What is Customer Experience?
Customer experience is a customer’s overall perception of a company or brand. It’s based on all the interactions the customer has with the company over the course of their relationship.
Today, creating a positive customer experience is more important than ever. In fact, 86% of consumers would pay more for a good customer experience, and 89% took their business elsewhere after a bad customer experience.
Customer experience (or CX for all the cool kids out there) starts from the first time someone hears of your company and continues through all the interactions they have with your marketing, sales, product and customer service.
Customer experience should be viewed as a combination of all these interactions. For example, while the user interface of a website is definitely a part of the customer experience, it’s not the only factor contributing to the experience.
Our friends at Zoom have built an awesome customer experience by simply listening to their customers. The moral of the story is this: you don’t need some crazy stunts or even a huge budget to create a stellar customer experience. All you need is a customer-obsessed mindset and a systematic, company-wide process for making it happen. But we’ll get to that later.
For now, the most important thing to note is that whether you’re in B2B SaaS, consumer retail or anything in between, CX concerns you. It’s all about setting expectations and making it easy – maybe even fun – for your ideal and current customers to interact with your brand.
Why CX Is Important
When we started Drift in 2014, there were already 5000+ vendors competing for the same customers’ attention. Instead of trying to go head to head with our competitors, we decided to get closer to the customer with a focus on conversations and some old-school human interaction.
The more saturated the market, the more important customer experience becomes. And the bottom line is this: people want to be treated as humans – not as leads.So it’s not surprising to see that 84% of customers say being treated like a person, not a number, is important.
As a result, it’s not surprising to see the following reasons why businesses invest in customer experience:
- Improving customer retention (42%)
- Improving customer satisfaction (33%)
- Increase cross-selling & up-selling (32%)
At the end of the day, there are serious, measurable & actionable reasons why paying close attention to customer experience is a good idea.
Happy Customers Mean More Revenue
When customers have a positive experience with a company, they’re less likely to do business elsewhere and more likely to recommend that particular company.
Two of the top three reasons why businesses invest in CX are improving customer retention (42%) and increasing cross-selling and upselling opportunities (32%). When a customer is already happy with their previous experience, they are also more likely to buy more and try other things your company has to offer.
Focus on keeping your existing customers happy. The fact is that creating and/or improving your customer experience strategy will help you build an experience that is focused on the customer.
Happy Customers Will Return To You
Having a good product or service, or a cheap price, or friendly customer service are not unique traits. But when your customers have an awesome experience throughout their relationship with your company, they have a reason to want to experience it again.
Here are three reasons why retention is the silent killer of customer experience:
- Companies focus on the short-term views instead of long-term views, when prioritizing customer retention requires more of the former.
- Retention metrics are easy to read wrong, which results in the wrong actions taken.
- A business should focus on both retention and engagement. Unfortunately, sometimes they don’t get enough attention (or none at all).
For example, Homejoy was one of the fastest growing startups ever in late 2013. However, less than two years later the company was shut down. They were paying too much attention on growth and acquiring new customers instead of focusing on existing ones.
Customer retention, or the lack thereof, can bite you hard if you don’t pay attention to it. Having a good customer retention rate means you don’t constantly have to worry about the costs of customer acquisition and making those new customers stick.
Word Of Mouth Is Your Friend
23% of customers with a positive experience told at least 10 people about it. A happy customer will keep coming back to your company or product again and again, and most likely they will also tell others about their awesome experience.
92% of consumers are more likely to believe suggestions from friends and family than ads, and 88% of consumers also trust online reviews from strangers as much as recommendations from their close ones. Word of mouth is truly your best friend when it comes to customer experience.
Customer experience is about emotions and feelings. People don’t simply have interactions with your company or brand, they are far more involved in the process than you could imagine.
Customer Service Vs. Customer Experience
Customer service is the handling of an interaction between a customer and a company. Customer service is only one aspect of the entire customer experience.
Customer service situations often include contact between the customer and the company in question, whether it’s face to face, online or through some other platform. In customer service situations you can:
- Establish a great connection to your customer
- Answer their questions
- Make a lasting impression
- Try to turn negative experiences around
It might be tempting to think that your customer service team will take responsibility for creating great experiences, but it should be everybody’s job from product to finance and from marketing to senior leadership.
How To Create An Actionable Customer Experience Strategy
It’s time to think about your customer experience strategy. The strategy is your actionable game plan: how you will deliver the type of awesome customer experience you’re after.
Have A Clear Vision Of What Your Company’s CX Should Be Like
Start by answering the following questions:
- Who are your customers? What are they looking for? What characteristics make up your ideal customer profile?
- Where will your customers interact with you?
