‘Customer experience’ or CX, as it has come to be known, is the biggest thing to emerge from the world of marketing in recent years.
Why is that?
It’s simple: A good CX strategy has been shown to improve customer satisfaction and retention, resulting in substantially higher profits.
So what exactly is CX?
Customer experience is all about recognising the value of customers to your business and how they affect your bottom line. According to research carried out by Harvard Business School, businesses improve their profitability by between 25% and 95% if they increase customer retention rates by just 5%.
As this suggests, while it is important to attract new customers, the low hanging fruit in terms of improving profitability is keeping existing customers happy.
So is customer experience just a new way of talking about good customer service?
Certainly, the two are related, but CX is a broader concept.
While customer service generally refers to the quality of interaction between customer and company at the point of sale, this is just one aspect of customer experience. CX encompasses every single interaction between a business and its customers, throughout the entire ‘customer journey’. It includes things like when a customer calls with an enquiry, takes a delivery, returns a product, or makes a complaint. Each of these interactions is referred to as a customer ‘touch point’.
How can a CX strategy help your business?
One of the first steps in developing a CX strategy is to create a ‘customer journey map’. This sets out every single touch point between your business and its customers.
Next, you need to ensure that your customers are getting the service they need at every touch point.
The thing is, customers can be a fickle bunch. One in three say they will leave a brand after just one bad experience. Interestingly, 68% of people say poor service is their primary reason for switching brands. This compares with 14% who say it is due to being unhappy with a product. On the other hand, if you can offer exceptional experiences at every touch point, customers will remain loyal and even become brand ambassadors, promoting your brand among their friends.
The emergence of social media, Customer Relationship Management (CRM) tools and data analytics has made it increasingly possible to gain deep insights into what customers think about your brand. A good CX strategy involves finding out how they feel about your service at each touch point. What they like and what you could be doing better.
Once you have this information, it is simply a matter of training your staff to respond accordingly.
CX is more than just a marketing strategy
While the previous sections define CX and outline the fundamentals of a successful CX strategy, there is more to it than that.
Properly understood, CX is not just a marketing tool used to retain customers and boost profits. It is intended as a holistic approach to doing business where the customer is central to everything you do.
This is well illustrated by anecdote. The founder and CEO of Amazon, Jeff Bezos, is famous for his devotion to CX. Legend has it that in the company’s early days, he would leave an empty chair at the table during board meetings. It represented the customer, and was intended as a constant reminder of who should be at the forefront of every decision.