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Customer Experience FAQ

What is Customer Experience?

What is Customer Experience? Customer experience is what a customer experiences: customers’ perceptions about how well a solution supports their intended outcomes.

Customer experience is measured by customers’ realities vs. their expectations.

Customer experience is not a recent invention. The first customer experience happened when the first people on earth bartered.

 
See also: Customer Experience Playbook

 

What is CX?

What is CX? CX represents what customers experience as well as the career field of customer experience management, which may also be abbreviated as CEX, CEM, CXM, CustExp particularly for social media hashtags. Customer experience is what a customer experiences: customers’ perceptions about how well a solution supports their intended outcomes.

 
See also: Customer Experience Playbook

 

What Makes a Great Customer Experience?

What Makes a Great Customer Experience? A great customer experience happens when what’s received matches or exceeds what was promised. This may be in the moment, but more importantly, it’s a series of consistent occurrences, since customer experience is cumulative.

 
See also: Customer Experience Playbook

 

What is Customer Experience Management?

What is Customer Experience Management? Customer experience management is what an organization does to react to or be proactive for customer experience: an organization’s (a) remedies for potential customer turnover and (b) efforts to nurture customers as brand allies.

It’s measured by (a) retained customers vs. lost customers and (b) positive word-of-mouth minus negative word-of-mouth.

 
See also: Customer Experience Playbook

 

What is Customer Experience Leadership?

What is Customer Experience Leadership? Customer experience leadership is organization-wide alignment to core-growth customers’ expectations.

Core-growth customers are your near-future high-revenue, high-margin customers.

Experience leadership is measured by prevention of issue occurrence, or what was delivered vs. what was promised.

 
See also: Customer Experience Playbook

 

Why is Customer Experience Important?

Why is Customer Experience Important? Customers are your primary source of revenue, budgets, salaries, and dividends. Feed the hand that feeds you.

A 1-to-1 ratio between customers’ realities vs. expectations minimizes waste and attracts both new and returning customers.

“Over a 10-year horizon, FoEs (firms of endearment) outperformed the Good to Great companies by a 3.1-to-1 ratio,” reports the book, Firms of Endearment, by Rajendra Sisodia et al. “The public FoEs returned 1,026% for investors . . . compared to 122% for the S&P 500; that’s more than an 8-to-1 ratio!”

 
See also: Customer Experience Playbook

 

What is B2B Customer Experience vs. B2C Customer Experience?

What is B2B Customer Experience vs. B2C Customer Experience? B2B customer experience is business-to-business CX, where both the buyer and the seller are businesses. B2C customer experience is business-to-consumer CX, where the seller is a business and the buyer is a consumer such as a household or individual who is buying something for personal use.

B2B CX typically involves numerous people in the customer’s company having a role in buying decisions.

B2B CX often has longer buying cycles, higher purchase amounts, longer period of interactions between buyer and seller, and higher risks to the customer in both personal and business aspects.

 
See also: Customer Experience Playbook

 

How to Measure Customer Experience?

How to Measure Customer Experience? Measure it by how well you are delivering what you promised to deliver, as seen by your customers. To do this, most companies survey customers. It’s also possible to monitor internally if you really understand customers’ expectations as your performance standards.

Most companies measure customer experience through customers’ ratings of likelihood to recommend them or level of satisfaction or amount of effort required by the customer.

Consider whether your measurements are company-centric or customer-centric: are you really measuring how good the customer experience is, or are you measuring the value received by your company?

Another pitfall is assuming that customer service experience or survey participation is the right basis for evaluating the customer experience our company is providing.

  • Keep in mind that customer experience spans the spectrum of selecting, getting, and using a solution. Therefore, customer service is typically a small part of that spectrum. Also, is ideal experience for customers inclusive or preventive of the need for customer service?
  • Remember that survey participants are only a fraction of your customer base. If you are assuming that survey findings reflect how well your company is performing, make sure you are conducting a stratified random sample with strong validity. Then evaluate whether the highest ratings are from your core-growth or non-core-growth customers.

