The boss calls a meeting and starts with something like, “We need to reduce churn among our customer base,” or “We’re lagging on our quarterly revenue projections,” and maybe, “It’s time to roll out the new product line.” Then your boss asks the most important question, “What are we doing to do about it?”
The answer: develop a customer experience strategy.
A well-developed customer experience strategy is part of a comprehensive business blueprint. Think of a standard strategic plan as having four parts:
- Vision – What do we want to accomplish?
- Who – What people do we need to reach?
- How – What actions will we take?
- Metrics – What data lets us know we succeeded in achieving the vision?
A customer experience strategy contains each of these elements and becomes part of the “how” for the larger business plan.
What is Customer Experience?
Customer experience is the sum total of how a customer perceives your business. Customer experience management involves understanding the customer’s journey with a product or service from start to finish (including before and after the purchase) and consistently refining and innovating on that journey.
Customer motivations, behaviors, and attitudes are changing rapidly. Customers are more sophisticated, have countless product and service choices, have access to multiple information channels, and can make purchases in a variety of ways. A study from Salesforce shows that 76% of customers indicate that it is easier than ever to take their business elsewhere. That makes customer experience an important brand differentiator.
A Gartner research article takes that thought a step further by stating “Customer experience is the last source of sustainable differentiation and the new competitive battleground.” Learn more about customer experience and how to lead a CX program by visiting “Customer Experience Management – What It Is and Why It Matters.”
Understanding the Customer Journey
Think about the last time you bought a car. What steps were involved in the process?
Customer experience goes beyond the transaction to encompass the entire process. The practice brings the experience and customer together and considers the entire journey with the brand.
A series of moments create a customer’s experience with an organization. Each moment generates a thought or feeling. Few experiences are perfect, which means customers experience times of delight, despair, and indifference. Management of the overall customer experience involves identifying each of these touchpoints and working to maintain or improve them in a measurable way that ultimately drives business goals.
Consider the customer journey map for buying a car as a series of snapshots. Let’s focus on the pre-purchase customer experience. Through word of mouth, a potential customer hears how well a car held up in an accident. Online reviews are mostly positive but some customer feedback details an issue with upholstery. The potential buyer asks about the issue through a chat function on the dealer’s website and receives a response in real time. The dealer follows up with communication including additional tips for making the buying experience easy. As a next step, a salesperson offers a free inspection to assess the value of the current car. A self-service option on the manufacturer’s website offers an interactive experience for the user to build, customize, and order their car. Overall, the potential buyer encountered a great customer experience and decides to make a purchase.
The pre-sale customer experience served as a brand differentiator compared to other businesses. If every interaction maintains that same high bar throughout the purchase and post-sale journey, the company can create a deep level of customer loyalty resulting in repeat purchases, high NPS scores, word-of-mouth endorsements, and a long-term buyer relationship. That is important because keeping a customer is less expensive than attracting a new one. In fact, the company responsible for inventing NPS found that improving customer retention rates by 5% increases profits by a minimum of 25%.
Customer Experience vs. Customer Service
People often confuse customer experience and customer service. Think of customer service as a single moment in time whereas customer experience is the collection of every moment. Typically, one department or a customer support team owns the service function, which generally is more reactive in nature. Everyone in the company owns customer experience. The practice crosses all departments and is part of every employee’s job. Customer service falls under the business’s broader customer experience strategy.
Think about taking a picture on your phone. Customer experience is the panoramic setting capturing a wide image. Customer service is portrait mode narrowed to a specific subject matter.
Great customer service interactions help keep customers happy and maintain strong levels of satisfaction. A person usually interacts with customer service teams when there are issues or they need assistance.
Customer experience includes these touchpoints, as well as every interaction that impacts how a customer perceives or feels about the product, service, or brand. Customer experience is more proactive and uses customer data and other feedback to refine the CX strategy over time.
