Learn everything you need to know about customer experience and why it’s so important for your business's success.
Creating a positive customer experience is essential for the success of your business. Just think about the last time you had an excellent online buying experience - and remember how that experience made you feel.
Was the customer service representative kind and attentive? Was the problem quickly resolved? Did you feel taken care of? And would you want to go back? Now think about a time when you had a bad customer experience. Would you go back? Probably not.
We all know that a happy customer is much more likely to become loyal and keep returning for more. But it goes beyond that, a happy customer can become your greatest advocate, leading to word-of-mouth marketing as they share their experience with their network. By simply creating a positive experience, you can boost marketing, sales, and brand awareness.
So, what is customer experience?
Simply put, customer experience is the response customers have to contact with a company - whether directly or indirectly. Direct contact happens when a customer is purchasing a product or service. In contrast, indirect contact is often an unplanned interaction, such as word of mouth, reading reviews, and so on.
There are two touchpoints regarding customer experience: people and products. Were you left feeling satisfied by your interaction with the customer care representative? Were you thrilled by the product? Both of these elements go into creating a positive experience for your customers.
To create a great experience, you must go beyond ticking boxes and packing in features - you need to understand what your target market cares about and how they shop. You must create an intuitive experience with the customer in mind while weaving your company’s value proposition into each offering.
A great experience includes everything a company does to provide top-quality experiences and value for customers. Nowadays, how a customer is treated is just as important as the product quality and services provided.
What is a customer journey?
A customer journey describes a series of steps that a customer takes, from discovering a product or service to making a purchase. These steps are touchpoints and opportunities to provide a positive experience and encourage customers along the sales funnel.
Companies must consider the whole journey to provide an overall positive experience rather than focusing on one or two touchpoints during the journey. Research shows that in the hospitality industry when a hotel gets the whole customer journey right, customers are 61% more willing to recommend those hotels, rather than ones that solely focus on touchpoints.
To move your focus from touchpoints to the whole customer journey, try the following:
- Observe: what matters to your customers and base your journey around their needs.
- Shape: re-shape interactions to fit your customers’ needs and behavior.
- Perform: engage your team when transitioning to customer journeys and track your progress.
The importance of customer experience
A positive experience results in loyal customers, helps customer retention, and encourages brand advocacy.
In today’s landscape, customers have the power, not the sellers. What does this mean? Well, customers can choose from multiple products across different channels worldwide. Plenty of resources exist to help them educate themselves about different products and make informed decisions. And in a crowded market, it’s increasingly important to provide a positive experience to make the sale (and gain repeat customers). Here are some key facts and statistics to highlight the real importance of customer experience:
Customer satisfaction is more important than it’s ever been
A positive experience is key to delighting customers and exceeding their expectations. According to research, a satisfied customer contributes 2.6 as much revenue to a company as a somewhat satisfied customer and 14 times as much as a somewhat dissatisfied customer.
New shoppers are more likely to become loyal customers
A superior customer experience keeps customers returning and doing business with you in the future. Acquiring new customers is much more costly than maintaining an existing one, with the probability of selling to an existing customer 60-70%, dropping to 5-20% for a new customer.
The power of brand advocacy
Word-of-mouth marketing is one of the most powerful tools available - people are far more likely to trust their network’s experience and online reviews than company advertising. In fact, 84% of Millennials no longer trust traditional advertising. So, by creating a fantastic customer experience, you’re turning your brand’s customers into advocates.
Differentiate with excellent service
It’s increasingly difficult to stand out from the crowd, with many companies providing excellent products and services alongside engaging content. Providing an outstanding customer experience can be the differentiating factor that ensures customers pick your company over your competitors. Put your customers at the center of your business and provide a positive experience they can share online and with their network - 88% of customers trust reviews as much as personal recommendations.
Build trust in tough times
To stand out from the competition and build trust, the key is to customize your service and customer experience as much as possible. By making each of your customers feel unique and cared for, you’re more likely to build rapport and trust, creating a stronger relationship with them. By building trust, customers are more likely to turn to you when times are tough, and they have less money to spend.
Why do so many brands struggle with customer experience?
Businesses often focus on the bottom line, and although they have access to data, sometimes they don’t put enough resources towards analyzing it and spotting customer patterns. Often, leaders cannot differentiate between customer satisfaction, which they have usually documented via expensive CRM software, and customer experience, which demands continual investigation.
