key to providing superb customer service, as is proper training, development, and management. Great customer service shows your customers that you care about them and is a fantastic way to differentiate yourself from competitors.
UX: Offering seamless user experiences is another way to enhance your CX. Crafting well-designed UX takes effort, testing, time, and money. But these touchpoints can differentiate you from your competitors, and ultimately it costs just as much to maintain a great website as it does to maintain a generic one that hasn’t been updated in a decade. Smaller companies often undervalue the importance of providing thoughtfully crafted websites, apps, and other digital experiences, allowing newer, more innovative companies to overtake them. Even seemingly minor pain points along UX interactions frustrate shoppers and often cause them to abandon their journey before they’ve truly considered your offer.
Core offering: Regardless of how great your touchpoints are, your core offering is still a a key component of the overall CX. Great experiences are meant to augment your core offering, not make up for it. Excellent customer service cannot compensate for inferior products. Amazing UX interactions cannot mitigate poorly designed and carelessly delivered services. If there are problems with the products or services you sell, focus on fixing those first before trying to enhance your customer experience.
Operations: Last, but not least, consider the base that your CX is built upon. Efficient and effective operations are at the core of any successful business and lay the groundwork for a loyalty-inspiring customer journey. A good customer experience relies on the careful selection of competent staff, their effective training and development, and the provision of well-defined & efficient workflows, systems, and procedures.
The Benefits of Providing a Great Customer Experience:
First and foremost, offering a great customer experience can help differentiate you from competitors in the eyes of the consumer. Depending on what you sell, there are likely dozens – if not hundreds – of other companies that people could also spend their hard-earned money at. While you may have a far superior core offering, the vast majority of businesses sell relatively generic products and services, making the customer experience the principal factor that determines where people choose to spend their money.
A superb customer experience leads to more satisfied customers that will happily vouch for you to their friends, family, and co-workers. It also leads to better engagement with your client base, allowing you to build valuable rapport that leads to unique insight and constructive feedback you can use to further improve your level of service.
An outstanding CX inspires customer loyalty and turns people into brand advocates that are less likely to shop at competitors regardless of price, location, or promotion. This decreases customer churn significantly, minimizing the need to undertake costly marketing initiatives to attract new customers. And when you do advertise, the increased brand awareness and reputation that customer-centric companies enjoy lend significant credibility to promotional materials.
Good CX leads to increased customer spending, repeat purchases, as well as effortless upselling due to the relationship you’ve built with devoted customers. It makes it easier to attract new buyers, particularly premium shoppers with a higher CLV, while also giving you leeway to charge more than competitors.
When you generally provide amazing service, customers tend to be far more forgiving of the occasional mistake. And while people frequently share bad experiences with their friends or online, the likelihood of grievances escalating to this point is exponentially lower when your customers are loyal and generally happy with you.
Although companies commonly focus on CX to boost sales, building the efficient operations required to support it can also result in time and cost savings. Well-designed procedures and operations don’t just help make customers happy, they also frequently lead to the elimination of inefficiencies that previously cost considerable time and money.
Companies that prioritize the customer experience also understand how important their employees are in delivering it. They nurture a good employee experience that motivates and engages staff, making it easier to attract and retain top-notch talent. When employees understand the impact they have on customer satisfaction, they become more invested in delivering exceptional experiences.
The Costs Associated With Providing a Great Customer Experience:
Building a customer experience that inspires unwavering loyalty doesn’t have to be expensive. While it’s generally a good idea to spend 10-20% above market rate to attract exceptional customer-facing employees, taking the time to hire the right staff and developing them properly is far more important. Even if you do end up spending a bit more on wages, the sales boost from the superior level of service will more than make up for it.
Designing great user experiences can be costly, but these one-time expenses also lead to potential revenue increases that will make you glad you spent the money. Additionally, well-designed websites, apps, store layouts, and automated phone systems decrease the time spent by staff assisting shoppers in more traditional customer service interactions. If your website provides all the information a customer might possibly need, your staff will spend less time answering inquiries via email or phone. And if your app provides an efficient and intuitive ordering experience, it allows your employees to allocate their valuable time towards other tasks and responsibilities.
Who Is Responsible for Customer Experience?
Every single person within a company is responsible for the customer experience. While management may set the overall CX strategy, everybody is responsible for delivering it to the customer. Many companies consider CX the responsibility of the customer service team, but this is a flawed way of thinking and sets you up for failure. Virtually every single person in a company plays a role in crafting and delivering the customer experience, from client-facing staff in a sales or customer service role to management, marketing, and IT.
Every single department at your company needs to prioritize the customer experience, even if they never directly interact with customers. Everything they do should be done with the customer in mind, and continuous communication and feedback between departments is key to building a customer-centric organization.
How to Measure Customer Experience:
Customer experience isn’t necessarily a metric that you can quantitatively measure. It’s an ongoing and fluid process that delivers value to your customers and benefits to your company. While still useful, traditional metrics such as net promoter and customer satisfaction scores are not the ultimate authority in assessing how good a customer experience truly is. The people who understand your CX best are the staff who provide it and the customers who receive it. Consistently ask them for feedback – particularly qualitative, but also quantitative – to measure your customer experience, gather valuable data and improve your level of service.
The best way to evaluate your company’s CX is by constantly testing every single touchpoint you offer from both internal and external perspectives. Work alongside your customer-facing staff for a day answering emails, taking phone calls, and providing service in-store. Engaging with both your front-end employees and customers in such a collaborative manner provides you with invaluable insight into the customer experience your company has built. Additionally, act as a mystery shopper and test your UX and customer service interactions from an outsider’s perspective on a frequent basis. It’s hard to truly gage the touchpoints your company offers if you never put yourself in a position to experience them from the perspective of your customers.
Prioritizing CX allows you to connect with your customers on a deeper level, exceed their expectations, and build a brand that stands the test of time. We help companies in Toronto embrace the power of customer experience to stand out from the competition. Check out the services page to learn more about how we can help your company succeed.