In the last few years, customer experience (CX) has become the buzzword and focus of marketing strategies at companies of all sizes and across all industries. In fact, people increasingly see CX as indispensable to successfully compete in the market and keep customer satisfaction high.
Using various feedback strategies to improve your CX and design new processes will help you take a competitive advantage. This will help you harness the holistic and inclusive dimensions of CX and to understand that it’s more than traditional customer service or straightforward marketing. CX programmes therefore need to be about evolution and development, based on and integrated within the voice of your customers. This can all sound very daunting, so we compiled this guide to share with you the insights we have learned from helping leading companies and start-up alike with their CX journey.
What’s behind the buzzword of customer experience?
customer experience (CX) is a holistic concept that includes every interaction between the customer and the organisation. From initial awareness to the present moment. It concerns the before, during and after a purchase, delivered service, or experience.
Broadly, there are three angles:
(1) the customers’ actual and perceived experience
(2) the experience the organisation designs and desires for the customers
(3) and the co-creation aspect.
CX lies at the intersection of organisation and customer. Therefore organisations and customers, both create and shape CX. In thinking about CX, it is important that you consider its emotional and subconscious aspects. As well as, how it is being influenced by customer expectations and also valued against those. It is therefore not entirely rational and cannot be measured or conceptualised as such.
To better understand and visualise CX, think of it as a customer journey with various touchpoints between customer and organization. The customer journey is made up of chronological steps, activities, questions, and possible obstacles. Touchpoints are these moments of direct interaction and can be everything from the product itself to traditional customer service to advertisements.
The origins of customer experience as a concept
Customer experience as a concept developed from the increasing commodification of services. It is the next step from the previous shift from goods- and product-based industries to a service industry that has become an industry of “experiences”. You no longer buy a car – you buy the experience of unlimited freedom and innovative independence. Instead of buying a computer, you buy the experience of a surge in your creativity and possibilities. Today, price and availability alone does no longer decide the value. Instead by created experiences that set one business apart from the others.
The origins of CX can be traced all the way back to the first marketing and consumer theories in the 1960s and to the 1990s. Around this time, long-lasting customer-organisation relationships became a priority, meaning the customer took centre stage over the product.
Branding and CX make a key difference for customers. The traditional marketing tools that focused on the Four Ps (price, product, place, and promotion) need to be rethought. Value is no longer separate from the customer but extremely personal, emotional, intellectual, and first and foremost unique and diverse.
Social media not only transformed our lives but also our experience and power as customers. Increasing digitalisation and connectivity enables the public voice of consumers to rival the communication power of big companies. Social media has become a platform where customers voice their opinions on organizations, their value and the experiences they offer. Customers can connect and exchange experiences as never before.
The result? Customers have higher expectations for CX and services, wanting every organisation to deliver at the speed. Together with the same level of personalisation and diversity as the leading companies of the technology sector.
The benefits of investing in customer experience
In spite of its buzzword reputation, CX is more than a trend. The management – and everyone else in the company – need to be aware of the profound impact a positive (or negative) CX can have on your business and its performance. For you to improve CX effectively and successfully, the entire organisation needs to understand and believe in the enormous impact of positive CX. Here are some of the impacts a good CX strategy can bring about:
- improved customer satisfaction
- higher customer loyalty
- the probability of customer to refer your business to friends and family and positive word of mouth
- customer retention (the likelihood of customers to remain your customers) and therefore less customer churn
- employee experience (is closely interlinked with CX)
CX has moreover proven to be a key business imperative that can help you to reduce the Cost to Acquire (CAC) and Cost to Serve a Customer (CSC) by knowing your customer better and serving their wishes and needs more efficiently and so lead to an increase in revenues. A popular case example for this is the transformation of the Royal Bank of Scotland.
For more insights into the benefits and statistics behind CX, check out our Future of CX 2023 report.
The science behind customer experience
Advances in neurology and experience studies gave the wide-spread attention and influence to CX. The first Nobel Prize for applying psychological and sociological research to business strategies was awarded to Daniel Kahneman already in 2002.
When thinking about CX, you need to take into account the community aspect that comes via the rise of social media. Customers today want to take part in a shared interest with others, so customer-customer relationships and interactions become increasingly important. It engages customers and adds behavioural value to their experience with a company, thus creating brand loyalty. Offering platforms for exchange, for example on social media, engage customers and makes them feel part of something bigger.
Emotional and Cognitive Aspects
Another area of research is in emotional and cognitive responses to subconscious design. It influences the moods and emotions of customers during their journey with the business, which was previously hard to measure and incorporate into the active design process.
Research has shown that customers cognitively evaluate their experience during the process. Something that is then expressed in complaints and suggestions. The emotional and cognitive aspects of CX are important to always keep in mind during your design process. They may seem abstract and hard to measure but they link to a company and brand culture that you can actively build.
Multi-channel customer experience and Social Media
The importance of CX is linked to the development of customers increasingly interacting with organisations across a wide range of channels; from the website to phone apps, print ads, and social media. This results in a more complex customer journey. You need to offer the same coherent experience across all channels and make the switch between channels nearly unnoticeable.
Research has also shown that customers use different channels during different stages in their journey and to different ends. A customer might come across your business on social media through a specific product or article and then go on to your website to get more information before finally considering a purchase.
Using social media not only to communicate to but with the customer, and putting engagement and interaction first, acknowledges the customer as your value co-producer and helps you create an active experience for them.
