In this digital age, the customer experience has become a key concept for marketeers. The following quote sums up just why it is so important: ‘One bad experience with a brand is enough for 90% of customers to abandon that brand.’ But what contributes to the customer experience? How can we make it seamless? And how do we measure the impact?
What is customer experience?
Many companies still think that their marketing strategy is up-to-date simply because they push their message via multiple channels (multichannel marketing). But customers no longer tolerate fragmented engagement across different channels – they want the whole experience to be consistent and seamless.
Because every interaction has an impact on your prospects and will set the stage for your relationship with them, it is crucial that every touchpoint comes with a positive, seamless customer experience.
This can be achieved when all communication with the customer convey the same message, an element that is key to good omni-channel marketing. All customer experiences should be consistent and the same values, tone, branding and structure should be present across a company’s online and offline communications.
Benefits of a seamless customer experience
An optimised customer experience is paramount for any organisation, whether it’s an international company with thousands of employees, or a Small to Medium-sized Enterprise (SME). Companies that successfully implement a customer experience strategy achieve higher customer satisfaction rates, reduced customer churn and increased revenues.
In the graph below, you can see what a great customer experience can be worth. By studying the cumulative total stock returns for two model portfolios, Watermark consult shows that customer experience leaders clearly outperform the market, compared to CX Laggards.
Now let’s have a look at the other main benefits:
1. Simplified buying process
A consistent and smooth customer experience makes the buying process a lot easier for the customer during and after the purchase. Whether customers start their journey in the store, online or on a mobile app, they should be able to complete the buying process when and where they want.
For example, in the digital world, shopping is easy. Within a few seconds or clicks, the customer can browse through an entire catalogue, select and pay for the product or service, and choose how and when to receive it.
Keeping your customers informed via different channels (website, mail, text message), you create a sense of security and contentment, which is vital when customers are buying things they haven’t seen in real life.
2. Increased efficiency for both the customer and company
Flawless customer experiences can make the customer relationship a lot easier to manage, while also improving the customer’s overall shopping experience. Automation plays a key part in the process.
Consider, for example, the self check-in commonly found in retail stores. Using this technology, customer data is sent to staff so they can work at peak efficiency. The customer stays in the loop in terms of waiting times and in-store promotions, thus having a great overall experience. This, in turn, results in more satisfied and more loyal customers.
3. More personal and special
Combining multiple channels not only allows companies to streamline their processes but it can also result in a more personalised customer service.
Every combined channel collects data and sends it to the company. This data can be analysed to better understand the expectations and needs of the consumers. If they feel that a company or brand understands those expectations and needs, it is very likely that they will be more positive about the experience.
How do we measure the customer experience?
As mentioned, a seamless customer experience is essential for any business. But how can the effectiveness of your customer experience be measured or assessed?
In general, we measure customer experience by looking at three aspects: effort, success and emotion.
In most cases, a low level of customer effort equals a high level of customer loyalty. However, there are various levels of customer effort depending on the brand loyalty.
Waiting lists are a great example of when a high customer effort can actually lead to a great customer experience.
Customers gladly place their names on waiting lists for a luxury items such as Louis Vuitton and Ferrari.
Camping out in front of stores before a launch e.g. for the latest iPhone is another example of just how far customers are willing to go when they love a brand.
Emotions contribute greatly to the overall customer experience. And brands that succeed in delighting their audiences generally have great overall customer satisfaction.
After looking closely at these three aspects of customer experience, you can also use following metrics for a fuller understanding.
Net Promoter Score
The Net Promotor Score (NPS) measures a customer’s willingness to recommend your company, brand, product or service to their friends, family members or colleagues.
The people who would recommend your company and give your company a score of 9 or more out of 10, are called ‘promoters’. Those who have a neutral opinion and give your company a score of 7 or 8 are called ‘passives’.
Finally, those who have a negative opinion about your company and give your company a score of 6 or lower, are called ‘detractors.’.
NPS is calculated as followed:
NPS = % of promoters – % of detractors
Customer Satisfaction (CSAT) is an effective tool to identify the strengths and weaknesses of your customer experience.
Measuring CSAT is quite straightforward using customer surveys. You simply ask your customers to rate their level of satisfaction with the company’s communication, interaction or company in general. The average score given to each aspect of the questioner will be your Customer Satisfaction.
Customer churn rate
The customer churn rate is the percentage of customers that leave your business. Meaning that they won’t directly come back for a next purchase or they will cancel their membership.
The customer churn rate is calculated by dividing the number of customers ‘lost’ over a certain period of time, by the number of customers at the start of that period.
First Response and Average Handle Time
The First Response Time is the average amount of time it takes your company to provide a first response to an issue or question from a customer.
Customers are less inclined to leave a business or website when companies keep the first response time to a minimum.
The Average Handle Time (AHT) is the average amount of time it takes to completely resolve a customer’s problem.
The handling time starts when the customer first seeks help, and ends when the problem has been completely solved. It’s important to maintain a balance between the average handle time and service quality.
Now you know what a seamless customer experience is and how you can measure it so you can improve it. One final word of advice, though: rather than asking for feedback to resolve a specific issue, embed a process that creates a constant feedback loop.
For more information about customer experience, take a look at our customer value management guide.