For the modern customer, customer experience has become the top brand differentiator. With PWC reporting 65% of U.S. consumers finding a positive CX more influential than advertising and 75% of consumers around the world desire more human interaction, customer experience remains a key element of business success.
Yet, while a customer experience strategy has proven to hold a considerable amount of value within a number of industry verticals, many businesses still struggle to understand its importance and how to go about implementing a successful one.
To help you get a better understanding of what customer experience is, we’re breaking down its definition, why it’s necessary in today’s competitive landscape, and how you can develop a solid program to promote long-term and company-wide growth.
What Is Customer Experience (CX)?
Customer Experience, or CX for short, is the interaction that takes place between a business and its customers, and the sentiment that emerges from it. More elaborately, Gartner Research defines customer experience as “the customer’s perceptions and related feelings caused by the one-off and cumulative effect of interactions with a supplier’s employees, systems, channels or products.”
In many cases, customer experience (CX) is used as a key performance indicator to measure overall business success.
Why Is Customer Experience (CX) Important?
Over the years, providing an exceptional customer experience has proven to have many benefits, from growth in revenue to customer loyalty. Here, we outline the top advantages.
It Builds Brand Advocates
In today’s vastly competitive landscape, businesses are constantly vying for customer acknowledgment and online praise, which has made providing an unparalleled experience more important than ever.
Customer experience is a tactic that can set you apart from other brands and give loyal buyers something to talk about with their peers. Thanks to social and other online forums, customers are all about sharing their unique and exciting experiences with others, making for a large business opportunity. For customers, the more unique the experience is, the more likely they’ll share it on social or bring it up in conversation. In this way, customer experience becomes a strategic way to build brand advocates who will promote your business for you.
It Reduces Costly Churn
Although many businesses focus on bringing in new customers, retaining current ones is much more cost-effective and can hold more long-term benefits. In fact, according to Harvard Business Review, “acquiring a new customer is anywhere from five to 25 times more expensive than retaining an existing one.” Further, “increasing customer retention rates by 5% can increase profits by 25% to 95%.”
Customer experience has proven to not only bring in new customers but also exceed the expectations of current ones, which encourages their loyalty. By constantly elevating the customer experience, customers feel tended to and invigorated every time they visit, increasing their likelihood to return while reducing costly churn.
It Builds Relationships
Today’s business landscape can be overwhelming for buyers. Being marketed to on a plethora of channels and having dozens of products thrown at them, the concept of having a personalized and engaging experience can be a refreshing offering.
When you provide the right customer experience, the customer remains the focal point of your strategy. In doing so, it sets your business apart from traditional scripted interactions and builds deep-rooted experiences with customers that are tailored to each person. This helps to make your business more personable and more likely to be their brand of choice.
It Improves KPI Goals
According to Bain & Co., “companies that excel at customer experience grow revenues 4-8% above the market.” When you go out of your way to make sure the customer experience is superb, you increase the sentiment of your customers and build repeat buyers. What’s more, if you start measuring the customer experience, you can start to identify particular areas of your business that need work and areas that you are excelling in. This is great for enhancing future performance so you can continuously meet KPI goals.
How To Build A Customer Experience Program.
It’s clear that by elevating the customer experience you reap many benefits. Regardless of industry, CX programs have the potential to really boost your bottom line and deliver greater customer loyalty. In order to help you kick start your journey with a customer experience program, here are some key steps to consider for success.
Step 1: Understand Your Business and Customer
Before you jump into designing a customer experience strategy, some background knowledge is required on your business. Things like it’s position in the market, your current customer base, and your target audience is essential to ensure your goals and strategy are designed effectively.
Business Performance
Designing an effective strategy starts with understanding your business first, because having a fundamental understanding of operations and service is critical before making any big changes.
