It’s safe to say that incorporating customer experience (CX) into your organization’s strategic decision-making has gradually shifted from providing a competitive edge to a standard that your clientele expects. People want digital experiences to be intuitive, enjoyable, and straightforward—and the most successful products and services are there to provide them with just that. As a result, this allows them to considerably decrease their churn rates, skyrocket brand loyalty, and increase advocacy among their customers.
Interestingly, this doesn’t really mean that everyone has their ducks in a row when it comes to providing good CX. In fact, this discipline is often misunderstood by organizations, which leads to disappointing returns on their investments—and there’s plenty of research to confirm this. For instance, a Gartner study suggests that over 70% of CX leaders are having trouble creating products that actually increase customer loyalty and achieve the desired results.
So, if you’re looking to develop a CX strategy or you failed to fully reap its benefits—this guide has you covered. In it, we’ll dive deep into how you can improve your customer experience strategy or even create one from scratch.
What is customer experience?
Okay, let’s revisit square one for a moment and explore what CX is and what it aims to achieve. Because customer experience is a broad field with a wide array of components, let’s first explore a very general definition: CX is a strategic approach toward shaping your customers’ cumulative and holistic perception of your brand. Given that it’s an all-encompassing approach, businesses should focus on a broad spectrum of channels and touchpoints that they should consider when developing their customer experience strategy—from the context in which your customers find your product on the web to customer service calls and beyond.
Everything you do impacts your clients’ perception and their decision to keep coming back or not—so a great customer experience is fundamental to securing a loyal and engaged customer base.
Customer experience—definition in a sentence:
"The customer’s perceptions and related feelings caused by the one-off and cumulative effect of interactions with a supplier’s employees, systems, channels or products.” — Gartner
What is the difference between customer experience and customer service?
Customer service and customer experience are terms that are often used interchangeably, but they’re far from being the same thing. While customer service is the more commonly used term, it only represents a fraction of the customer experience umbrella.
In this context, the support team is but one touchpoint in the customer’s journey—an extremely important one but far from being the single point of interest in a CX strategy.
More importantly, there are a variety of conceptual differences between the two. First, customer service generally covers a very specific interaction—there is one particular scenario in which customers and support professionals interact. Customer experience, on the other hand, is a holistic approach that encompasses a wide array of touchpoints.
Secondly, customer service is fundamentally reactive—typically, users reach out to a company’s support department to alleviate a problem they’re facing. In contrast, customer experience aims to be proactive and anticipate your customers’ needs and wants.
Last but not least, customer support interactions are generally isolated events. Once a person’s issue is addressed, their interaction with the department will most likely stop until they face a different issue. CX aims to achieve the exact opposite—it attempts to build a lasting and ongoing relationship with an organization’s customers.
Why customer experience is so important
Customer experience matters because it sets a precedent for the way your customer will perceive your brand. Right from the beginning, they will associate certain feelings with your product, which will usually last throughout the customer journey. Whether before, after, or during a sale, a negative experience could potentially derail them from making a purchase or coming back. Actually, let’s explore some statistics on the consequences of poor customer experience:
According to the American Express Global Customer Service Barometer, 53% of respondents ended up not purchasing a product or service due to bad service.
A Salesforce report suggests that 74% of people are inclined to switch brands if the checkout process is too convoluted.
A PWC study indicates that only 49% of the respondents consider that their companies provide good CX.
The above American Express study also suggests that Americans will mention about a poor experience to approximately 15 people.
A NewVoiceMedia report indicates that US organizations lose approximately $75 billion each year as a result of unsatisfactory customer experience.
Although dating back to 2004, it’s worth mentioning the work of David Reibstein, a marketing professor at the Wharton School, who has calculated that the difference in CLTV (customer lifetime value) between satisfied and dissatisfied Starbucks clients is approximately $2800.
Alright, but enough of these scare tactics. Let’s talk about the benefits. Delivering an exceptional CX will satisfy your customer at every key touchpoint, leading to better retention, loyalty, and business growth. Particularly with the modern consumer, they value convenience, ease of purchase, speed, and innovation.
According to a Gallup report on high-impact customer experience, a well-thought-out CX strategy is:
Responsible for driving over two-thirds of customer loyalty, making it more impactful than brand identity and pricing.
Essential in crafting intuitive and satisfying experiences that help create a powerful and lasting effect on customer loyalty.
Useful predominantly when it’s rooted in salience, which is why it’s critical to have a strong understanding of your Customer’s Voice (VoC) in order to understand what your clientele cares about most.
