customer experience | 7 min read

What is Customer Experience? And How Can You Improve it?

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The term "customer experience" has been gaining more and more attention in recent years. But is this just another marketing buzzword, or does it actually carry some merit for your brand image and bottom line?

Given the latest research, we can confidently say it’s the latter. Studies show that customers are willing to pay more for an item or service if it means getting a better experience. Customer-centric companies are more profitable than companies that aren’t invested in the customer experience. It helps them retain customers, increase referrals, and maintain an edge over competitors.

It’s no secret that customer satisfaction is one of the main factors that determine a company's success. A great customer experience at every touchpoint can make a huge impact on a customer's perception of a brand and whether or not they will return.

There are several key elements to creating a great customer experience, but the most important is simply understanding your customers. Here’s your guide to customer experience and how to apply it in your business.

What is Customer Experience?

Let’s start with the definition of customer experience — what exactly does it mean?

We define customer experience as the totality of how customers interact with your brand or company. This includes everything from engaging with an employee to using a product to getting support to exploring your branded content online.

In terms of the customer journey map, the customer experience includes every touchpoint, from how they discover your brand to purchase to what happens post-purchase.

The abbreviation for customer experience is CX.

Common Customer Experience Misconceptions

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Marketers often use CX interchangeably with similar terms, such as customer service, user experience, customer success, customer engagement, customer relationship, or brand experience. There’s some overlap with these terms, but their meanings differ slightly.

Let’s look at some nuances among them.

Customer Experience vs. Customer Service

Customer service is proactive. It involves someone representing your brand actively serving your customers. It’s part of the bigger customer experience picture.

On the flip side, customer experience can be active or passive. It “happens” regardless of whether your employees are involved.

Customer Experience vs. User Experience

User experience (UX) is a term usually reserved for digital experiences. It might refer to someone using your website. Or, in a case like Linkfluence, it could refer to a platform or digital product.

UX is measured with metrics like abandonment rate, on-page time, time to complete a task, and the number of clicks required to complete a task, among many others.

Like customer service, user experience is a slice of the bigger CX pie.

Customer Experience vs. Customer Success

Customer success has some overlap with customer service and is also part of the total customer experience. Customer success usually involves help from an employee to learn more about a customer’s goals and create an optimal solution or outcome.

Customer Experience vs. Customer Relationship

Customer relationships are built over time. It’s the connection you build with each of your customers, starting with the initial discovery and lasting long after the sale or conversion. In comparison to CX, a customer relationship is often defined by the quality of their experience.

Customer Experience vs. Customer Engagement

Customer engagement helps to strengthen a customer relationship, which ultimately shapes the customer experience. We define customer engagement as the proactive effort to keep customers connected to your brand. This might be via loyalty programs, social media content, email marketing, or user-generated content, for example.

Customer Experience vs. Brand Experience

Customer experience and brand experience (BX) share many characteristics. The main differences are the feelings they create and how each is measured. For brand experience, the main goal is to make customers feel a certain way about your brand. BX is measured through engagement metrics. CX is designed to make customers feel satisfied with your brand and is measured through customer satisfaction surveys, customer satisfaction (CSAT) scores, and NPS.

Why Customer Experience Matters

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Customers are more informed than ever before. They’re entering the buyer journey at various stages of the traditional sales funnel, not just at the top. Digital technologies and the ability to discover, research, and compare brands have given buyers more power over their buying decisions.

Consumers now have more choices than ever. With so many brands competing for the same audience, a good customer experience can speak volumes.

By offering a great customer experience, you can help buyers take control over the customer journey. Make it easy for customers to explore their options, compare pricing, get answers to their questions, and discover new products and services. Being forward-thinking in this process can help you meet customers wherever they are in the journey and be ready to serve them before your competitors are.

Customer experience is also the key to earning repeat business and referrals. It’s no secret that customers share their great experiences with friends and family. But they’ll tell even more people about a bad experience. Bad news travels fast, and that doesn’t do you any favors when it comes to growing your business. When you intentionally create good experiences, you’re not only able to meet customer expectations, but also their glowing reviews and referrals!

Customer Experience as a Competitive Advantage

Things like pricing, product quality, and customer service might come to mind when you think of your competitive advantages. But customer experiences should be part of that list, too.

That’s because CX can (and should) control the entire customer journey. Brands need to take charge in guiding customers to the desired outcome. Being intentional about this journey, including the emotions it triggers, can help brands reinforce why customers should do business with them.

What Affects Customer Experience?

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Given that CX is the sum total of all of a customer’s interactions with your brand, there are plenty of objectives for marketers to focus on. Some of the areas that affect customer experience include:

Price

Price affects experience because it immediately communicates the value of your product or service. It’s not the only thing that signals value, but it does set the tone for the experience.

