The boss calls a meeting and starts with something like, “We need to reduce churn among our customer base,” or “We’re lagging on our quarterly revenue projections,” and maybe, “It’s time to roll out the new product line.” Then your boss asks the most important question, “What are we doing to do about it?”
The answer: develop a customer experience strategy.
A well-developed customer experience strategy is part of a comprehensive business blueprint. Think of a standard strategic plan as having four parts:
- Vision – What do we want to accomplish?
- Who – What people do we need to reach?
- How – What actions will we take?
- Metrics – What data lets us know we succeeded in achieving the vision?
A customer experience strategy contains each of these elements and becomes part of the “how” for the larger business plan. When designing a customer experience strategy capable of driving business results, consider four A’s:
- Aligned – The strategy must align with the business vision and goals. All initiatives should have context connected to how the business operates. Getting buy-in from top executives means showing how customer experience (CX) efforts can support bottom-line results or other key company initiatives.
- Actionable – Good data produces several opportunities for customer experience improvements. However, limits of time, money, and resources may dictate what can be accomplished and how ideas should be prioritized. Maybe a production process impacts the customer experience but would cost too much and take too long to change. When the reward outweighs the risk, the customer experience opportunity is not genuinely actionable. Think of the 80-20 rule and focus on the 20% of factors that produce 80% of the outcomes needed.
- Achievable – Set realistic customer experience goals. Moving from a Net Promoter Score (NPS) of 57 to 95 in a few months would be difficult. Improving a customer satisfaction metric by 10% during the same timeframe might represent a better objective. The best way to embed a customer experience strategy throughout a company is by creating consistent wins that move toward more substantial goals. Everyone wants to be part of a winning team.
- Assessable – Make your customer experience strategy measurable. Identify the data required for detailing progress. Set benchmarks and measure against them. Define key performance indicators and consistently report on targets. Make the metrics accessible, applicable, and understandable to employees throughout the company from the C-suite to the front line.
Think of a customer experience strategy as a form of business GPS. The plan uses data regarding where you’ve been, factors in present variables that could impact direction and speed, and is forward-looking, working toward a defined business goal. Rather than roadways, this GPS focuses on managing and improving the customer journey.
What Is Customer Experience?
Customer experience is the total of how a customer perceives your business. Managing the customer experience involves understanding the customer’s journey with a product or service from start to finish (including before and after the purchase) and consistently refining and innovating on that journey.
Understanding the Customer Journey
Think about the last time you bought a car. What steps were involved in the process?
Customer experience goes beyond the transaction to encompass the entire process. The practice brings the experience and customer together and considers that whole journey with the brand.
A series of moments create the customer’s experience with a company. Each moment generates a thought or feeling. Few experiences are perfect, which means customers experience times of delight, despair, and indifference. Management of the overall customer experience involves identifying each of these touchpoints and maintaining or improving them in a measurable way that ultimately drives business goals.
Consider the car-buying journey as a series of snapshots. Let’s focus on the pre-purchase customer experience as an example. Through word of mouth, a potential customer hears how well a car held up in an accident. Online reviews are mostly positive but some customer feedback details an issue with upholstery. The potential buyer asks about the issue through a chat function on the dealer’s website and receives a response in real time. The dealer follows up with communication including additional tips for making the buying experience easy. As a next step, a salesperson offers a free inspection to assess the current car’s value. A self-service option on the manufacturer’s website offers an interactive experience for users to build, customize, and order their car. Overall, the potential buyer encountered a great customer experience and decided to make a purchase.
The pre-sale customer experience served as a brand differentiator compared to other businesses. Suppose every interaction maintains that same high bar throughout the purchase and post-sale journey. In that case, the company can create a deep level of customer loyalty resulting in repeat purchases, high NPS scores, word-of-mouth endorsements, and a long-term buyer relationship. That is important because keeping a customer is less expensive than attracting a new one. In fact, the company responsible for inventing NPS found that improving customer retention rates by 5% increases profits by a minimum of 25%.
Customer Experience vs. Customer Service
People often confuse customer experience and customer service. Think of customer service as a single moment in time, whereas customer experience is the collection of every moment. Typically, one department or support team owns the customer service function, which is generally more reactive. Everyone in the company owns customer experience. The practice crosses all departments and is part of every employee’s job. Customer service is part of a business’s broader customer experience strategy.
Think about taking a picture on your mobile phone. The customer experience would be the panoramic setting capturing a very wide image. Customer service would be the portrait setting narrowing in on a specific view. Customer service works to keep customers happy and maintain strong levels of customer satisfaction. A person usually interacts with a customer service department when there is an issue or they need assistance.
