Focus effectively on customer experience (CX) and your business will witness significant performance improvements across the top- and bottom-line. This is the key takeaway from a recent study by Forrester Consulting, which established that experience-led businesses have 1.6x higher brand awareness, 1.9x higher order values, 1.6x higher customer satisfaction rates, 1.7x higher customer retention rates, 1.9x higher return on spend, and 1.5 higher employee satisfaction. Customer experience could even replace product and price as the key brand differentiator in the near future.
(Image source: cmo.com)
Clearly, customer experience presents an exciting opportunity for businesses that learn to master it. But what is CX, and why is it becoming so fundamental to business performance?
How CX Experts Define Customer Experience
Ask anyone the last time they had a bad customer experience – perhaps a sales representative was rude either in store or over the phone, or an online service made it practically impossible to delete an account – and it wouldn’t take them long to come up with a story of what happened and how it left a lasting impression of feeling angry, upset, devalued, or frustrated.
Bad customer experiences are common. We’ve all had them, and when we do, the chances are we will be reluctant to do business with the same brand again in the future. In fact, according to a recent report from Acquia – Closing the CX Gap: Customer Experience Trends Report 2019 – globally, more than three-quarters (76%) of consumers switch to a brand competitor after just one bad experience.
(Image source: acquia.com)
Undoubtedly, CX matters more than ever to customers. But before we go any further, we first need to understand what customer experience even is in the first place.
In a recent blog post, Lumoa put the question “What is customer experience in 2019?” to 15 CX leaders. Here are three of what we think are the most illuminating answers.
“Customer Experience has moved from being focused on customer service to the entire experience a customer has with the company. That means every interaction, large or small, and that includes any and every interaction the customer has with the organization’s employees, the packaging of products, the experience navigating through a website, advertising/marketing messages via traditional and digital, interactions on social media, etc.” – Shep Hyken, CX Expert and Bestselling Author of The Convenience Revolution.
“Customer Experience is very simply explained as everything an organization does to deliver the ‘end to end experience’ to a customer. From advertising; to PR and media; to sponsorship; to websites and apps; to physical interactions (stores and branches); to products; to documentation; to employee behavior; to communication; to Customer Service etc.” – Ian Golding, CCXP, CX Consultant and Trainer.
“To me, customer experience is more than a business discipline, it is a way of life for customer-centric organizations. Customer experience represents the most powerful lens for looking at the totality of a customer’s interactions with an organization and trying to maximize not only the value of each individual interaction but the customer’s overall journey.” – Adam Toporek, CX Consultant, Author, Speaker.
The common thread throughout all of these definitions – and the remaining twelve in the Lumoa post – is that customer experience is embedded in everything a company is and does. CX is the overall impression a brand leaves with its customers – which results in how they think about the brand – across every stage of the customer journey. It’s not just friendly customer service representatives. It’s product. It’s packaging. It’s sales. It’s marketing. It’s social media, websites, emails, stores, employees, and more. Experience-led businesses realize that CX is everything, everything is CX, and that good experiences are good for business.
Why CX Is the New Competitive Battleground
As Shep Hyek (quoted above) goes on to explain to Lumoa, over the coming years, organizations both large and small will need to recognize that customer experience is as important as anything else they offer their customers. Why? Because customers are no longer just comparing like-for-like competitors anymore – rather, they are comparing their experience with one brand against all other experiences they’ve ever had with all others.
According to the second edition of the State of the Connected Customer report from Salesforce, over two-thirds (67%) of customers will pay a premium to companies that offer superior experiences, creating opportunities for not only competitive differentiation, but increased or even new revenue streams as well. What’s more, 80% of customer say the experience a company provides is just as important as its products and services, 95% say they are more likely to be loyal to company they trust, and 67% say their standard for good experiences are higher than ever.
(Image source: salesforce.com)
But the CX difference works both ways – and today’s customers are just as likely to take their business away from a company on the basis of CX as they are to be drawn to one. 57% of customers have stopped buying from a company because a competitor provided a better experience, while 62% say they share bad experiences with others – including on peer review sites and social media.
(Image source: salesforce.com)
CX Is Becoming Data-Driven
Unsurprisingly, in the digital age, technology is becoming the key enabler of effective CX. As new technologies like artificial intelligence (AI), Internet of Things (IoT) and voice-activated personal assistants explode across the market and impact customer expectations and purchasing habits, it’s the digital customer experience (DCX) in particular that is emerging as a key brand differentiator.
