What is Customer Experience (CX)? Definition, Design, Management, Best Practices, Trends and Examples
Oct 14 2019 | 06:45 PM | 15 Mins Read | Level - Intermediate | Read ModeRaj Roy Sr Manager for Editorial Content and Assets , Ziff Davis B2B
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Raj leads the editorial sponsorship and premium content program at Ziff Davis B2B. With over 8 years of experience in 360 digital marketing, his central focus has been on creating content and inbound marketing strategies that deliver the most engaged audiences. As an animal lover and nature enthusiast, he likes to spend free time with his pets and in natural landscapes.
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Customer experience (CX) is defined as the overall experience of a customer with a company, based on all interactions before, during and after the purchase of a product or service.
In this article, we explain what customer experience is, how to design it through journey mapping, customer experience management and best practices, with the top customer experience (CX) trends to watch out for in 2020!
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DownloadTable of Content
- What is Customer Experience (CX)?
- Importance of Customer Experience: 3 Key Business Advantages
- Customer Experience Design: Mapping Customer Journeys
- How To Measure Customer Experience (CX)?
- What is Customer Experience Management? With 5 Best Practices to Deliver Great CX
- Top 7 Customer Experience (CX) Trends to Prepare For In 2020
What is Customer Experience (CX)?
Customer experience (CX) is the overall experience of a customer with a company, based on all interactions before, during and after the purchase of a product or service.
In other words, CX is the overall perception of a company held by customers, that is based on all points interactions and engagements - including digital experience.
For example, below is a typical urban customer's journey for purchasing a laptop today:
- Customer searches online for the top options for laptop within his/ her required specifications and budget.
- Shortlists laptops, perhaps watches the official video of the products, checks out more 3rd part reviews.
- May be goes to the store to test the actual laptop and interacts with the in-store agents.
- Makes the purchase online / from the store.
- Contacts customer care for post-sales help / technical support from time to time.
- Depending on the product use and experience till now, may or may not make additional purchases from the same brand.
So from the above example, we arrive at the following 5 key customer experience touchpoints:
- Brand discovery/ access experience: How easy was it to find the product’s website/listing? How was the website navigation experience? How well was the official product video put together? etc.
- Product testing and final decision making experience: How was the in-store experience? How were the customer reviews and 3rd party demonstration videos? Did the marketing team put enough helpfiles / FAQs about the product to answer common questions? etc.
- Product purchase experience: How was the purchase experience (whether done online or in-store)? Was it simple and self-explanatory or did the user need more help? If the customer needed help with the purchase process, how well and fast was assistance delivered?
- Product use experience: Above all - how well does the actual product fare Vs competitors in the same budget?
- Post sales experience: How was the post-sales experience with the brand (for technical support / hardware or software issues? Does the company offer special loyalty rewards for more purchases? Did the company ask for customer experience and satisfaction feedback from the customer after a certain period of time?
A good customer experience with a brand is when customer expectations are satisfactorily met across all physical and digital points of interaction. Subjectively, a great customer experience is when delivery exceeds expectations.
This also means that a positive customer experience delivery is not a goal that can be delivered by just one central team - instead great experiences are a result of democratizing customer centric focus at an organizational level such that it includes product development teams, sales and support, marketing etc. When a customer interacts with your product, opens a newsletter, reads a feature-update blog on your site, interacts with service team and so on - the impact of these interactions are not siloed into team-specific perceptions, rather they all come together to form the holistic brand image.
If the overall experience delivered is consistently good - and across the board, the take-away perception is a positive customer experience that the customer associates with the entire organization.
Learn more: What is Customer Service Experience? Definition, Examples and Best Improvement Strategies
Importance of Customer Experience: 3 Key Business Advantages
Way back in 2011, Oracle had conducted a historic study that found 86% of customers were willing to pay more for better customer experience, but only 1% said that companies met their expectations. Its a key factor to understand why iPhone prices have risen by at least 10% each year since 2011, while managing to continue to break its own sales record year-after-year.
While many successful companies have come a long way in delivering great customer experiences, here are the 3 key reasons why any business, invariant of size and revenue, needs to care about customer experience:
1. Higher conversions and better campaign ROI
According to American Express, more than half of customers abandon a purchase due to bad service, which is a result of poor customer experience planning and execution.
Orchestrated and managed experiences lead to an improved buying experience throughout the journey - which in turn leads to higher conversions and customer acquisition through both physical and digital points of sale.
2. Increased revenue from existing customers
Another research by PWC, found that companies that provide great customer experiences are able to charge a 15% premium, without losing customers.
Not only are companies able to generate more revenue by investing to deliver good experiences, satisfied customers are also much more likely to continue with the same brand and even upsell to a higher value deal / product license.
