What is Customer Experience?
Customer Experience is not just the interactions a customer has with a brand. It also involves impression, relationship, experiences, and perception about the brand.
It includes their customer journey through various touch points during the course of their interaction.
Important: The customer experience process doesn’t end after the sales process. It continues even after the sale is made and the product or service is used by the customer. In short, it includes the after sales processes as well.
Customer Experience Management
What is it?
According to Gartner, Customer Experience Management is defined as “the practice of designing and reacting to customer interactions to meet or exceed customer expectations and, thus, increase customer satisfaction, loyalty, and advocacy.”
In simple terms, it is a process that enables a brand to manage all the interactions with the customers.
Every customer-centric brand needs protocols and policies to ensure it manages its interactions and relationship with its customers in the most efficient manner and Customer Experience Management helps clear the chaos associated with it.
Why do you need a Customer Experience Management solution?
Customer Experience is the new battlefield. Brands are going to compete primarily on the basis of customer experience. It is the primary differentiator.
Not having a customer experience management (CEM) solution in place will cost your business dearly. The following are the reasons why you need customer experience management solution (CEM)
- Reduce customer churn
It is a known fact that acquiring new customers costs more than retaining existing ones. Customer retention helps the business in keeping the cash flow steady. In fact, Increased customer retention of about 5% leads to an increase in profits by 25%.
A CEM solution can help you reduce customer churn by taking necessary steps with the the help of useful insights provided by a CEM solution.
- Increase in revenue
As mentioned earlier, customer churn reduces your revenue while customer retention maintains a steady flow of profits. Moreover, regular customers who avail your service will become satisfied and turn into loyal customers.
- Let customers be your brand advocates
The greater the customer experience, the higher will be the number of your loyal customers. Satisfied and loyal customers tend to be positive brand advocates. They recommend you to their friends and family voluntarily.
Now, that you understand the need for a CEM and a solution to manage the same, let us also comprehend the related terms to customer experience so as to better understand the distinction between them.
Key terms in customer experience
Customer Satisfaction refers to the contentment level of the customers after having used your product or service. It includes how your product meets the expectations of your customers.
Customer Loyalty refers to customers preferring to use a particular brand over their competitors. It is a result of a good customer experience. After sales service also counts as a big factor in earning customer loyalty.
It is only possible when a brand or a firm consistently strives to deliver a product par excellence.
Customer Service refers to the provision of service post the sale of the product. It could be regarding the usage, issues and other queries. It involves the interaction between the customer and the customer service representative.
Excellence in customer services fosters good client-customer relationship. A business could surely do well with some tips on delivering good customer service.
Information regarding the experience of a customer with regards to a product or service refers to customer feedback. It highlights the shortcomings and issues with the product.
It is their review highlighting whether or not their product met their needs or beneficial to them. Customer feedback is usually taken through surveys, emails, phone calls.
Want to learn more about customer experience? Do so by attending these customer experience events in 2019.
Moving on from the key terms, a brand needs a customer experience strategy if they wish to improve things. Let us take a look on the need and importance for the same.
Customer Experience Strategy
Delivering stellar customer experience is no child’s play. Without a strategy in place, it would take a miracle to pull it off. A customer experience strategy is a well thought out, actionable plan which includes all the major customer touchpoints where the customer interaction takes place.
Simply put, it refers to each stage of the sales funnel. Before crafting a customer experience strategy the following things are to be kept in mind.
- Reach and relevance
Before devising the customer experience (CX) strategy, ensure that the channels that you plan to focus on are used by your customers.
- Ease of service
Can your customers easily find the answers that they are looking for? Examine all the online and offline channels.
Make use of the data available to you. Personalize your CX strategy according to individual customer needs. It makes the customers feel that you aren’t taking them for granted.
- Channel flexibility
The channels that your customers are present should be able to integrate to deliver seamless customer experience. Rigidity in the same will axe the customer experience as the multiple touchpoints should be able to carry from it left off. Omnichannel customer experience is the need of the hour.
From online to offline, desktop to mobile, social media channel to live support, make sure the channels used are flexible.