Customer experience includes these touchpoints plus every interaction that impacts how a customer perceives or feels about the product, service, or brand. Customer experience is more proactive and uses customer data and other feedback to refine the CX strategy over time.
Why Customer Experience Matters
Customer motivations, behaviors, and attitudes are changing rapidly. Customers are more sophisticated, have countless product and service choices, have access to multiple information channels, and can make purchases in various ways. A study from Salesforce shows that 76% of customers indicate that it is easier than ever to take their business elsewhere. That makes customer experience even more important as a brand differentiator.
A Gartner research article cites Tiffani Bova, former Gartner Vice President and Distinguished Analyst: “Customer experience is the last source of sustainable differentiation and the new competitive battleground.”
The fact that nearly 50% of surveyed businesses indicate investments in customer experience are a bigger priority than pricing and product over the next five years is not surprising (SuperOffice). Consider the data on why customer experience matters:
- Customers base 70% of their buying experiences on how they feel they are being treated (McKinsey & Company).
- Following a subpar experience, 47% of customers say they will stop buying from a company (Salesforce).
- Research indicates that U.S. companies lose $62 billion annually due to poor customer service (Vonage).
- Waiting for customers to initiate feedback is too late. About 91% of unhappy customers practice “quiet abandonment” by leaving a brand without complaining.
- A customer is four times more likely to buy from a competitor if they experience a service-related problem compared to a price or product issue (Bain & Company).
- It takes 12 positive customer experiences to make up for one negative experience (Newell-Legner).
- That one negative experience is costly, with 62% of customers indicating they share their bad experience with others. On the bright side, 72% of happy buyers share their positive customer experiences (Salesforce).
As powerful as these statistics are, they do not tell the full story. No brand is perfect, and managing customer experience is an ongoing journey rather than a destination. However, customer experience represents a collection of tools to minimize and overcome the inevitable bad experience. Research from our partner the XM Institute indicates:
- Nearly 75% of consumers who rate a company “very good” for overall customer experience are likely to forgive a company for a bad experience. By comparison, only 15% giving a “very poor” rating feel the same.
- Almost 90% of consumers rating a company “very good” for overall customer experience indicate they trust the company to take care of their needs.
- That trust translates into dollars. About 94% of consumers giving a company a “very good” overall customer experience rating are likely to purchase more products or services in the future from the company.
Sure, making customers happy feels good. But more importantly, making customers feel important, heard, and taken care of creates financial value for the business. Not only do customers stick around, but they buy—and pay—more. Our own research proves this out, with more than 86% of surveyed buyers stating they will pay more for a better customer experience.
4 Customer Experience Strategies to Help You
No customer is the same, and neither is a customer experience strategy. However, every customer experience journey includes four foundational elements that serve as guideposts for creating brand loyalty, driving customer satisfaction, and building a continuous ability for a business to meet customer needs.
Strategy #1 – Reachability and convenience
Make it easy for a target audience to interact with the brand. Reachability starts by answering a key question: what channels do our customers use? The next step is becoming familiar with each channel and how customers use them as they relate to company products and services. Look at the car-buying pre-sale example. The buyer reached the brand through channels including friends, television, websites, live chat, social media, physical locations, and email. All delivered different, but consistent, information and operated largely on the customer’s timeline, making them very convenient. No or low access barriers existed that would prevent the customer from accessing the information he/she wanted. The consumer expended little effort to inform their decision.
Now let’s consider if things had gone differently when the potential buyer reached out to the dealership through the website chat feature. What if the dealership used an automated chatbot capable only of answering a series of common buying questions? Customer frustration. What if staff only monitored the chat function between the hours of 9 a.m. and 5 p.m.? Customer frustration. What if a staff member took too long to respond to a chat message? Customer frustration. What if unreliable internet unexpectedly ended the chat and the buyer had to start over? Customer frustration. These scenarios probably sound familiar and when they happen, the failed touchpoint reduces a customer’s ability to reach a brand conveniently. Remember, always make it easy.
Strategy #2 – Channel flexibility
As with our car buyers, most customers do not use one channel to access a brand. Companies focused on optimizing the customer experience understand they need an omnichannel approach. Consumers should be able to move fluidly across multiple channels while still receiving a consistently great customer experience. That means integrating every channel to create a seamless experience for the user. Audit the channel flexibility of businesses by asking:
- Can customers switch between desktop and mobile without much effort? Consider how often people switch between their desktop and mobile devices throughout the day. Customers rely heavily on both and the experience should be optimized for and between each channel, allowing for maximum fluidity.
- Is product and service information consistent across all channels? Different opinions among people are helpful and make reviews important. However, product or service information should be standardized. The details on a company website should match what a live agent says and what an advertisement promises. Message consistency builds brand trust and helps develop customer loyalty.
