What does CX actually mean?

Published on: June 27, 2018
Author: Olivier Njamfa - CEO & Co-Founder

Everyone talks about the importance of the customer experience – from CEOs downwards. But what does it actually mean, and how does it impact your business?

The opening keynote at the recent Gartner Customer Experience & Technologies Summit began with a list of some of the things that Customer Experience Management is NOT:

  • the same as customer service
  • another name for user experience
  • just a new term for CRM
  • a technology to be bought
  • the same thing as a digital strategy


Instead, Gartner defines customer experience as: “The customer’s perceptions and related feelings caused by the one-off and cumulative effect of interactions with a supplier’s employees, channels, systems or products.”. Customer experience management is therefore: “The practice of designing and reacting to customer interactions in order to meet or exceed customer expectations and so increase customer satisfaction, loyalty and advocacy.”

Based on these definition, five key points should be understood:

  1. It involves emotion
    Customer experience is not just based on pure cold hard facts. Unlike poor customer service, which could be defined by very concrete things such as customers waiting too long on the phone or deliveries not being made when they are meant to, customer experience is about emotions, perceptions and feelings.
    This means that it  cannot be measured solely using concrete metrics. To assess it you need to be able to understand how customers feel – and that can often be more clearly understood by looking at the unstructured data that lives in digital conversations with customers, their social media posts and other sources.

    So rather than just focusing on structured feedback collected as part of Voice of the Customer (VoC) programs, you can use Natural Language Processing (NLP), text analytics and AI to make sense of unstructured data to spot trends and opportunities and build up a much more complete picture of the customer experience.

    Not only does this kind of analysis answer the basic questions about what is happening (i.e. the who, what, when and where) but it is also more likely to deliver the insights to unlock thewhy – why is the customer behaving in this way?
     
  2. It has a cumulative and one-off effect
    A customer’s individual events and interactions with a brand all work together to create an overall perception of the customer experience. Research from McKinsey on customer onboarding at a telecoms provider backs this up. While the study found that customers gave satisfaction scores of 90%-plus for each individual interaction in the onboarding process - such as talking to a product technician or arranging an installation visit – their happiness for the whole process fell to 40%. The cumulative effect of all the phone calls, emails, visits and letters they received from different departments was too time consuming and complex, leaving them annoyed and upset.

    So to truly understand the customer experience you need to be able to understand the effect of individual touchpoints as well as the overall impact of the whole customer journey taken together.
     
  3. It covers all interactions
    It is easy to think that customer experience is solely defined by contacts that a consumer has directly with your brand – when they ring up, visit a store, or communicate through email and social media. However, it can be much more than this, covering external factors you can’t control - including what other people and the media are saying, your brand reputation and their own feelings and experiences from the specific way or circumstances in which they are using or consuming your products.
    This is another reason why VoC surveys alone – which are usually based on a set of standard questions assessing company performance –do not gather all the insight required to make better customer experience decisions.
     
  4. It impacts the bottom line
    Improving the customer experience delivers loyalty and improves the bottom line. For example, in the recent Eptica Knowledge Study 91% of UK consumers say that they feel less loyal to brands who do not reply to their questions. Conversely, 94% of them agreed that “Getting a high quality, personalized response to my question makes me more likely to buy from that company again”. There is also clear evidence of the link between superior customer experience and company success. For instance, in the Institute of Customer Service’s UK Customer Satisfaction Index (UKCSI) companies with above average customer satisfaction scores were found to enjoy average revenue growth of 9.1% - while those with lover than average scores managed growth of just 0.4%.
     
  5. It is a continuous process
    Consumer expectations are continually rising – therefore customer experience management is a continual process of improvement. Fail to move forward and you’ll slip back. 65% of respondents in the Eptica Knowledge Study say that the questions they ask organizations now are more detailed than they were five years ago and 88% expect companies to be more transparent and provide more detailed information.

As customer experience continues to take on greater significance in business, it is vital that brands take the time to truly understand what it means. Only then can they ensure their programs are effective, efficient, engage customers and boost the bottom line….

Tags: Gartner, Customer experience, CX, Eptica, Knowledge, McKinsey, Institute of Customer Service, Customer Service, CRM, emotion, VoC, Voice of the customer, NLP, Natural Language Processing, AI, Artificial intelligence
Categories: Best Practice, Trends & Markets

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