In the last couple of years, the interest in CX (Customer Experience) has risen significantly. Yet, many CX professionals would say that the term still doesn’t circulate the world to the desired degree. They often emphasize the need to focus on spreading the word and introducing CX to all parts of the globe. This article is CXM’s contribution to the initiative as we aim to explore the topic and present CX to all audiences out there.

Customer Experience definition

Let’s start with the definition. For those of you who are very new at this – CX is short for Customer Experience. Although the term can be explained in many different ways, it basically comes down to how customers perceive their interactions with brands. So, what does CX stand for? In a nutshell, CX stands for all the interactions a person has with an organisation during the entire customer-brand relationship. This can be everything from simple actions such as phone calls to fully completed purchases.

What does CX mean?

Now that we know the general definition of the term, it’s time to dig deeper into the question of what does customer experience mean. Basically, every time a customer interacts with your brand, that interaction raises certain feelings, which further affect how a person perceives your organisation.

The crucial thing here is the result. Depending on whether the experiences were good or bad, a customer will decide to return to your brand or leave it completely. Simply put, CX is all about meeting people’s needs and expectations for seamless experiences and mutual benefits. Because it focuses on perception and feelings, we are not talking just about a set of actions that focus on a buying experience.

 Good customer experience can be seen in (although not reduced to) some of these:

An illustration of customers interacting with a brand within various aspects.

On the other hand, people could negatively react to your brand when faced with difficulties in navigation, long waiting lines, poor customer service, inadequate support methods, untransparent pricing, false promises, and more. All these things make the bad customer experience.

CX involves interactions at every point of the customer journey with a brand, from marketing to sales and everything in between.

That’s why it’s essential to think about all points of customer interaction with a brand when referring to CX. Only this way, a clear picture of the relationship can be made. But why is this important? What reasons do organisations have for exploring these interactions and investing in their improvements?

The importance of Customer Experience

Customer experience is one of the key factors that impact a bottom line in business. The way people feel about the brand is directly linked to retention, lifetime value, and brand loyalty. In today’s overloaded and highly competitive market, attracting and retaining customers is not an easy task. Companies that overlook the importance of CX could be left behind competitors that understand its value and benefits.

Long-lasting relationships

To put things simply, people who are satisfied with one brand’s services and products are more likely to stay loyal and continue purchasing these offerings. Moreover, they also tend to spread the word and share a positive brand image.

‘Trust is a product of vulnerability that grows over time and requires work, attention, and full engagement.’

Brene Brown

In one of our previous articles, our contributors from Forrester wrote about building trust relationships with customers. According to Forrester’s research, 1 in 5 UK customers will leave a brand if it is not aligned with their values. Therefore, CX is all about building trustful and loyal relationships both with internal and external stakeholders.

Lower customer churn

Bad experiences drive people away from companies and towards others that can meet their needs and provide what they’re looking for. However, constantly living up to customer expectations is not simple. Even one remotely bad experience with the brand can result in lower satisfaction, affect reputability, and cause people to leave the company once for all.

Still, companies with a long and solid customer-centric culture are more likely to avoid these risks and prevent customer churn in long term. We’ll dig deeper into this topic below!

The factors influencing CX

The sure-fire way to grow your business is to invest in your CX. However, the way you are supporting the initiative has to be informed by different factors impacting the final CX result. Let’s take a look at three factors that emerged as particularly important over the past few years.

Data analytics and ethnography

According to a Preto Principal, roughly 80 % of your sales will come from 20% of your customers. Following this methodology, not every customer will stay in the business and bring you revenue. Therefore, using data analytics to inform your CX strategy can result in:

  • high customer retention
  • high customer acquisition

However, in one of our recent articles, we wrote about the importance of ethnographic research in CX. Even though the technology will continue to shape the CX developments, small data and human to human interaction have to remain the company’s priority. Moreover, focusing on qualitative research techniques provides you with additional opportunities to create breakthrough products.

Ethics and employer brand 

Employees working together to figure out what does CX mean within an organisation.

What makes the most influence on how people feel about your company inside out? Your CX and EX approach combined. Over the past two years, the connection between CX and EX became inseparable due to dramatic changes caused by the pandemic.

Care also emerged from the pandemic as a dominant phenomenon – customers started showing for people behind service desks. Ethical workplace conditions, purpose, and sustainable agendas are emerging as equally crucial for a holistic CX.

Building a people-centric organization is an inseparable part of CX. The truth is your employees come first, not your customers. Once you have all teams aligned, and motivated by a strong purpose, the CX impact will follow.

Moreover, having your CX values in place means investing in employee training, CX courses and masterclasses, offering them options for personal growth and authentic relationships with customers. Letting employees shape your CX is what might result in an outstanding employer brand and make your company a desirable place to work, create, and develop.