- What kind of impression do your want your customers to have of your company or brand?
- What kinds of resources, structures and processes do you need to create the intended impression?
- What are the most important touchpoints for your customers? And what does a great customer experience look like across those specific touchpoints?
- Who are your competitors, and what is their customer experience like? How can you make your customer experience stand out?
- Who owns customer experience in your company?
- What KPIs will you use to measure progress?
- How will you ensure that the whole company comes together in creating great customer experiences?
Documenting the answers to these questions and sharing that vision with your whole company is the first step towards systematically improving the experience your customers have with your company, brand and product.
Understand Your Customers And Make It Easy To Give Feedback
Not all customers are the same. Once you have defined a company-wide ideal customer profile, you need to create action plans for serving each chosen segment and cater to each customer segment’s needs.
Make it convenient for your ideal customer to find the content they are after, and make sure to personalize content whenever it adds value to your customers. This also includes keeping track of your customers’ past interactions to ensure you know their history with your company.
Remember to note what the easiest channels for your customers are to approach your company and contact you in case they need to. Are they likely to contact you through a form on your site or call a customer service agent directly?
Make it easy to send feedback and questions, and follow the feedback you get constantly. Good ways of collecting customer feedback include live chat, forms, polls, pop-ups, emoji reactions and so on.
Listen To Your Customers And Make Sure To Close The Feedback Loop
Once you’ve made it easy to give feedback, you will hopefully get a lot of it. Feedback is good! Treat every piece of it as an opportunity to improve your customer experience.
Make sure your team reacts as fast as they can and preferably contacts every customer about their question or complaint personally.
Your customers will use their time and energy to give you feedback, and so your team should use their time and energy to get back to them and solve their issues. Potential channels for this include surveys, polls and interviews, but we’ll get to those later.
While it’s important that your team knows how to handle customer feedback, the most important thing is to make it a natural part of your company culture by setting an example.
Drift CEO and co-founder David Cancel actually “gets in the mud” in order to identify pain points in customer experience. He often has lunch with customers to hear their thoughts and understand them better.
Don’t Forget To Listen To Your Employees And Their Ideas
Remember to also listen to what your employees have to say and what their take on your customer experience is.
Front-line employees, AKA the people who directly interact with your customers, are probably those who understand the issues in the customer journey the best, and may have valuable ideas that you would never even be able to dream up. This means they will also be able to help you with your customer experience strategy.
Make sure that your employees can be honest about their thoughts and opinions on the matter. The relationship between customer experience and employee experience cannot be ignored, and there are numerous examples to prove it.
Some concrete ways of involving your employees in your CX process:
Have predefined, clear goals
It’s important that your employees understand what aspects of the customer experience should be worked on. If they do, your employees will have a far better opportunity to actually pay attention to these aspects and work towards your goal.
A clear goal is something that can be sought and measured easily, for example, improving your Net Promoter Score by a certain amount in, say, the next 6 months. We’ll look at different ways of measuring your CX later, so stay tuned!
Offer them open data and access to all qualitative feedback
Your employees should have access to this data to fully understand what kind of actions need to be taken in order to improve the CX of your company.
Empower your employees to do right by your customers
Employees need to have clear instructions on what kinds of steps they can take to ensure the best possible customer experience. For example, what kind of amounts can be reimbursed in what sorts of situations without asking their supervisor first.
This is to ensure that reaction times are quick and that the managers of front-line employees don’t end up becoming bottlenecks blocking the best possible customer experience.
Ritz-Carlton hotels famously budget a total of $2,000 per customer for customer experience. The employees are trusted to use their judgment, and it’s a great example of letting employees actively take part in improving customer experience.
Measure And Track Your Success (And Learn From Churn!)
Last but not least is of course data. Be sure to measure and track all aspects of the customer experience to see what needs improvement and to know more about your product/market fit. Also, never be afraid to learn from your mistakes.
Everything doesn’t always go as planned and no business ever will have zero unhappy customers. The trick is to turn negative experiences around and learn from whatever goes wrong – even churn rates.
Customer Experience Management
Customer experience management, or CEM, consists of viewing the company from the customer’s viewpoint, providing the tools to improve CX based on customer feedback, and being genuinely interested in the customer and their overall experience.
It’s a good idea to hire a person to actively take care of, track and improve the customer experience in your company. That person can be a chief customer experience officer whose job it is to build and own the customer experience strategy. Depending on the size of your company, it can be a good idea to hire an entire team.
Think of customer experience as a journey. On this journey, the people in charge of customer experience management are a bit like tour guides: their job is to plan and create the perfect holiday experience for their customer based on – you guessed it – the customers’ feedback.