To start, review some of the data you have at hand to understand where you are today. You might want to review these following elements: Your performance over the last year, whether or not service quality has increased or decreased during this period, the timeliness of delivery, and employee sentiment. Knowing the answers to these questions will help you understand the areas that could be affecting the customer experience, how to improve, and help support your argument for adopting a customer experience program with key stakeholders.
Your Position In The Market
Today’s competitors are a different breed. They’re never short of new ideas, lower prices, and unique product/service qualities. Knowing what they’re doing can help you stay agile and forecast future trends for your strategy to incorporate.
In order to get a sense of the competition and where you stand in relation to them, take a look at online reviews, talk to customers, and do your fair share of market research. Knowing what competitors are offering and the tactics they’re using can help you gain an understanding of what customers want when it comes to your industry.
Current Customer Sentiment
Knowing what it is about your business that customers love is critical, as is knowing what they are less impressed with. Your current customer’s sentiment is one of, if not the most, important aspects to take into consideration when creating your customer experience strategy. Without it, you won’t know how to tailor your product or service and improve team performance.
In order to start measuring your customer’s sentiment, try sending surveys in real-time during different points in their journey, immediately after their experience, or hold focus groups or interviews on a regular basis. By prompting a customer with questions close to the time they’ve engaged with your business about service quality, cleanliness, employee attitude, and more, can help you gain better insights into your performance.
Customer Personas
Developing a customer persona (or buyer persona) is a pivotal aspect of not just your customer experience strategy but also your marketing strategy as a whole. With it, you can understand the most prominent segments of customers in your business, so you can better tailor your products, services, or messaging.
We recommend starting with 3-5 personas. Each of these customer personas should be tailored to the individual, which means you should be identifying things like the customer’s background, pain points, interests, goals, and of course – demographic details.
In order to obtain this data, like any business project, you will need to do some research. In most cases, one-on-one interviews are conducted or customers are asked to fill out more qualitative-based questionnaires. It’s important to keep in mind when planning interviews or questionnaires, the questions or statements should be constructed with the persona profile in mind and the results should ultimately summarize your persona.
Step 2: Plan The Customer Journey
Determine a Goal
In any sort of new business venture, a goal is a necessity. Using the research from Step 1, it’s time to sit down and identify common trends to determine a favourable goal that is both realistic yet ambitious enough to engage team members and propel growth.
By creating a goal before you plan your strategy, you are able to measure your success and see your progress every step of the way. Whether you end up exceeding expectations or falling short, a goal is a great way for stakeholders to visualize your objective and to motivate teams.
Draw Out Your Plan
Using the goal you’ve constructed, develop a plan to get there. Use the end-to-end customer journey as your starting point and fill it in using details like the typical customer’s preferences, their barriers, their opportunity, and so on.
When drawing out your plan or writing down what you want to see happen, don’t be afraid to get innovative on how you can elevate the experience. In addition, each persona that you created earlier should be a consideration in devising your plan.
Step 3: Implement Customer Experience Strategy
Once you’ve gone through the research phase, identified your goal, and built out a plan, it’s now time to implement. This includes informing your high-level teams of goals, objectives, and measurements – in addition to training your customer-facing teams to follow your new strategy.
Step 4: Consistently Measure
Monitoring and measuring your progress during and after your strategy has been implemented is both the final and most important step to the overall success of your program. With it, you’ll be able to see just how realistic your goals were, if team members are putting in their expected work, and how customers are taking to your new strategy.
To measure effectively and ensure you’re not missing critical aspects of the customer journey, we highly suggest adopting a customer experience management solution. With a dedicated technology solution, you can access customer insights, determine trends, and identify issues in real-time, by hour, day, shift, and more. What’s more, with innovative natural language processing and rich reporting capabilities, you can identify trending topics of operational concern to continuously optimize the customer experience.
Conclusion
Providing an exceptional customer experience is a great tactic to continuously wow your customers and drive repeat business. By having a thorough understanding of what CX is and designing a powerful strategy that includes our 4 aforementioned tips, you can ensure your time and resources are drawing out the most favourable outcome.
