Have you ever walked into a restaurant and waited forever to be seated, only to be treated rudely and have your food served cold? If so, it’s safe to say that you’ve had a bad customer experience. Odds are, you probably told others about it too. Maybe you even left a one-star review online!

Likewise, I’m sure you can think of a company that really exceeded your expectations. To run further with the restaurant example (if only because I’m hungry), you might return to a place whose food is consistently good and where the waitstaff know your name.

Why? Because you had a good customer experience.

The concept of customer experience is intuitive and easy to understand at a high level. But it’s also a very nuanced concept, and that makes it hard to provide unless you’re very deliberate about how you run your business.

That’s why we’re going to talk in depth about what customer experience is and why it matters!

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What is Customer Experience?

According to the Harvard Business Review, “customer experience is the internal and subjective response customers have to any direct or indirect contact with a company.”

That’s a pretty broad definition, so let’s parse it further. Customer experiences can happen as a result of a number of different occurences. Maybe the customer’s making a purchase or using a product or service – both of which are deliberate actions.

On the other end of the spectrum, customer experiences can also be unplanned. Customers can hear about companies through ads, the news, online reviews, branding efforts, and promotions.

To put it more simply, if you order a cup of coffee at Starbucks, that’s a customer experience. If your friend orders a pumpkin spice latte and tweets about the sweet taste of the #PSL, then that’s also a customer experience.

Harvard Business Review even says that the sound of a Harley-Davidson motorcycle – which is unmistakable – can also create a customer experience.

Why Customer Experience Matters

Spoiler: it’s because your customers matter!

Strip away the specifics of accounting, manufacturing, and logistics for a moment and you notice something very simple. All companies have the same basic purpose: meet customers’ needs to make money.

Dig further into those needs and you find that most of them are emotional. It’s a basic fact of consumer behavior. If customers have a good experience, they’ll buy from you again. If they don’t, they’ll ignore you and tell their friends to do the same.

To put that another way, Hotjar correctly identifies three positive outcomes of providing a good customer experience:

  • Increased customer loyalty
  • Increased customer satisfaction
  • Better word-of-mouth marketing, which includes positive reviews and recommendations

This isn’t just armchair philosophy either. The data backs this up.

According to SuperOffice, customer experience is on track to be the biggest brand differentiator in 2020 and beyond. This cuts both ways, because renowned consulting firm PwC found that 59% of customers will leave after multiple bad experiences. Many people won’t be that patient, because 32% will leave after one bad experience.

SuperOffice goes on to point out that customers are willing to pay a premium for a good customer experience, which they estimate to be between 13-18% for “luxury and indulgence services.” Personally, we suspect that people would be willing to pay more than 13-18% extra, and not just for luxuries either.

Good customer experiences, in summary, mean you can retain more customers and make more money on each one. Bear in mind that retaining customers is a lot more cost-effective than acquiring them from scratch, too.

Customer Experience vs. User Experience

At this point, you might be saying “didn’t you guys do a post about this not long ago?” Sort of. We were actually focused on user experience instead.

There’s a lot of crossover between customer experience and user experience, to be sure. But I’d be remiss if I didn’t make the distinction clear here.

Customer experience is focused on making sure customers have positive interactions with companies as a whole. User experience is focused on making sure customers have positive experiences when using products, systems, or services.

Put another way, user experience is about making sure that your customers have a good experience in regards to what you can control. That is, your products, services, and systems. Customer experience is about making sure your customers have a good experience with what you can control in addition to what you can only influence.

Customer experience covers word-of-mouth, news, reviews, and so on. These are not things that a company can control, but, with mindful marketing practices and good products, they can create the conditions for good experiences. Good products generally lead to good reviews. Friendly business practices and interesting events lead to favorable press coverage, and so on.

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7 Principles of Good Customer Experience

Now we’ve clearly defined customer experience and described why it’s important. The next logical question is “how do you create a good customer experience?”

To answer that question, here are seven general principles which you can follow to create an environment conducive to good customer experiences. You can use these principles irrespective of the type of business you are running.

1. Be responsive.

Nothing can kill a customer experience like waiting with no end in sight. Think back to a few months ago when flying was more common – there was nothing quite as uniquely obnoxious as getting stuck in the airport because of a delayed flight.

We live in an instant gratification society and that’s something you have to account for. Customers generally expect quick responses to their inquiries, with 88% expecting a response within 60 minutes.

2. Understand what your customers need.

We’ve used the term product-market fit on this blog so much that’s it’s almost an inside joke at this point. But the reason for that is so important: you must truly understand what your customers need. That means you understand both what kind of product they need, but why they need it, and why they feel they need it.

If you can’t clearly articulate what your customers need, then you need to do some market research.

3. Work until you answer your customers’ questions and resolve their issues.

According to Statista, globally, the most important aspect of a good customer experience is: getting my issue resolved in a single interaction (no matter the length of time).

Interesting, right? This ranks higher than a knowledgeable customer service representative, not having to repeat oneself, and being able to find information without contacting support.

When a customer contacts you with a service inquiry, you are obligated to do whatever you need to do to resolve the issue. On that note, I advise people personally to err on the side of generosity when it comes to refunds. Remember: acquiring customers is a lot harder than retaining them.

4. Know when the human touch is necessary.

I’m a Millennial, and a young enough one to pass for a Zoomer. But good grief, do I hate getting passed through a clumsy phone tree or getting irrelevant canned answers out of a chatbot.