What can CX experts do to keep up with customers high demands and constant technological change? According to CXPA, CX is made up of six core competencies each CX professional has to master:

  • Customer-Centric Culture
  • Organizational Adoption & Accountability
  • VOC, Customer Insight & Understanding
  • Experience Design & Improvement
  • Metric, Measurement & ROI
  • Customer Experience Strategy

These competencies demonstrate the complexity of the CX field that requires years and rich experience to be on the level of mastery. Anyone can start with the micro CX initiative as of today. However, not everyone can remain persistent on the path of keeping customers and employees on top of everything over a longer period.

Customer Experience FAQs

Now that we answered what is Customer Experience, it’s time to explore other burning questions.  To make sure you have a good grasp of the topic, we bring forth more definitions, tips, trends, and practices within the industry.

What is the difference between customer service and customer experience?

Is customer experience the same as customer service? These are probably the two most confused terms in the CX industry. In the insightful masterclass hosted by CX guru Ian Golding, our team had the opportunity to explore differences between customer experience, customer service, and customer-centricity. Here is how Ian defined the three terms:

‘Customer service is the assistance and advice provided by a company to those people who buy or use its products or services.’

On the other hand, the customer experience field is defined as a much wider field of interactions:

‘Customer experience is the sum of all experiences a customer has with a supplier of goods and/or services, over the duration of their relationship with that supplier. This can include awareness, discovery, attraction, interaction, purchase, use, cultivation and advocacy.’

And finally, customer-centricity is seen as a mindset:

‘Customer Centricity is putting customers at the heart of everything you do will lead to increased customer satisfaction and loyalty, which will ultimately lead to an increase in profitability.’

How to create a customer experience strategy?

A good CX starts with your team being intentional about changes they want to see in organizational culture, customer journeys, and overall business growth.

An illustration shows people communicating to discuss the best approach to CX strategies.

The CX strategy is there to inform everyone in the organization what the intended customer experience is about and how to deliver it.

Therefore, this kind of strategy answers the questions about long term goals, but also daily operations.

Before you decide what strategy approach to follow, you need to evaluate your CX maturity level. There are different benchmark tools businesses can use to estimate their current CX success.

According to CXInspired research conducted in collaboration between Awards International, CXPA, and European Customer Consultancy, there are five levels of CX maturity: Unaware, Preparing, Meeting expectations, One step ahead, Empathetic-Front-runner.

Here are the three questions that will help you do the first evaluation and start planning your CX strategy:

  • Do we know who our customers are?
  • Do we know what are they needs and how to meet them?
  • Do our people have the knowledge, tools, and resources to deliver expected experiences?

How to improve CX?

Improving CX is an ongoing process. CX design is an infinite game that companies have to embrace fully and intentionally. To improve CX, professionals can apply various methodologies of finding out customer needs, brainstorming optimal solutions, and running low-cost tests.

The three most applied and widely spread methodologies are Lean, Design Thinking, and Agile. All of them have a few things in common but focus on different organizational aspects.

  • Lean aims at reducing waste in a process. This methodology is cost-effective and highly useful for service improvements.
  • Design thinking aims to solve customers’ issues by always putting people first. The values of design thinking are empathy and deep research with users. CX professionals typically use design thinking to innovate their processes or products.
  • Agile approach helps teams organize themselves in a flexible, efficient, and explorative way. Unlike design thinking, and lean, agile focuses on organizational management and team success.

What are some of Customer Experience trends in 2021?

Following the pandemic, many studies emerged predicting the new CX trends and practices. We highlight the ones that have received the most attention so far: 

  • Digital innovations 

Digital innovations continue to be at the centre of 2021. According to Statista’s report, worldwide spending on digital transformation technologies and services increased 10.4% in 2020 to $1.3 trillion. We expect this trend to develop even further. 

  • Omnichannel experience

Considering the fact customer journeys are no longer one-directional due to rapid digitalisation, businesses have been investing in omnichannel experiences. The research conducted by Reputation indicates this might be the only way for businesses to ensure seamless experiences and remain competitive.

  • Data privacy and security

This is the burning topic in 2021, and most customers are worried about the privacy and security of their data. Moreover, 99% of interviewed customers say companies need to improve their trustworthiness as we emerge from the pandemic. Protecting user’s data and increasing trust will probably remain top priorities for brands throughout the entire year. 

  • Personalization

Another thing COVID-19 brought out is the importance of empathy and human connection between brands and customers. According to the Five9 report, most customers seek personalized services right now. Keeping a human touch in the quickly advancing world of technology will be another imperative this and next year.

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