What is Customer Experience (CX) and Why it Matters
What’s Customer Experience?
Can you think of a time you had a horrible customer service interaction that you spent days chatting about it with your friends and family? Or, about a time you switched brands because of the poor customer service?
Well, you’re not alone…
58% of American consumers will switch companies because of poor customer service.
How about a time where you were so mad about a defective product but actually felt much better after contacting customer service? Do you consider customer service when interacting with a brand?
95 percent of all consumers consider customer service to be important for brand loyalty.
With the rise of customer expectation and needs, customer service is now a competitive differentiator. Companies are working to provide an omni-channel experience via social media platforms, contact centers, emails, and messages.
The truth is, when it comes to customer retention and loyalty, customer service is only the tip of the iceberg. Customer service falls under the more general umbrella of Customer Experience (CX).
So… what’s the difference?
While customer service is only one touchpoint in the customer’s journey, CX is every touchpoint customers have with a business — the whole customer journey. It encompasses the more holistic customer experience and the overall impression that they are left with. It begins with pre-sale interactions, like the awareness stage, and ends with a post-sale interactions, like customer service.
Do consumers shudder at the thought of interacting with a brand? Or, do they find the experience somewhat delightful? What do people think and feel?
U.S. companies lose more than $62 billion annually due to poor customer service
Companies were originally built to support the traditional brick and mortar customer experience, however, as businesses start to offer services via digital channels, the need to re-evaluate the customer journey arises. This calls for customer experience strategy or customer experience management professionals.
As of 2020, CX management market is worth $7.6 billion.
CX management is the practice of designing to meet and exceed customer expectations. It’s about knowing customers so well, that they’re able to deliver personalized experiences that will not only keep them loyal, but also evangelize to others about the brand.
Americans tell an average of 15 people about a poor service experience, versus the 11 people they’ll tell about a good experience.
CX Impact
CX provides the right operational ecosystem that thoughtfully and consistently delivers good customer experiences. Good customer experiences impact customer loyalty, retention, and satisfaction.
Keep ‘em happy, keep ‘em coming back! (it’s cheaper, too)
It is anywhere from 5 to 25 times more expensive to acquire a new customer than it is to keep a current one.
Improving a business’ CX:
- Improves customer loyalty and customer advocacy for your brand
- Reduces customer churn rate
- Increases customer retention rate
- Boosts revenue from word of mouth
After having a positive experience with a company, 77% of customers would recommend it to a friend.
Measuring CX success
CX can seem like this abstract concept that’s hard to measure. How can you measure one’s experience? What metrics are involved in that?
Relying on metrics is essential for tracking progress and evaluating success. Here are four quantitative ways to measure customers’ loyalty and satisfaction:
- Customer Effort Score (CES)
This score comes in the form of “ ‘How easy was it to get your issue resolved today?’ and a rating scale going from ‘1: very difficult’ to ‘7: very easy’.” after a customer service interaction.
CES gives qualitative insight as to how “easy” or “difficult” it is for customers to complete an action.
- Net Promoter Score® (NPS)
I’m sure we’ve all come across the famous “On a scale from 0 to 10, how likely are you to recommend this product/company to a friend or colleague?”
This simple, close-ended question gives insight to customer loyalty.
- Customer Satisfaction Score (CSAT):
CSAT questions focuses and measures a specific touchpoint that the customer interacted with.
- Time to resolution (TTR):
Since the leading cause of customer frustration is a long wait/response time, TTR is the measurement of the average length of time it takes customer service teams to resolve an issue after it’s been opened by a customer.
People hate feeling like they’re wasting their time, so the shorter the TTR is, the happier the customers are!
Customer experience is built on emotion and is challenging to measure. These metrics give some insight on customer satisfaction. Surveys and interviews can also be conducted as a form of quantitative research.
No company is too small, or too big, to invest in CX. CX can drive revenue growth by increasing customer satisfaction and loyalty rates. Companies make every customer count by ensuring the best possible experience — from start to finish. Whether they’re well-establish or just starting out, CX is at the forefront of their agenda.
Can you think of a brand that provides exceptional customer experience? Let me know below!
