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Why is customer experience important? That’s the question that disturbs the minds of many people. Basically, even a child can say why is customer experience significant - it defines whether the customer will or will not do business with a company again, and also for how long will the customer stay with the company or even will client advertise the product or services of the company to his acquaintances, friends, or family members. In other words, customer experience means how much your business will earn from customer-brand relationships and how successful you will be in competition.
Nonetheless, many questions regarding customer experience remain actual - what is a good customer experience? What is customer experience as a concept and what is customer experience as a metric? How to provide a great customer experience on a regular basis to most of your customers? What are the customer experience best practices? What is the formula for measuring customer experience and does it even exist? What makes a good customer experience valuable?
That’s why we are here with this guide, and that’s also why you have to read it. No more empty words, let’s move straight to the topic.
What is customer experience?
Customer experience is customer opinion about all customer interactions with the company throughout the customer journey. Even though this customer experience definition sounds simple, it is all more complex when it comes to the practical use of customer experience practices. CX (customer experience) in marketing is one of the most valuable metrics to measure, as it defines the success of the brand.
First of all, customer experience is often considered a customer service metric that should have had a customer experience formula to be measured and monitored. The first, but not the last surprise - it isn’t a metric at all, it is rather a sum of a few different metrics you may have never associated with the customer experience concept.
So, following the previous conclusion, there is no easy way to calculate the customer experience level - you might say whether it is positive or negative, but never it can be referred to as a precise percentage or score.
How can it be that such an important part of customer relationship management and customer service at all doesn’t have its own metric? Doesn’t it create complexities with customer experience management and customer experience tracking? Yes, it does, but as customer experience is an extremely complex concept, there is no other way than to define it by using a few different customer service metrics.
To finish the issue of customer experience meaning, let’s also say that we can measure the customer experience for both the entire customer journey and also for each single customer interaction, even though in most cases you will use less complex tools, such as customer satisfaction score (CSAT) or something else.
How to measure customer experience?
To measure customer experience (CX), you have to measure its key components. So, let’s first define what those customer experience (CX) components are.
Customer satisfaction (CSAT)
Customer satisfaction level (CSAT) alone is one of the most important customer service metrics and the best tool to evaluate whether customers like the way you service them and your products. Nonetheless, customer satisfaction is clearly a part of the customer experience (CX) concept, as it points not only to satisfied and happy customers but also to dissatisfied customers.
To measure customer satisfaction, you have to collect customer feedback first. Provide customers with an opinion poll about chosen customer interaction - product purchase, customer support experience, etc. - and ask them to evaluate it on a scale from 1 to 10. Then use the following formula.
Customer satisfaction = Sum of customer evaluations/Total possible evaluations * 100%
For example, if you surveyed 10 clients, 5 of them rated your service as 8, 3 as 10, and 2 as 3, you have a sum of evaluations of 76 out of 100. So, 76/100 * 100 = 76%, which is actually a good score.
Customer effort score (CES)
Customer effort score is a far less famous customer experience metric than customer satisfaction, but not less important. Customer effort score, as it follows from its name, has its purpose to measure how effortful or effortless it is for your customers to achieve any service from your company or complete any kind of customer interaction, such as, for instance, purchasing a product or getting customer support.
As with customer satisfaction, the way to measure customer effort score is quite similar.
For instance, you provide customers with a scale from 1 to 10, where 10 is extremely effortful, and 1 is absolutely effortless. So, 1–3 answers are considered positive, 3-5 neutral, and 6-10 negative - nonetheless, it all can change depending on your business needs or approach you prefer more.
So, you have to sum up all customer evaluations and divide them by the number of those evaluations.
Let’s presume you have 5 answers, where 3 is 1, 1 is 6, and one is 8. So, (1+1+1+6+8)/5 = 3,4, which is not bad.
So, the precise formula for CES would be:
CES (Customer Effort Score) = Sum of customer evaluations/Total number of answers
Keep in mind that there are other approaches to measuring CES, so you can find different formulas - it doesn’t mean their ones or ours is wrong. Just such a little change as changing dispositions in the survey - changing the question in the survey will change the formula.