For instance, if you were to walk into a store and notice all the handbags costs hundreds of dollars, you’d know you were in a high-end luxury goods store even if you weren’t familiar with the brand. In this case, you might expect personalized service, refreshments, gift wrapping, or large dressing rooms, for example.

If you walked into a large mass merchandise store with sale signs everywhere, you would expect to find some great deals on everyday items. You’d trade expectations of personalized service and refreshments for self-service and convenience.

Customer Service or Support

A brand’s service and support options can help a customer feel confident about their purchase and even encourage them to pull the trigger. They know that if they have questions or issues, there’s someone they can reach out to for help.

In some cases, the presence of free support is a competitive advantage in its own right, but the type of support available can also create good or bad customer experiences. For instance, brands may offer support via phone, live chatbot, email, or a self-help resource center. Each of these set unique expectations for customers, and each has the power to reinforce a brand’s commitment to customer centricity.

Availability

Is a product available to order, or it is often out of stock or on backorder? If it’s a digital product, such as a website or platform, is it available 24/7 or does it frequently crash? Does your e-commerce site offer fast shipping options?

When a customer needs an item, they want it to be available to them immediately. A lack of availability at critical moments can lead to a poor customer experience.

Convenience

Convenience refers to how easy it is for customers to take advantage of your offer, product, or service. Do they have to jump through hoops or meet several criteria, or can they quickly access your product? Generally speaking, the less friction and fewer access restrictions, the more customer-focused the experience.

Quality

Quality impacts the customer experience by making customers feel they either got their money’s worth or completely wasted it. Price is often a sign of quality to customers, so they can feel even more disheartened when they pay a premium price for an item whose quality doesn’t line up.

Likewise, customers might feel pleasantly surprised when they spend less on an item that’s high in quality and lasts a long time. When customers feel like they got their money’s worth, they’re more likely to share their experience with others.

Response Time

Similar to customer service and support, response time can quickly change a customer’s perceptions for better or worse. For instance, if a customer has a question and reaches out to your company, following up in a timely manner can boost your image. But not responding or waiting days or weeks to offer resolution can do the opposite.

Options

Customers like having options when it comes to purchasing. From sizes to colors to styles to price points, having different options allows you to meet individual customers’ needs at the right time. These choices allow customers to feel more in control over their purchasing experience.

User Friendliness

No amount of customer service, pricing, or quality can compare with user friendliness. A poor user experience can delay customers from reaching their ultimate goal. If a product is too complicated to use, customers are likely to search for better options.

Branding

All brands carry value that make customers feel confident in their buying decisions. A high brand equity is usually the result of all of the above factors. Consistency helps you build your reputation and makes it easier for customers to say yes.

When brands focus on customer journey, customers are automatically put at the heart of every decision. From messaging to processes to services to marketing, the customer is at the center of your business strategy. Customers know when they’re being treated as a priority, and a high level of service stands out compared to brands that aren’t as customer centric.

The Benefits of Customer Experience

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Improving customer experience is the key to increasing sales, retaining customers, and improving satisfaction. On average, companies that have invested in their customer experiences report:

  • 42% increase in customer retention
  • 33% increase in customer satisfaction
  • 32% increase in upselling and cross-selling

Likewise, 78% of consumers admit they’ve backed out of a purchase due to a poor customer experience.

It’s clear that CX isn’t something to leave to chance. Granted, customer experiences happen with or without your intentional effort. But if a strong CX means increasing sales, loyalty, referrals, and brand image, it makes sense to take control of the process. Great CX doesn't happen on its own.

The Challenges of Creating Good Customer Experiences

CX is a huge mountain to climb, especially if you don’t have an existing CX strategy or plan already in place. Deciding to make it a priority is the first step, but that step is quickly met with a number of challenges.

Lack of Insight

Creating a strong customer experience is about catering to your customers’ needs. To achieve this goal, you first need to understand what kind of experiences your customers want, expect, and will be attracted to.

A lack of insight around these questions can prevent brands from creating optimal experiences. According to a McKinsey study, 93% of CX leaders rely on CSAT scores to inform their CX strategies. But the majority aren’t happy with their evaluation methods, particularly because the results are limited.

Brands can’t assess experiences in real time or before a purchase with survey-based feedback. It’s a highly reactive approach that doesn’t use all available data and channels.

Lack of Culture

CX leaders know that customer experience is only as powerful as the culture it’s embedded in. A customer-first experience is something that all employees, departments, and stakeholders must adopt. Companies should be willing to place themselves in the customers’ position and see their challenges, needs, and goals through the customers’ eyes.

