Customer Experience: Why do we need it? How do we define it?
Why should an organization value customer experience?
Let’s start with an example. Tiffany has a business. She delivers a high quality product and service consistently, at a competitive price. In Tiffany’s business, she has mainly focused on making sure her product and service are the reason her clients choose to purchase from her business. When other competitors start offering the same product or service at a better price, Tiffany’s market share gets diluted, and in order for her business to grow, she needs a distinct customer experience (CX). A strong customer experience creates a differentiated brand that builds relationships leading to loyal customers.
Customer experience is the foundation for changing your customer base from transactional to relational. It is the culmination of all of your products and services in addition to every thought, interaction, or emotion that your brand invokes in not only those they serve, but the employees within it as well. For many organizations, a loyal customer base is the pinnacle of success. That bond is cultivated through a variety of interactions over what we call a customer journey (some may call customer life cycle). The most important part of customer experience is that a brand cannot define it for themselves, the customers must be the ones to define it for the brand.
“Customers define their brands. Every touchpoint makes a difference in how the brand is described and whether customers believe in the company’s promise.” -Sheryl Pattek , VP & CMO Executive Partner, Forrester Research
Customer experience has been a proven approach for years. In fact, a study from 2017 explains how customer experience performance was tracked over a ten year period through the lens of market value.
3 Key takeaways from this study:
- Customer Experience Leaders outperformed the broader market, generating a total return that was 45 points higher than the S&P 500 Index.
- Customer Experience Laggards trailed far behind, posting a total return that was 76 points lower than that of the broader market.
- Customer Experience Leaders generated a total cumulative return that was nearly three times greater than that of the Customer Experience Laggards.
A great example of understanding how customer experience can help a company to excel is by looking at those who have done it well. Amazon, Southwest and Zappos are known for their customer service, but that is actually a by-product of their customer experience mindset. These companies are customer experience giants who have not only reinforced their brands through their products and services, but truly differentiated themselves in the age of our expectation economy.
“65 percent of consumers say that a positive experience is more influential than advertising or marketing” — PwC
How do we define customer experience?
Customer experience is often mistaken for customer service. An experience is the culmination of the entire relationship between a client and an organization serving that individual (or group). Customer service is one supportive factor of that experience.
The clients must be the ones who define what the current experience is for the brand, before the brand can understand what opportunity that experience has to change in the future. When a brand doesn’t put the voice of the customer first, we have historically seen wasted time and money on creating solutions that do not provide the client value. This is mainly because these solutions were not created with the client’s true needs in mind (what the client asked for), but instead what the brand thought the client needed or wanted. What is missed most often are the emotional aspects of CX, as brands tend to think about the functional needs of their clients first and foremost. Overlooking functional needs over emotional needs means overlooking a fundamental part of being human.
Since the clients are the ones who define what the experience is, we (all of us, including you) will need to hear the feedback directly from them. At Cast & Hue, we use a number of qualitative and quantitative methods to ensure we fully understand the needs and journeys of your clients. Let’s continue the conversation through email@example.com.