What Is A Customer Experience Strategy?

From product differentiation and pricing strategies to cross selling, improving customer service and more, there are many strategies businesses can employ to help gain a competitive advantage and increase profits and growth.

Yet, as the number of customer touchpoints continues to grow the importance of including a customer experience strategy is becoming increasingly important to this business mix.

So, what is customer experience?

Customer experience defined

When we talk about customer experience (CX), we are essentially referring to a customers’ holistic perception of your business or brand, based on their experiences and feelings about it. This includes all interactions, however brief, that they’ve had with you across all aspects of their buyers’ journey. Today, CX is often covered as part of a fully thought out programme of customer experience management, or CXM for short. Tip: for more on this, see our deep dive on What Is Customer Experience Management.

Differences between customer service and experience

It’s important to be clear about the differences between customer service and customer experience, as these terms are often confused or used interchangeably by many people.

However, although they’re not the same thing, they’re related. While customer service is best described as one piece of the puzzle focused on human interaction and directly supporting customers, customer experience is more concerned with ensuring customers enjoy the entire sum of their customer experience journey with your business.

This becomes even clearer if you look at each approach in more detail.

Customer service

The more familiar of the two, customer service focuses on the help and advice you provide to customers for your products or services, as and when the customer needs it

Customer service requires your customer facing team to have a particular mix of skills including product knowledge, patience, and determination, so they can best fulfil your customers’ needs. It’s the most human element in your customer journey and the voice your customer will recognise as representative of your organisation.

Customer experience

In contrast, customer experience, or CX, refers to your customers broader journey across your organisation and includes every interaction between your customer and your business.

From pre-purchase touchpoints like social media and your website to touchpoints during and post-purchase, such as interacting with your in-person or ecommerce point of sale or sales and support teams and more. Customer experience encompasses all the possible ways that your business can potentially interact with a customer.

It looks to capture how the customer uses your product or service and their interactions with your human and self-service support options and try to ensure you provide the best experience throughout.

Why customer experience matters

When you look at all the touchpoints and interactions that the average customer has with a brand, the importance of customer experience becomes more obvious, as it only takes one bad experience to shape how they feel about a business.

While people remember great experiences, more often than not the bad experiences stay with them for longer. People are also more likely to tell others about bad experiences too. And given how quickly bad news travels today with the advent of social media, any negative experiences could prove extremely costly and are therefore best to avoid.

It’s also worth considering the cost of acquiring new customers against that of keeping existing ones. Given the general rule of thumb, which states that it typically costs around 5 times more to get a new customer than to retain one, it makes sense to provide the best possible experience and keep customers happy.

When you focus your attention on every customer touchpoint, it’s also a more efficient and effective way for your business to operate. The single customer view it enables helps ensure all your departments and teams work seamlessly and are always able to quickly identify and resolve the most critical issues.

Working in this way helps with improving customer experience, which in turn helps boost your overall growth. This is because positive experiences promote greater loyalty, help you to retain customers and encourages brand advocacy.

What goes into a CX strategy?

Fortunately, with a customer experience strategy in place, you can ensure you’re delivering more of the positive experiences you need to improve customer loyalty.

Customer experience strategy definition

A CX strategy refers to the plans you put in place to deliver positive experiences at every touchpoint of your customers’ journey and includes effective ways to measure customer experiences, both online and offline. The aim through measuring and improving positive experiences is to deliver more of these meaningful experiences throughout.

Key considerations for your CX strategy

When you’re thinking about what to put into your CX strategy and how to shape it, there are a number of important factors you should consider first, including, but not limited to.

Competitive insight

With more companies competing on customer experience to differentiate themselves, knowing how you compare with others in your industry is extremely important to your CX strategy research.

Besides studying your competitors CX tactics, it can be really valuable to benchmark yourself against them. The Net Promoter Score (NPS) metric, is one of the simplest and most effective ways of doing this.

Customer research

Before starting work on any corporate strategy, it’s good practice to know how well you’re performing currently, so you have a benchmark with which to assess your future success. The same is true for a customer experience strategy.

Subsequently, by getting feedback from your customers through the use of customer satisfaction and voice of the customer surveys, you can immediately get a feel for how well you’re doing and what you need to improve.

Stakeholder buy in from your departments

It might sound obvious, but if you’re to launch a successful customer experience strategy you need the involvement and buy in from all your departments, not just those in customer facing roles. This is because customer touchpoints can affect any department, at any stage of a customers’ journey with you. So, if they’re all working effectively and seamlessly together, you’ll have a much better chance of improving your customer experience.

Once you’ve researched the most important areas, you’re ready to begin developing your customer experience strategy.

Next time

Having introduced the concept of customer experience, why it matters, the differences with customer service and considerations for your CX strategy, in part 2, you’ll learn all about how to develop a customer experience strategy. Stay tuned.