There are different ways of handling customer feedback, one of which is the Spotlight Framework. It’s a way of identifying exactly what your customer needs and what their feedback concerns by placing feedback into different categories and finding appropriate solutions for each category.
Customer Experience Design & Surveys
Customer experience design is the practice of designing products and services with a focus on the user experience. Every single touchpoint within the customer journey with a company should be exactly what the brand promises.
Surveys allow you to ask your customers anything that will help you further improve the customer experience of your company. It’s a good idea to start with the basics to find out what your customer thinks about your product, service, company or brand in general.
Of course, the more detailed your survey is, the more you will know, but keep in mind that your customer experience survey should also be customer-friendly and as easy to complete as possible. Make your survey compact and short, avoid making any fields mandatory, and only ask the relevant questions.
Good questions to ask your customers
How often do you use our product/service?
An easy way to find out how much experience your customer has with your product or service, if they tried it just once or twice, or if they come back to it often.
Does our product/service help you reach your goals?
With this question, you can easily find out if your product or service does what it’s supposed to – or in other words, if the customer gets what they need out of it. Depending on your product or service, this is extremely useful information. Is your customer pleased with your product or service?
Customer Experience Maps
Customer experience mapping is the process for modeling a journey of your customer’s engagement with your company, across all channels. With customer experience maps, you can easily discover potential knots to untangle in your company’s customer experience.
Creating a customer experience map requires some work, but it’s worth the trouble. With the map, you have a clear visualization of the entire customer journey with all its touchpoints, which makes it easier to identify areas of improvement.
The idea is to be able to perfect your company’s customer experience by discovering key insights, your strengths, weaknesses and possible obstacles. You start the progress by mapping out the basic customer journey all the way from start to (possible) finish.
Look for answers for the following questions:
- Where will your customer first meet you or find about your company/brand?
- What will they know about you?
- Why will they choose your product or service?
- What happens after they have bought something from you?
- How can you make sure that they will come back to you?
- What’s the best thing about our product/service?
Use the customer feedback you have collected as the basis of your map. How do your customers find you, and when they do, how do they make a decision to purchase?
Make sure you’ve got every touchpoint covered: this means every interaction your customer will ever have with your company. Remember to think about all the different channels of communication, too.
Once you’re finished with your customer experience map, you can start using it to improve the customer experience of your company. However, don’t forget that you can always go back and edit it based on feedback from both your customer and your team. This way your customer experience map is always up to date.
If you figure out that your customers don’t really care whether your product or service exists or not, it’s best to try and figure out what you could improve about your service and CX. An open field for explanations can help you understand why a customer feels the way they feel about your product or service.
The answer to these questions should tell you why your customers have chosen your product or service instead of a competitor’s – and probably also learn if they enjoy their overall experience with your company.
Do you have any improvement ideas?
A way of asking “What is wrong with our product/service/customer experience?” but phrased more positively. This way you’ll find out if your customer has encountered any issues along the way, and whether they have valuable ideas about how to potentially solve them.
Age, location and other basic customer demographics
This way you’ll find out who your customers are – at least those who answer your survey. It’s extremely important to know your customers, or otherwise properly shaping the customer experience is an impossible task.
It might, however, be a good idea to place these near the end of the survey and only ask the most important questions about demographics to avoid making your survey too long.
Possible open questions about any relevant touchpoints
It’s always a good idea to leave room for open questions and comments. In case you forget to ask something, your customer still has the opportunity to let you know what’s on their mind and then further help you understand them.
These can include things like:
- Would you recommend product/service to your peers? How would you describe it?
- This helps you understand how your customers view your product or service and how they talk about it to others.
- Who do you think would benefit most from product/service?
You’ll find out more about who your target customers should be, and also if you have the right idea about your market segmentation.
You can also be blunt and ask: What made you decide to buy product/service?
You might get an honest answer and understand how your product or service is viewed as opposed to your competitors’, and maybe understand better why your customers have chosen your product or service in the first place.
Besides surveys, other potential ways of collecting customer feedback include pop-ups with questions, questionnaires, feedback buttons and a live chat option on your site.
How To Avoid Bad Customer Experiences
According to Forbes, there are three very good reasons to ask for customer feedback:
- You’ll learn what your customers like and don’t like
- You can make them feel important and included by listening to them
- You can improve your company and product/service based on the feedback you get
A good customer experience makes your customer want to come back to you and be loyal to you and your brand. No company can do everything right every time, but even when things go south, you can turn bad customer experiences around.