- Can the user find reliable help through business-managed social media channels? Nearly 5 billion people across the world use social media. People average 2.5 hours per day on social networks. So, it makes sense that more than 54% of people use social media to research products or services. When a brand delivers a positive experience on social media, 71% of consumers indicate they will recommend the brand to friends and family. Businesses should ensure social channels provide relevant information and afford easy access to answer questions and address failed brand touchpoints.
- Does a customer’s information travel with them between channels for streamlined interactions? In our car-buying example, after the customer chatted with the dealership, they received additional helpful information from one of the salespeople. That is because their information was centrally stored and accessible to multiple people within the company. One key way this enhances the buying experience is by helping marketing and sales teams personalize the relationship with the customer. Every brand-initiative touchpoint working toward a sale becomes more meaningful—and more valuable. As part of a CX strategy, maintaining data from each customer touchpoint also helps companies expedite customer support needs. Consider if the dealership captured information from the buyer during the sales process that this car will be the family’s only source of transportation. So, when the car comes in for a service issue, the mechanic prioritizes fixing the car helping to get the driver back on the road quickly. Capturing and using all possible data about a consumer as part of a thoughtful, comprehensive CX strategy creates truly superior customer experiences.
- Do the channel options meet the needs of different customer demographics? Consider brand preferences between generations. What customers want between Gen Z (ages 6 to 24) and Baby Boomers (ages 67-75) differs. Therefore, each generation requires a different customer experience design. For example, younger generations prefer self-service options when communicating with a brand. They feel comfortable with technology and using social media as an active communication channel. Older customers want more personal forms of support and communication. They are not digital natives and are less well-versed in technology. Therefore, they may require more training on diverse digital platforms. Companies also should focus on customer needs regarding accessibility for differently abled populations. Diversity and inclusion strategies also represent an area of importance for recognizing how channel communication aligns with a diverse customer base.
Strategy #3 – Personalization
Every customer-centric organization treats customers as people, not numbers. Personalization enriches every customer interaction and represents an opportunity for a brand to differentiate from the competition. According to an article from McKinsey, unique experiences tailored to individual customers deliver on goals for customer loyalty and top-line growth.
Creating personalized customer experiences requires collecting proprietary customer data across channels. Using that data to deliver great one-of-a-kind brand interactions helps create a competitive advantage and makes a brand point difficult for competitors to imitate.
But the average person generates 1.7MB of data every second. That represents nearly 147GB of data per person every day multiplied by 8 billion people. How can companies possibly sift through that much data to create a unique experience for each person? That is where artificial intelligence (AI) comes in. AI excels at creating high-quality insights from huge datasets in real time. Each data point individually might be insignificant but aggregated together they create valuable marketing opportunities.
Audible and Netflix drive customer value by suggesting books and shows data indicate a specific subscriber would enjoy. Online retailers deliver a better customer experience by optimizing their websites to recommend products based on shopper characteristics. Starbucks combines customer order data with app geotracking to promote products or share discounts when customers are near one of their locations. In a June 2021 episode of The CX Leader Podcast, Melissa Drew of IBM shared how a company created a flight plan specifically for skiers. The positive customer feedback created a bigger marketing opportunity for the company.
Personalization strategies increase brand utility, deepen customer loyalty, and create better customer engagement. These customer-centric organizations deliver long-term value by serving customer needs and creating the products and services customers want, how they want them.
Strategy #4 – Customer Journey Maps
Customer journey mapping brings the four strategies together. When it comes to managing the overall customer experience, businesses must consider the entire customer journey. Mapping that journey involves capturing all interactions at every point across the entire customer experience. This process identifies if the customer’s experience is convenient, flexible, and personalized. Journey mapping allows management to find friction points that lower customer satisfaction or create barriers to consumer success.
The first step to start mapping a customer’s experience journey is by creating personas for each type of customer. Then, step into the shoes of each of those personas and follow the journey. Start at the beginning from the first moment a customer interacts with the brand. Follow every interaction to the point when a customer journey officially ends. Ask key questions along the way:
- What is the customer thinking? What is the customer feeling?
- What is the action of the customer? Why did they perform that action?
- What customer needs does the process address? What customer needs remain unfulfilled by the current process?
- What does the customer want to happen during each of the interactions?
- How can the journey better support the customer?
- What tools does the customer use? What tools would better serve customer needs?
- What is the next step for improving this map? How should this map look in the future?
Mapping provides valuable feedback on the customer’s experience. The exercise creates a map for delivering a better customer experience. Generated ideas might include:
- Enhanced training for frontline workers
- Providing better tools to the customer support team
- Developing new resource materials in marketing
Journey mapping isolates areas of focus, offering an action plan for driving customer solutions and success. The result is superior customer experiences built from high-quality interactions.
