Customer Experience: What It Is & Why It Matters Illustration

Customer Experience

Customer Experience

The Ultimate Guide to Customer Experience: How to grow revenue and improving retention through automated customer experience.

 Summary:

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What is customer experience? 

Customer experience is the customer's perception of a company from every touchpoint in their lifetime of interactions with the company. The customer experience journey is a more holistic way of viewing a customer's satisfaction with your company. Customer experience-oriented businesses understand that customer satisfaction is not only relevant when the customer purchases or ends a subscription for a product – it is relevant throughout the customer's life with the company. As such, the company should work to ensure customer satisfaction throughout that lifetime. 

What makes up the customer experience 

A multitude of factors called 'touchpoints' comprises the total customer experience. Generally, a touchpoint occurs every time the customer interacts with the company or its products. Some of these touchpoints include traditional store visits, mobile apps, social media channels, and support forums. They also encompass support services such as web and SMS chat, as well as creative marketing endeavors. Basically, when a customer is thinking about your product, your company has a chance to improve their customer experience. 

Many companies traditionally hire a single customer-facing team to improve the customer experience. In business to business, or b2b customer experience models this strategy becomes slightly more complicated. Either way, given the plethora of available touchpoints and the many teams responsible for each of these points, this traditional model makes no sense. An effective customer experience strategy needs to encompass the whole company. Every team must collect holistic data on customer experience, identify critical features for their team to improve upon, and communicate with other groups to ensure the company evolves efficiently and effectively. 

For this model to work, customer experience must be at the forefront of a company's KPIs and its long- and short-term goals. When customer experience has a seat at the table, all teams will be more driven to create the best customer experience possible, and the business will function more smoothly.

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Why is CX important for your business?

Today, the market is full of products that perform similar functions. While each product may boast its individuality, the fact remains that for the average consumer, many other products can likely achieve the same or equivalent functions as yours can. The critical factor that sets you apart from the competition is customer experience. Customers care about being treated well, and they will often choose to buy a product when they feel a personal connection or desire to interact with your business. No marketing strategy can offer a more convincing reason to switch products than that. 

Customer experience strategies work primarily by enhancing customer satisfaction and loyalty. When your business creates a phenomenal customer experience, customers will have fewer reasons to leave. Customers will also be more likely to purchase additional products from your company if they love their total experience. A customer experience-focused business drives up customer loyalty and retention rates, which results in a subsequent increase in sales. 

When your business chooses to enhance customer experience, you will also notice an increase in new customers. Companies spend billions of dollars globally on marketing, but one of the most cost-effective advertising strategies will always be word-of-mouth. When your business invests in a great customer experience, they indirectly invest in this practically free marketing strategy. This factor is more important than ever in the age of Google and Yelp reviews. Now, when customers are satisfied with their experience, they have the potential to reach thousands of other potential consumers, all at zero cost to your business.

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What's the difference between customer experience and customer service? 

Customer experience is the product of the amalgamation of every interaction between company and customer. What is customer service experience? Customer service is a more traditional, zoomed-in iteration of that model. Customer service generally refers to the direct interaction between consumer and company representative, generally from a sales perspective. Customer service teams are an initial point of contact between customer and company. They often facilitate sales and can sometimes provide simple support for products. Now, let us zoom out from customer service to include marketing, support, social media, IT, and engineering teams. All these people are equally responsible for customer experience.

Customer experience includes every touchpoint where the user thinks about the product and company. Customer experience-centric companies use analytics to evaluate points of friction. These friction points can consist of tech glitches where users often need support, call centers with long wait times, or social media strategies that do not reflect consumer values. The best customer service experience is just one tiny facet of the experience and its associated points of friction.

Research from McKinsey & Company identified that your business' financial outcomes correlate much more strongly with the customer's entire journey than with a single touchpoint. That is why a customer experience strategy is more effective in the long term than reducing analytics to a solely service-focused perspective.

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What is a good customer experience? 

A good customer experience is where the customer feels valued, listened to, and supported throughout their purchasing and use of the product. To better envision an efficient and effective customer experience strategy, let us travel through a customer service experience example.

A potential customer sees a marketing campaign that the marketing team actively designed with customer satisfaction in mind. They are attracted to the campaign, so they visit the business' social media sites. They notice that the social media teams engage customers through the platform while weaving in appropriate marketing tactics. The customer decides to talk to someone about the product, so they visit the company's store.