This is not news, even back in 2015, a report published in ARC Journals, showed that 69% of surveyed customers ‘strongly agreed’ on the strong correlation between their retention and their satisfactory experience with the brand / company.
3. Increased customer recommendations
Here is a thumb rule that most of us can relate to as consumers (because we have all done it): when we like something, we tell people about it. When we don’t like it, we tell even more people about it.
This fact is the basis for Net Promoter Score (NPS) measurement, which is a customer survey asking people on their likelihood of recommending brands based on their experience.
In 2017, a Tempkin Group study found that 77% of customers who had a positive experience with a product / company - recommended it to a friend or family member.
Therefore, investing in delivering good customer experience leads to increased customer accounts through direct recommendations.
How To Measure Customer Experience (CX)?
Customer experience (CX) measurement is the process of surveying customers to collect data on their satisfaction levels at across key points of interaction with the company.
This data is then analyzed to arrive at a collective understanding of the state of customer experience across geographic locations, products, departments etc, and appropriate data-oriented action items are drawn to improve/ enhance experience.
Customer experience is measured using 3 important surveys and their scoring:
1. Customer Satisfaction (CSAT) Score Survey: The CSAT score survey asks this question to its customers -
‘How satisfied were you with your experience with us today?’
This question comes with a response option of 1 to 7, 1 indicating lowest satisfaction and 7 indicating highest satisfaction.
2. Net Promoter Score (NPS) Survey: The NPS Survey is one of the industry's most trusted and straight forward experience measurement surveys. It is designed to probe customer satisfaction and brand loyalty at the same time. It asked customers the following survey question -
‘Considering your complete experience with our company, how likely are you to recommend us to a friend or family member?’
The response options range from 0-10, with 0 being least likely and 10 being most likely. Based on the response, customers are further bifurcated as brand promoters, passive or detractors. Responses from 0-6 are classified as detractors or potential detractors, 7-8 are passive and 9-10 are promoters.
3. Customer Effort Score (CES) Survey: The CES survey is typically administered to customers after an interaction with the company’s service or support teams. This survey asks the following question -
‘How easy was it for you to solve your problem with us today?’
The 5 response options for this question are:Very easy, Easy, Neutral, Difficult, Very Difficult. During aggregate calculation, Neutral response has 0 value, while all 4 remaining options carry 1 value each.
CES = %(Very easy + Easy responses) - %(Difficult + Very Difficult responses)
Customer Experience Design: Mapping Customer Journeys
Customer journey mapping is defined as a comprehensive, diagrammatic map of all possible stages and points of interaction between a customer and the company, starting from brand discovery to post-sale servicing.
This customer experience design also includes action items for delivering good experiences each point of interaction - to navigate customers to perform the next desirable action in their buying journey and throughout their lifecycle as a customer.
For example, in digital customer journey mapping, if a consumer visits the product feature page on your website, what is the next ideal step you would like him/her to take? Is it applying for a free license? If they are an existing user, should you offer a compelling discount to upgrade existing license? How will this offer change based on geographic location?
All such questions, variations and exceptions need to be taken into account during the journey mapping stage in as much detail as possible, with ideal outcomes for each interaction and a plan to encourage customers to perform desired actions.
Of course, given the variety of customers, this is not possible manually, and there are many customer journey design and management platforms in the market today to help marketers map customer journeys at scale.
What Is Customer Experience Management? With 5 Best Practices To Deliver Great CX
What is Customer Experience Management?
Customer experience management is defined as the overall process of designing, allocating resources and tracking the goal of delivering good customer experiences, such that it meets their business goals.
For example, an ecommerce business takes steps to improve website design in such a way that it increases customer interest in its products, reduces the effort required to discover or find products, eases checkouts and payment process etc. The complete operations and processes required to deliver the optimized customer experience - website design and development execution, textual, graphic and video content, effective online and offline customer support, post delivery feedback and follow up etc - together is the customer experience management for this ecommerce business.
Here are the 5 best practices to manage and deliver a great customer experience (CX):
1. Be customer-centric
Every business has it constrants - it could be resources, revenue model, flexibility and so on. In order to deliver an optimal customer experience, you will need to prioritize based on customer’s needs - in other words, design from the outside-in, rather than from inside-out. For example, if you are a software product company, what is the preferred buyer journey? WHat channels and platforms do your best customers prefer to search, explore, and discover products on? How do they prefer to pay? What are their most important priorities in terms of features and capabilities? Many marketers tend to be channel-centric or even worse, technology-centric- i.e. building customer experiences around the channels or technologies they may already be invested in, versus focusing on being customer-centric.