How to design a customer experience for your organisation
When starting to think about how you can improve your CX, it’s important to identify touchpoints in the customer journey that you can actively influence. Because CX lies at the intersection of organisation and customer, you cannot influence all touchpoints of customer experience. Some are determined by the social and external context such as the economic situation in a period of recession. Which might influence customers’ purchasing decisions or turn them to one organisation over another. Here are some pointes, however, that can guide your design approach:
- Target groups: Start the design process by identifying the desired target group(s) of your organisation. You want to create a custom experience for them. Develop a brand or organisation theme that you consistently use to design all elements of your customer experience.
- Company story: Your CX should be unified and tell a compelling company story – think about it in terms of narrative. Ideally, it should engage multiple senses to make the experience more profound and memorable. If your values and brand story align with those of your customers it also means more loyal customers.
- Try to be innovative and up-to-date: you need to speak to your customer group in a way that addresses their mentality and Zeitgeist. For example, many of today’s successful companies present themselves as ‘green’, ‘social activists’ or ‘ethical’, whilst designing their CX accordingly.
- Empathy: Being a moral leader and showing empathy has become important for organisations to attract and keep customers. You need to create positive associations with your organisation or brand in order to create a positive experience for potential customers.
Other practical tips include ensuring that the customer experience ends on a positive note, whilst making in-between steps more time-efficient and engaging for the customer. For example, consider merging stages of customer interaction and giving simple options. That way you give customers choice and power.
Denise Yohn Lee presents a seven-step customer experience Architecture approach that can serve as inspiration:
- Define your brand and what it stands for.
- Define the customers’ feelings and opinions you want their overall experience to include and induce.
- Divide your organisation/business into segments and see if you require different experiences for each segment.
- Divide your customer group into different segments – do they have different wishes and needs?
- Prioritize the different experiences you want to create to manage resources and time – improving which experience will be most valuable for your organisation?
- Develop the actual design by improving existing strategies and developing new ones.
- Review your strategies in the light of the overall brand experience you defined.
Collaborating to build CX throughout the organisation
The design of CX and the customer journey needs to start with the management team. If they are convinced of the positive impact a CX program will have on the organisation’s success. They must initiate the CX design process, assign resources and experts, and drive the process forward.
However, a transformation needs to happen throughout the organisation and all departments. Departments as diverse as IT, marketing, operations, customer service, and HR need to collaborate to develop and implement CX strategies and to drive CX improvement across the organisation.
Some organisations chose to set up a team of customer experience experts that works outside any one specific department and helps to integrate the strategies with each of them.
How your current employees can help build your CX
Your employees are key contributors to a positive CX, too. Hire employees who care about customer experience and satisfaction and fit into the customer-centred organisation mentality. Organisations successfully let their employees experience CX and have them meet customers to better understand their experience. This can happen through focus groups with actual customers or testing and reviewing customer service routes.
A key strategy we recommend is to formulate a statement describing your intent and reflecting the brand and desired CX. In order to communicate this statement to all employees throughout the different stages of their career, starting with the onboarding process.
A new trend with leading businesses is to extend their customer experience to their employees and align CX and Employee Experience (EX). This supports the perspective that a full organisational transformation must include a positive EX as well. This holistic company culture reflects the holistic concept of CX.
How to measure customer experience
Experts agree that the start of a CX improvement journey begins with the customers’ perspective. For that, you need customer input. A practical and fast way to get that is by conducting customer surveys. Measuring your organisation’s CX before, during and after the design process is essential to understand initial areas of improvement, review strategies put in place and their impact, and check whether your strategies are still working.
Since CX is a complex and inclusive concept, it is ambitious to measure CX in one big survey. An interesting group to survey in this regard is churned customers who chose to change to a competitor. Finding out what made them dissatisfied can provide you with clues about which touchpoints need development.
It’s important that you evaluate feedback in a way that makes the insights actionable. You can aim to link root causes to outcomes such as improving customer satisfaction with a CSAT survey tool, customer loyalty or Net Promoter Score (NPS) and so identify areas of your CX that need improvement. By identifying these areas, you can develop actions, make changes, and continuously review those. You can also capture where it works well and you ensure good customer experiences. You can then use smaller pulse surveys to check on developments, or receive feedback on a specific product or service.
We recommend instead to focus on measuring aspects or steps of the customer journey. You can measure perceptions and attitudes as “snapshots” during steps in the experience. For example during a single transaction or a single contact with customer service. You can also measure commitment and loyalty with the NPS as an indicator of a positive CX. By measuring customer experience during steps in the customer journey and so mapping it, you can develop a blueprint customer journey for your organisation or segment of the organisation. This is effective because it considers all the different facets and steps that make up a good experience.
You should collect both qualitative and quantitative data from different sources, such as surveys, social media, focus groups, and reviews with the adequate VoC software or customer survey software. For this feedback to have an immediate impact, you should give the customer support teams access to the results of the feedback surveys to allow them to make changes where their actions directly concern the customer.
Customer experience in the future
With an exponential increase in data and feedback from customers produced across channels, innovative methods for measuring CX become desirable and in some cases even necessary. Already, linguistic-based analysis programs deduce sentiment from feedback, identifying recurring vocabulary and “pain points” in the customer’s journey.
In the future, customer experience management (CEM) will be driven by artificial intelligence (AI) and facilitated through machine learning on large scales. AI will collect information on customer actions and with the increasing data will learn how to improve the CX in real-time, personalised for each customer.
These innovations will be especially powerful at identifying unhappy and dissatisfied customers or those at risk of going to a competitor. By learning from data, AI will be able to predict in advance who these customers might be and counteract at an early stage.
These innovative CX measuring and management technologies will make it possible to act rather than react to customer experience. Get started on your journey towards excellent customer experience now!