What is Customer Experience? A Complete Guide

What is customer experience?

Customer experience, also known as CX, is the holistic perception of your customers' experience with your brand. It is the outcome of every interaction and touchpoint a customer has with your business, from speaking with customer service and visiting your store, to navigating the website and how they feel about their purchase. Everything you do impacts your customers’ perception and their decision to return or not—so creating and improving your customer experience is critical to success.

Why is customer experience important?

Outstanding customer experience can take your business to the next level and be key to profitability. When customers feel valued and have an overall enjoyable experience of doing business with your brand, you're more likely to retain and encourage them to refer your company to others.

Benefits of improving customer experience

Customers are more likely to be repeat customers if they feel like their needs are understood and expectations are met. Great CX leaves consumers feeling heard, seen and appreciated. It has a tangible impact that leads to increased revenue.

In a PWC survey, 73% percent of respondents said customer experience is an important factor in their purchasing decisions. Forty-three percent of all consumers would pay more for greater convenience and nearly as many would pay more for a friendly, welcoming experience.

From a business point of view, better CX enables you to:

Stand out from your competition with stellar customer service

Ineffective customer service is a buyer's number one frustration, while customer service that exceeds expectations separates your business from those that fall short.

Increase customer satisfaction at every touchpoint

Companies have the potential to drastically increase customer satisfaction if they focus on maximizing satisfaction across the entire customer journey.

Create word-of-mouth advertising for your business

Going beyond what is expected often leads to powerful free word-of-mouth advertising. In fact, 93% of people trust word-of-mouth recommendations over any other type of marketing.

Reduce your cost of customer acquisition via customer loyalty

When you lose customers, your acquisition costs go up. Conversely, loyal, repeat customers spend 67% more in the third year of their relationship with a company than they do in earlier stages.

Grow your loyal customer’s lifetime value

Customer lifetime value is the total revenue your business earns from a customer over time. It is a good way to size up customer satisfaction, loyalty and the longevity of your brand. A great CX leads to happy customers who buy from you repeatedly.

Enhance your company’s brand value

Customers expect a positive experience with the brands they engage with. Going above and beyond to create great CX is one of the biggest differentiators for any brand. Find out why creating outstanding customer experiences are imperative to staying ahead of the competition in this Forrester report.

What is the difference between customer experience vs. customer service?

What is customer service?

Although the two concepts cross paths, the journey is different. Customer service is one component of the customer journey, while customer experience encompasses all the interactions between a customer and your brand.

Customer service is reactive in nature and revolves around a specific touchpoint, like when a customer reaches out to ask for help or to have questions answered. Though customer service is not the same as customer experience, improving your customer service is still a vital part of improving your business’ overall experience. According to Forbes, over 70% of customers say that they would spend more to get great customer service.

What is CX?

CX is proactive, spread across many touchpoints and is continuous. A visit to your company’s website or mobile app and a conversation with a customer service agent or a sales rep can all be considered part of the customer experience. Everyone in the organization, from the marketing team to the sales team to the product team, is responsible for ensuring the best customer experience across all points of contact. Achieving a high level of customer satisfaction pays off in the long run. Seventy-six percent of consumers claim that a great customer experience drives their buying decisions.

What makes a good digital customer experience?

Digital customer experience includes what customers experience through a digital interface, such as a computer, tablet or smartphone. Researching a product online, searching for a store’s nearest location and looking for tech support online are all digital customer experiences.

Providing a memorable digital customer experience requires organizations to offer a responsive and frictionless experience across digital platforms. Examples of these platforms include social media channels, live chat, email, your website and app, just to name a few. Being aware of all the touchpoints across these channels will allow you to make each interaction a positive one for customers.

Many businesses create a customer journey map to pinpoint all those touchpoints. When you’re aware of all the interactions, it's possible to identify where your organization can lessen conflict.

Understanding your users' digital experience and optimizing your most essential touchpoints can make or break a deal. Customer feedback can be used to develop an in-depth understanding of your customers. Collect feedback to continually improve the customer experience. Prioritize your customers' voices and create an efficient system where customer feedback and concerns are gathered, evaluated and acted upon.

Surveys are also a good tool. Sending a survey after certain touchpoints makes it easier to identify problems. Companies can act on those findings and plan accordingly.