2. Leverage technology to drive CX at scale
Tracking customer behavior to arrive at patterns of habits and preferences can happen at several levels, based on how advanced you are with customer data management. Whether you track customers at an individual level (unique tracking of each individual customer), device level (you can track user behavior and interests specific to a device), account level (tracking and targeting a business account as a single entity) etc., the more comprehensive your understanding of customers based on the data, the more tailored and personalized your customer experience approach can be. This means, not only do you need to invest in technology to track customers / prospects at scale, you need the right technology to deliver more relevant and personalized customer experiences. A typical set of technology platforms needed would include a customer data management platform such as customer data platform (CDP) or data management platform DMP to manage first and third party data, some form of data analytics platform, customer management platforms such as CRM, and of course the range of marketing technology platforms for marketing automation of email, social media, and all other channels.
Learn more: What is Customer Data Management?
Learn even more: Top 10 CDP companies for 2020
3. Integrate your martech stack for seamless CX strategy-execution-analysis and optimization
Today, customers live and operate in a world that straddles multiple channels (online channels like email, social, mobile messaging and offline channels), multiple platforms (from Facebook to LinkedIn) and multiple devices (they switch multiple times a day between phone, desktop, laptop and other smart devices). They may choose to interact with the brand at any stage, and the brand is expected to be ready, with the right message at the right time. Also, marketers cannot duplicate messages or send contradictory messages on different channels or platforms.
Just building the infrastructure to give you a unified view of the customer is not enough to build customer-centric CX strategies. The data then needs to be used - or activated - across multiple channels in an orchestrated manner to deliver what the customer will experience as a seamless interaction, irrespective of the device, channel or platform where the interaction happens. This needs marketers to think about removing silos between different marketing channels and technologies, finding ways to connect them. Integrating an intelligent analytics platform across the stack is also crucial to ensure performance metrics and insights are looped back for real-time campaign optimization.
Learn more: How To Improve Customer Experience: Top 7 Tips for 2020
4. Provide consistent experiences
According to 2018 Gladly survey, 71% of customers said that they expect consistent experiences from brands invariant of channel of contact, while only 29% said that they actually experience this consistency.
Therefore, that companies that invest in delivering orchestrated and consistent omni-channel experiences, will hold a critical business edge over competition - this verdict is already out!
5. Create and deliver differentiated experiences
This sounds obvious and even archaic, but it is still a critical part of delivering the overall customer experience today. Customers today don’t just expect personalization for the sake of it- they also expect brands to be relevant, contextual, and above all, authentic. Anything that feels like its coming from a machine is automatically filtered out by today’s digital natives. The irony is that the more we use intelligent technologies such as AI to deliver CX, the more ‘human and authentic’ interactions are expected to feel! Brands need to build their own unique, differentiated voice and positioning - but most of all, they need to build differentiated experiences.
Remember Apple’s ‘Get a Mac’ campaign from 2005-2009? According to Apple, that ad was so effective, that it increased Mac sales by over 200,000 during 2005-2006 fiscal year, ending the year with 39% sales growth. Needless to say, while the branding effort got them consumer attention, Apple at large succeeded with Mac because their CEO, Steve Jobs, famously put special emphasis on customer experience across the company - product design, user interface and customer service.
Learn more: Customer Experience Strategy - Best Practices for 2020
Top 7 Customer Experience (CX) Trends To Prepare For In 2020
1. Mobile-first -an organization wide approach
According to a 2019 study done by Pew Research, 81% of Americans now own a smartphone. Europe leads the smartphone adoption trend, with a slightly higher penetration of about 83%.
Today, customer journeys don’t begin in a brick-and-mortar store or customer facing office - 90% of all purchase decisions begin online. Infact, according to 2019 Statistica, over 40 Million Americans are ‘mobile-only’ internet users, about ⅓ rd of the entire internet population of the country.
It was Google who first rang the bell in 2018, when it declared that it will now prioritize mobile experience as the key factor in ranking websites in its search engine. Simply because more searches happened on mobile than desktop. This meant that sites that offered better mobile user experience will get more priority and will experience better ranking on Google. Let’s also remember that as of April 2019, Google searches account for nearly 89% of all Global searches by users.
However, mobile-friendly is not the same mobile-first approach. Mobile first approach means prioritizing mobile-based customer delivery for every aspect of the business, which includes website design, outreach programs, product design / services and customer support.
Just as customer experience requires alignment across the organization for optimum delivery, mobile first approach requires the same alignment across all teams and channels.
2. Omnichannel customer experience is becoming a non-negotiable expectation
Today, customers own contact - which means they decide when and on which channel / platform they will contact a brand, and the brand is not only expected to be present on the channel, but also provide a cohesive omnichannel customer experience across these channels.
And this did not begin today, its accelerating today. According to 2015 Invesp study, companies that provided omnichannel customer experiences, were able to retain 89% of customers, versus, 33% for companies that provided only multi-channel experiences.