At the store, friendly and empathetic service representatives help the customer find the product that works best for them and teach them how to get the most out of their chosen product. If the customer prefers online shopping, its website is updated and user-friendly, and service representatives are present at a moment's notice through chatbots, email, or phone lines. The website translates seamlessly to mobile format, and the customer can also browse through the app if applicable. The customer feels valued. They enjoy their shopping experience so much that they leave a positive review for the store even before using the product.

After purchase, the customer has round-the-clock support through their preferred communication channel. The support team saves data from previous interactions, so the customer does not have to repeat information. The support team actively uses analytics to inform IT and engineering of repeating problems. These teams design new products and update existing products guided by customer support feedback.

Throughout this experience, the company informs the customer of new deals and sends out surveys to measure different analytical aspects of the customer experience. They do not only use surveys after the customer purchases a product or cancels a subscription; surveys evaluate the customer experience throughout all relevant touchpoints. The surveys are designed not to be time-consuming or dull; they are brief, open-ended ways for the customers to communicate feedback. They avoid asking multitudes of questions about the customer's purchases because the company already has that data.

Your company also recognizes that surveys are only one angle to view your customer experience strategy's efficacy. You ask the customer if they are willing to join a focus group to discuss a new product they might be interested in. Alternatively, you invite them to enter a follow-them-home study wherein a representative visits the customer to see how they use the product. These insights all lead to outcomes that satisfy the customer's needs and improve their customer experience.

The customer can easily change their email preferences, but the surveys make them feel like their opinions are valued. They continue to inform their friends and colleagues about your business's quality service. When you expand to begin offering new products, they are more likely to purchase additional products to receive the same quality customer experience.

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Things that cause a bad customer experience 

Now, let us discuss the opposite of the idyllic (but achievable) situation described above. These factors are all symptoms of a company that does not put customer experience first, and they can have severe negative long-term impacts on your company's success.

Long wait times 

We have all experienced the frustration of long wait times to receive service or support. These wait times can take many forms; whether you send an email and wait days for a response, spend hours in a phone queue, or even spend far too long wandering around a store looking for a service representative, these long wait times can seriously impact your perception of a company. 

Long wait times cause intense frustration and lead the customer to feel like they are not valued. They can also seriously impact service employee job satisfaction. When these employees feel pressure to move through customers as quickly as possible and often begin their interactions with customers who are already irritated from their long wait time, they are more likely to be stressed, and job satisfaction will decrease. With decreased job satisfaction comes a more frequent need to hire and train new employees. Furthermore, people who do not like their job will generally perform worse. Since service representatives are one of the main connection points between customer and business, this model is a recipe for failure.

Employees don't understand what the customer needs 

Poorly trained, inexperienced, or stressed employees will worsen customer experience during the interaction and into the future. If sales reps do not understand what kind of product the customer is seeking, they could lead the customer to a product they do not want or need, all while the perfect product is waiting in the background. The customer will then buy the product and be unsatisfied with it or leave without purchasing anything. Either way, revenue will decrease either through negative reviews or through fewer purchases.

Similarly, overworked or untrained support representatives can miss the point of a troubleshooting call and cause the customer to feel immense dissatisfaction with the product and its support services. Generally, people who have to interact with support representatives are already frustrated about some aspect of their product that is not working. If those representatives do not understand the issue, frustration will increase until customers decide to change companies.

Unresolved issues/questions 

Unresolved issues are generally a function of overworked employees or an inefficient operating system. Overlooked emails, employees who cannot provide the required level of assistance, and a web interface that does not offer easy access to services can immensely impact the customer experience. Sometimes people will be too confused by your product or your contact page to bother reaching out. You can include all these people in the category of those who will not return to purchase more.

Ensure your employees are adequately trained and know where to turn if they cannot resolve an issue. You must also make sure your support teams are easy to reach from whichever contact platform is most convenient to the customer, whether SMS, email, chatbot, social media, or phone. When you run support out of the channels that the customers want, you are enhancing customer experience. 

Similarly, you are opening yourself up to more platforms and more chances for issues to get lost in the pipeline. Your internal operating systems must be working as efficiently as possible so you do not miss a beat. Using customer experience technology to sync multiple software platforms onto one operating channel is a significant asset for this goal.