Ultimately, customer experience measurement should inform you about: (1) gaps between what’s delivered versus promised, (2) customer expectations as your performance standards, (3) your potential risks versus rewards for acting or not acting on customer experience insights.

To choose what’s best, discover how your customers naturally assess the goodness of their experience, especially as it relates to their intended outcomes. Then setup your customized method according to what makes the most sense to (a) customers’ viewpoint and (b) managers’ actionability.

 
See also: Customer Experience Playbook

 

How to Start Customer Experience Management

How to Start Customer Experience Management: Start customer experience management with your business objective and a plan for who should do what, when and why.

Avoid the temptation to buy a technology or start a survey until you have created your plan.

1) Example business objective: retention, differentiation, industry leadership, customer value, profitability, or risk minimization.
2 ) Who are your core-growth customers? What do you already know about your them regarding this business objective?
3 ) Who in your company (and its ecosystem) is a contributor to these customers’ behaviors regarding this business objective?
4 ) How has a previous initiative with these contributors succeeded or failed? What lessons learned can you borrow?
5 ) How can you engage these contributors in aligning their behaviors with your answer to question 2 above? What will you need to do to minimize their resistance and workarounds, and to maintain their ongoing energy for these behaviors?
6) Referring to your answer to question 2 above, what will make the most sense to your customers as ways to engage them toward your business objective?
7) How can you tie-in your answers to questions 5-6 to the routines of contributors and customers? Routines include planning cycles, reviews, meetings, and so on.
8) Communicate your answers to questions 5-7 above to the contributors and engage them in making a difference.
9) Engage customers, buy technologies, and so on in accordance with your answer to question 8.

 
See also: Customer Experience Playbook

 

How to Increase Customer Experience Scores?

How to Increase Customer Experience Scores? The prerequisite for sustainable improvement of survey scores is to act systemically on what customers have told you. Systemic action is resolution of root causes, to prevent recurrence of an issue. By taking systemic action, you’ll save time and resources for your own company and for customers, earning ongoing rewards from both existing and new customers.

  1. Conduct a correlation analysis between an independent variable (e.g. loyalty, NPS, likely to rebuy, overall satisfaction) and each dependent variable (e.g. survey ratings of user-friendliness, knowledgeability, responsiveness, etc.). The highest correlation coefficients are key drivers.
     
  2. Conduct a Pareto analysis of each key driver. Rank-order the frequency of themes related to the key driver (e.g. from customer comments, returned materials, inquiries, complaints, or other operational data). The top themes that total 80% of all themes are your vital few improvement priorities, whereas the rest of the themes are the useful many areas for quick wins. All of the themes are symptoms of a root cause.
     
  3. Quantify the monetary impact of the vital few themes: how much are these themes costing customers? how much are they costing your company? how much revenue is represented by the affected customers? Any data you have will be useful — just explain that this is the tip of the iceberg. Share this monetary report with executives to stimulate their passion for driving improvement.
     
  4. Conduct a root cause analysis of each vital few theme. Ask “why are we allowing this to happen?” Typically, the answer to the 5th round of this question is the true root cause. This is what team members should focus on improving!
     
  5. Identify a metric you can track for this root cause. It must be an internal metric that predicts the symptom. Accordingly, this internal metric will be predictive of customer experience scores and financial performance.
 
See also: Customer Experience Playbook

 

Why Improve Customer Experience?

Why Improve Customer Experience? The costs of poor customer experience are staggering: negative word-of-mouth erodes marketing, high costs of customer support and customer success to smooth over the rest of the company’s incongruencies and mis-steps, escalation involving executives’ time and opportunity costs, customer turnover curtailing lifetime value, customer acquisition costs to replace discontinuing customers, distrust lengthens buying cycle time, and so on.

