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What Is Customer Experience & Why It’s So Important

What Is Customer Experience & Why is it So Important?

A positive customer experience is vital to the success of your business. In today’s highly competitive digital landscape, we must keep the end-user front and center. After all, a happy customer can help you boost and build the bottom line, and it takes far fewer resources to maintain existing customers than it does to acquire new ones.

According to a recent study, the cost of acquisition has risen 60% over the past six years. This data underscores the need to focus on retention strategy first, and that begins and ends with the customer experience.

So, what is customer experience? And why is it so important? Let’s dive in!

What is Customer Experience?

In a nutshell, customer experience is your customers’ overall impression of your company. This includes their experience when shopping on or browsing your website, interactions with customer service, and every touchpoint in between.

Social, email, live chat—it all matters. Providing customers with a seamless, frictionless, consistent experience is what a good customer experience (CX) is all about.

Why is Customer Experience Important for Your Business?

A good customer experience is critical for every business in every industry. Unless you have a product or service that nobody else offers (unlikely), you’ve always got competition. Should you fail to meet your audience’s needs, most will not hesitate to take their business elsewhere.

Taken in that light, the benefits of an excellent customer experience go well beyond sales. Good CX increases customer loyalty, as they’ll always know you deliver what they want and need. Customers are more satisfied, come back often, and are more likely to refer their friends and colleagues, post favorable reviews, and engage with your content on social.

In short, your loyal customers are among your most valuable assets, so they deserve to be nurtured in every way that makes sense.

Customer Experience vs. Customer Service

Many people confuse customer experience with customer service. And although there is some overlap, they are distinct practices in themselves. That said, customer service is a critical component of the customer experience.

CX is the holistic impression your customers get from interacting with your company, while customer service is associated with specific touchpoints in the customer journey. Customer service is triggered when the customer requests help or assistance with a product or service, to answer a question, fix a problem, request a refund, or upgrade their service level.

Customer service supports good CX as the customer expects a prompt, courteous response. Customer experience is a blanket strategy that includes every aspect of the customer journey, including customer service.

How to Measure Customer Experience

In light of mounting competition and a high emphasis on CX across most industries, continuous improvement is essential. However, you need to know what you need to improve before you do it.

In itself, CX is challenging to measure. Having specific metrics or KPIs helps you assess the success of your efforts. Some of the indexes we measure customer experience with include:

  • Net Promoter Score (NPS) is measured through direct response, usually via a contextual survey that asks customers to rate you, on a scale of one to ten, how likely they are to recommend your brand to others. The score is represented by a percentage (average number out of 100).
  • Customer Satisfaction Score (CSAT) is similar to NPS, but it asks about the customer’s level of satisfaction with specific touchpoints along the customer journey. CSAT is generally scored on a scale with very satisfied at the top and very dissatisfied at the bottom.
  • Customer Effort Score (CES) is also measured with surveys, usually sent to the customer following a transaction or a trial period. The questions might be related to a service call to determine if their issue was resolved to their satisfaction and/or how difficult it was to complete their task.
  • Time-to-Resolution (TTR) is an internal score that looks at how long it takes your team to resolve an issue. It starts when the customer engages about a problem and ends when the ticket is closed. TTR can be measured in days, hours, or minutes, and it’s vital to track as it can be directly correlated to customer satisfaction.

Causes of Bad Customer Experience

So, what makes for a poor customer experience? We’ve likely all been on the receiving end of bad CX at one time or another, but here are the top issues:

  • Waiting a long time to respond to a customer service request
  • Lack of employee understanding of customer needs
  • Unresolved questions or issues
  • Lack of human interaction/intervention
  • Rude or uncaring employees
  • Lack of service personalization

Tips How to Improve Customer Experience

In the previous section, we see some very specific points—all of which are within your power to improve. The ultimate goal here is to eliminate friction, so here’s what you can do to get started:

  • Ensure you have adequate customer service personnel for the demand.
  • Enable omnichannel to unify all touchpoints.
  • Provide oversight and accountability to ensure all requests are addressed in a timely manner.
  • If you use customer service bots, make sure there is an option to engage with a human at any point in the journey.
  • Recruit employees according to your company culture and train them well to support your brand voice, mission, and vision.
  • Enable personalization to improve the shopping experience and increase loyalty.

In conclusion, customer experience is among the most important practices for every organization. Whether you’re a B2B or B2C company, your customers are the lifeblood of your business continuity—and that is precisely why you need to consider their needs, desires, and impressions first.

Tracking key metrics (as outlined above), ensuring your employees are good representatives of your brand, and placing a high priority on the human touch are all significant. Though it’s easy to assume that technology can reduce operational costs and solve many problems, people—not machines—are buying your product or service. Responding to human needs with a human touch should be the foundation of your CX strategy.

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