Customer experience (CX) is one of the biggest buzzwords in the business world today. With 2/3 of companies competing on customer experience1, up from just 36% in 20102, companies now have Customer Experience Hubs and are hiring Directors of Customer Experience to champion CX efforts.
In this post, we’re diving into everything you could possibly want to know about customer experience, including:
- What is customer experience?
- What do customers want when it comes to CX?
- Why is customer experience so important?
- What companies are getting customer experience right?
- How do I improve customer experience?
- How can you measure customer experience?
What is customer experience?
Customer experience is a customer’s emotions towards a brand based on the totality of every interaction.
In other words, CX is your customer’s perception of your brand. It encompasses every touchpoint – in-store, online, browsing a website, customer support, product – and spans the entire relationship that a customer has with the company.
What do customers want when it comes to customer experience?
Over the past few years, there has been a tremendous focus on streamlining and removing friction from customer experiences. Everything that customer-obsessed companies like Amazon, Uber and Netflix do is through the lens of providing the most effortless customer experience possible.
Companies no longer compete with direct competitors on CX, but also these “customer-obsessed” brands, which have dramatically increased expectations across the board. So what exactly is a great customer experience? Good CX boils down to a few key things:
- Anticipating and removing points of friction; Making every interaction as simple and effortless as possible
- Being available whenever (24/7), and across multiple channels
- Minimizing wait or downtimes
- Eliminating anxiety by eliminating unnecessary steps and actions; minimizing decision-making
- Being proactive; not relying on the customer to take the first action
- Deeply understanding your customers’ usage of your product and website
Why is customer experience so important?
Loyalty is harder to earn than ever before: 54% of people said they’d switched providers in the past year, and 78% say they retract loyalty faster today than they did three years ago3.
In this environment, brands have to prioritize the customer experience. CX is now just as important in consumers’ eyes as price and quality. In fact, 86% of buyers are willing to pay more for a great customer experience4. Companies that earn $1 billion annually can earn an additional $700 million within three years of investing in CX. On the flip side, customers switching companies due to poor CX costs U.S. companies a total of $1.6 trillion5.
Good CX is not just good for customers. It also makes for happier employees. Studies have revealed that companies with a great customer experience have employees who are 1.5X more engaged than less customer-centric companies. When employees are engaged, they work better and are less likely to turnover (resulting in even more cost-savings).
How do I improve customer experience?
Improving your customer experience comes down to removing friction (i.e., reducing effort), anticipating issues and making things as quick as possible. Here are a five strategies for improving your customer experience today:
Removing friction from every touchpoint: In the customer experience, friction refers to “anything that gets in the way of a customer completing a task6.” Essentially, anything overly complicated or something that takes a lot of time. Always choose the path of least resistance. This is critical because 81% of customers who report high effort during an experience will talk negatively about a company.
According to Kintan Brahmbhatt, who helped create the Amazon Music subscription services and music on Alexa: “The goal here is really about anticipating friction points in the customer’s mind — and if you can’t, then finding and alleviating them quickly. This isn’t easy.” Reducing friction requires a cross-functional effort from sales and website to support and product design.
Amazon, of course, is the poster child for removing friction from the customer journey. Free and fast shipping, one-click buying, saved payment methods, and access to reviews and comparisons in the same window. An article in Fortune talks about Amazon’s “War on Friction: “‘Amazon maintains an obsessive focus on removing every pain point from the buying process.’ To put it another way, Amazon is the world champion at taking out friction.7’”
Leverage AI and chatbots to automatically resolve customer service tickets: One of the biggest pain points with the customer experience is customer service. When a question or issue arises, customers often have to reach out on multiple channels to get a response and wait for a response. AI-powered chatbots are being used by global brands to automatically resolve everyday customer issues within seconds on email, chat, social / messaging, SMS and more.
Providing proactive and proactive experiences: Companies are also starting to anticipate issues before they exist and preemptively intervene before an issue becomes a bigger deal. By acting on behavioral, lifecycle or sensors from the physical world, companies can now anticipate the next contact and preemptively intervene with the right information or solution at the moment of relevance. HP, for instance, sends customers a message before they run out of printer ink and provides a seamless reorder experience.
Find ways to surprise and delight: One of my favorite customer experience stories is from Zappos. A support agent was on the phone with a customer and heard a crying baby in the background. The agent sent the customer a nice note and a baby blanket in the mail. It was a completely unexpected gesture that would make a significant impact on a customer’s perception. Empower your customer-facing team to be human and go above and beyond to delight your customers.