The revenue gains are impressive: a study by the London School of Economics discovered 3X increase in revenue by reducing negative word-of-mouth compared to increasing positive word-of-mouth.

 
See also: Customer Experience Playbook

https://clearaction.com/advocacydrivesgrowth_5-9-05-2 
(study report PDF)

 

How Can You Improve Customer Experience?

How Can You Improve Customer Experience? There are 3 levels of customer experience improvement: resolve the instance, prevent recurrence, and prevent occurrence.

1) Listen to customers. What’s costing them the most worry, time, and money? These are your top improvement priorities.

2) For greater clarity, ask customers to rate various aspects of their realities with your solution, plus an overall loyalty question.

a) Then conduct a correlation analysis to identify which CX aspect is strongly correlated with overall loyalty.
b) Next, conduct a Pareto analysis to identify which subthemes of that CX aspect are the vital few contributors to customers’ grief.
c) Then conduct a 5-why’s analysis to identify the root cause of the vital few subthemes. Make a plan to prevent the root cause!
d) Maintain high visibility of each action plan: review in staff meetings, ops reviews, senior execs’ preparation for analyst calls, etc.

You may find this recipe sufficient for driving significant changes and CX ROI. Journey mapping is optional, not required.

Customer experience improvement is the heart of customer experience ROI. Directional correctness is typically sufficient. Emphasize prevention of root causes, rather than quick fixes or analysis paralysis.

 
See also: Customer Experience Playbook

 

SIPOC?

SIPOC is an acronym used in process management: Suppliers provide Inputs to Processes which produce Outputs to Customers. The customer-centric version is backwards: COPIS. Customers’ realities vs. expectations gaps determine the Outcomes needed from our Processes and Inputs from Suppliers. This is the key to identifying and focusing on true leading indicators of customer experience ROI. Since customers experience the outcomes of your company’s processes, dissatisfaction points to under-performing processes. See this FAQ: “How You Can Improve Customer Experience?

 
See also: Customer Experience Playbook

 

VoC Acronym?

VoC is voice of the customer, or feedback and inputs from customers. VoC can be customer-initiated or company-initiated. VoC is data, whereas Customer Intelligence applies managerial meaning to VoC by connecting various sources and discovering patterns that compel managers to act wisely on the insights.

 
See also: Customer Experience Playbook

 

How to Collect Voice of Customer?

How to Collect Voice of Customer? Ask for feedback only as often as changes occur in customers’ expectations or in solving a prevalent customer issue.

Use customer insights (a) to educate all groups in your company of their performance standards based on customer expectations, (b) to prevent recurrence of prevalent customer issues, and (c) to check customer acknowledgement of issue resolution trends you’re tracking internally.

1) Allow customers to give feedback anytime, anywhere, any way they prefer.
a) Make a QR code or URL available everywhere possible to encourage customers to initiate feedback.
b) Enable customers to give feedback in any format: photo, video, verbal, written, or ratings.

2) Act on almost-free VoC before requesting customer feedback. Almost-free VoC is customer-initiated feedback from their interactions with your service, success, sales, and marketing organizations, alliance partners, and channel partners.

3) Invest in text-mining and similar software capabilities to make the greatest use of almost-free VoC.

4) Use wisdom you’ve gained from almost-free VoC to expand depth or breadth of insights from other unstructured feedback sources such as customer advisory boards, user groups, front-line listening and executive listening sessions, and so on.

5) Use wisdom you’ve gained from all the above to expand depth or breadth of insights from transaction surveys and relationship surveys.

 
See also: Customer Experience Playbook

 

What is a Customer Experience Journey?

What is a Customer Experience Journey? A customer experience journey is what a group of similar customers see, hear, taste, think, feel, and do from the time they are aware they need a solution until they deem the solution as no longer needed.

A journey map summarizes a customer experience journey in columns for the steps customers take and with icons or pictures to represent what customers care about, their expectations, consequences when things go well or not, and the solution provider’s performance gaps.