This brings us to an important point—while pretty much everyone knows and applies CX to a certain extent, that doesn’t really mean that they’re doing it right. In fact, the above-mentioned report suggests that the majority of business leaders doubt their current strategy will be successful in accomplishing its goals.
On this optimistic note, let's explore some surefire ways to improve your CX strategy.
Ways to improve customer experience
So, let’s say you’ve given CX a try and you’ve seen subpar results. Here’s how you can troubleshoot and improve your strategy.
Leverage technology to create exceptional experiences
One of the essential components of CX is technology. At the peak of digital transformation, an application-driven customer experience can help transform the way your clientele perceives and uses your product. From customer-facing tech, like chatbots and service kiosks, to analytical tools that help bring data insights to the back-end, CX technologies can be used to enhance your relationship with the people you cater to.
But there’s a catch: people still really value when their interactions with a brand have a human touch. For instance, a PWC report suggests that only 3% of US consumers want their experiences to be fully automated. Here’s how the study’s respondents weighed in on automated experiences:
Tools that use Artificial Intelligence (AI) and Machine Learning (ML) enable brands to provide a tailored experience for the customer. This could be through providing round-the-clock service that interacts with them in real-time. Technologies can also be used to deliver a higher level of personalization by assessing consumer needs and characteristics.
Businesses also leverage data insights to improve CX. Through collecting, analyzing, and understanding data from customer interactions, they are able to make knowledge-driven decisions.
Establish who owns CX
While, fundamentally, it’s your customer who truly owns the experience, since they are the ones who perceive your organization’s value, everyone in your company should feel that they are directly contributing to it and, therefore, own part of it. However, a common problem many organizations face in terms of their CX strategy is lacking a person who oversees and manages it. Designing and ensuring great CX are two different things—the former is typically the responsibility of the CXO.
Assigning a CXO is a good way to considerably align experience-related efforts, but it’s critical to view the CEO as a vital partner in this process. Without their collaboration, it would be complicated to translate the company’s vision into action.
Create a consistent brand experience through omnichannel
Customers nowadays value convenience. In fact, 97% of customers have abandoned an online purchase due to an inconvenient service. Ease of purchase allows brands to showcase their unique proposition that goes beyond the price or quality of their products.
An important part of ensuring an enjoyable experience is tapping into an omnichannel approach. This is especially important since nowadays about half of the web traffic comes from mobile devices, which is why it’s important to harness a multi-device approach toward journeys.
Omnichannel allows brands to blur the lines between multiple touchpoints by integrating various channels into a one-stop platform. This enables businesses to create a consistent brand voice and align their message in a single place. By combining the different components of the brand, online and offline, we are able to deliver a seamless customer-to-brand interaction.
Personalize for an exceptional customer experience
The so-called Customer Age has given consumers great power. We find that customer empowerment also comes with its own set of demands and needs that have to be met. Consumers today expect personalized experiences when they’re buying products. By taking on a personalized approach, brands are able to create a tailor-made customer journey that is unique to each customer that comes through the door.
Targeting customers as single entities rather than a general target audience will cater to each specific need or want they have. Whether it is through communication, offers, or promotions, reaching out with a personalized approach lets them feel as if the brand cares about them as an individual. It pays off, too. 72% of customers have stated that they only engage with customized messages that are specific to their interests.
Lose the silos
Back in 2016, the American Management Association published a report that indicated that about 83% of executives considered that silos existed in their organizations, and a whopping 97% of them found it to be detrimental to their processes.
Silos are a massive problem—they prevent people from working together, sharing valuable data, and ensuring a cohesive and efficient collaboration with their colleagues. It’s also fair to say that silos are generally an artifact of value chain thinking, which often forces the customer to figure things out for themselves without really assisting them in doing so.
All these problems will invariably lead to a predictable outcome—issues with profitability, low employee morale, and poor decision-making.
Develop team skills and ideas
We’ve mentioned previously that an often overlooked factor of your CX strategy success lies in the people. While many leaders and managers tend to place technology at the forefront of their CX, they often tend to forget about the importance of a healthy corporate culture. Without creating an environment where all employees partly own customer experience, your attempts to deliver good CX can be rendered useless.
The people are a company’s greatest asset—they’re a major touchpoint and key interaction with everything outside of an organization. Essentially, they’re acting as ambassadors for the brand. It can be worth investing time and resources to align their objectives with the company and hone in on their skills, not just with people but with technology and infrastructure.
