Small business owners know one of the most effective ways to differentiate themselves from their larger competitors is to provide exemplary customer service.
You’ve already dedicated a substantial portion of your resources to eliminating common customer service problems. However, even after you fix these common issues, you consistently see only a brief uptick in customer satisfaction levels.
The truth is, focusing exclusively on customer service could cost you up to 78% of potential purchases.
Customer experience is the missing piece of the puzzle for many businesses that can’t otherwise explain decreased profitability, unhappy customers, and even high employee turnover rates.
Improving the overall customer experience as opposed to focusing on individual customer interactions is the solution.
Table of Contents:
- What Is Customer Experience?
- Why Is Customer Experience Important to Your Business?
- What Is a Good Customer Experience?
- How to Measure Customer Experience?
- How to Improve Customer Experience: Tips and Tricks
- Customer Experience Trends to Watch
- Top Business Communication and Collaboration Software To Improve Customer Experience
What Is Customer Experience?
Customer experience (CX) is the overarching feeling or opinion that customers have about your business based on their history of interactions with your company throughout their customer journey.
Customer experience is not made up of a single interaction, but rather a series of interactions that include researching your business, buying and using your products/services, getting support, and providing feedback.
One customer’s CX can be influenced by multiple communication channels, several different departments and agents, separate brick-and-mortar locations, and their experience with multiple products or services your business offers.
What Is the Difference Between Customer Experience and Customer Service?
The difference between customer experience and customer service is that while customer service refers only to the part of the interaction where the customer receives advice/support about a product/service, the customer experience encompasses the entire customer journey from start to finish — not just the part where they receive assistance from a team member.
Customer service is only a part of the overall customer experience. Chatting with a live agent to get advice about which specific product to purchase is an example of customer service.
CX is the sum of all experiences across multiple touchpoints, numerous communication channels, and different buying stages. It informs how people feel and think about your brand.
The table below highlights the key differences between customer service and customer experience.
|Customer Experience||Customer Service|
|Is influenced by each interaction a customer has with your brand, including marketing, product/service research, brand reputation, customer service, packaging, delivery, product/service quality, etc.||Refers to the part of the customer journey when customers seek product advice and support before or after a purchase|
|More emotion-based||More information-based|
|Requires a knowledge of your customer base||Requires technical knowledge of your business’s products/services|
What Makes Up the Customer Experience?
If the customer experience is best understood as the sum of all customer interactions and how they make people feel about your business, then what kinds of interactions make up the customer experience?
- Company marketing campaigns (print/video ads, blog posts, email marketing, online reviews)
- Company’s social media presence (what content you post/react to, frequency of posts and follower interaction, number of followers, influencer marketing)
- Customer service across multiple channels (chatbots, live chat, phone support, social media support, customer self-service via IVR, online CS portals, customer knowledge bases)
- Shopping experience (brick-and-mortar/online stores/mobile app shopping, product organization, payment methods accepted, clear explanation of included features/products and what they do
- Setup and/or delivery experience (shipping updates/speed, product packaging, onsite setup, installation process)
- Quality of products or services (reliability, warranties, sustainability, production process, features offered, scalability)
- Pricing (fairness/affordability, discounts, sales/coupons, customer rewards program, pricing and fees transparency)
- Customer Satisfaction and Customer Care (adapting to changing customer needs with new products/services, existing customers feel valued/prioritized, understanding and empathizing with the customer base, customer surveys)
Why Is Customer Experience Important to Your Business?
Companies spend tens of thousands of dollars each year to improve their customer service and to keep customer satisfaction levels high.
Unfortunately, many overlook the importance of customer experience.
Customer experience has a major impact on your business’s revenue and ROI, employee turnover rate, customer retention rates, and much more. In fact, companies say focusing on customer experience is even more important to them than the products/services they actually offer and how much they’ll charge customers for them.
Quality Customer Experience Increases Revenue
You’ve probably spent more with companies that you feel “get” you, make you feel valued, and offer speedy customer service and support.