 
See also: Customer Experience Playbook

 

Centric Definition?

Centric Definition? Centric means what’s at the center of one’s focus. Product-centric means products are the central focus. Customer-centric means customers are the central focus.

 
See also: Customer Experience Playbook

 

Experience Definition?

Experience Definition? Experience is the totality of what a person sees, hears, touches, smells, tastes, feels, and thinks about a solution.

This applies to customer experience, patient experience, member experience, employee experience, partner experience, and so on.

Experience occurs in a moment, yet it is also additive: the sum of all experiences a person has with a solution shapes their expectations and overall assessment of good or bad experience with the solution.

 
See also: Customer Experience Playbook

 

What is Customer Centricity?

What is Customer Centricity? Customer-centricity is the degree to which customers are the central focus. Since culture is a group’s ways of thinking and doing, customer-centric culture is the degree to which customers are respected in a group’s decision-making and actions.

 
See also: Customer Experience Playbook

 

What is a Customer Experience North Star?

What is a Customer Experience North Star? Customer experience north star is your senior leadership team’s commitment to running the business in accordance with your core-growth customers’ expectations as the primary basis for all decisions.

The foundation of your north star is intentional customer experience: a description of how you want your customers to feel across their end-to-end journey with your brand.

 
See also: Customer Experience Playbook

 

How to Lead Customer Experience?

How to Lead Customer Experience? To lead customer experience in your company and industry, close negative gaps between what’s delivered and what’s promised.

  1. Get crystal clear about what your customers perceive as what’s promised, within the context of their intended outcomes.
  2. Educate every group in your company about these findings as each group’s performance standards.
  3. Engage every group in closing the gap and preventing gaps in customer-centric ways.
 
See also: Customer Experience Playbook

 

What is Customer Experience Strategy?

What is Customer Experience Strategy? Customer experience strategy is executives’ shared vision on how customer-centered business will maximize value.

  1. Start with your core-growth customers’ expectations as your company’s North Star.
  2. Reality-check your corporate objectives, values, structure, cap-ex criteria, and so on relative to the North Star.
  3. Reality-check your reviews, agendas, development objectives, recognition criteria, and so on relative to the North Star.
  4. Plan how you will bring to life and make these a way of life throughout your company: VoC, customer intelligence, customer lifetime value, customer experience improvement, design, and innovation, employee engagement in CX, customer engagement, and CX performance metrics.
 
See also: Customer Experience Playbook

 

What is a Customer Experience Roadmap?

What is a Customer Experience Roadmap? A customer experience roadmap is a timeline that sets milestones for increased levels of customer experience maturity.

  1. Mobilize CX management: engage contributors of customer experience issues in resolving these issues.
  2. Operationalize CX management: routinize CX efforts with your company’s annual calendar.
  3. Align CX management: align customer insights to each issue contributor, in turn, they align their work to customer insights.
  4. Embed CX management: weave-in CX criteria to reviews, approvals, agendas, development, advancement, rewards, and so on.

For best results, put the basics all CXM building blocks in place within this next year and move to higher sophistication yearly.

CXM building blocks: VoC → customer intelligence → customer lifetime value → customer-centered corporate strategy → customer-centered culture → CX improvement → CX design and innovation → customer engagement → CX metrics.

Ideally, you will be embedding, aligning, and operationalizing from the start of your customer experience management efforts, with the basics first, graduating to more sophistication year by year.

 
See also: Customer Experience Playbook

 

What is a Chief Customer Officer?

What is a Chief Customer Officer? A chief customer officer facilitates company-wide ownership of customer experience performance and value.

 
See also: Customer Experience Playbook

 

What Does a Customer Experience Team Do?

What Does a Customer Experience Team Do? A customer experience team facilitates prevention of customer issues, to ensure what’s delivered matches what’s promised.

 
See also: Customer Experience Playbook

 

What is Customer Service vs. Customer Experience?