First Contact Resolution (FCR)
Obviously, this customer service metric that is all about call center customer experience is a part of customer experience (CX) itself. Why is it so? Well, that is a generally accepted customer service standard that in at least 80% of cases, customers should not require an additional call or request through different channels to the customer service team to get their issue resolved. Repetitive requests to customer support without progress harm the customer experience (CX) as nothing elsem, so high FCR rate is another sign of excellent customer experience.
FCR formula is quite simple:
FCR (First Call Resolution) = Number of customer requests resolved within one contact/ Overall number of customer requests * 100
There is also a first call resolution benchmark - it is 80%, but in some cases, 75% or even 70% is acceptable for niches where complicated customer issues happen more frequently - banking, insurance, real estate, and so on.
Net Promoter Score (NPS)
NPS (Net Promoter Score) is a synonym for brand advocacy - the likelihood for customers to advertise your brand using word-of-mouth marketing. NPS points to the possibility for your clients to be loyal customers to convince their friends or relatives to purchase from you.
NPS is also a kind of metric that can’t be measured without collecting customer feedback. You have to survey your customers and ask them to rate on a scale from 1 to 10 how likely it is for them to recommend your product or service to their friends or relatives, where 1 is “impossible”, and 10 is “extremely likely”.
So, the formula comes here:
NPS = Sum of customer evaluations/ Total number of surveyed customers * 100
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Why is customer experience (CX) so important?
Importance of customer experience (CX) can’t be overlooked. First of all, importance of client experience follows from its nature - customers who don’t like their customer experience (CX) will just leave your company and seek for better options.
But out goal is to define measurable benefits of customer experience (CX) and ensure that importance of customer experience (CX) is as valuable as experts state.
- Customer retention - customer experience has direct impact on customer retention and reduces customer churn. Take into consideration that even 2% grow in customer retention generates as much revenue as 10% cut in operational costs, and otherwise, over 60% of customers are going to end their relationship with a brand if its customer experience isn’t friendly;
- Customer loyalty - 74% of customers are highly likely to make a purchase based on experience alone;
- Higher customer lifetime value - 86% are ready to pay more if brand offers outstanding customer experience (CX);
- Higher company profit - brands with good customer experiences generate up to 6 times more revenue than their competitors with worse customer experiences;
This list can be literally endless, but the main conclusions are clear - customer experience (CX) is a key to not only customer retention but to higher profits, which is the main business goal for any company - and so the customer experience (CX) is the main tool for achieving it.
What is customer experience management?
Customer experience management (CXM) is a process of collecting, analyzing and operating data regarding customer experience (CX) you provide for your customers. Of course, customer experience management covers all your efforts on improving customer experience.
Customer experience management is the most important process when it comes to improvement of customer experience and it includes both methods and practices you use for it, and also tools, such as customer experience management platforms.
How to improve customer experience effectively?
Customer experience management, as we have already mentioned, includes both practices and tools. So, based on that, let’s move to the main steps you can take to improve your customer experience management and customer experience (CX) of your clients respectively.
Invest in customer service personalization
80% of clients prefer companies that offer personalized experiences, while 49% of buyers have ever made impulse purchases after receiving highly personalized customer service experiences. This means people are no more ready to receive non-personalized service, and this is a clear sign for any company that is thinking about investing in customer service personalization.
Modern customer experience (CX) platforms, like omnichannel contact center software tools, offer enough data collection and processing capabilities to provide personalized experiences, but you may also need a CRM system.
Provide omnichannel support
Omnichannel customer support isn’t a trend, it is a must-have - customers’ willingness to tolerate single-channel support is no more. This is a big problem for companies that avoided to invest additional money in adapting text contact channels or other digital channels to service customers. Nonetheless, the option to choose different channels isn’t the main one - the goal is to allow users to achieve the same quality of customer experience (CX) though all communication channels, including in-store experiences.
Omnichannel support covers following communication channels, such as emails, social media channels, web chats, video conferencing, messengers, and so on.