You’re not alone, as 70% of consumers say their buying decisions are primarily influenced by how they feel they’re being treated. That’s likely why over 85% of shoppers are willing to pay more for a product or service if it means a better customer experience.
Companies that make over $1 billion in annual revenue will make an additional $700 million within just three years of investing in an improved customer experience.
These revenue increases are even more dramatic for SaaS companies, who could potentially double their annual revenue by investing in CX.
Note that you won’t just see increased profits from an improved CX — you’ll also experience a cost savings of up to 79%.
(Sources: Eckerd, Walker, Affility Consulting, Forbes, The Good)
Good Customer Experience Decreases Customer Churn
Over 90% of consumers that have a bad customer experience with your business won’t shop with you again — and many will share their negative experience with others.
The good news?
92% of businesses that prioritized improving CX saw a major increase in customer loyalty.
Over 30% of companies say that the main reason they invest in CX is to improve customer retention rates — and you should do the same.
(Sources: Glance, Dimension Data, Gartner)
Ignoring Customer Experience Benefits Your Competitors
Over ⅔ of businesses say that customer experience is where they gain the biggest advantages over their competitors.
That’s probably why over 90% of companies say CX is the number-one aspect they focus on when it comes to beating out the competition.
Underestimating the importance of customer experience, or even failing to prioritize it over other metrics, is a gift to your competitors.
But if you start to take CX more seriously, expect to gain a 4-8% revenue advantage over your competitors who aren’t.
(Sources: KPMG, Oracle, Gartner)
What Is a Good Customer Experience?
A good customer experience is anything that makes it easier for your customers to have a positive interaction with your business.
For example, offering omnichannel communication as opposed to single-channel communication makes it much easier for customers not only to reach you, but also to reach you on their preferred channel.
A good customer experience is one that is convenient, consistent, simple, prompt, and personal.
Perhaps surprisingly, it’s less about creating a “gimmick” or “disrupting” an industry and more about being reliable and straightforward.
Real-World Examples of Good Customer Experience
To better understand what makes a good customer experience, let’s take a look at a few real-world examples during several key phases of the customer journey.
The Marketing Phase: Gamification as Fundraising in the Nonprofit Sector
German nonprofit Misereor used gamification in their marketing strategy to make raising awareness and collecting funds for their cause unforgettable.
To help donors understand where their money actually goes, they created the first-ever interactive poster ad that accepted donations via credit card. Digital images on the ad showed a child’s hands tied. When someone swiped their card to donate, the image would change and show the child’s hands freed from the rope.
The Research Phase: Retailers Harness The Power Of AI
The COVID-19 pandemic completely changed the ways customers research products, and companies like clothing shop BrandLabs are using AI to bridge the gap.
At the height of the pandemic, shoppers could no longer try things on in-stores, get fabric samples, or even test out furniture before bringing it home.
BrandLab partnered with AI tool Style.me to create virtual clothing stores customers could “browse” from the comfort and safety of their own homes.
Now, customers just click on pieces they like to see information about the materials, sizing, and price.
Best of all? Shoppers can upload images of themselves or choose from avatars to virtually “try on” outfits (avatars are saved for future shopping.)
Makeup brands, eyeglasses companies, and more have followed suit, partnering with social media platforms like Snapchat to let shoppers get opinions from virtual assistants and their friends in real-time.
The virtual try-on experience has become so popular that many brands have now made it a permanent option.
The Shipping/Delivery Phase: Real-Time Tracking in Ride Sharing and Food Delivery
“When will my food arrive?” “Did you forget my order?” “Is the driver downstairs?”
Though delivery and shipping services are more convenient than ever, they also lead to countless calls from impatient or lost customers.
Grocery delivery services like Instacart and food delivery apps like Seamless now offer interactive maps that let customers track their order in real-time — from the moment the delivery has been received to the time it’s delivered.
Instead of just providing periodic updates, live location tracking tools let customers watch couriers move constantly. These tools also allow for instant communication between courier and shopper to assist with issues like item substitution or broken apartment buzzers.
Rideshare giant Uber also uses telematic live tracking to let customers follow the live location of their driver on a map. If they can’t find their ride, a one-click live chat with the driver is available. Riders can even send their trip to their friends, who can follow along with their live location and make sure they get home safely.