How The Customer Experience Strategy Has Evolved
We can trace customer experience as we know it today back to the 1920s when an American psychologist promoted the concept of market research for advertising. Gallup polls followed in the 1930s and focus groups in the 1940s. The next major evolution happened in the 1980s with the concept of Total Quality Management (TQL). The strategy focused on increasing customer satisfaction through continuous business improvement.
Customer experience took a huge leap forward in the 1990s with the introduction of the internet. Now anyone could sell online and digital experiences began. People could shop around, read reviews, and solicit recommendations through early social networks. The decade ushered in what Harvard Business Review coined the new Experience Economy—where experience serves as a distinct offering separate from the product or service itself.
Digital changed everything. Prior to the internet, building relationships between businesses and their consumers was important. Yet there was little focus on long-term customer care because consumers had fewer options and switching providers was difficult. Now with computerized commerce, unhappy customers could easily take their business elsewhere.
Organizations started to rethink how they viewed consumers. Companies began placing a greater focus on the entire customer journey to maintain customer loyalty and spending. Today entire businesses are built around the customer experience including Uber, CarMax, Hilton, and Southwest Airlines.
Customer experience continues evolving today as organizations navigate omni-channel touchpoints, machine-enabled personalization, text analytics, and virtual innovations.
The one constant between the 1920s and the 2020s? The customer must sit at the center of business.
How to Design a Customer Experience Strategy
When designing an effective customer experience strategy capable of driving business results, consider these seven A’s:
- Aligned – A clear customer experience vision must align with existing business goals. All CX initiatives should connect with how the business operates. Getting buy-in from top executives means showing how customer experience efforts can support bottom-line results, top-line growth, or other key business objectives.
- Audience – Building a brand requires a deep understanding of the customer. This includes who they are, what they think and feel, and what they are looking for in a product or service. Segmenting data to create buyer personas helps identify what matters and motivates members of the target audience.
- Associates – A superior customer experience strategy requires having the right people on board for the work head. Combine skills, job functions, influence, and know-how to build the best team(s). Empower the workforce through training, knowledge sharing, and constant communication.
- Applications – Investing in the right tools bolsters the capabilities of a customer experience strategy. Digital tools like live chat, surveys, knowledge libraries, and quick quotes are important to today’s consumers. Delivering a personalized online experience requires the use of artificial intelligence. Traditional tools like phone calls and emails remain popular. Apps also are critical for collecting, aggregating, and acting upon every customer’s experience data. Determine the appropriate tools and devices when designing the CX strategy.
- Actionable – Good data produces opportunities for customer experience improvements. However, limits of time, money, and resources may dictate what can be accomplished and how ideas should be prioritized. Maybe a production process impacts the customer experience but would cost too much and take too long to change. When the reward outweighs the risk, the customer experience opportunity is not truly actionable. Think of the 80-20 rule and focus on the 20% of factors that produce 80% of the outcomes needed.
- Achievable – Set realistic customer experience goals. Moving from a customer satisfaction score (CSAT) of 57% to 85% in a few months would be difficult. Improving a customer satisfaction metric 10% during the same timeframe might represent a better objective. The best way to embed a customer experience strategy throughout a company is by creating consistent wins that move toward more substantial goals. Everyone wants to be part of a winning team.
- Assessable – Make your customer experience strategy measurable. Identify the data required for detailing progress. Set benchmarks and start measuring customer experience touchpoints. Define key performance indicators and consistently report on targets. Make the metrics accessible, applicable, and understandable to all employees from the C-suite to the front line. Use the findings to create a process for continuous improvement.
Think of a customer experience strategy as a form of business GPS. The plan uses data regarding where you’ve been, factors in present variables that could impact direction and speed, and is forward-looking headed toward a defined business goal. Rather than roadways, this GPS focuses on managing and improving the customer journey.
4 Customer Experience Strategies to Help You
No customer is the same and neither is a customer experience strategy. However, every customer experience journey includes four foundational elements that serve as guideposts for creating brand loyalty, driving customer satisfaction, and building a continuous ability for a business to meet customer needs.
