Beyond the Buzz: CX and Why it Matters to Your Business
By Anna Ho, Associate Director of Strategy
Companies are now operating in what many are calling the Age of the Customer, an era where consumers are more empowered than ever. Experience is everything to consumers and on top of that, customer expectations keep increasing.
To keep up with this changing tide and better respond to customer expectations, more and more companies are turning their attentions to the customer experience or “CX.” The problem is most organizations are not clear on what exactly CX is and the value CX delivers to both customers and the business.
To help you go beyond the buzz and understand its value, here’s a brief rundown of what CX is and how it might be your competitive advantage in an increasingly crowded consumer landscape.
What is CX?
Customer experience (CX) is the holistic experience a customer has with your brand or company. It encapsulates every encounter your customer has with all facets of your organization and their perception of each interaction. Today, those interactions blend across all channels, including digital touch points, social media presence, brick and mortar visits, calls with your customer care line — all the way down to the packaging and unboxing of your physical products. Customer experience is not only the singular impact of each interaction, but also the cumulative effect of all encounters a customer has with your brand.
Why does CX matter?
CX matters because consumers have come to prioritize experience over things. In their annual study of the State of the Connected Consumer, Salesforce found that “80% of customers say the experience a company provides is as important as its products and service.” Unfortunately, for customers, these interactions just aren’t cutting it. According to the Salesforce study, more than half of all customers surveyed agree that “most companies are falling short of their expectations for great experiences.”
With the rise of both the experience economy and omnichannel retail, customers have come to expect timely, personalized interactions with a company, regardless of channel, or they’re taking their business elsewhere. In their study of consumers, the CMO Council and SAP Hybris found that even if they have been a loyal customer for years, nearly half of consumers say they will spend money with a competitor if they continuously encounter a poor customer experience from a brand.
How does CX impact my bottom line?
A stellar customer experience is not only beneficial to consumers; it’s also good for business. As the Harvard Business Review reports, customers who had the best customer experience spend 140% more compared to those who had a poor customer experience.
Indie fashion and beauty brands, for one, have had great success in adapting to consumer expectations of personalization and on-demand value. Direct-to-consumer brands like Everlane, Glossier, and Warby Parker have each managed to amass a loyal customer base thanks in large part to their reputation for consistently providing interactions that reinforce their company’s commitment to their customers and what their customers value. Ultimately, these differentiated customer experiences drive customer loyalty, which in turn increases revenue growth.
Glossier, for example, flexibly enables conversations with customers to happen across all channels, including social media, email, FaceTime, and phone, and even has dedicated “gTeam editors” for each channel to ensure that every customer receives a quick and personalized response. Furthermore, Glossier’s customer service team is well integrated into its business and marketing efforts, ensuring that customer conversations regularly inform product development and the overall brand strategy. The results of those efforts are not only beneficial for customers, but also good for the business. Reportedly, Glossier’s sales nearly tripled in 2017, with more than a third of its sales coming from word-of-mouth recommendations.
What’s the relationship between CX and UX?
User Experience (UX) refers to the experience customers have with a specific product or service. A good user experience, for example, provides customers an app experience that is relevant, easy-to-use, and enjoyable. CX or customer experience, on the other hand, refers to the customer’s broader involvement with a company. CX encompasses every interaction a customer has at any point in their customer journey, one of which could be their user experience with an app or website.
Just as good UX centers on a deep understanding of the end-user, CX is rooted in a holistic understanding of customer behaviors and what they need, want, and expect. These insights help to define a systematic approach to establishing a differentiated customer experience that drives growth. Critical to a winning CX is a shared understanding across your organization of who your customer is, the complete end-to end customer ecosystem, and how each role within your organization contributes to the customer journey and to what end.
To succeed in what’s increasingly become a consumer-centric landscape, it’s vital to define how your company will deliver value beyond your core product or service. Here are three fundamental things your company needs to do to get to that shared understanding:
1. Know your customer. Evaluate the state of your customer experience today – from the perspective of your customers. Map the customer ecosystem. Talk to customers or examine customer care data and reviews to learn first-hand about their interactions as customers. What do customers perceive about your brand? Are you providing a consistent customer experience across touch points? Does the customer experience vary amongst market segments/personas?
2. Define a customer experience strategy. A truly impactful customer experience requires continual coordination and communication across departments — marketing, R&D, product, customer service, data analytics, relationship management, etc. To provide customers a consistent and cohesive customer experience, you need to define your CX strategy, which includes a unified understanding of:
a. what your customers need and value
b. how teams across your organization (both at the front of the house and back of the house) will deliver on your brand’s promise at every customer touchpoint
c. how information and resources will be shared across departments and how efforts will be governed across the organization
3. Connect feedback to action. In order to invest wisely in your customer experience, it’s important to understand how your organization will measure customer satisfaction as well as the impact of the customer experience on the business. How do these customer insights inform decision making through the organization? How does customer feedback inform product development and your overall brand strategy? Moreover, how will you measure and validate improvements to your customer experience?
Today’s customers expect highly responsive customer experiences at every encounter, touch points that speak directly to their needs and values. So, as your company continues to transform its offerings to keep up with the latest trends in technology, make sure you don’t lose sight of one very important question: what are you doing to shape the customer experience and keep up with their evolving expectations and needs?
Want to learn more about CX? Learn how to create a digital experience that lives up to customers’ expectations, by speaking to four fundamental human desires.