Track and act on reviews: Don’t ignore what your customers are saying about your company in reviews, social media and NPS surveys. You can identify friction points in the customer journey and be able to address any issues. According to Shan-Lyn Ma, Zola’s CEO and founder: “It’s tempting to listen to all the good stuff you get in your NPS surveys. But we know we’ve learned a lot more by being very focused on the not-so-good comments. We want to really understand the reasons certain couples aren’t promoters.”
What companies are getting customer experience right?
We’ve talked a lot about Amazon in this article, so now we want to highlight other incredible examples of companies that have reduced friction and provided an incredible customer experience.
- Uber: It’s hard to remember, but we used to stand outside in the glaring sun, pouring rain or freezing cold to hail a yellow cab. Uber completely redefined the experience through on-demand ride-hailing, seamless / contactless payments, instantaneous reviews and impeccable customer service. The company identified every pain point and offered a much more effortless and enjoyable solution.
- Chewy: The customer experience team at Chewy, an eCommerce marketplace for pet food and products, aims to wow customers every day. It sends 11 million handwritten cards annually to new customers, birthday cards to customers’ pets, and sympathy cards when pets pass away. It’s these little WOW moments that can completely change a person’s perception of a brand.
- WestJet: The Canadian airline’s Juliet chatbot fully resolves up to 87% of tickets without human intervention. So if a traveler needs to be rebooked on a flight or has a last-minute baggage question, an answer is immediate. Juliet proved her worth at the beginning of Covid-19 when travelers rushed to cancel or rebook flights or request refunds. The average hold time to speak to an agent on the phone during that time was over 12 hours, but Juliet deflected tens of thousands of calls by providing immediate, effortless resolutions to pressing and time-sensitive questions.
- Slack: This online communication and messaging platform is recognized for its merging of engineering and customer service. It has specialist teams that become experts on specific areas of the product so customers are routed to the right expert every time. This ensures issues are resolved in a single touch, eliminating a customer from being passed from agent to agent and repeating themselves. With 33% of people saying getting their issue resolved in a single interaction is the most important thing for a company when it comes to customer service, it’s easy to see why Slack is celebrated for its CX.
- Zola: The eCommerce platform helps millennial couples manage their wedding registries. In the past, a bride and groom would register with one or two retailers. Zola lets couples register for gifts across 600 retailers and has everything shipped directly from the manufacturer. In addition to an innovative product, Zola is a great example of taking feedback from its customers and adapting its strategy.
According toShan-Lyn Ma, Zola’s CEO and founder, “We interviewed hundreds of couples and formed the hypothesis that they no longer wanted traditional items for their registries. We thought they only wanted experiences, cash for their future, and cool gifts from up-and-coming brands. What we found out right away — through both our NPS [Net Promoter Score] research and the data we collected on the site — was that our thesis was not entirely correct. Couples want it all. We had to change our merchandising strategy very quickly.”
These are just a handful of examples of some of our favorite companies dedicated to customer experience. Who did we miss? Drop us a line at firstname.lastname@example.org to be included.
How can you measure customer experience?
There are several methods of measuring customer experience. First is understanding deeply how your customers are using your products and website and where things might be broken. Additionally, you can solicit feedback directly from customers themselves. Here are a few of the most common ways to measure CX:
- CSAT: Customer satisfaction surveys are sent immediately following an interaction such as a purchase, free trial or customer service interaction. CSAT surveys measure how well you deliver against your customers’ expectations of these independent moments. A text, email or message is sent asking something like “How satisfied are you with your recent purchase/support interaction/service?” or “On a scale of 1-5, how satisfied are you with your recent purchase/support interaction/service?”
- CES: As discussed above, a major focus for CX is reducing effort that the customer has to put in to complete a task. With customers expecting truly effortless interactions, the perception of good CX will be tied almost directly to low effort. Customer effort score (CES) surveys ask, “How easy was it for you to [complete this task]?” The customer ranks the effort on a 5 or 7-point scale, from Extremely Difficult to Extremely Easy
- NPS: Net Performer Score looks more holistically at a customer’s perception of a brand by asking how likely they are to recommend a product, service or company. It’s more of an indicator of long-term loyalty than CSAT, which is more about short-term happiness. If a person perceives a good customer experience, they are more likely to recommend a brand to their friends.
The importance of CX is only growing
The implications of CX are not just with increasing brand loyalty and making customers happy. It’s not tied to the bottom line: brands with superior customer experience bring in 5.7 times more revenue than competitors that lag in customer experience. Customer experience needs to be the top priority for every rough brand to thrive in increasingly competitive markets.
Can we talk about how AI can help elevate your customer experience? Get in touch.