Last updated: December 2024
Learn about Customer Experience (CX) and why it's important for building successful relationships with your customers.
A recent study by Hubspot reveals that 90% of CX leaders agree customer expectations are at an all-time high. As customer expectations evolve, delivering exceptional customer experiences (CX) has become a top priority for businesses striving to gain a competitive edge and foster long-term relationships with their customers.
Organisations that prioritise CX reap numerous benefits, including customer loyalty, increased revenue, and positive brand perception. In fact, a study by Salesforce found that 88% of customers report that the experience a company offers is as important as its products or services. But what exactly is CX? And why is customer experience important?
Learn about customer experience and its benefits, how to measure CX and the role of cloud contact centers in enhancing customer experience.
Customer experience, also known as CX, encompasses every interaction a customer has with a brand throughout their entire customer journey. It’s not limited to a single touchpoint; rather, it’s the sum of all moments—whether online, offline, or across various channels—that shape a customer’s perception. It includes every interaction a customer has with a brand, from initial awareness and engagement to post-purchase support and loyalty.
Customer service and customer experience are closely related but not the same. Customer service is a subset of the broader concept of customer experience. Customer service is a crucial component of the overall customer experience, but CX extends beyond just service interactions to encompass the entirety of the customer's journey and interactions with the brand.
Let’s look at some definitions that are closely related to customer experience.
Customer service: Customer service relates to the assistance, support, and solutions to customers before, during, and after a purchase or interaction with a company's products or services. It involves addressing queries, resolving issues, and catering to customer needs and preferences through various communication channels such as phone, email, chat, social media, or in-person interactions. Effective customer service aims to enhance the customer experience, build trust, and foster long-term relationships.
Customer journey: A customer journey refers to the sum of all interactions and touchpoints that a customer experiences with a brand or business across different stages of their relationship lifecycle, from initial awareness to post-purchase engagement. It represents the path that a customer takes while interacting with a company, including researching products/services, making purchases, seeking support, and providing feedback.
Customer care: The holistic approach of nurturing and maintaining relationships with customers by providing attentive support, personalised assistance, and proactive engagement. Customer care involves listening to customer feedback, anticipating their needs, and taking actions to exceed expectations, ultimately fostering long-term loyalty and advocacy.
So, why is CX important? A positive customer experience is crucial for building trust, fostering loyalty, and driving advocacy, as satisfied customers are more likely to return for future purchases and recommend the brand to others. At the same time, good customer experience results in 3x returns to shareholders, according to McKinsey.
In contrast, poor customer experiences can lead to customer churn, negative word-of-mouth, and damage to a brand's reputation. In fact, a study by PWC found that one in three customers would walk away from a brand they love after just one bad experience. Additionally, according to Forbes, organisations lose $75 billion a year due to poor customer service (which is an important aspect of customer experience).
Now, let’s look at the main benefits of prioritising customer experience.
"Customer spending increases up to 140% following a positive experience, according to Deloitte."
Prioritising customer experience (CX) is not just beneficial; it’s essential for any business that wants to thrive in the modern landscape. Here are some key benefits of placing CX at the forefront of your business strategy:
Enhanced customer satisfaction: When you prioritise CX, you directly contribute to higher customer satisfaction. By understanding and meeting your customers’ needs and expectations, you create positive experiences that leave lasting impressions.
Increased customer loyalty: Customers who have consistently great experiences with a brand are more likely to remain loyal. This loyalty translates into repeat business and a higher lifetime value per customer. In fact, a study by Dimension Data found that organisations that prioritise offering great CX reported a 92% increase in loyal customers.
Positive word-of-mouth: Happy customers are your best advocates. They are more likely to recommend your brand to friends and family, which can be a powerful form of organic marketing. In fact, of consumers who experience a positive CX, 77% will recommend the brand to a friend.
Competitive advantage: In industries where products and prices are similar, CX can be a key differentiator. A superior customer experience can set you apart from competitors and attract more customers. And, with 54% of U.S. consumers saying that most companies need to improve their customer experience, it can create a huge competitive advantage to put CX in focus.
Higher revenues: There is a strong correlation between CX and revenue growth. Customers are willing to pay more for better experiences, and businesses that deliver on CX can see increased sales and profitability. In fact, according to McKinsey, improving customer experience increases sales revenues by 2-7%.
Reduced customer churn: A focus on CX can help reduce the rate at which customers stop doing business with you. By addressing pain points and improving the overall experience, you can decrease customer churn.
Better customer insights: Prioritising CX often involves collecting and analysing customer feedback, which can provide valuable insights into product development, marketing strategies, and operational improvements.
Employee satisfaction: Employees tend to be happier and more engaged when they are part of a company that values CX. This can lead to better performance and lower turnover rates.
Brand strengthening: A commitment to CX helps build a strong, customer-centric brand identity. This can enhance your brand’s reputation and lead to long-term success.
We’ve looked at the many benefits of prioritising customer experience for organisations. Now, let’s explore how to make a great customer experience by looking at some core components of a good CX strategy (and how you can implement these to upgrade your CX).
1. Build a customer-centric culture
A successful customer experience strategy begins with fostering a customer-centric culture. This involves ensuring that every member of your organisation, from top management to frontline employees, understands the importance of CX and is committed to delivering exceptional service. Remember, only one negative customer experience can highly affect your company – therefore, every employee should know the importance of putting the customer at the front. Some key elements of building a customer-centric culture include:
2. Understand the customer journey
Understanding the customer journey is crucial for developing an effective CX strategy. Customer journey mapping involves visualising the entire customer experience from the initial point of contact to post-purchase interactions. This helps identify touchpoints where your customers interact with your brand and uncover areas for improvement.
3. Give personalised experiences
Personalisation is a key element of a customer experience strategy. In fact, according to Statista, 62% of consumers state that an organisation would lose their loyalty if it delivered a non-personalised experience. By tailoring interactions to meet your individual customer needs and preferences, your organisation can create more meaningful and memorable experiences.
Strategies for personalisation include:
4. Deliver omnichannel experiences
Customers don’t want to repeat themselves to different agents. Nor do they want to have disconnected experiences. In fact, a study by Salesforce found that 79% of consumers expect seamless interactions across different departments. Therefore, providing a seamless omnichannel experience is essential for a robust CX strategy. Your customers should be able to interact with your brand through their preferred channels, whether it's online, in-store, via mobile, or social media, without any disruption in service quality.
5. Empower your teams
Customer service agents are your best advocates. Empowering your employees and customer service agents to make decisions that benefit the customer can greatly enhance CX. Providing them with the necessary tools, training, information, and authority to resolve issues quickly and effectively is key.
Now that we’ve covered some important elements of a good CX strategy, it’s time to look at how to measure it. This is crucial to understand how well you are meeting customer expectations and identify areas for improvement. Here are some examples for measuring customer experience:
Cloud contact centers play a pivotal role in shaping the customer experience by providing organisations with the tools and capabilities to deliver seamless, personalised, and efficient customer service across multiple channels. Unlike traditional on-premises solutions, cloud contact centers offer scalability, flexibility, and advanced features that enable organisations to meet the evolving needs and preferences of their customers in real-time.
By integrating cloud contact centers into your CX strategy, you can leverage technology to deliver these benefits. Cloud solutions offer the tools and flexibility needed to provide a seamless, responsive, and personalised customer experience, which is key to reaping the rewards of a CX-focused approach.
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