Developing a CX-driven mindset throughout the company culture can help all employees think like a customer, regardless of their role. Even roles that don't engage customers face to face can create a cross-functional approach by tying everything they do back to the customer.

Infusing CX Across All Channels

Traditional corporate structures can make it hard to create a cohesive customer experience, especially in an omnichannel environment. Departments are largely self-driven and have complete ownership over various parts of the customer journey. Shifting to a more holistic approach is easier said than done, which makes creating a culture of customer centricity all the more important.

What is Customer Experience Management?

Customer experience management (CXM) is the process of actively shaping and managing the customer experience strategy across all touch points.

Best-in-class customer engagement and satisfaction are the main goals of CXM. This involves documenting processes and steps to take to collect customer insights and quantify their experiences. From there, CX managers will proactively adjust elements of the customer experience to achieve the desired outcome.

How to Measure Customer Experience

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Brands have a few options for measuring customer experience. Using dedicated customer experience measurement tools can help brands create a continuous cycle of data collection and improvement.

Learning how to measure customer experience is two-sided: You want to know what you’re doing well and where you can improve. Here are a few ways to figure out both.

Use Customer Satisfaction Surveys

Customer satisfaction surveys are simple and effective ways to get insights into the customer experience. Brands commonly send surveys after a customer makes a purchase to get their feedback.

Survey results can be used to calculate a brand’s CSAT. Customers can rate the brand on a scale of 1 to 5 (or 1 to 10), then average the results to generate the score.

Another way to gauge customer satisfaction is via net promoter score, or NPS. NPS measures how likely a customer is to recommend a brand to their friends or family.

You can measure NPS via customer surveys with questions like, “How likely are you to recommend us to a friend, on a scale of 1 to 10?”

If your average result falls between 9 and 10, your customers are likely to be loyal and engaged. They interact with your brand frequently and are likely to be long-term happy customers.

Results that fall between 7 and 8 are more passive. They’re not dissatisfied, but they’re not as enthusiastic, engaged, or loyal.

Results that are at or below a 6 are considered detractors. You’re at risk of losing them, and they may do damage to your brand by telling others not to do business with you.

Look at Customer Churn Rate and Reasons for Churn

Churn rates and reasons can be revealing about your customers’ experiences. A high churn rate could indicate dissatisfaction with your product or service, or it could mean a competitor is doing something better than you.

Make sure you’re routinely asking your churning customers why they’re leaving and what you could do to earn their business in the future.

Review Customer Support Tickets and Trends

Reaching out to customer support is a great opportunity to build your brand and earn customer loyalty. Granted, customers who open support tickets are usually experiencing an issue. But their experience with your resolution of the issue could make all the difference in how they feel about your brand.

Review support tickets and look for patterns or trends. If you notice a number of repeat occurrences, you can focus your efforts there to prevent those issues from recurring.

Gauge Consumer Sentiment

Customer sentiment analysis can help you learn more about how people feel toward your brand. This is a particularly important piece of the CX puzzle because it doesn’t rely just on customers or surveys. It takes into account what your target audience is saying, even if they haven’t done business with you.

Platforms like Linkfluence measure consumer sentiment at scale across multiple channels to give you a holistic snapshot of your target audience.

Analyze Social Media Data

Similar to consumer sentiment, social media data allows you to go beyond customer feedback and see what others are saying. Today’s customers are more forthcoming about their feelings towards brands because social media gives them a place to share their thoughts. You can monitor brand mentions and conduct social listening to stay in touch with conversations.

Customer Experience Management Tools to Support Your Strategy

If you’re seeking ways to improve the customer experience, the right tools and technologies can make a difference. In many cases, you’ll need to make changes across multiple departments and channels, and that means getting everyone on the same page.

Let’s look at a few customer experience management tools that can improve this process for you.

Zoho One

Zoho One is an all-in-one solution that combines Zoho CRM with the brand’s other apps, including a help desk, data collection, and more. Since it’s all integrated into a single solution, brands can stay on top of various conversations without having to toggle between systems and departments.

HubSpot Service Hub

HubSpot Service Hub combines multiple customer experience features into a single platform, including a help desk and customer feedback surveys to determine NPS. Anchor all of your customer data and channels to manage the entire customer journey.

Linkfluence

AI-powered Linkfluence helps you understand your customers in real time. It turns social listening into social intelligence by creating usable insights from the data it collects. Linkfluence aggregates data collected from social media conversations, online reviews, media mentions, and customer feedback, then delivers actionable insights to help you take the next step in the right direction.


Learn more about how Linkfluence empowers your CX strategy when you schedule a demo.

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