Complete Guide to Customer Experience

“You are caller number 10; please stay on the line.” A few years ago, a phone message like this from a company was a standard part of the customer experience.

But today, customers expect more. They expect callback options. They expect to open a chat window on your website, send a text message or a tweet, and get a near-instant reply. They expect that you already know who they are when they call, that you’re aware of their most recent order, and that you understand what they need next. They don’t want to repeat their information. And they definitely don’t want to wait.

Customer expectations for good experiences keep soaring. They don’t just want the right product at the right price — they want the full package. In our annual State of the Connected Customer report that surveyed nearly 17,000 global customers, 91% of business buyers and 86% of consumers said the experience a company provides is as important as its products and services.

As products become less distinguishable by brand and price, a great customer experience has become essential for companies to differentiate themselves. Here are some ideas and strategies for building customer relationships that last.

What is customer experience?

Customer experience, also called CX, gets thrown around a lot. But how is it defined, and what does it mean?

“Customer experience and service have converged,” said Peter Schwartz, LIKE.TG senior vice president of strategic planning. “It’s more than call centres and successful responses to problems. It is service opportunities in sales, support, and marketing. Delivering great customer experiences now means providing amazing, almost magical service at every opportunity.”

For example, think back to the last time you called your cable company, filed an insurance claim, or booked a vacation. When you were finished, how did it feel? Was the overall experience easy and enjoyable? Or headache-inducing? What did you think of the company that provided the experience?

What’s the difference between customer service and customer experience?

The customer experience is broader and deeper than just the level of service received. Customer experience is the total perception of the company, interaction by interaction, from the first touchpoint to the last. This may include navigating the website, talking to sales reps over the phone, visiting a store, sampling a product or service, and experiencing an onboarding phase after a purchase.

The point is that at every one of these moments, customers form judgments about whether a company is living up to their expectations. Is that company making it easy and enjoyable for them to do business with? In other words, customer experience is the sum of all interactions.

Why is customer service important?

Customer service isn’t just about addressing concerns or fixing issues; it’s about forging relationships, building trust, and creating memorable experiences that your customers will reflect on for all the right reasons. Let’s unpack why investing in premium customer service should be a no-brainer for today’s businesses.

Increased brand loyalty thanks to great CX

When customers feel valued and understood, they’re more likely to stick around. Every other positive experience and interaction they have with your brand reinforces their decision to choose you over competitors. Conversely, a single negative experience can be enough to push them towards competitors. Indeed, one in six shoppers will abandon a purchase after just one bad experience.

Prioritising excellent customer service is your ticket to building a loyal customer base. And you’ve no doubt realised for yourself how much easier it is to convince an existing customer to buy from you again than it is to convince a prospective customer to buy from you for the first time. Not only that — increasing customer loyalty (retention) by just 5% has been shown to increase profits by somewhere between 25-95%.

Minimised churn through genuine care

Churn, or the rate at which customers stop doing business with an entity, is a metric no business can afford to overlook. This is the flip side of the brand loyalty argument. Since it’s much more complicated (and more expensive) to win a new customer than keeping an existing one, the churn-reducing impacts of providing great customer service are similarly immense. The difference here is that brand loyalty refers more strongly to customers making repeat or additional purchases. Whereas, churn is more relevant to subscription- and membership-based businesses as it’s more strongly related to people choosing to cancel a service rather than to choosing not to make a repeat purchase. (Note, you can measure a churn rate even if you sell non-consumable products. However, the reasons for churn in those circumstances are harder to determine and attribute. Often, the reason is simply that a customer doesn’t need any other products from you.)

Effective customer service acts as a vital buffer against churn by proactively addressing concerns, listening to feedback, and showing customers they’re more than just numbers. We instinctively understand that it’s easier for a customer to choose not to make a purchase in the first place than it is for them to cancel an ongoing subscription or membership. (The former is really easy. The latter takes effort.) But if you thought one in six shoppers abandoning a purchase after a bad experience was bad, this may just make you fall off your seat. A whopping 86% of shoppers will leave a brand altogether after just two bad experiences!

Additional sales opportunities with stellar service

Ever heard the phrase ‘people buy from people’? When customers have an emotional connection with a brand, they’re not just more likely to buy but also are more loyal customers and likely to upsell or cross-sell. And they’re also much more likely to share their positive experiences with their friends, relatives, work colleagues, and even just acquaintances. In fact, 72% of customers will share a positive experience with six or more people.

Delivering top-tier customer service can lead to increased sales opportunities, from repeat business to referrals. When customers love your service, they won’t just come back — they’ll bring friends.