Having read the importance and the key things to ponder before devising a strategy, a central component called customer journey mapping to ensure your customer experience strategy is realistic and help you realise your goals.
Customer Journey Mapping
Customer journey mapping is the visual depiction of all the stages the customer has interactions right from the primary point of contact to the later or end point of the relationship.
It is the sum total of the customer's action, emotions and motivations, and pain points. To put it across better, it is the pictorial representation of the interactions of the customers with the brand.
It is the primary step a brand must create in order to ensure that all their customer experience strategies are fruitful.
The below-enunciated points are the reasons why you need a customer journey map
Ensure customer centricity
Unless the whole organization works towards creating a better experience for their customers, no customer experience strategy is going to work.
Customer journey mapping ensures that all the departments and functions are kept informed of the processes, the touchpoints, and the problems.
It is essential so that there is coordination between various departments to smoothen the customer experience process. All strategies should be customer focused.
Understand customer personas
Wasting your time targeting the wrong customers will slow you down. It is a misstep and hence to better understand the psychographics and demographics such as age, gender, and other details, customer journey mapping is really important.
Customer personas help you understand the buying behavior, motivations, and the actions of the customers.
Customer journey mapping will help you understand the customer personas and make decisions based on their behavior during the touchpoints at every stage.
Ensures quicker and smoother sales
The most common reason customers back out even after showing interest is because of the slow sales cycle. Inconsistent information is the main reason for frustrating customers.
When a customer journey roadmap is created and all the departments work in unison to help make it happen, the customer no longer faces any roadblocks.
Use it for lead generation and gauge demand for new products
Brands face an uphill task when it comes to generating demand for new products. The positive reception of a new product is important for its success. While mapping the customer journey, you can conduct market research based on the existing buyer personas.
Convey the issues to the sales, customer success, and marketing teams to bridge gaps leading to inconsistency in customer experience.
How to create a customer journey roadmap?
1. Align your goals
Often times, starting a plan without concrete goals leads to a mess. Chart out your goals by how you want to improve customer experience. Your buyer personas will help with aligning the right goals.
2. Do your research right
Now, research is of two types:
- Anecdotal research
Anedoctal refers to the customers’ experience of using the product. But, getting anecdotal data can be tough. One way to gather the said data is through social media and through customer interviews.
The customer-facing staff and frontline staff work with customers directly and hence can add value by giving insights on customer pain points, problems and the like.
Based on the customer personas gathered, you can make assumptions based on certain logic.
- Analytical research
Turn to your website analytics. The data obtained there will tell you how the users are interacting with your website.
Log in to your Google Analytics account and find out the following:
- The number of users visiting the page
- Most frequented pages of your website
- How do prospects convert into customers
- What is there goal in each of the pages
- Best products and services having high purchase rates
A common mistake that brands make is that they assume that a high number of page views means the customer is engaged.
Wrong! For all that you know, they could be confused and lost.
3. Identifying all the major touch points
Identify all the points of interaction and contact customers have with your brand. Specify them at all stages such as pre-purchase, purchase, and post-purchase.
Enquire with the departments and customer-facing roles such as sales and marketing. How do the customers come to know about you? Do they come through your website?
4. Connecting all the touch points
There is numerous way a customer could find you. It could be through a google search which leads them to your website, a google ad, email marketing, social media or third-party review sites.
Omnichannel experience is continuity in customer experience despite a change in offline to online channels. Don’t confuse multichannel with omnichannel.
Multichannel only means that your brand uses multiple channels. Omnichannel covers all the touchpoints at every stage of the customer journey.
Your customer journey mapping is incomplete without omnichannel customer experience strategies.
Your brand will be successful at creating an omnichannel experience if there is a seamless brand experience across brick and mortar, web, social and apps. But, despite the word being thrown around a lot, all channels work in isolation which is why delivering omnichannel experience is met with failure.
With customers having numerous choices to shop from, customer service should adopt the omnichannel customer experience strategy. Employees should be trained to deliver exceptional customer service to ensure stellar customer experience.