This is no mere quirk of my psychology either. A Hotjar survey asked 2,000 customer experience professionals to respond to “what is the #1 frustration your customers have during their experience with your company?”

Quelle surprise, “too much automation” ranked #4 on the list with 14% of the vote. The constant reminder of an inevitable robot uprising, no doubt, will irritate your customers!

5. Personalize your service as much as possible.

The same Hotjar survey also showed that 11% of customer experience professionals identified “service not personalized” as the #1 frustration of customers. Personalized customer service might seem like a bonus, but it’s quickly becoming an expectation. There’s a reason that people are willing to pay a premium to feel like individuals.

6. Watch how your employees treat people.

The American Express 2017 Customer Service Barometer said that 33% of Americans will consider switching companies after a single instance of poor customer service. From my personal experience, this statistic checks out. People hate being treated like they don’t matter, and they will take their dollars elsewhere if they get even the slightest hint of that from your employees.

7. Learn the principles of UX design.

User experience design is a world of its own, so I encourage you to read this article. Or, if you’re looking for a more tangible example of good UX, read my colleague’s article on why Spotify is good at UX design.

More and more of the world is being experienced through software and services. When thoughtlessly designed, these systems can scare people off.

Measuring Customer Experience

While customer experience can often be measured indirectly by smiling faces and booming bank accounts, a lot of companies won’t put serious effort into improving until you define metrics. Hotjar, in particular, recommends three that I really like:

Net Promoter Score® (NPS): NPS measures the likelihood that customers will recommend you to friends or colleagues, and it’s an excellent predictor of future growth.

Customer Satisfaction (CSAT): CSAT questions are used to determine whether a customer is satisfied with a specific element of their experience (e.g., the support they received).

Customer Effort Score (CES): CES evaluates the effort required for a customer to achieve a goal (e.g., fix a problem, place an order).

Analyzing and measuring the customer experience, Hotjar

If you’re looking to quantify the quality of your customer experience, these are some good stats to track. The only other one I would recommend is “time to resolution.” I would define that as how much time it takes for your company to fix a customer’s problem after it comes to your attention.

Even as you track these numbers, make sure you don’t start missing the forest for individual trees. Hard facts provide great guidelines and can help you make a clear case for higher-ups, but remember: this field is still emerging. That means we’re still trying to determine the best way to quantify customer experience.

Final Thoughts: 10 Tips to Improving Customer Experience

I’d like to conclude by giving you ten simple tips on how you can improve the customer experience your business provides. My hope in doing so is to give you some clear goals that are easier to complete than broad principles.

1. Make customer experience part of your culture.

Corporate culture changes are always hard and take time. Yet if you clearly state that you want to improve customer experience and you set about taking the steps to do so, then your staff will know you’re serious about improving. That’s square one and it’s really important.

2. Spread the good word to your boss.

If you’re not running the company, find the people who are (or who are at least higher up in the food chain). Make a clear case, backed by data, for improving customer experience. It’s not easy to get people to change their mind, but saying “this will make you money” is a damn good start.

3. Set a clear vision.

Describe what a good customer experience looks like. Seriously – this thought experiment alone can clarify your thinking and make it easier for you to make it happen.

4. Define your target audience and find their needs.

We’ve talked about this exhaustively in prior posts, but the point bears repeating. Figure out exactly who you’re selling to, why they should buy from you, and why they feel that way.

5. Map out the customer journey.

Imagine all the steps it takes for a person to go from having never heard of your company to convincing a friend to buy from you. This process is known as the customer journey. It helps to write it down so you can imagine how the process works.

Do a quick Google Image search and you’ll see a billion ways to do this. Pick one that feels natural for you.

6. Collect customer feedback in real time.

The more feedback you have, the better able you will be to create better experiences. If you can collect feedback in real time, then that’s even better! Asking customers about an experience they had six weeks ago is not going to give you the same fresh, unfiltered data than if you ask them about an experience they had six minutes ago.

7. Constantly train and support employees.

As many as 74% of employees feel like they’re not meeting their potential due to lack of training. The U.S. Bureau of Labor Statistics even found that most companies with 100 – 500 employees provided 6 minutes of training.

That is not a typo. I wrote “6 minutes,” as in “360 seconds.”

How on earth could an employee truly support a customers’ needs with so little training? The short answer is they can’t! Avoid this trap by making sure your employees have what they need to succeed.

8. Be transparent.

Many misinformed companies like to try to avoid conflict. They do this by not making it clear that they’ve made a mistake, hoping that they can sort it out behind the scenes. This might seem nice in the moment, but it’s actually sort of evil. (Making this mistake, after all, is a form of lying.)

If you screw up, own it. People are much more likely – 85% more likely – to stick with companies that are perceived as transparent.

9. Focus on real and pleasant human experiences.

Take a moment to experience your business as a customer from time to time. Focus on creating real, pleasant human experiences. Don’t try to force it or coerce it – just work on creating an environment where good experiences are likely to happen.

10. Prove ROI.

Customer experience is an emerging field of study and a “soft science.” That means many numbers-first executives and business partners will look at it with skepticism. It’s a political reality that you would be unwise to ignore.

Remember to take the time to measure the effects of your efforts. You can even use some of the metrics I mentioned earlier. Doing so gives you a much greater chance of getting the resources you need to keep making customer experiences better!

First time marketing your small business?
We know marketing can be confusing. Download our free marketing checklist for advice.


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