What is Customer Experience?
Customer experience (also known as CX) is defined by the interactions and experiences your customer has with your business throughout the entire customer journey, from first contact to becoming a happy and loyal customer.
CX is an integral part of Customer Relationship Management (CRM) and the reason why it’s important is because a customer who has a positive experience with a business is more likely to become a repeat and loyal customer.
In fact, according to a global CX study by Oracle found that 74% of senior executives believe that customer experience impacts the willingness of a customer to be a loyal advocate. If you want your customers to stay loyal, you have to invest in their experience!
Simply put, happy customers remain loyal.
The happier you are with a brand, the longer you stay with them. So, if you treat your customers poorly or ignore their customer service emails, then they are more likely to stop doing business with you. This is why companies that deliver a superior customer experience outperform their competitors – and this means they’ll be spending more with your business and less with your competitors.
For example, here’s a few statistics that caught our eye:
- Customer experience is set to be the number one brand differentiator in 2020 (and beyond)
- 1 in 3 customers will leave a brand they love after just one bad experience,
- Customers are willing to pay a price premium of up to 13% (and as high as 18%) for luxury and indulgence services, simply by receiving a great customer experience,
- 49% of buyers have made impulse purchases after receiving a more personalized customer experience.
- Customers that rate companies with a high customer experience score (i.e. 10/10) spend 140% more and remain loyal for up to 6 years.
So, it’s extremely important that you focus on the experience you deliver to your customers.
Is customer experience the same as customer service?
In most cases, a customer’s first point of contact with a company is usually by interacting with an employee (either in person, via electronic communication or by speaking on the phone). This gives your business an opportunity to deliver great customer service.
However, customer service is only one aspect of the entire customer experience.
For example, if you book a vacation on the phone and the person you are speaking with is friendly and helpful, that’s good customer service. Yet, if your tickets arrive early and the hotel upgrades your room, then that’s a great customer experience!
That’s the difference between customer service and customer experience.
Like most things in today’s market place, customer experience has changed – it’s more than person-to-person service and thanks to technology, companies can connect with their customers in new and exciting ways.
Customer service is still as important as ever, but it’s no longer the sole focus of the customer experience. Now, the customer experience brings new ways to strengthen customer relationships through technological breakthroughs.
How important is the customer experience?
A business cannot exist without its customers, and this is why companies are focusing on how to win new business and, perhaps more importantly, retain existing customers.
A survey by Bloomberg Businessweek found that “delivering a great customer experience” has become a top strategic objective. And a recent Customer Management IQ survey found that 75% of customer experience management executives and leaders rated customer experience a ‘5’ on a scale of 1-5 (5 being of the highest importance).
The challenge here is that even though it’s a high priority, most companies are failing to deliver a good customer experience.
When Bain & Company asked organizations to rate their quality of customer experience, 80% believe they are delivering a superior experience. This is compared to only 8% of customers who believe they are receiving a great customer experience.
So how many brands are truly delivering an excellent customer experience?
In fact, less than half of all companies deliver a good (or excellent) customer experience.
Each year, the Qualtrics release their Customer Experience Ratings study.
By analyzing feedback from 10,000 consumers and recording their experience with more than 300 companies, the latest Qualtrics report shows a decline in the number of companies that scored a ‘good’ or ‘excellent’ rating.
Customer expectations are rising, and faster than the speed that companies can improve their customer experience. Customers expect every interaction, end-to-end, to be the best experience they have with any company – not just yours!
Impact of bad customer experiences
If a great customer experience is focused on ensuring all interactions and touchpoints with your business is easy, enjoyable, and seamless, then the exact opposite is true when it comes to a bad customer experience.
More than $62 billion is lost each year to bad customer service. Meanwhile, another study found 91% of unhappy customers leave a brand without complaining.
It doesn’t get any better. Only 10% of consumers say brands meet expectations for a good experience.
Some of the most common causes for bad customer experiences involve:
- Difficult purchasing processes
- Negative experiences with customer support
- Compromising a customer’s personal security
- Waiting too long on hold
- Ignoring customer feedback
So how can you ensure a great customer experience? We’ll look into this in a future post so come back and check on us regularly.