What makes a bad customer experience?

Poor customer experiences happen anytime your business fails to meet customer expectations in terms of service quality, response time or overall customer satisfaction.

The damage could be long-lasting. According to a study from the Association for Psychological Science, we’re more likely to remember bad experiences over good. One bad customer experience has the potential to negate your good work, increase customer churn, harm a brand’s reputation and can result in a significant loss of revenue.

Situations that contribute to a bad customer experience

Long wait times

A study by the American Customer Satisfaction Index (ACSI) found that wait times are among the top drivers of customer satisfaction. Customers who wait longer than expected for a delivery, in line, on a website or in a customer service queue are 18% less satisfied with their overall experience. And this dissatisfaction doesn't just go away once the wait is over.

Difficult purchasing journey

A lengthy and difficult online checkout process can result in cart abandonment. Common reasons potential customers abandon items include unexpected costs at checkout, a difficult and lengthy checkout process and concerns about payment security.

Rude or negative employees

Rude behavior can negatively affect consumer perceptions. Roughly one-third of survey respondents reported they're treated rudely by an employee an average of once a month and that these and other episodes of uncivil worker behavior make them less likely to return to those businesses.

Not delivering on customers’ expectations

The way you deliver your products and services has a big impact on the customer experience and satisfaction. Not delivering on promises risks not only disappointing customers, but also completely losing their trust. Regardless of how strong your brand is, the lack of follow-through ultimately erodes credibility.

Customer’s perception of being deceived

According to Consumer Reports, at least 85% of Americans have encountered an unexpected or hidden fee over the past two years for a service they used. Those tacked-on fees take advantage of customers, tarnish the customer experience and erode trust due to a complete lack of transparency.

How do you measure customer experience?

A positive customer experience can separate you from the crowd. A positive customer experience leads to increased customer loyalty, which in turn boosts customer retention. According to a recent Forbes article, customers who had a satisfactory experience spent 140% more and, on average, stayed with a company for five years longer.

Delivering customer satisfaction is what keeps organizations in the business. These metrics are measurable indicators of a good, or bad, customer experience. They’re used to optimize the customer experience, determine if their customer experience efforts are improving or worsening and can be used to gauge the improvements in customer experience over time.

The six CX metrics below can be used separately or together. A business doesn’t need to use all of these, only the ones that apply to their business model.

6 types of customer experience metrics

Net promoter score (NPS)

The net promoter score (NPS) is used to measure customer loyalty and experience of a customer. NPS is often calculated based on the answer to the question, “How likely is it that you would recommend this agent/or company to a friend or colleague?”

The scoring for this answer is typically based on a 0 to 10 scale, with 9 and 10 being promoters, 7 – 8 are passive, while 0 – 6 are called detractors. The NPS is derived by subtracting the percentage of customers that are detractors from the promoters. That means a score of over 50 is considered good.

NPS allows you to receive valuable feedback from customers relating to their interactions with your organization. Strong NPS scores go together with positive revenue and business growth.

Customer effort score (CES)

CES indicates the ease with which your product solves a customer’s specific situation. Like customer satisfaction, there’s no standard system for measuring CES. Some companies use a five-point scale; others can use as many as seven points.

CES is a key predictor of disloyalty. Knowing who experiences high effort enables customer service leaders to proactively identify at-risk customers and mitigate churn.

In general, the CES uses a single question similar to: “On a scale of 1 to 7 (where 7 stands for strongly agree and 1 for strongly disagree), did the service make it easier for you to solve your problem?” Higher CES scores mean better customer experiences.

Customer satisfaction (CSAT)

CSAT, together with NPS, is one of the most used CX metrics. CSAT provides a numerical score indicating how satisfied a customer is with a specific interaction, service or product.

CSAT is measured at the end of a customer survey, using a point scale and is a leading indicator of loyalty and long-term revenue from a customer. One purpose of measuring CSAT scores is to get a better understanding of which factors are impacting the customer experience negatively or positively.

Often, companies ask for customer feedback to determine customer satisfaction and whether an agent has adequately solved an issue. Based on an arbitrary scoring system, companies classify responses based on feelings such as: very satisfied, satisfied, not satisfied or very unsatisfied.