Now, industrial companies use these live tracking tools to improve supply chain management and to communicate with their drivers in real-time.
The Customer Service Phase: Airlines and Automated Callbacks
Good customer service proves you value your customer’s time and provides customers with options that put them in control — two things airlines aren’t exactly famous for.
To put an end to record-breaking hold times to reach a live agent, airlines like JetBlue, United Airlines, and Delta have now implemented automated customer callbacks.
This means customers no longer need to wait on the phone line until an agent becomes available.
Instead, customers can choose the best time for them to receive a callback from the airline. This leads to much more pleasant interactions between customers and representatives, but still offers customers flexibility and choice.
The Customer Feedback Phase: Transparency and Customer Research Saves Dominos’ Reputation
In response to the outpouring of criticism, Domino’s created their “Pizza Turnaround” campaign by running a video ad highlighting bad customer reviews and showing brutal focus group responses.
The ad also featured the company’s President and leadership responding to customer reviews, providing company history, and discussing the specific steps they took to offer customers a new recipe based on comments and complaints from customer feedback.
The ad ends with Domino’s leadership driving unannounced to the home of a particularly unhappy member of a previous focus group. They present her with their new pizza, which she adores.
The spot completely saved their reputation (and likely, the entire company.) Domino’s still constantly reviews customer feedback.
What Causes Bad Customer Experience?
You probably already know what makes a bad customer experience as, unfortunately, it’s all something we’ve experienced.
Generally, poor customer experience happens because a business failed to meet a customer’s expectations or could not keep the promises they made.
Specifically, poor CX is caused by:
- Long support hold times
- Lengthy IVR menus that make it difficult to speak to a “real person”
- Inconsistent pricing and hidden fees
- Constant pressure to purchase new or upgrade existing products
- Lack of self-service options like online bill pay, self-help databases and forums, etc.
- Uninformed or irrelevant customer service
- Having to repeat issues to multiple customer support agents
- A defective product, particularly one without a warranty
- Poorly-designed websites that make it difficult to find product/pricing information
- An overall lack of transparency with customers
- Outdated products/services that no longer meet the needs of customers
- Ignoring customer feedback
- Poorly-trained employees/agents
How to Measure Customer Experience
In addition to the above examples of good CX, there are a few ways to measure and quantify customer experience.
Use Customer Surveys to Identify Your Customer Persona, Key Touchpoints, and More
A good first step is to run customer surveys that include a mix of multiple choice questions, 1-10 rankings, and open-ended questions.
Note that instead of running a single survey, it’s best to run several types of customer surveys simultaneously.
Customer Demographic Surveys
Customer Demographic Surveys help to identify and create your business’s customer persona — a fictional but factually-informed “ideal customer” based on the most consistent survey responses. Many businesses think they know their target market, but surveys often reveal that their biggest customers are far more different than what they perceived.
These surveys should include questions relating to customer demographics, such as:
- What age group do you belong to?
- What is your education level?
- Where do you work/what is your job title?
- Where are you located?
- What languages do you speak?
- What is your marital status?
- What is your annual household income?
Key Touchpoint Surveys
Surveys can also provide insight into key customer touchpoints across the customer experience, especially when it comes to where things are going wrong. You can’t expect to improve CX without a solid understanding of what’s working and what isn’t.
The map below outlines key customer touchpoints across the customer journey to ask questions about.
CX surveys and the creation of your own customer journey map based on responses will help you to identify common blocks within the customer journey. You’ll also get insight into the overall effectiveness of your current sales and customer service processes.
Customer Satisfaction Surveys
CSAT survey responses identify top reasons for customer churn, offer insight into the quality of customer service and support, and show recurring customer complaints and problems to improve.
In addition to calculating your CSAT rate, (which we’ll discuss below) ask customers questions like:
- On a scale of 1-10, how satisfied are you with our products/services?
- On a scale of 1-10, how satisfied are you with the customer service and support you’ve received?