What is Customer Service vs. Customer Experience? Customer service is typically post-sale reactive assistance to customers who have a question or complaint.

Customer experience includes customer service as well as pre-sale assistance by marketing and sales and others, customer success, and many aspects of the customer journey that are not direct interactions with the seller.

Ideally, customers would need customer service only when there is a change in the customer’s life situation, such as location, name, weather effects, etc. To achieve this, the seller must be fully aligned to customers’ expectations.

 
See also: Customer Experience Playbook

 

What is Customer Success vs. Customer Experience?

What is Customer Success vs. Customer Experience? Customer success is typically post-sale proactive assistance to ensure customers’ objectives are met.

Customer experience includes customer success as well as pre-sale assistance by marketing and sales and others, customer service, and many aspects of the customer journey that are not direct interactions with the seller.

Customer success is most common in B2B firms with software as a service, to increase the likelihood that customers will renew their subscriptions.

Ideally, expectations VoC educates every group in the seller’s business about customers’ objectives and expectations to minimize gaps between what’s delivered and what’s promised. This would make customers’ success almost automatic.

See also: Customer Experience Playbook

 

What is Customer Effort vs. Customer Satisfaction?

What is Customer Effort vs. Customer Satisfaction? Customer effort is an evaluation of how easy it is for a customer to get an answer or remedy via customer service.

Customer satisfaction includes customer effort as well as how well the answer or remedy met the customer’s expectations.

Customer effort is typically evaluated by customers through a post-service survey question. For example, on a scale from very difficult to very easy, how easy was it to get what you needed? This is used by customer service managers to fine-tune technology, processes, policies, staffing, and agents’ interactions with customers.

 
See also: Customer Experience Playbook

 

What is Customer Loyalty vs. Customer Value?

What is Customer Loyalty vs. Customer Value? Customer loyalty is a customer’s insistence on a certain brand. Customer value is two-fold: (1) benefits of a brand to a customer and (2) benefits of a customer to a brand.

Value is evaluated by each party and it is relative to alternatives available to each party.

The denominator of value quantifies what is spent, such as money, time, stress, resources, and opportunity costs.

The numerator of value quantifies what is gained, such as solution, interaction, relationship, and opportunities.
Both customer loyalty and customer value should be mutual and nurture seller-buyer relationship strength.

 
See also: Customer Experience Playbook

 

What is Product Centric vs. Customer Centric?

What is Product Centric vs. Customer Centric? Product-centric means products are the central focus. Customer-centric means customers are the central focus.

When you are focused on customers, you are more likely to create and deliver high-value products, for which customers will continually reward you.

 
See also: Customer Experience Playbook

 

What is Brand Experience vs. Customer Experience?

What is Brand Experience vs. Customer Experience? Brand experience is what drives target customers’ perceptions, emotions, and preferences, which influence their purchase and usage behaviorCustomer experience management is what an organization does to react to or be proactive for customer experience. Therefore, brand experience is a component of customer experience management.

The phrase, Brand Experience (BX), was coined by Qualtrics to guide marketing professionals in improving customer experience. Customer experience is what a customer experiences: their perceptions about how well a solution supports their intended outcomes.

 
See also: Customer Experience Playbook

 

What is Customer Centric vs. Customer Focused?

What is Customer Centric vs. Customer Focused? Customer-centric means customers are the central focus. Likewise, customer-focused means customers are the central focus.

 
See also: Customer Experience Playbook

 

What is CX vs. UX?

What is CX vs. UX? UX is user experience and CX is customer experience. UX is an approach to product development that incorporates direct user feedback throughout the development cycle (human-centered design) in order to reduce costs and create products and tools that meet user needs and have a high level of usability (are easy to use). https://uxpa.org/about-ux

CX is what a customer experiences: their perceptions about how well a solution supports their intended outcomes. Customer experience management is what an organization does to react to or be proactive for customer experience. Therefore, UX is a component of customer experience management.

 
See also: Customer Experience Playbook

 

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