Time to resolution

Time to resolution is a customer service metric that measures the average amount of time between when a customer interaction is created and when it's marked as "resolved." Time to resolution may also be called mean time to resolution (MTTR) or time to resolve (TTR).

Churn rate

The customer churn rate reflects how many of your customers have stopped using your products or services. Generally, customer churn rate counts the total number of lost customers or the percentage of lost customers within a certain timeframe. Sometimes, the customer churn rate is calculated as a lost business value.

Following the customer churn rate is critical because generally, it is much less expensive to retain existing customers than it is to acquire new customers.

Conversion rate

Conversion rate metrics reflect the percentage of people who take an action. It is the measurement that allows you to quickly see if a particular customer touchpoint is performing well. Conversion rates are the standard way to measure many key moments of a customer’s experience. It tracks every touchpoint action that led to gaining a new customer.

Those touchpoints could include:

• Seeing an ad and clicking on it
• Landing on a page and then providing their email address
• Going from providing email to starting a trial
• Transitioning from the trial to becoming a paying customer

How to improve customer experience

Improving the customer experience should be an ongoing process as your business, products and customers develop and change. Here are several effective ways to improve your CX:

Identify your customer's most important touchpoints and deliver interactions that align with their preferences

A customer-centric company serves customers by knowing them. Figuring out the touchpoints that resonate with that customer enables you to use those touchpoints to paint a complete picture of the buyer. Those insights require your organization to collect data on that customer and analyze their interactions so you can understand them deeply, think from their perspective and anticipate their needs.

Prioritize listening to customer feedback and act upon what they say

Your customers are your best source of information. Soliciting and listening to their feedback is your opportunity to transform that first-hand knowledge into superior service, sales and products.

Listen to and use employee feedback to improve the customer experience

Employees who feel respected are more engaged at work and are more willing to help customers, so it’s important to let them know they’re valued by listening to their opinions and ideas. Taking action on the feedback your employees provide shows them that their opinions are important.

Continually train your internal team on applicable customer experience

Customers expect a seamless website or app experience, optimized for convenience and speed. When a website transaction fails, frustration sets in. Solving the problem as quickly as possible is paramount. Enable employees to provide efficient, helpful support by offering a comprehensive customer service training program.

Gain a deep understanding of the customer and their journey

Each customer’s digital journey is different. If your company is going to understand a person’s needs and wants, you need to see the journey from a customer-centric point of view. Considering the entire journey, not just the touchpoints, helps to frame the experience from the customer’s perspective.

Optimize the omnichannel experience

The omnichannel experience is most successful when brands provide a consistent message and experience to customers across all channels and touchpoints. Customers may start interacting on one device and expect to seamlessly resume on another without re-entering information or running across different pricing or offers.

According to Forbes, customer-centric companies are 60% more profitable than companies that don't focus on customers. Brands with superior customer experience bring in 5.7 times more revenue than competitors that lag in customer experience.

That makes customer experience metrics, such as NPS, CSAT and CES, all the more worth tracking. Data can serve as a guidepost if you’re regularly engaging with customers to glean fresh, pertinent feedback at various stages in their journey. By being on top of the changing needs and personal requirements of your customers, you will become more effective and successful in serving them.

Tools to improve customer experience

Glassbox can make improving the customer experience easier by giving you the tools and insights to measure the value of each interaction and better monetize each digital journey. These tools can help you analyze digital customer behaviors in real-time to create personalized shopping experiences for websites and mobile apps.

You’ll be able to find and fix UX issues to lower your bounce rate and boost conversions. Understand the reasons behind user behavior and improve engagement with the Glassbox Augmented Journey Map™, which shows where customers are abandoning their journey and why.

With a quick look at the Augmented Journey Map, you’ll be able to spot any conversion drop, visitor struggles or system errors on your website or mobile app. And more importantly, you’ll understand the reasons for these issues, with artificial intelligence (AI) revealing how an experience at one stage of the journey can impact later behavior.

Every user is unique, and every one of their sessions is unique too. Trying to understand a particular user journey can be complicated and frustrating—for both you and the user. Session replay is the eyes and ears of your website and mobile app, capturing every click, tap, scroll and swipe. Glassbox automatically captures all activity alongside events on IT systems too, enabling you to use session replay to identify technical issues without having to recreate the experience.

Unlock the true value of every digital journey with Glassbox.