- Agree/disagree with this statement: The products/services our business provides met your expectations. (Possible answers can include strongly agree, agree, neutral, disagree, strongly disagree)
- How likely are you to recommend our business to a friend/family member?
- How do our products/services add value to your life?
Identify, Calculate, and Track the Right Metrics
In addition to asking questions via customer surveys, there are more mathematical ways to evaluate the customer experience.
Below, we’ll outline some of the most important equations and calculations to consider and consistently track to measure CX.
Net Promoter Score (NPS)
Your Net Promoter Score is the most important calculation to evaluate customer experience.
In essence, it measures brand/company loyalty, customer satisfaction, and CX by asking one simple question:
“On a scale of 1-10, how likely are you to recommend our business to a friend, family member, or coworker?”
Responses are divided up into three categories: Detractors (1-6) Passives (7-8) and Promoters (9-10.) d how loyal customers are to your brand.
The below image outlines how to calculate NPS.
Customer Churn Rate (CCR)
Customer Churn Rate is an excellent indicator of your overall CX score as it helps you to understand how quickly you’re losing your customers, as well as the percentage of your overall customers that will likely leave.
You can calculate CCR for month, date, year, or even within a set period after you released a new product or made significant changes to your business process.
The below equation explains how to calculate CCR over a set period of time.
First Call Resolution Rate (FCR)
FCR measures the percent of customer service calls that are completely resolved during the first interaction between customer and representative.
FCR can also be applied to other communication channels as “First Contact Resolution Rate,” following the same equation below.
CSAT (Customer Satisfaction) Score
Your CSAT score offers insight into how your customers feel about your business and what it provides.
It is based on survey questions that are answered on a scale of 1-5, with 4-5 seen as “positive” scores.
CSAT is measure based on the below equation:
How to Improve Customer Experience: Tips and Tricks
You should strive to be constantly improving your customer experience score.
Just because customers are happy today doesn’t guarantee they’ll still feel positively about your company tomorrow.
The below tips and tricks offer advice on how to improve the customer experience.
Value Customer Time Above All Else
71% of shoppers say their time is the most valuable thing to them — and they’re unlikely to continue to work with businesses they feel waste it.
One of the best things you can do to boost your customer experience is to prove to customers you respect their time.
This can be accomplished by:
- Adding robust omnichannel self-service options
- Using CRM software to ensure all agents have access to the most current customer information and conversation history
- Offering automated callbacks or providing estimated wait times
- Keeping IVR menus brief
- Allowing customers to speak to a live agent at any time
- Including chatbots or live chat messaging on your website
- Sending automated notifications to clients regarding shipping updates, sales, order status information, etc.
- Using features like remote call forwarding, shared voicemail, and call routing to speed up the resolution process
Be Upfront and Be Realistic
If you want to keep your customer experience positive, avoid making promises you know you can’t keep.
Though telling the customer what you think they want to hear may have some payoff in the moment, in reality, all it does is promise greater frustration later — and an extended resolution process that will likely escalate.
- Letting salespeople promise discounts/free offers without confirming it with higher-ups
- Exaggerating how long your product will last in the hopes of making a sale/providing higher value
- Promising unrealistic delivery/technician arrival times
- “Hiding” excess fees in the fine print, or adding fees without offering a clear explanation of the reason for them
- Placing (undue) blame on the customer if a product has been lost or has arrived damage
- Lying about the hold time length/wait time length before a call is returned
- Making unrealistic claims about the things your product or service can do
- Not clarifying which features/services are standard and which ones come with an additional fee
Use Analytics to Learn What Customers Aren’t Telling You
Maybe you’ve heard the famous statistic that only 1 in 26 unhappy customers actually make a complaint.
The rest simply disappear.
In addition to using the metrics we’ve mentioned above to measure CX, rely on analytics to fill in the gaps when it comes to customer satisfaction, team productivity, and more.
For example, if you’ve noticed an uptick in customer wait times, that’s likely going to negatively impact your CX score. On the flipside, if you’ve noticed an increase in first call resolution rates, chances are that consumers are pretty happy with your customer service.
Our list of the top call center metrics provides more detailed insight into the KPIs to monitor historically and in real-time.