There are numerous benefits of adopting an omnichannel approach as part of your customer experience strategy-
Personalization becomes easy
Personalization when it comes to offerings and choices, find a lot of takers. With the omnichannel approach, data is easily available. Customers are willing to pay more for more personalized experiences.
If they have the choice of shopping through an app or a brick and mortar store, they are more likely to choose the one convenient to them. Especially in retail, customers are ready to part with their data if they see a benefit.
Speaking of personalization, festivals are a great part to improve customer experience. Here are 5 leading brands which nailed customer experience this season.
Helps build customer loyalty
Creating personalized brand experiences make customers feel valued. They are likely to become loyal customers thus increasing your customer retention rates. A high customer retention rate and loyalty correlate to higher customer satisfaction.
New data insights
Since omnichannel includes both digital and offline channels, new data insights are available. First party data is available from your website and google analytics. You can easily identify where your customers are coming from.
Chatbots and virtual assistants can be used to collect data of common customer concerns.
No industry is devoid of customer experience problems, here is a overview of customer experience present in some of the industries.
Customer experience problems across industries
Restaurants are dependent on online reviews to drive sales. Negative reviews are a result of poor customer service which is one aspect of bad customer experience. With growing awareness in the restaurant industry, restaurateurs are using CEM and ORM solutions.
If you are a restaurateur and don’t believe in using a CEM solution, then here are 5 reasons to convince you otherwise.
Online review sites like Zomato, Yelp and Google reviews are now being seriously monitored by restaurants. Customers are posting online reviews and have now become more aware.
Then there is the problem of negative reviews and fake ones which are a big blow because it tarnishes their online reputation. To resolve issues pertaining to poor customer service, they need a ticketing solution as well. All customer experience problems ranging from food, menu, hygiene, and ambiance are highlighted in reviews.
So, make sure you work on resolving problems by taking reviews seriously.
Guest experience is an aspect that of late hotels have started giving attention to. Among the many problems faced by hoteliers, increasing occupancy rates is a big problem. Hotels are now realizing the growing importance for customer experience.
OTAs such as TripAdvisor, Expedia, Booking, MakeMyTrip, and ClearTrip are some of the travel review sites which are frequented by customers. Since 97.7% of the customers read online reviews before making a purchase, hotels must pay attention to online reviews. It also helps driving traffic to your business and not to forget SEO.
Owing to their orthodox mindset, hoteliers fail to understand the amount of business different channels could generate for them. Most hoteliers still have teams to manually reply to these reviews or have outsourced the work to third-party agencies.
Food & Beverages
Since the Food & Beverages industry too comes under the purview of the hospitality industry, they too are plagued by online reputation problems. Often times, older reviews which were written two years ago and have been resolved leads to a loss in revenue as they drive away customers.
F&B also comprises the Quick Service Restaurants (QSR) which have popped in every nook and corner of the world. Here are some tips to help local QSR chains compete with global brands.
A CEM solution with a review management feature can help F&B chains combat this problem. Over the years, though recency plays a part while factoring reviews, still negative reviews from the past turn up.
How do you solve this? Review management is the answer. And, then there are the fake reviews.
The retail industry is one of the mammoth industries that is affected by online reviews. The success of e-commerce is largely due to online product reviews. 90% of the customers read online reviews before deciding to make a purchase.
Also, since consumer behavior has changed and omnichannel experience has to be provided, retailers face unprecedented challenges.
Personalization according to customer preferences by analyzing data is another problem that stops retailers from delivering excellent customer service.
Retail chains are also faced with the management of the multiple store units. Also, traditional retailers are shutting down, due to the inability to amalgamate online and offline mediums to create world-class customer experience.
If your retail store is facing problems with creating a good customer experience, then a CEM solution is the answer.
American Apparel filed for bankruptcy in 2017 while Macy shut down 15 units followed by Kmart closing 78 while Sears bringing curtains down on 26 of its stores.
What does this convey?
Omnichannel experience is important or you shut shop.