Strategy #1 – Reachability and convenience
Make it easy for a target audience to interact with the brand. Reachability starts by answering a key question: what channels do our customers use? The next step is becoming familiar with each channel and how customers use them as they relate to company products and services.
Strategy #2 – Channel flexibility
Most customers do not use one channel to access a brand. Companies focused on optimizing the customer’s experience understand they need an omni-channel approach. Consumers should be able to move fluidly across multiple channels while still receiving a consistently great customer experience. That means integrating every channel to create a seamless experience for the user. Audit the channel flexibility of businesses by asking:
- Can customers switch between desktop and mobile without much effort?
- Is product and service information consistent across all channels?
- Can the user find reliable help through business-managed social media channels?
- Does a customer’s information travel with them between channels for streamlined interactions?
- Do the channel options meet the needs of different customer demographics?
Strategy #3 – Personalization
Every customer-centric organization treats customers as people, not numbers. Personalization enriches every customer interaction and represents an opportunity for a brand to differentiate from the competition. According to an article from McKinsey, unique experiences tailored to individual customers deliver on goals for customer loyalty and top-line growth.
Creating personalized customer experiences requires collecting proprietary customer data across channels. Using that data to deliver great one-of-a-kind brand interactions helps in creating a competitive advantage and making a brand selling point difficult for competitors to imitate.
Strategy #4 – Customer Journey Maps
Customer journey mapping brings the four strategies together. When it comes to management of the overall customer experience, businesses must consider the entire customer journey. A customer journey map involves capturing all interactions at every point across the entire customer experience. Journey mapping gives management the opportunity to find friction points that lower customer satisfaction or create a barrier to consumer success.
The first step in mapping a customer’s experience journey is creating personas for each type of customer. Then, step into the shoes of each of those personas and follow the customer journeys. Start at the beginning from the first moment a customer interacts with the brand. Follow every interaction to the point when a customer journey officially ends. Ask key questions along the way:
- What is the customer thinking and feeling?
- What is the action of the customer? Why did they perform that action?
- What customer needs does the process address? What customer needs remain unfulfilled by the current process?
- What does the customer want to happen during each interaction?
- How can the journey better support the customer?
- What tools does the customer use? What tools would better serve customer needs?
- What is the next step for improving this map? How should this map look in the future?
Stand Out from the Competition
Nearly 50% of businesses prioritize customer experience over product and price. Organizations failing to become customer centric will not last and certainly cannot outperform the brand prioritizing customer experience management.
Here are eight tips for differentiating a brand from the competition by offering best-in-class customer experiences:
1. All customer feedback is good feedback—even the bad stuff.
No one likes receiving bad news, but every piece of customer feedback offers valuable insights. A customer-centric organization sees all feedback as an opportunity to assess satisfaction, gauge client success, or create new customer solutions. A customer-centric brand also looks for feedback across channels. A single post or image on social media could indicate a larger opportunity for creating a better customer experience.
2. Focus on customer-facing interactions first.
“Rome wasn’t built in a day.” When customer experiences present many opportunities for improvement, prioritize what the customer sees, then work with other departments and customer support teams throughout the company.
3. Do not assume what customers want—ask them.
The sales team, marketing department, and executives all may think they know what customers want. Yet without data—generated through direct customer feedback or carefully monitored brand interactions—teams fly blind. The customer experience illuminates those blind spots to foster business success.
4. Measure what matters.
CX teams monitor every important number when it comes to customer success. Common customer experience metrics include:
a. CSAT (customer satisfaction) – measures how products and services meet customer expectations.
b. NPS (net promoter score) – generates a number indicating how likely a customer is to recommend a brand, product, or service to a friend.
c. CLV (customer lifetime value) – projects the total net profit a customer brings through their long-term relationship with a brand or company.
5. Employee experience drives customer experience.
Happy and engaged employees create a better customer experience. They focus on interactions that help customers succeed. This comes from developing high-quality teams through training that shows the importance of making work customer centric. When the employee experience makes people feel like they matter, they operate from a mindset that the customer matters too.