There’s often a lack of attunement to customers’ needs, especially from leaders with finance, engineering, and manufacturing backgrounds. These leaders usually see customer experience as something to be managed by marketing, sales, and customer service, rather than the heart of their businesses. On the other hand, leaders who have risen through customer-facing functions are more likely to manage by incorporating customer experience into everyday business goals.
If there’s no data, it’s easy to make claims about businesses being customer-driven - we all want to think we have our customers at heart - but once analyzed, the numbers may reveal something different. Many leaders fear what this data may reveal and aren’t always inclined to act on it, despite what it may tell them. It can often feel difficult to implement an improvement plan for customer experience as it is largely qualitative rather than quantitative.
Many leaders see experience data as ambiguous compared to concrete figures, such as the number of orders placed. However, analysis is increasingly sophisticated and can quantify the relative importance of every single touchpoint along the customer journey. And when properly understood, customer experience data can indicate what the next major transformation may be.
How we interact with brands and what we need from them have changed. Customer behavior is increasingly inconsistent thanks to constant external change in the world from social, economic, environmental, and political forces. And with it, customer experience is changing, with 64% of customers wishing companies would respond faster to meet their changing needs, and 88% of executives believing their customers are changing faster than their businesses can keep up with.
How to create a great customer experience
Almost 80% of Americans claim that the most important elements of customer experience are speed, convenience, knowledgeable help, and friendly service. So while companies focus on wowing customers with cutting-edge technology and quirky design, the data shows you can stand out by taking a customer-centric approach.
Customers want technology that always works, an elegant and user-friendly website and app design, and an easy-to-use interface with speed, convenience, and relevant information. It’s not rocket science, but when your customers’ needs are met or, better yet, exceeded, you can gain benefits, including the chance to bring your customers back again and again.
Companies should focus on a holistic approach to understanding customers to attract and retain them successfully. Find out who they are and what motivates them. You need to know more about them beyond just being buyers. You need to go beyond short-lived transactions and focus on enhancing their lives through omnichannel services that connect physical stores with personalization using customer data.
According to McKinsey, three essential building blocks improve customer experience throughout your company. These foundations have been shown to deliver 15 to 20% boosts in sales conversion rates, 20 to 50% service cost reduction, and 10 to 20% customer satisfaction improvement:
- Build aspiration and purpose: deliver on your company’s purpose with a clearly defined customer experience aspiration.
- Transform your business: discover your customer’s needs, design solutions, and deliver impact.
- Enable the transformation: support your customer-centric shift by transforming your employees’ mindsets, building capabilities, using the latest tech, data, and analytics, and deploying systems to measure and manage performance.
Here’s how you can create great customer experiences:
Know your customers’ experience
Before making any changes, try to understand the current situation. Check the current experience you offer, from its strengths to weaknesses and inefficiencies, to get a full overview of what you’re working from. You can do this with market research, data analysis, and customer insights to audit where you are right now.
Identify pain points and areas for improvement
Once you have a clear understanding of your current situation, you need to identify the main pain points and see what you can improve. Even if the experience is positive, elements can constantly be improved. You could think about how to innovate your experience to surprise and delight your customers and stand out from the competition.
Make corrections
Once you have an idea of what needs improving, it’s time to strategize and put an action plan in place. If your pain points involve different processes, and you’re unsure how to move forward - it can be valulable to bring in customer experience experts or consultants to guide you.
Put customers’ preferences first
Think about where your customers are hanging out, understand where they shop, how they research, and what they’re looking for. Use the communication and shopping channels that fit their needs and habits and allow them to feel at ease.
Go for customization
Every customer is different, and no two customers behave the same way. This is why personalization is essential - adapting to each individual’s customers and offering them what they need is the best way to build loyalty.
Align experience to your mission and values
You should align the experience you offer to your customers with your company's promise, values, and vision. These lofty words are often created at the start of a brand’s journey, but companies often forget to go back and check they’re sticking to them. You don’t want customers to feel as if they’ve been misled.
Don’t forget about employees
Your employees are the face of your brand, and looking after their experience is just as important as your customers. If your team is unhappy and not having a good experience with your customers, they will notice. On the other hand, if your employees are happy, they will also pass it on to your customers.
What does a great customer experience mean online?
When creating a fantastic experience for your customers, it’s essential to understand the entire journey that customers go through. If you don’t already have one, it’s best to start with a customer journey map - a visual representation of the customer journey that shows your customers’ experience across all touchpoints.