“Building a good customer experience does not happen by accident. It happens by design.” — Clare Muscutt
How to create a customer experience strategy
A CX strategy is the backbone of great customer experience. At its core, it’s an organizational plan and definition for how teams and machines should communicate with customers. Having a clear CX strategy requires a lot of careful planning. In turn, managers are able to filter out inefficiency and hone in on areas of focus to drive productivity.
Creating a CX strategy can be an overwhelming task, which is why we have simplified it into a few steps.
Step 1: Find out who your customer is
This first step is an important one. Finding out who your target customer is allows you to create personas and have an in-depth understanding of their needs and outlooks.
Market research and user studies will allow you to discover who your customers are, what they value, along with their interests and motivations. Buyer personas help leaders visualize their customers and put a face to who they’re serving. It also provides an understanding of how the brand is currently being perceived and opportunities to improve it.
Step 2: Align strategy with business objectives and processes
Organizational success requires an effort from all departments to align their strategies with the overall objectives of the business. The CX strategy works in line with business objectives and processes to seamlessly deliver great experiences without disrupting current operations.
For instance, if your current business goal is to increase your revenue stream, the strategy should work towards this task rather than investing too much of your focus into other less important responsibilities. Other businesses, for example, may have a different definition of success. Perhaps it is to grow the customer base or increase brand attention. Business objectives are always specific to each organization, so it is crucial to take some time to question your priorities and goals.
Step 3: Map the customer journey and define customer experience
Customer journey mapping is essential to creating a clear definition of your customer experience. It allows teams to take a look at the brand from a different perspective, identifying potential issues and opportunities.
Collect and analyze customer data to gain insights into the current customers. This will allow you to discover pain points and critical areas that can be addressed in the customer journey. Customer journey mapping provides insight into who your customers really are. It gives insight into how they will potentially interact with, view, and respond to your brand.
Findings can be used to form a gap analysis, identifying risks, high points and low points, and hidden needs. This is essentially a visual illustration of the customer’s entire time with the brand, from beginning to end, in aerial view.
Step 4: Decide on the right teams and the technologies
An outstanding customer experience is driven by the right people and the right tools. Together, they are able to work towards a common goal. It is also important that teams are equipped with the right skills to increase efficiency and productivity.
Before you implement the CX strategy, analyze the available CX tools and decide on which features best suit your strategy. You may discover that some tools are limited to certain features and capabilities that are outside of your needs, and engaging these tools will be a waste of resources.
Then, assess employees to build teams that can carry out and effectively use these tools to achieve success. Each employee will possess a unique skill set, and it is important to understand what works best for your CX strategy. Provide interpersonal training to the newly-formed team to enhance or impart new knowledge that is needed to successfully plan, execute and organize the customer experience.
Step 5: Implement your CX strategy
After all the planning is done, it is time to execute the strategy. Here, it is vital for people, processes, design, and technology to work in harmony. Managers should constantly check in on teams and ensure that tools are up-to-date and working properly.
Step 6: Measure effectiveness through key metrics
After implementation, the CX journey isn’t all set and done. Measuring effectiveness through core metrics will give leaders an idea of whether or not KPIs have been met. It is also important to understand how customers are experiencing your brand.
Some key metrics for customer experience include:
Net promoter score (NPS) – measures word-of-mouth marketing by looking at the number of promoters out of a surveyed group of customers.
Customer satisfaction (CSAT) – measures how satisfied customers are on a scale of 1 to 5.
Customer effort score (CSET) – measures the convenience and complexity of the customer experience, most commonly used to understand how quickly or easily their issues were resolved.
Churn rate – a measure of customer turnover, or a number of customers that stop using the product or service over a given period of time.
Customer retention rate – measures the number of customers that have returned to a business or made repeat purchases.
The results of these core metrics allow insight into what actually happened in interactions and their effects. Teams can better understand what strategies are working, what can be done better, and the next steps to enhance CX.
Additionally, the definition of customer success is always evolving as factors like emerging trends, changing customer preferences, new competition, and market conditions come into play. The CX strategy is something that needs to be constantly revised over time to cater to the evolving market needs.
Understanding and improving customer experiences with NEXT
Investing in customer experience technology can often be what it takes for your teams to be empowered and driven to success. With the right tools, teams can complete tasks, manage expectations, and effectively communicate with your customers.
NEXT is an integrated one-stop platform for organizations to take on a customer-centric approach and satisfy their buyers through an immaculate customer experience. NEXT collects and analyzes valuable consumer data so that brands can make informed decisions through actionable insights to improve the customer experience.