Too much automation/not enough human touch 

As automated services such as chatbots become more prevalent, some customers express concerns that they are missing the essential human touch from their service interactions. Chatbots are an excellent tool to proactively engage future customers, route questions to the appropriate team, empower customers to self-serve, answer simple questions, and collect feedback. Still, they can never fully replace the feeling of connection that arises from speaking to another human. 

A recent Harvard Business Review study indicated that customers who feel an empathetic connection to representatives are at least three times more likely to purchase the product again and three times more likely to recommend the product to a friend. When using Ada, customer experience agents get involved at the right time so that customers do not feel left in the dust, and you strengthen this empathetic connection.

Service that is not personalized 

One of the essential aspects of a positive customer experience is personalized service. Customers want to feel like every interaction focuses on improving their experience. When service agents use scripted interactions or when customers are left to fend for themselves, they will be less satisfied with their experience, and your business will suffer as a result.

When using Ada, the chatbot can personalize each interaction by pulling information from the customer's profile. It integrates directly with Salesforce, Zendesk, Oracle, and Intercom to provide the most streamlined information flow. When the bot hands the customer off to the agent, they have the chatbot conversation's full context. Since many simple requests are automated, the agents can also focus more deeply on the current customer, their history, and their preferences to make the experience as personalized as possible.

Rude/angry employees

No service team is perfect. Sometimes, customers will consider specific interactions particularly hostile, and this threshold changes on a per-customer basis. With Ada, agents no longer have to deal with mundane and repetitive questions, so they'll be more engaged and less irritable. Job satisfaction and happiness will increase, and consequently, the frequency of negative customer interactions with rude or angry employees will decrease.

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What is the impact of bad customer experiences 

Bad customer experiences can have a multitude of adverse effects on your business. While you may save some money upfront employing fewer service or support agents, automating too many interactions, or spending less time training new hires, that money will ultimately drain from your bottom line as customer satisfaction decreases. 

Customer churn and negative reviews, both online and by word of mouth, will increase. These factors mean that you will retain fewer loyal customers while generating fewer new customers. Again, intelligent marketing strategies cannot make up for the happiness generated by a positive service interaction and overall positive customer experience.

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What is customer experience management? 

Customer experience management is the active engagement at all levels of a company to improve customer satisfaction with every facet of their experience. A business that focuses on customer experience management orients all its goals, KPIs, and operating procedures towards achieving this experience. Every department is involved in data collection at all touchpoints, and they are engaged in disseminating their findings and implementing top-down solutions across the board.

Things to consider when building your customer experience management strategy: 

While the entire enterprise should reorient towards a customer experience-centric model, a few teams can drive this change. These are the teams who are generally more customer-centric, meaning they likely already share some of these core values. 

Marketing teams can collect valuable information on your enterprise’s target demographics, including information on how to have successful interactions with the demographic on all levels. For example, one group of people may prefer a more user-friendly self-service chatbot on the website, while another group prefers earlier human intervention. Some groups may find an hour-long webinar sufficient to learn about the product and its features, while others might benefit from a more hands-on class. Marketing teams already have resources to collect data on what customers want from a product and its ads. Now they can begin to collect data on what they want from the enterprise customer experience.

Sales teams already know better than anyone what makes a successful interaction. For them, success is also the easiest to measure. Did the customer buy the product, or not? Customer experience models take this definition of success one step further. Did the customer feel pressured to purchase the product, or are they genuinely excited about it? Were they served right away? Did the rep answer all their questions and direct them to the product that best suits them? Based on the sales interaction, how likely are they to come back and purchase another product? All these are equally as important as measuring sales revenue because they imply increased income in the future when the customer comes back for more.

The product itself must also work to enhance the customer experience. Engineering teams must always engage in collecting data to inform the creation of new or updated products. This data collection should be constant; they should know how long it takes people to figure out how to use it, whether they are using it for unintended reasons, and with which complementary products they often use. They should receive data from support teams to understand where customers most often need support with the product. Then, they can compile all this data to create a product that best enhances the customer experience.

Customer service teams are already at the forefront of improving the customer's experience at a few crucial touchpoints. Now, they must expand upon these touchpoints and remodel their focus to be entirely customer-centric. Service agents can collect data on friction points that customers have been experiencing with the company and direct improvements in these areas. They can also enhance the customer experience by frequently following up and proactively engaging them in new solutions.