By building a customer journey map, you’ll be able to understand your customers’ perspectives more clearly. Step into their shoes, and you can see their pain points and how they can be improved. So to start, map out any possible touchpoints, from a website and social channels to interactions with marketing and sales teams and checkout.
Once you have your map, you make each touchpoint a positive customer experience. For example, if a customer needs some information, make it easy for them to contact a customer service rep. An excellent experience for this example would be to have a chat feature pop-up on hand to ask customers if they need help.
Another example would be to make it as simple as possible for customers to return unwanted items - if they know it’s easier to return, they won’t hesitate to buy. To do this, you could include a pre-paid return shipping label and package so that all they need to do is to take it to their nearest drop-off point or organize a pickup.
The best way to continue creating positive experiences is to forge relationships with your customers and clients. Build a community and ask for feedback. Listen to your customers and try and understand what they need. The better you know your audience, the easier it will be to create a great experience for them. It pays to be transparent, too - you won’t have brand loyalty without it.
Building relationships through digital channels is increasingly important as more businesses head online. So, if you’re running a SaaS company or launching a new app or website, there are a few extra things to remember when designing your customer journey.
Mobile devices
If your company is online, customers can reach you from any mobile device, so the experience they have when using a mobile device should be almost identical to when using a desktop.
The best way to do this is by having an app for your website or ensuring your site is user-friendly and responsive across devices. This means your site should seamlessly adapt to a mobile screen, making it easy for your customers to browse and navigate the site without affecting efficiency.
Usability
Both your website and app should be intuitive and easy to navigate. It should be clear which step a customer should take to achieve their goals. You can run usability tests on your current site to see how easy your site is to operate and then adapt user experience design where necessary.
User onboarding
Onboarding is teaching new customers how to use your website, product, or service often used by SaaS services. This experience is when a company’s customer service rep works with a user to ensure they understand the value and purpose of the product or service, thereby saving time and a long learning curve, enabling you to get value from your business quickly.
Does customer experience differ between B2C and B2B?
Although B2C and B2B customer service are quite different - and we’ll go into why shortly - research shows that B2B customers would like a better experience that is more similar to those of B2C customers, which provides a more personalized experience and really focuses on human interactions.
Although the foundations of an excellent customer experience remain the same, one of the main differences is that B2B relationships are deeper, and the stakes are usually a lot higher - we’re talking million-dollar deals. The B2B customer journey is often more complex and involves more individuals, and customization is generally more widespread.
Despite this, many B2B customers would like to experience the customer-centric focus that consumer companies offer their target market. Often when it comes to B2B relations everything becomes dry and corporate, but the human element of the business remains - your company is still dealing with people.
Consider complex industries, such as after-market service contracts for industrial services, where better customer experience is essential to drive business growth. One of this scenario’s most significant pain points is a lack of speed in supplier interactions - something easily rectified with an improved experience.
By taking the time to understand your B2B clients, you can respond to their needs and adjust your approach while shifting to omnichannel models.
On the other hand, when a B2C customer needs assistance, it usually requires a much less dedicated service than a B2B client and tends to be considerably less complex. B2C customers search for information via websites and social media rather than speaking with a customer service rep. So they need easily accessible information - think FAQs on your website and an AI chatbot to answer basic questions quickly.
Who is responsible for ensuring a positive customer experience?
To put it simply, the responsibility flows from the top down, but everyone has a shared responsibility to ensure a positive experience. Each function within a business has its part of customer experience to focus on, but there needs to be a big-picture view that incorporates changing consumer needs.
That means that customer experience needs to be at the top of mind for every stakeholder in your business. Internal operations must be simplified and aligned to pursue a common goal. This starts with the C-suite, which must go beyond products and services to focus on a customer-centric approach to meet their needs. These are the companies that will grow and emerge on top.
When creating a positive customer experience, it’s also essential to consider your employees. Building a customer-centric culture in your organization can be a powerful tool for growth, and this often starts with happy employees. If employees have a positive experience, this usually translates into a positive customer experience.
Despite not necessarily working directly in customer service, a customer-centric culture reframes the mindset to encourage employees to create opportunities to ask for customer feedback, allowing the business to improve and grow.
How can we measure customer experience?
You can monitor your current customer experience in several ways, and how you analyze it will depend on the information you seek. For example, when analyzing past, present, or potential patterns, each pattern requires a slightly different approach.