Stand Out from the Competition
Remember the statistic we shared earlier about nearly 50% of businesses prioritizing customer experience over product and price? Unfortunately, that means 50% still are not. Organizations that fail to become customer centric likely will not last and certainly cannot outperform the brand prioritizing the management of customer experiences.
Here are eight tips for differentiating a brand from the competition by offering best-in-class customer experiences:
- All customer feedback is good feedback—even the bad stuff. No one likes receiving bad news, but every piece of customer feedback offers valuable insights. A customer-centric organization sees all feedback as an opportunity to assess satisfaction, gauge client success, or create new customer solutions. A customer-centric brand also looks for feedback across all channels. A single post or image on social media could indicate a larger opportunity for creating a better customer experience.
- Focus on customer-facing interactions first. As the saying goes, Rome wasn’t built in a day. When customer experiences present many opportunities for improvement, prioritize what the customer sees, then work with other departments and teams throughout the company.
- Do not assume what customers want—ask them. The sales team, marketing department, and executives all may think they know what customers want. Yet without data—generated through direct customer feedback or carefully monitored brand interactions—teams fly blind. The customer experience illuminates those blind spots to foster business success.
- Measure what matters. CX teams monitor every important number when it comes to customer success. Standard customer experience metrics include:
- CSAT (customer satisfaction) – measures how products and services meet customer expectations.
- NPS (Net Promoter Score) – generates a number indicating how likely a customer is to recommend a brand, product, or service to a friend.
- CLV (customer lifetime value) – projects the total net profit a customer brings through their long-term relationship with a brand or company.
- Employee experience drives customer experience. Happy and engaged employees create a better customer experience. They focus on interactions that help customers achieve success. This comes from developing high-quality teams through training that shows the importance of making work customer centric. When employees feel like they matter, they operate from a mindset that the customer matters too.
- Contact centers do not drive customer experiences—the entire company does. Customer experience does not belong to a type of employee or specific team. Marketing is not the sole driver of customer experiences. Customer feedback is not intended for a single department. Every staff member has a responsibility for driving customer satisfaction. Customer-centric businesses share customer data, feedback, and performance metrics throughout the organization so everyone takes ownership for doing better. This creates a shared aspiration for serving the customer.
- Work toward long-term solutions. Far too many companies put band-aids on challenges. A customer experience strategy is not just in search of quick fixes. The function looks for long-term, sustainable change that creates loyal, engaged customers.
- Plan for the future. Eliyahu M. Goldratt’s The Goal is a business school staple. The book details the process of continuous improvement. Once the team resolves one problem, another emerges. The process continues getting better but never goes without additional opportunities for improvement. Customer experience is the same way. A company might launch a new product or service that requires an entirely new journey map. Good metrics may suddenly need to become great to stave off competition. A once-in-a-lifetime pandemic might occur. Customer-centric companies create successful customers today while planning for the future.
How to Improve Customer Experience
As customers evolve, so do their expectations. That means new pain points could emerge at any time or the customer journey might require different interactions. A new piece of customer feedback could indicate a brewing challenge on the horizon. Creating successful customer experiences is a never-ending job. While that is hard, it also makes the practice fun. Here are three tips for a brand wanting to build a better customer experience:
- Take a Customer-Centric Approach – Create an image and put the customer at the center. Now draw a circle around the outside and include all connection points to the customer. This could include different departments or channels. Now imagine the customer physically turning around and coming face-to-face with each of those interactions like the hands of a clock. That 360-degree customer view provides the perfect start for analyzing a customer’s experience. Use that feedback to discover what works well and what needs improvement.
- Create Clear Cross-Functional Accountability – The 360-degree image represents a powerful visual for developing customer-centric accountability across the entire company. Everyone is a cog in the customer experience wheel. Each person affiliated with the brand should understand their responsibility for customer support, acting on customer feedback, and focusing on their portion of the CX metrics. When frontline and back-office teams must work together to meet a metric, groups unite around a common goal.
- Provide Employees with Customer Insights and Knowledge – Share the data with everyone. Help employees internalize customer feedback by sharing both positive and negative remarks, guiding how to act on what they heard. Arm the team with information to make a difference. Meaningful, actionable data helps teams become loyal to the process and committed to making it successful—a benefit for every customer and a business’s bottom line.
Ready to focus on the customer experiences connected to your brand? It’s time to talk to Walker. We are a Qualtrics-certified full-service Experience Management (XM) firm. Our team of experts provides technology implementation, end-to-end managed services, and expert strategic consulting—all to deliver better results for our clients.
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