Standing out in a saturated market

With so many options available at the click of a button, what makes a customer choose one brand over another? More often than not, it’s the experience they anticipate or have received. In a market teeming with similar products and services, standout customer service can be the difference between being a customer’s first choice or a forgotten brand. And 81% of businesses believe the experience they give their customers differentiates them from their competitors.

Ability to charge higher prices

Impressive though the above CX benefits are, there’s one amazingly direct benefit that makes investing in superior customer experience and service even easier to justify. Customers will pay for a better customer experience. And we’re not talking about a minority here. An overwhelming majority (86%) of shoppers are willing to pay a premium for great customer service.

How to create good customer experiences

Customers have always wanted a consistently good buying experience and the best value they can get. If they’re not happy buying expensive razor blades, they can sign up for inexpensive monthly delivery. If they’re fed up with mediocre hotel chains that don’t offer value, why not try Airbnb?

Technological advances have led to disruption across every industry. Customers have more choice and great freedom to take their business elsewhere if they’re not receiving the experience they expect. In fact, 71% of consumers switched brands at least once in the past year.

And, social media and review websites like Tripadvisor and Yelp give consumers an unprecedented platform — for better or worse — to amplify poor experiences to a much wider audience.

Together, these factors give consumers an upper hand dealing with companies. And service with a smile is no longer enough.

Customer experience isn’t a new concept, but it’s never been more relevant. According to our State of the Connected Customer report, 88% of customers say the experience a company provides is as important as its products or services — the highest it’s been since LIKE.TG began tracking the sentiment.

Customer service teams aren’t the only ones responsible. Once mainly concerned with driving new leads, 80% of marketers now feel they lead customer experience initiatives across their organisation.

The good news? Customers are willing to pay a premium for great experiences, and not just great products and services. This means businesses have an opportunity to increase revenue by delighting their customers in a way that no one else can.

How to measure customer experience

Offering top-notch customer experience is vital for businesses today. But how do you know you’re delivering what your customers want? The key is to measure and evaluate your activities using not just one, but several methods. Here are some top techniques to get you started.

Analyse customer satisfaction survey results

Surveys are a direct line to your customers’ thoughts and feelings. When you send out a well-crafted survey, you’re essentially asking your customers, ‘How’d we do?’, and their responses can provide a wealth of information. 

Look for patterns in the feedback. If multiple customers mention a specific aspect of your service that they loved, you know you’re onto a winner. Conversely, if there’s consistent feedback about areas of improvement, it’s a sign there’s work to be done. 

Not everyone will respond to your survey request. Those that do will tend to have a reason to respond. Either something’s been bugging them, and a survey is a chance for them to air their feelings. Or they’re thrilled with their user experience along with you, and so they’re happy to help you out. People in the middle tend not to bother filling in surveys unless there’s an incentive. Either way, keep your surveys concise and focused to get the most meaningful results.

Identify the rate of, and reasons for, customer churn

Customer churn, or the rate at which customers stop doing business with you, can be a telling metric. However, a high churn rate might indicate dissatisfaction with your customer service, or it could result from dissatisfaction with your products or services. Therefore, it’s essential to know your churn rate and understand the reasons behind it. 

As an example, if you sell infant nappies (diapers), customers will churn when their children are toilet trained, no matter how wonderful your products and customer service are. However, if your churn rate suddenly spikes, you can be pretty sure there’s some other factor at play.

Exit surveys can help you gain insights into why customers are leaving. Maybe it’s pricing, maybe it’s a competitor’s new offering, maybe they had a bad experience with one of your customer support team or people, or perhaps it’s something about the product itself. Pinpointing the reason for churn can guide your strategies for reducing it in the future.

Ask customers for product or feature requests

Surveys of any kind are always going to give you information, mostly from people who are either really happy or dissatisfied. Suppose you don’t want to experience the disadvantages associated with incentivising survey responses. In that case, one clever way to get feedback from people in the middle of the spectrum is to allow them to submit product, service, or feature requests.

It’s simple but effective: ask your customers what they want, and they’ll tell you if anything is missing from your offering. By actively seeking feedback from unhappy customers on potential new products or features, you can ensure you’re meeting (and even exceeding) their expectations. If you notice certain requests popping up repeatedly, it clearly indicates a market demand. Delivering on these requests can enhance the customer experience and foster loyalty, as customers feel heard and valued.

Analyse customer support ticket trends

A treasure trove of information can be found in customer support tickets. Examining the trends and recurring issues in these tickets gives you a clearer picture of where customers might be stumbling. Is there a particular stage in the buying process that causes confusion? Or maybe a product feature that’s not intuitive? Keeping a close eye on these tickets can provide actionable insights to smooth out any wrinkles in the customer’s perspective journey.

What is customer experience management?