Persistent
When looking at past patterns, you generally want to understand a recent experience’s metric to improve your current service or assess the impact of new initiatives. This is usually done frequently with follow-up surveys.
Periodic
When tracking current relationships and experiences with an eye on future opportunities, you should keep a consistent and deeper understanding of relationships. This method is more often used periodically with critical populations and issues.
Pulsed
When testing future opportunities, you can send out target inquiries to unveil and test new products and services. These are best measured with one-off and purpose-driven analysis.
It’s relatively simple to gather helpful information about your brand experience. Here are some ways to measure customer experience:
Analyze customer surveys
Regularly check in on your customers by using customer satisfaction surveys. This is a quick and straightforward way to gain insight into the experience customers are having with your brand, product, or service.
Once you have some data, you can use NPS (Net Promoter Score) to measure how likely customers are to recommend your company to their network based on their experience with your business. When analyzing data, consider the multiple touchpoints along your customer journey. For example, what is the NPS for customer service teams across different communication channels? Or what is the NPS for sales?
By analyzing these different touchpoints, you’ll get a feel for where you’re creating a positive experience and where you have room for improvement.
Understand customer churn
Although churn is to be expected, it’s also essential to understand and learn from it to prevent it from happening again. You can do this by regularly analyzing your churned customers to establish a churn rate and determine whether it’s increasing or decreasing, the reasons for churn, and establish actions your team can take to prevent a similar situation.
Talk to your customers
Find out what your customers want by speaking to them directly. You can create a forum where customers can request new products or features to improve your offerings. By creating a dedicated space, you can encourage your audience to offer improvement suggestions proactively. Although you don’t have to act on every suggestion, you can pick up on trends and themes and see if there’s anything significant showing up.
Analyze support ticket trends
Take time to analyze customer support tickets from your customer support team to see what issues are coming up regularly. Check for recurring issues, look for possible reasons for where they might come from, and provide solutions. This will decrease the number of tickets your team is dealing with and ultimately ensure a positive experience for your customers.
Examples of good and bad customer experience
H3: Good customer experience
Great experience stories are rarely based on unbelievable feats. More often than not, they are based on a regular customer strategy.
Ritz-Carlton
The hospitality brand known worldwide for its highly individualized customer experience empowers its employees to provide an exceptional experience for every single guest. One of the most notable ways it’s done this is through its customer experience stipend - employees are allowed up to $2,000 per incident to resolve customer problems without management approval. This allows employees to resolve problems with the customers' interests in mind immediately.
Airbnb
Airbnb provides a highly personalized experience by recognizing its customers: those looking for somewhere to stay and those looking to rent out their properties. The company has created a simple search function to suit both audiences on the same platform simply by opting to ‘Become a host’ or ‘Book a place to stay.’
Adidas
Adidas has been increasingly improving its digital experiences through customer experience. As the company noticed that people were shopping more online, Adidas invested in personalizing its content and messaging using data insights and user engagement. The company also took the time to listen to customer feedback. When customers showed interest in sustainability, Adidas began producing shoes from ocean plastic, selling one million pairs in just a year.
Bad customer experience
On the other hand, there’s also a lot to be learned from bad experiences.
Lack of empathy
The easiest way to show your customers that you care about them is by displaying empathy. Customers need to feel heard, and connecting with them on a human level can set you apart from the competition. Empathy should run through the veins of a customer-centric company. This means always putting the customer first. To encourage empathy, give your customer service team enough time to resolve the problem without crushing pressure to finish the call too quickly and allow them to be proactive in their support.
Hard-to-reach support
To provide best-in-class customer experiences, you must be available to help on the channel of their choice, whether via their smartphone or a live chat. Implementing a live chat and chatbot enables customers to contact you at their convenience. At the same time, you can serve multiple customers and filter human interaction to the most critical cases.
Inefficient support team
Excellent customer service, and ultimately experience starts with your customer support team. If your team is below competent, you could miss out on creating loyal customers and future sales. Ensure all your employees are trained regularly about products and etiquette to maintain company consistency, and share important business information with your support team to ensure they’re aware of any issues and solutions.
Customer experience is key
A customer-centric approach is the future of business. Not only will it impact your business’s reputation, but it will ultimately affect your bottom line too. By taking the time to understand your customers and fulfill their needs along every touchpoint of the customer journey, you’ll build trust and loyalty and keep them coming back with their network in tow.