6. Contact centers do not drive customer experiences—the entire company does.
Customer experience does not belong to a type of employee or specific teams. Marketing is not the sole driver of customer experiences. Customer feedback is not intended for a single department. Every staff member has a responsibility for driving customer satisfaction. Customer-centric businesses share customer data, feedback, and performance metrics throughout the organization so everyone takes ownership for doing better. This creates a shared aspiration for serving the customer.
7. Work toward long-term solutions.
Far too many companies put band-aids on challenges. An effective customer experience strategy is not just in search of quick fixes. The plan looks for long-term, sustainable change that creates customer engagement and loyalty.
8. Plan for the future.
Eliyahu M. Goldratt’s The Goal is a business school staple. The book details the process of continuous improvement. Once the team resolves one problem, another emerges. The process continues getting better but still generates additional improvement opportunities. Customer experience is the same way. A company might launch a new product or service that requires an entirely new journey map. Good metrics may need to become great to stave off competition. A once-in-a-lifetime pandemic might occur. Customer-centric companies create successful customers today while planning for the future.
How to Improve Customer Experience
As customers evolve, so do their expectations. That means new pain points could emerge at any time or the customer journey might require different interactions. A new piece of customer feedback could indicate a brewing challenge on the horizon. Creating successful customer experiences is a never-ending job. While that is hard, it also makes the practice fun.
Here are three tips for a brand wanting to build a better customer experience:
Take a Customer-Centric Approach
Create an image and put the customer at the center. Now draw a circle around the outside and include all connection points to the customer. This could include different departments or channels. Now imagine the customer physically turning around and coming face-to-face with each of those interactions like the hands of a clock. That 360-degree customer view provides the perfect start for analyzing a customer’s experience. Use that feedback to discover what works well and what needs improvement.
Create Clear Cross-Functional Accountability
The 360-degree image represents a powerful visual for developing customer-centric accountability across the entire company. Everyone is a cog in the customer experience wheel. Each person affiliated with the brand should understand their responsibility for customer support, acting on customer feedback, and focusing on their portion of the CX metrics. When frontline and back-office teams work together to meet a metric, groups unite around a common goal.
Provide Employees with Customer Insights and Knowledge
Share data with everyone. Help employees internalize customer feedback by sharing both positive and negative remarks while providing guidance around how to act on what they heard. Arm the team with information to make a difference. Meaningful, actionable data helps teams become loyal to the process and committed to making it successful.
What You Need to Know for Your Customer Experience Strategy in 2022
Customer experience writer Phil Britt offers five key questions every company must ask themselves when crafting a successful customer experience strategy:
1. Are you aligning strategy with the brand promise?
Organizations must sync their CX strategy with what their brand strives to provide. Chewy focuses on delivering pet happiness. Therefore, the customer experience strategy must be pet-centered with quality products, simple shopping, and shipping convenience.
2. Did you consider the customer base?
Building a CX strategy requires a complete understanding of the customer—their needs, why they chose the company, and the experience they want.
3. Did you start with the business goal in mind?
Short-term, qualitative CX goals rarely move the needle on business objectives. The CX strategy must connect to revenues, costs, margins, market share, and other long-term, large-scale business metrics to truly drive success.
4. Have you ‘remembered the human?’
In a digital world, losing sight of the importance of personal connections is easy. At the center of any customer experience strategy is building a relationship with the consumer that results in loyalty and a larger share of wallet. Customer satisfaction and happiness result when a brand fulfills an emotional need—something even the best technology struggles with sometimes. Do not overlook the personal elements necessary for a successful customer experience strategy.
5. Are you taking privacy considerations into account?
Customers want personalized service while maintaining data privacy. That presents a unique challenge to organizations. The value exchange is more important than ever for getting consumers to opt in on sharing their information and engaging in communication.
Ready to focus on the customer experiences connected to your brand? It’s time to talk to Walker. We are a Qualtrics-certified full-service Experience Management (XM) firm. Our team of experts provides technology implementation, end-to-end managed services, and expert strategic consulting—all to deliver better results for our clients.
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