Fitness centers and gym
Fitness centers and gyms have customer churn rate other than the reason of customers not turning up due to laziness. The main issues that see customers quit midway are broken and substandard equipments, certified fitness trainers and rude staff.
All these problems make their way to the Google My Listing page and other review sites. Since the major players are chains, they too wrestle with the problem of gauging the performance of multiple store units.
Any efforts invested to improve something is worthless if it can't be measured. Customer experience improvements must be tracked over time in order to ensure that you moving in the right direction. It is for these it has to be measured.
Customer Experience Measurement
So far we talked about how and why you should create a better customer experience. But, how do you know whether its working and track improvements so that you can keep a tab of things?
It is, for this reason, there are 5 customer satisfaction metrics to measure customer satisfaction.
1. Net Promoter Score (NPS)
Net Promoter Score or NPS is a customer loyalty metric which is based on a scale of 1 to 10, where
- 1-6 represents the Detractors. Detractors are customers who have had bad customer experiences with your product or service. They sum up their negative experiences through online reviews. Detractors mean trouble and higher the number of detractors, the lower will your NPS be.
- 7-8 are the Passives. This group of customers neither have a positive nor a negative experience with your brand. Passives are not the most vocal customers and are left out of the equation.
- 9-10 denote the Promoters. Promoters bring good news. Positive brand experiences by customers make them promoters. If you want to increase your NPS, then your goal should be to increase your promoters.
Calculation of NPS
To calculate NPS, follow the below formula.
NPS = Percentage of Promoters - Percentage of Detractors
Percentage of Promoters = Total No. of Promoters/ No. of survey respondents
Percentage of Detractors = Total No. of Detractors / No. of survey respondents
2. Customer Satisfaction Score (CSAT)
CSAT stands for Customer Satisfaction Score which is based on the scale of 1 to 5 where each number denotes the following-
- Very Unsatisfied
- Very Satisfied
For CSAT calculation, only the answers consisting ‘4’ and ‘5’ are taken into account. The formula for the same is:
CSAT = No. of Satisfied Customers / No. Satisfaction Survey Responses *100
While NPS determines the likelihood of a customer recommending a product, CSAT is for the satisfaction of the product.
3. Customer Effort Score (CES)
Customer Effort Score is for the measurement of efforts required by the customer to complete a particular task. It takes into account the ease with which a customer executed a task, it could be a raising a ticket or finding answers related to usage of a product.
CES is useful in understanding the pain points and loyalty of the customers. It consists of the following-
- Strongly Agree
- Somewhat Agree
- Neither Agree nor Disagree
- Somewhat Disagree
- Highly Disagree
4. Customer Churn Rate
Customer Churn Rate is the percentage of customers who don’t make a recurring purchase and discontinue using the product or service. It is a metric that is used by companies whose services works on renewal or a subscription model, particularly SaaS companies.
Customer churn rate = No. of lost customers for any given period time/No. of active customers for a given period of time.
5. First Response Time
First Response is the average time the customer has to wait before receiving a response to the ticket raised by them. It is the time period between the first time the customer raises the ticket until the time of the first response from the support team.
Take note of the formula to calculate First Response Rate.
First Response Rate = Total First Response Rate / Total No. of Cases
The total first response rate includes the time taken to reply to all the first responses.
Average Handling Time
The time is taken to resolve a call starting from call initiation, hold time and the conversational or talk time. It is mainly used in call centers and support centers.
As we near the end of the blog post, here is a brief note on how the future of customer experience will evolve in the future.
Future of Customer Experience
As customer preferences keep evolving, so do the way customer experiences are delivered. The customer experience vertical is still in its nascent stage and the process is being strengthened by technology.
Artificial Intelligence, Natural Language Processing, Chatbots are some of the cutting technologies that will change the landscape of customer experience. Here are the 5 customer experience trends for 2019 that you need to know about.
As trends change, so do the stats. Stats depict the significance, impact and new insights in an industry or domain. Since customer experience is no exception, here are 23 important customer experience stats that you should know in 2019.
The article is a comprehensive guide to customer experience management covering various sub topics and necessity for the same.