Provide self-service options
Self-service channels are also a must-have for any business that is willing to provide exceptional customer experiences. Under self-service channels, we mean such tools, as IVR system, chatbots, knowledge management systems, including knowledge bases, FAQs, customer social communities, self-service portals, and so on.
Self-service is required because many customers - around 60% - want to resolve their issues on their own before contacting customer support. Customer experience management platforms often offer multiple self-service channels.
Provide proactive customer experiences
Proactive customer experience (CX) is a situation in which you reach out to a customer proactively, which means if there is a customer service issue, you identify this issue before it can harm your clients or before they even notice it. Nonetheless, proactive customer experience doesn’t always mean that there has to be any customer issue - you can reach out to customers proactively with special offers, notifications, or other offers they don’t expect to receive, and this may lead to so-called impulsive purchases. \
To provide proactive customer experiences, you have to use powerful data collection and analyzing features, so customer experience management platforms have to be capable of that.
Collect customer feedback
Customers are the ones who tell you about the quality of customer experience you provide, so it is clear you have to connect with them as often as you can. Collecting customer feedback isn’t the stage you have to stop on - you have to adapt it, which means if customers want something from you, you have to provide it as soon as possible. Customer experience management is all about measuring customer expectations and current customer opinions, and the way you are going to listen to your customers will define their customer experience in the near future. Understanding customer experience begins from transparent and honest communication between the customer and brand, and that’s where you should start too.
Ask your customers - what is a good customer experience in their opinion? What is a good customer experience in the context of your brand? What would they change in current relations with you to make the customer experience they receive better?
Customer experience vs customer service
Surprisingly, there are some people who think that client experience and customer service are two synonymous terms. Even though it is clear they are not, let’s define why.
Customer service is the assistance, advice, and help provided by the company to customers in the case of need, for instance, while choosing the most suitable option or after purchasing a product. Customer service includes all processes of servicing customers, and unlike consumer experience, is defined from the company’s perspective.
Customer experience is even sometimes called customer service experience, so it is not about the process of servicing customers - to explain customer service experience it is enough to say that it is all about the customer’s perspective - how a client evaluates the experience of interacting with the company throughout his customer journey.
Is there any customer experience benchmark?
Well, there is no way to provide a “one size fits all” example of good customer experience or bad customer experience, as well as there is no mathematical way to say that X percent of customer experience is good, and Y is bad.
If you know your customer is satisfied with the service you have provided, then it is a positive customer experience. If the situation is the opposite, that’s poor customer experience. That’s why we have targeted so much attention on communication with customers - if there is no communication, there is no way to track customer experience.
Conduct regular customer surveys, and try to collect customer feedback after all valuable customer interactions to make sure that no aspect of customer experience has fallen out of your sight.
What is a customer experience management solution?
The importance of client experience makes people ask whether there is any customer experience management solution that will help them to automate processes of gathering and analyzing data about customer experience, and surely improving it.
The answer is yes, if shortly. Foremost, as customer experience is mostly about the customer service stage of the customer journey, the customer experience platform should have powerful features to improve the speed and quality of customer service. There are two groups of solutions that meet these requirements - CRM (Customer Relationship Management) systems and contact center software.
Customer experience in call center is the biggest priority, as call center agents try their best to make customer experience as positive as possible. Remember what we have said about omnichannel service and self-service as the main paths to providing superior customer experience? These features are available only as a part of the call center customer experience, as only call center customer experience solutions bear these features.
For even more advanced features for call center customer experience platforms, you have to look for software tools that are integrated with CRM software. With the capabilities of the call center customer experience platform and CRM system combined, you will be able to provide a first-class customer experience in call center you own.
Where to get such a complete solution? Well, we have one - a Voiptime Cloud contact center solution that can be set with in-built CRM or integrated with your current CRM via API. Moreover, we also have our own CRM system that is natively integrated with our call center solution. Such basic customer experience features, such as omnichannel communication, self-service options, customer feedback collection tools, customer service personalization opportunities, and powerful data analytics functionalities are available. But what do words matter? You should better check it out on your own!