- 79% of consumers who shared a bad customer experience online were ignored by the company they complained to
- 50% of consumers give a brand only one week to reply before they switch to a competitor’s business
- 34% felt bad about the fact that companies don’t even remember individual customers and their previous interactions
Reply To Customer Feedback
Reply to negative customer feedback directly and take steps to change whatever went wrong in the first place. Get back to them as soon as possible with an apology, possible reimbursement and/or other type of proposed solution.
Think about your own negative customer experiences and how frustrating it is when you voice your complaint and no one gets back to you. Avoid making that mistake with your own customers.
Listen To Your Customer
Have your team empathetically listen to what your customer has to say and do your best to genuinely understand where they’re coming from. Ask follow-up questions to fully understand what’s on their mind. You can also ask what they would like you to do, and try to fix the problem to your best ability.
Remaining active and empathetic when you customers are unhappy is a way to turn their negative experiences around and make them positive instead. Being able to correct your mistakes will also signal to your customers that you care about their experience.
How To Effectively Measure Customer Experience
Once you’re ready with your surveys, maps and customer experience strategy, it’s time to look into how these things can be measured and tracked.
Tracking the customer experience of your company is an excellent way of seeing what works and what doesn’t, and finding out what sections need untangling and improvement.
Think about what channels are the easiest to communicate through from the customer’s viewpoint. When giving feedback is super easy and encouraged, you will receive much more of it, and the more feedback you have, the more data you have.
It’s a good idea to pick only the KPIs that are actually relevant to your specific business and not try to measure everything at once. Also, every time you change things for the better, don’t forget to measure the ROI that results from this change.
Some common KPIs that can be used to track customer experience include:
Net Promoter Score (NPS)
The NPS is a short and simple survey that tracks how likely a customer is to recommend a product or service to someone they know on a scale of 1 to 10. It’s easy to answer and that makes it quite customer-friendly.
The results are also easy to track, and when you place customers in three categories (promoters, passives and detractors) based on how likely they are to recommend your business to someone, it’s easy to pay attention to when customers are unhappy with something in particular.
Promoters (score 9-10) are loyal customers, likely to recommend the product or service. Passives (score 7-8) enjoy the product or service, but do not actively recommend it to others and are not loyal to your particular brand. Detractors (score 0-6) are unhappy and more likely to talk negatively about your company.
Customer Satisfaction (CSAT)
CSAT uses a scale of 1 to 5 (very unsatisfied to very satisfied) to measure customer satisfaction, so it’s relatively easy to track. However, it works best for one-time interactions with a company, so it might not work that well in terms of customer experience improvement in the long term.
It also doesn’t offer a lot of additional information beside the score, so it’s a good idea to combine CSAT with other qualitative metrics.
Customer Effort Score (CES)
CES asks the customer how much effort they needed to put in in order to get their problem taken care of. It offers more data in the sense that there’s an average score, but you can also identify common issues with individual scores.
This metric can work well when trying to find out how easy it is for your customers to find information and reach out to you.
Customer Lifetime Value (CLV)
CLV is, basically, trying to foresee and calculate the total value your customer will bring your business. The main basis of this metric is the fact that keeping existing customers happy is a lot more sustainable approach than always acquiring new ones.
The problem is that it might not work for all types of businesses. It’s an important metric to measure, but the revenue a customer brings your company is not directly related to their perception of your company.
Churn and Retention Rates
The churn rate means tracking how many of your customers have stopped using your product or service, while the retention rate refers to tracking how many of your customers have, in turn, returned to your product or service.
These are excellent metrics to track, but they don’t really tell you much about the why, which is why you should always supplement them with qualitative interviews and/or surveys.
The Omni-Channel Customer Experience
The omnichannel customer experience means using multiple channels to reach and engage your customers: for example social media, the web, email, voice, text, and so forth. The goal is to reach a 360-view of your customer and be able to create the greatest possible experience through all channels you wish to use.
It is an excellent way to approach the customer experience of your company, as you can easily monitor all touchpoints through all channels. The idea is to gain information across all engagement channels throughout the customer journey in order to make the experience as seamless as possible.
A basic example is a customer who contacts your company through a chatbot, and the customer service agent instantly sees the customer’s previous interactions with the company and knows what interactions have been had before.
The idea is to make the customer experience as effortless as possible, and avoid all confusion and frustration that often arises when a company or brand inconsistently uses multiple channels of communication.
Customer Experience Checklist
To be able to start improving your customer experience today, here’s a handy checklist you can use to make sure that you’ve got all the aspects covered!
- Have a clear vision and strategy
- Get to know your customers
- Engage with your customers, always reply and take their insight into account
- Communicate consistently and keep your information updated
- Monitor all touchpoints and channels
- Measure the ROI from renewing your customer experience
- Listen to your team and their feedback