The World Wide Web has given customers power. As the business world moves online, customers have more options at their fingertips. They have switching power (76% of customers say it’s easier than ever to take their business elsewhere), and more power than ever to influence the success or not of a business through social media and online review sites.
And this all makes DCX a data-driven process. As Nicholas Therkelsen-Terry and Samuel Irvine Casey recently pointed out in blog post for IBM, companies today have all kinds of tools and technologies at their disposal to find out what customers think about their products and services so they can improve the overall customer experience. Mining data from social media, focus groups, surveys and feedback from customer service reps, the information gathered reveals what customers are thinking and feeling and can be used to drive intelligent decision-making.
This type of data analysis is now becoming even more powerful with the application of AI technology and natural language processing (NLP). These tools allow CX professionals to not only understand what customers are thinking, but why they’re thinking it – and can process much, much more data in a fraction of the time than the previous generation of analytics solutions.
Speaking of IBM’s own cognitiveCX solution, powered by Watson, Therkelson-Terry and Casey reveal the power of AI in revealing the why of customer sentiment. “We can get amazing insight by applying AI to our clients’ data. And I mean all their data. Before AI, we didn’t have the capacity to analyze the kinds of data volumes we’re looking at today, and those volumes continue to grow. With Watson powering our cognitiveCX solution, we don’t need to sample. We can look at everything – millions, maybe billions of documents, calls, posts, news articles – it doesn’t matter. We’re no longer looking at 1,000 social media posts out of hundreds of thousands, or at 100 people surveyed in focus groups. We’re looking at every relevant customer comment about a product.”
Companies around the globe are now leveraging the incredible power of AI to boost their customer experience efforts by learning more about the customer and anticipating their needs. The Royal Bank of Scotland (RBS), for instance, which manages 17 million customers across seven brands and eight different channels, completely overhauled its strategy from one which primarily sought to upsell customers into new credit cards to one which focused on the customer. Its approach was to leverage AI-powered data intelligence into entirely new forms of customer contact. For example, when a customer repeatedly overdrafts his or her account, the AI flags the appropriate bank personnel to contact the customer with financial advice. “It’s about continuous conversation,” said one company executive.
Elsewhere, Air Canada deployed an AI and machine learning data analytics system that provided insight into customer behavior across digital and offline channels. The brand then leveraged the insights into customer-facing performance enhancements and a streamlined website experience. Another example would be luxury hotel brand Dorchester Collection, which used a custom AI analytics solution to sort through online surveys and reviews to review key performance drivers. The brand, in fact, even changed its breakfast menu based on AI suggestions after analyzing guest reviews.
Final Thoughts
The importance of becoming a customer experience-driven business in 2019 and beyond cannot be understated. In the digital economy, buying is an experience, not just a transaction, and as customers look for innovative digital experiences from the brands they do business with, those same brands must seek emerging and maturing technologies to deliver the personalized and contextualized experiences that customers expect.
What’s concerning, however, is that even as companies recognize the growing importance of CX, there remains a huge gap between commitment and actual achievement. 94% of companies now rate CX from “moderately important” to “extremely important”, and yet, only 31% are truly experience-led. The even more worrying indication, this time from Forrester’s proprietary CX Index™, is that CX quality has been languishing for three years and is unlikely to surge in 2019.
As Maxine Schmidt, Principal Analyst serving Customer Experience Professionals at Forrester, told CMO.com, “We have seen for a number of years now that companies are talking about CX. We see lip service from executives, but the efforts aren’t going anywhere because there isn’t a real commitment.”
Companies today need to overcome this challenge, and not simply shout from the rooftops about how important customer experience is, but actually make moves to improve it from top to bottom across the whole organization, and invest in the people, processes, and technology to make it happen.
Importance of CX
Focus effectively on customer experience (CX) and your business will witness significant performance improvements across the top- and bottom-line. This is the key takeaway from a recent study by Forrester Consulting, which established that experience-led businesses have 1.6x higher brand awareness, 1.9x higher order values, 1.6x higher customer satisfaction rates, 1.7x higher customer retention rates, 1.9x higher return on spend, and 1.5 higher employee satisfaction. Customer experience could even replace product and price as the key brand differentiator in the near future. The World Wide Web has given customers power. As the business world moves online, customers have more options at their fingertips. They have switching power (76% of customers say it’s easier than ever to take their business elsewhere), and more power than ever to influence the success or not of a business through social media and online review sites.