With leading digital consumer products such as Netflix, Youtube, Zomato, Uber, Gmail etc, already providing coherent omnichannel experiences invariant of channel of contact / use, platform or device, customer expectations are rising. When there is an expectation, brands that rise up to the occasion win these customers - and brands that are slow to change lose customers to their more flexible competitors. To customers, soon omnichannel will be a non-negotiable expectation
For example, in 2007, when Apple launched the first iPhone, it completely changed what consumers expect from a phone. Samsung rose to the occasion with quick adaptation of Android ecosystem and successfully rivaled with Apple for domination in the industry. At the same time, Nokia and Blackberry soon became historic legends and lost nearly all of their market share in a matter of years. Every expert tells us that neither Nokia, nor Blackberry understood how quickly their customer’s expectations were shifting due to Apple products.
Learn More: What is Omnichannel Marketing?
3. Beyond customer data centralization - AI for individualized customer experiences
According to Gartner, data centralization and management is now past its ‘trough of disillusionment’ and approaching ‘peak productivity’ in the US.
As more and more organizations move from siloed customer data spread across channels and platforms - to a hub from where all this data can be accessed, the next step is to process and utilize this wealth of data to intelligently craft personalized customer experiences.
AI technologies, including machine learning (ML) and natural-language processing (NLP), can read, organize and utilize this centralized data at a scale that is beyond the capacity of humans.
For example, AI-driven customer experience can identify, map and track customer data down to an individual level in real-time and create personalized journeys based on patterns of choice and preferences.
According to a latest PwC research, by 2030, nearly 45% of global revenues will come from AI-driven customer demand due to hyper-personalization, improved affordability and variety in product choices, with a $15 trillion share of the global economy.
4. More and better customer facing bots and virtual assistants
According to Gartner, by 2020, 85% of all customer interaction with brands will happen without any human interaction, using only self-service digital interfaces, chatbots and virtual assistants.
This is supported by the fact that millenials, who are already the largest consumer segment in US, have reported a 70% satisfaction rate with chatbot interactions.
Today many websites have already integrated live-chat support, and the agents who handle these chats are shifting quickly from humans to bots, with only exceptions and escalations requiring human intervention. These bots already provide real-time responses within seconds, can handle intermediate complex question and are far less error prone compared to their human counterparts.
5. RPA for improved efficiency in customer experience delivery
Robotic process automation (RPA) is the technology implementation of replacing repetitive human tasks with robotic engines, which can deliver the same tasks with greater effectiveness and efficiency - and at scale!
According to Gartner, RPA costs 1/5th the amount of an on-shore employee and 1/3rd that of an off-shore employee.
Scope for RPA includes email drip campaigns, customer service workflows, support chat bots, product delivery management (post order placement), instantaneous customer feedback analysis and response - and much more.
Forrester Research predicts that the robotic process automation (RPA) industry is expected to grow from about $250 million back in 2016, to $2.1 nillion in 2021. Moreover, among companies that have already invested in RPA, more than 75% plan to invest more over the next 3 years.
6. Augmented reality for immersive demos and CX
Augmented reality (AR) is used to enrich user experience of a brand - by making it more immersive, while giving brands more choice and control over this experience.
For example, Ikea Place is an AR app which allows customers to virtually view placement of Ikea furniture products around their home. This gives users a more realistic picture of the final product’s look and feel when it finally arrives.
Also, there is a reason why pictures and videos are compelling marketing channels for product demonstrations- they bring the experience closer to the real product and reduces uncertainty and adds to customer excitement.
With VR, you can give your customers an even more realistic picture of the final experience, like driving a car, using a smartphone, adding a new piece of furniture, getting a new pet etc.
7. Customers expect more data transparency
Experience is heavily dictated by perception, and perception in turn is highly influenced by ‘trust’. One of the key emerging factors in how companies, especially in the tech space, are perceived by customers - is their transparency on data collection and use. Customers today are increasingly tech-savvy and conscious of the data they are sharing, how it is used and by whom. Triggered by hacks and scams, customers are wary of sharing personal details and unsolicited use of their data for promotions is one of the biggest factors contributing to consumer distrust, especially towards large corporations.
The solution to this is also simple - ask for customer permissions, update them on how their personal info is being used and ‘why’ it is used this way. If you are collecting data to improve personalization (which is one of the key reasons), there is no reason to hide it - it's a service to the customer and the problem is unclear and non-transparent communication. Needless to say - if your intention is to misuse this data, either government or customer (or both) will end up making you pay.
Be honest, be clear, earn more loyalty and retain customers for business growth - there is no downside to transparency when you are ethical. It's a matter of effort and you do reap the financial rewards when your customer trusts you.