Measuring customer satisfaction score and experience and analysing the effectiveness of your CX strategies are both important parts of customer experience management (CXM or CEM). CXM isn’t a new concept, but it’s not particularly well known. However, as shoppers demand ever-increasing levels of customer service, customer experience management is also increasing in popularity.

At its core, customer experience management is about ensuring customer interactions lead to positive and memorable experiences. It’s the practice of designing, understanding, and optimising every interaction and touchpoint in a customer’s journey to foster satisfaction and loyalty. It’s not just about mitigating negative experiences, but actively creating positive ones.

In a world where consumers have endless choices at their fingertips, a single, poor customer experience frequently leads customers to explore competing options. Conversely, a consistently good experience can turn a one-time buyer into a lifelong advocate. Add the power of online reviews and social media into the mix, and such advocates can influence countless potential customers. This interconnected landscape makes CXM crucial for modern businesses.

The components of effective CXM

Customer service management is a whole topic unto itself; however, these are the basic pieces of the puzzle:

• Listening to your customers: This sounds obvious, but it’s more than just hearing words. It’s about understanding the sentiments behind the feedback, be it through surveys, reviews, or direct communications.
• Analysing data: With technological advancements, we’re swimming in data. But raw data isn’t helpful on its own. Effective CXM involves diving deep into this data to glean actionable insights about customer preferences, behaviours, and pain points.
• Engagement and personalisation: Today’s customers don’t just want products; they want experiences tailored to their unique needs and preferences. Using tools like customer relationship management (CRM) software can help businesses offer personalised recommendations, content, and interactions.
• Continuous improvement: The world isn’t static, and neither are customer expectations. CXM isn’t a one-off task but an ongoing effort, so it’s important to regularly revisit and refine strategies based on new insights and feedback.

As you can see, customer experience management is more than just a buzzword. It’s a comprehensive approach to understanding, engaging with, and delighting customers at every step of their journey. In a world where customer-centricity is the name of the game, businesses can’t afford to overlook the power of effective CXM. If you’d like to kick-start your CXM efforts, check out our guide to improving customer experience management.

Why customer relationships matter

If a friend ignores a call, text, or email, it probably doesn’t bode well for the relationship. As with friendships, customer relationships bloom when individuals feel understood. Relationships weaken when customers feel that businesses don’t appreciate their personal preferences, whether that’s remembering they enjoy romantic comedies, or that they would rather be contacted by email.

Lack of trust can also derail a customer’s experience before it even starts. While customer data is an essential part of delivering personalised experiences, customers need to know that if they hand their data over, it will be safe, used legitimately, and beneficial to them.

As questionable business practices make headlines, customers grow ever more selective about the brands they trust. Nearly two-thirds (64%) say most companies aren’t transparent about how they use personal information at a time when trust comes at a premium: 74% of customers say communicating honestly and transparently is more important now than before the pandemic. Businesses that clearly articulate how they use their customers’ data can gain and keep their trust.

How can companies better know and connect to their customers and build more trust? Listen to Seth Godin, marketing guru and founding editor of The Carbon Almanac, and Brian Solis, vice president of Global Innovation at LIKE.TG, discuss.

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A company’s trustworthiness also represents its values. Increasingly, customers consider what a company stands for when deciding whether or not to buy from it. According to the State of the Connected Customer report, 66% of customers stopped buying from a company whose values didn’t align with theirs — up from 62% in 2020.

How do you create a good customer experience?

One challenge for companies trying to get this right is that customer expectations keep soaring. Increasingly, customers want experiences that are connected, memorable, and differentiated. We’ll talk through examples of each.;

Our research shows that 85% of customers now expect consistent interactions across departments when they engage with a company. For example, in a customer’s mind, a service agent should know the details of any recent ecommerce transaction they made, and engage accordingly. Not doing so risks losing customer trust: 55% of customers lose trust in companies when there’s a lack of consistency across touchpoints.

U.S. Bank connects all of its employees with a single, unified database of customer information. The solution also allows the bank to turn raw data into high-value insights, which can be used to drive decision-making, and personalise its financial offerings for customers.

Customer relationships had previously been built within individual business units such as banking, mortgages, investments, and payments. This led to a disjointed and often unsatisfactory customer experience. By approaching customer relationships as a single business, employees now have an aligned and complete view of their customers’ interactions with the entire organisation. This creates a unified customer experience across all business lines and strengthens relationships with customers.

Customers now have an easier time accessing financial services across all channels, including mobile devices, personal computers, ATMs, and 3,000 branches across 25 states.

A customer experience strategy builds relationships

It’s not enough for businesses to provide a personalised customer experience. They need to stand out from other companies setting a high bar. And they need to organise around the customer.  While research from more than a thousand global senior leaders in a study from Harvard Business Review Analytic Services found that customer experience is a top-five business priority, few feel they’re presently doing it well.