Build a Personal Connection
The good news is that there are countless ways to offer a highly personalized customer experience without having agents spend hours chatting with clients about their personal lives.
Market segmentation uses past purchase and demographic data to break up customers into groups of shoppers/clients with similar interests.
For example, if a customer purchased a new computer, they’d probably like to know when relevant computer accessories go on sale. They’d also probably like to receive information about product updates for that computer.
Maybe your research has found that female clients between 30-35 are three times more likely to buy a specific product than others. Instead of sending these clients emails about products they don’t really care about, send them updates when their favorite product goes on sale or when you launch a similar product.
Other ways to optimize personalization include:
- Automate the inclusion of the client’s first name in otherwise form emails
- Have agents take call notes about customers by implementing after-call work time
- Create loyalty “VIP” programs and make product recommendations based on past interests
- Invite customers to in-store events
- Invest in personalized packaging
- Make a video call if you can’t meet in person
- Use analytics and data to anticipate future customer behavior
Don’t Undervalue Your Employees’ Opinions
The most successful businesses know that asking for employee feedback and insight is valuable not only to decrease turnover rates, but also to better understand how customers and team members are feeling about your company.
In addition to making your employees feel valued, setting up meetings or sending out anonymous surveys to your team helps you see common customer issues, ineffective business processes, and even workflow mismanagement you may have previously overlooked.
Happy employees that are optimized — not overburdened — are much more likely to go the extra mile for customers.
Customer Experience Trends to Watch
To ensure you stay ahead of the game, familiarize yourself with upcoming customer experience trends.
The list below outlines top trends you should expect to see in the coming year and helps you to determine which ones might benefit your customers.
Transparency Into Company Processes
Customers want to know what goes on “behind the scenes” at their favorite companies.
Use social media stories and consider working with influencers to give your market a front-row seat to your board meetings, production facilities, and even your shipping process.
When possible, make it personal. Feature a new team member each day and allow them to “take over” your social media stories.” Include photographs of the employees who packaged or made your products.
Vacation home giant Airbnb has seen great success with this tactic via their “All About Airbnb” takeover campaign.
Use Bots to Provide Instant Answers
90% of customers expect an “immediate” (10 minutes or less) response when they contact a company, whether they reach out via social media messenger, online chat, or via phone.
To keep customers happy, more and more businesses are adopting automated chatbots that instantly respond to customer queries. These bots can let a customer know their message has been received, tell them their place in the queue to speak to a live agent, or even provide relevant help based on automated responses and online knowledge databases.
Strengthen Security to Increase Consumer Trust
Customers don’t just want to like your company — they want to be able to trust it.
Showing consumers you take a proactive approach to security and privacy by implementing two-factor authentication, using end-to-end encryption, and offering transparency about third-party access to client data will do wonders for your CX.
Our guide to VoIP and online security threats identifies top security concerns and offers advice on how to guard against them.
Don’t Switch Back to the Status Quo Post-COVID
COVID may have accelerated the digital transformation, but the truth is, it was already well on its way to becoming the new normal before the pandemic hit.
As the world returns to normal and your business is able to function as it once did, don’t abandon the innovations you made to accommodate social distancing. Though customers will return to stores, once again attend in-person events, and meet with sales reps for lunch, they’ll also continue to want the convenience of a digital connection.
Keep offering virtual tickets to in-person events, continue to allow for AI-powered at-home try-ons, host online product tours, and continue to offer video meetings.
Top Business Communication and Collaboration Software To Improve Customer Experience
Today’s business software solutions offer features and analytics that make it much easier to track and improve customer experience.
For example, team collaboration tools with features like real-time file editing, task management, instant chat messaging, and user presence optimize internal communications and streamline workflows.
Call center software offers omnichannel communication, multi-level IVR for better self-service, and advanced call routing options to boost first call resolution rates.
These communication platforms can send out post-call automated surveys, track NPS, and give you real-time insights into agent and customer behavior.
Our interactive list of the top Unified Communications platforms offers detailed information about providers, pricing, and features that improve your customer experience.