To implement a customer experience model, change needs to come from the top. Companies need customer experience management solutions. Financial incentives to improve the customer experience must replace financial incentives to sell more, create more, or move through more support tickets in a shorter amount of time. Training sessions must also reflect these new values. But if today's sales values do not directly correlate with customer experience, how can we measure and implement a great customer experience?

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How to measure and analyze customer experience 

Analyze customer satisfaction survey results

To achieve customer experience certification, you need to hear from the customer. The key here is to remember that customer satisfaction matters at every point in the customer's experience, not just after purchasing the product or interacting with a support agent. Depending on the product and customer type, consider sending out an annual survey regardless of a change in the company's account. This survey will help your team identify future problems before they arise and work to meet your clients' needs proactively.

Furthermore, improving customer experience through survey results should matter to everyone, not just the customer-facing teams or the teams administering the surveys. Companies should work to disseminate survey results across all teams and encourage collaboration between teams to find solutions to problems that the surveys have identified. This collaboration will help you achieve customer experience optimization.

Identify the rate and reasons for customer churn

When customers leave your company, try to delve into their reasons for leaving. These can include friction points across their lifetime with your business. Then, make these points your highest priority. You may find that your attention to these details influences some customers to resume their business with you.

Ask the customers for product or feature requests 

Customers love to feel heard, and one of the best ways to achieve this sensation is to give them a seat at the table. This attention to your customers' values will enhance their loyalty to you, and it will help you create products that you know your customers will love. These meetings are also an excellent opportunity to glean customer satisfaction with the products they are already using and your company in general.

Analyze customer support ticket trends

Support tickets are one of the easiest ways to identify problems in your product. You can analyze these trends without sending out surveys, which can annoy some customer demographics. People should always be working to decrease the frequency of support calls by updating product glitches and designing better training seminars. 

Since support calls almost always correlate with customer dissatisfaction, you can connect the frequency of support calls with customer product experience. However, there are many other aspects of the customer experience that are slightly more difficult to measure. Next, we will delve into the best and easiest customer experience metrics.

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Metrics to measure customer experience

Metric

Brief Description

CES

How easy was it to get your questions answered?

NPS

How likely are you to recommend our company/product to a friend/colleague?

CSAT

Rate your satisfaction with various aspects of our product and company

TTR

How long did it take to resolve your issue?

 

Customer Effort Score (CES)

The CES measures the degree of difficulty customers perceive when trying to complete an action with your company. Generally, you measure CES after customers receive support. You can measure CES by sending out a survey that asks customers how easy it was to get their questions answered, where one equals very difficult, and either 5 or 7 equals very easy. You can use this metric to quantify the efficacy of your support teams. You can also use the CES to evaluate sales or service quality where customers receive one-on-one attention.

Net Promoter Score (NPS)

The NPS is a great tool to measure the overall customer experience because it encompasses every aspect of a customer's journey. The survey asks how likely the customer is to recommend the product or company to a friend or colleague on a scale of one to ten. This tool is excellent because it bundles every aspect of your brand into a single number which you can easily track over time. However, it does not offer insight into individual elements causing a rising or falling trend. This metric is most effective when you combine it with some follow-up questions or other metrics.

Customer Satisfaction Score (CSAT)

The CSAT is a customer experience survey that delves deeper into customers' feelings about various aspects of your product and company. You can specialize your CSAT surveys based on your goals and values. Generally, customers can respond to five- or seven-point rating questions or yes/no binary questions to communicate their feelings about your company. These numerical responses are also easy to track through time, and they will help your company isolate areas for improvement. 

You can combine the CSAT with the NPS to identify other areas that your CSAT might have missed. For example, if almost all CSAT scores are rising while NPS is falling, you might have missed some crucial aspect of your company with which customers are dissatisfied. You can then organize interviews or target surveys to improve areas that you had not considered before.

Time to Resolution (TTR)

While CES measures your team's efficacy, TTR is more closely related to your team's efficiency. TTR measures the time in business hours or days between when a customer reaches out to your company and when you resolve the issue. Long wait times are a significant cause of customer dissatisfaction, so TTR is a crucial metric to analyze customer experience whenever they interact with service agents.