One European brand seeing results is Brunello Cucinelli, which quadrupled its ecommerce revenue after it adopted its customer experience strategy, culture, and solutions. The high-end clothing brand found maintaining its personal touch challenging for digital shoppers. It needed to bring the personalised experiences it was known for in its stores to online commerce.

The company’s solution was to implement what its leaders have dubbed “graceful technology.” This centralised system builds stronger, more personal relationships with customers. Featuring easily accessible customer order histories and automated workflows, the system helps store managers expedite online customer service needs. Employees can spend more time building relationships with shoppers. Customers can receive in-store service regardless of where they connect.

Brunello Cucinelli has successfully translated the luxury experience to the digital realm. And in the process, set new customer experience standards for the mass market.

The benefits of long-term customer relationships

Customers want businesses to treat them like individuals. They want tailored engagement based on their unique needs. While niche brands were the first to offer differentiated customer experiences, this is now the expectation people have of mass-market companies as well.

Take Piedmont Healthcare, for example. With the U.S. healthcare industry shifting to a value-based model, the healthcare provider was under pressure to improve patient outcomes and meet growing patient expectations with more personalised medicine. Piedmont Healthcare realised it needed to embrace technology to help it engage with patients and assist them to get easier access to care. They needed to personalise how the company connects with them.

The organisation’s solution was to implement an integrated cloud-based system to capture patients’ information and create comprehensive patient profiles. It gives the company better insight into its relationships with both patients and physicians. They can use data-driven information to create high-quality, personalised marketing communications for both groups. Sales staff can also use the system to deliver personalised messages to physicians at scale, track engagement, nurture leads, and follow up with greater speed.

How to make an amazing customer experience

With success stories such as these making the market acutely aware of what’s possible, 56% of customers expect offers to always be personalised. LIKE.TG’s Peter Schwartz believes businesses will eventually use artificial intelligence (AI) to achieve a better customer experience. He wrote that it can turn a “comprehensive trove of data into insights that can anticipate customers’ needs and act as their digital assistant.”

He uses the example of a frequent business traveler. They walk into a hotel room to be greeted by their favourite song playing, photos of their family in digital frames, and an email asking if they’d like the Caesar salad, without croutons, they last ordered from room service. The temperature and lighting are set to their preferred levels. And when they turn on the television, it suggests a movie they’ve yet to see, starring their favourite actress. A rental car of the model they’re considering buying is available at the hotel.

“This isn’t marketing to a category of consumers,” Schwartz said. “It’s applying AI and all the customer data to cater to the needs of a single individual, which is much more powerful.”

Glen Hartman, global lead of commerce and ecosystems partners at Accenture Song, has also described the potential for unprecedented levels of customer immersion. “Say you usually do your grocery shopping on a Saturday morning. You use the store’s app, you belong to its loyalty program, and perhaps you’ve even attended a do-it-yourself cooking class there. So, they know you well,” he said in an interview.

“When you walk in the door, the store knows you’re there through location technology. Delivering a real-time personalised experience in this context could mean the store suggesting a recipe based on your shopping list you created using the store app.

“They could even show you a video of what the recipe looks like, right on your phone. Then they might upsell you on some other things to have a great dinner that night. That’s a successful shopping trip.”

Hartman stresses that people also expect the brands they love to understand their wants and needs in context. Otherwise, it’s easy to miss the point and end up alienating customers. As he pointed out, if that same customer came back with the goal of quickly picking up some medicine for a sick child, for instance, and was offered all kinds of coupons and additional ingredient suggestions, their experience would clearly be less than optimal.

How to improve customer experience

Shelves of books are devoted to answering this question. However, the advice can be distilled to two pieces of wisdom:

1. Give your business a customer-first mindset. Put the customer at the heart of your business — from marketing to point-of-sale procedures and after-sales follow-ups. Make customer obsession principles part of executive conversations and business planning during pipeline reviews, inside shareholder meetings, and throughout business development. Ask what their needs are, what’s driving their decision-making, what their goals are, and what they’re feeling.
2. Get started with automation and AI. Get clear on the specific business problems you want automation and AI to solve. Once you’ve defined a specific use case, consider how existing workflows would be impacted and who would need to be reskilled.

Customers are open to companies using AI to improve the experience they receive, including chatbots, text and voice analytics, and more. In fact, AI adoption is surging from service teams and beyond.

Connected customers are knowledgeable and technology-aware — and they have limited patience for brands that can’t keep up. Delivering outstanding experiences isn’t a luxury; it’s an expectation. And those that do it well will be rewarded with customer loyalty and repeat business.