by Tomsin Dollin
There's little doubt that today's consumers are a fickle and demanding bunch. Easy access to product and pricing information has shifted power away from brands and towards customers. It takes much more effort to win new business and customer loyalty in today's consumer driven environment, elevating the importance of having a rock-solid customer experience strategy.
According to Salesforce research, 88% of customers say the experience a company provides is as important as its product or services. Customer experience (CX), which is the perception a person has of a business based on a collection of impressions, can be the thing that sets a business apart from the rest of the pack.
In fact, Adobe found that companies that prioritized and effectively managed customer experience were three times as likely than their peers to have significantly exceeded their top business goals in the prior year.
On the other hand, brands that don’t have their CX approach buttoned up can experience higher than average churn. For example, NICE research revealed that a majority of consumers would abandon a brand after two negative interactions.
If you’ve ever used product reviews or feedback from a friend when making a purchasing decision, you’ll know that CX can also impact customer acquisition. It’s highly likely that those people who churned after two bad interactions expressed their displeasure to friends and family. Word of mouth is a powerful way to acquire new business, but it can also keep potential customers away.
A successful customer experience strategy addresses keeping new customers as well as nurturing prospects as they move through the sales funnel. Let's take a closer look at how exceptional customer experiences can turn fence sitters into lifelong fans.
What is a customer experience strategy?
A customer experience strategy is the plan a business puts in place to ensure their customers receive consistent and positive experiences throughout their customer journeys, regardless of their goals or chosen paths. Because customer experience is based on a collection of impressions, an effective CX strategy sets standards for all customer-facing touchpoints and the handoffs between them.
Typical components of a good customer experience strategy include:
CX vision. A CX vision describes what people should encounter when interacting with a brand and may be heavy with descriptive terms such as "convenient," "friendly," and "innovative." A clear customer experience vision acts as a touchstone for all CX decisions and should be both aspirational and inspirational.
Customer description(s). Delivering experiences that people value requires a deep understanding of the customer. Brands may use multiple customer personas to develop a holistic view of customer expectations, needs, and motivations. Ultimately, customer insights developed by creating these descriptions or personas should drive the customer experience strategy and vision.
Gap analysis. A customer experience vision describes the future state and lets employees know what they're working towards. Performing a gap analysis on the current state versus the vision will help organizations identify and prioritize initiatives that will help improve customer satisfaction and customer loyalty.
Road map. To be effective, the strategy needs to include a road map for reaching the end state described in the customer experience vision. The map should include components such as a high-level timeline, budget, and necessary technology.
Accountability matrix. A customer experience transformation is an effort that requires participation from multiple teams across the enterprise. An accountability matrix ensures all the key resources know who is responsible for what.
KPIs. The customer experience strategy also needs to include details about how the organization will measure the effectiveness of their CX improvements. Possible metrics will be discussed in a later section.
Ultimately, the CX strategy should include enough information to guide decisions about prioritizing and funding client-impacting initiatives, and provide customer experience standards for employees to follow.
The Journey: Understanding every step from first click to last purchase
A critical step for moving closer to the customer experience future state is understanding customer journeys from the customer’s point of view. Walking in their customers’ shoes can help organizations identify pain points and moments of delight throughout the entire customer journey. Creating customer journey maps is a best practice for getting to this level of understanding.
Figure 1 Source: NICE CXone Mini Guide: Journey Mapping the Digital Experience and Journey Mapping Template
A customer journey map is a visual representation of the path customers follow to accomplish a goal, such as purchasing a product or resolving an issue. The best customer journey maps include information for each touchpoint within the journey such operational business data and customer feedback. Maps can be in a variety of formats, but they all need to accomplish one primary goal: represent what customers experience while interacting with the brand.
Businesses should, in particular, create customer journey maps of the sales and retention journeys to identify ways they can improve customer satisfaction, customer loyalty, conversion rates, and the overall customer experience. Let's take a quick look at some initiatives brands can undertake to enhance different parts of the sales funnel and beyond.
First impressions and the power of a click
Research shows that first impressions are typically formed within seven seconds and that a bad first impression is difficult, if not impossible, to overcome. This means businesses need to focus on providing powerfully positive experiences during the initial part of the new customer journey to keep these leads in the funnel.
Making a good first impression relies upon using business data and customer feedback to know what potential customers need, want, and expect. These needs may include:
Great product photos and descriptions on a website
Intelligent product recommendations
An uncluttered, well-organized retail store with friendly, helpful staff
Competitive prices
A generous loyalty program
People in this segment of the funnel are still researching their options, so businesses should also provide proactive, contextual assistance for first time shoppers. For example, it might make sense for an AI-powered virtual assistant to be readily available to answer product questions, or to offer a smart, searchable knowledge base loaded with content for would-be customers.
Not everyone in this part of the funnel moves to the next phase, and businesses need to understand why that is so they can address it in their customer experience strategy.
Engaging and retaining: Nurturing the middle of the funnel
The funnel narrows as leads drop out and businesses begin to focus on more high value prospects. Would-be customers who make it to the middle of the sales pipeline have received a positive first impression of the business and are seriously considering a purchase. This is the moment when organizations should focus on building trust and providing more information about their products and services.
Potential customers in this consideration phase of the sales process are still researching their options, and they may be using multiple channels for this task. For example, they may search a brand's online knowledge base and then click on a chat button to get more details from a live agent.
In the above scenario, businesses that offer omnichannel customer service can stand out from the crowd by offering seamless experiences. When the chat agent already knows what the shopper searched for in the knowledge base, they won't ask the shopper to repeat their question, which makes a great impression and streamlines the interaction.
Depending on the nature of their customer experience strategy, businesses may also want to consider personalizing interactions to forge stronger relationships, ensuring contact center technology can scale as more leads are added to the pipeline, providing customer service teams with tools that enhance their knowledge and soft skills, and analyzing unstructured feedback with AI-powered analytics software.
Organizations should also survey shoppers to learn why they do or do not move into the next stage of the journey by making a purchase.
Final purchase: Closing the deal and beyond
An effective customer experience strategy needs to also address what customers experience as they make a purchase and how the brand will continue to strengthen the relationship post-purchase. This is the phase of the customer life cycle that can have the most significant impact on customer loyalty.
Making a purchase needs to be frictionless. Once a prospect makes a final decision to purchase, issues like a slow-to-load shopping cart or an indifferent sales agent shouldn't make them second-guess their decision. The CX strategy should also address onboarding and how the organization will help new customers get the most value from their purchases.
All too often, prospects receive red carpet treatment during the sales process and then feel neglected post-purchase by receiving irrelevant communication and inadequate support. If existing customers don't feel the love, they just might start shopping around for a more attentive partner. It's much cheaper to keep an existing customer than acquire a new one, therefore the experiences customers encounter while conducting tasks such as making additional purchases and seeking assistance should be a primary component of any customer experience strategy.
The role of technology in shaping customer experience
Today's consumers value speed and convenience, as well as knowledgeable and friendly assistance. This has significant implications for contact centers, who play a prominent role in the post-purchase customer experience. As a result of the CX strategy, customer service teams may find themselves implementing:
Smart self-service. Most support journeys begin with a self-service attempt by customers who want quick resolutions on their own terms. Businesses can answer this demand by offering DIY solutions such as virtual agents powered by generative artificial intelligence, conversational IVRs, and knowledge bases that can be indexed by search engines.
Omnichannel capabilities. Customers frequently use multiple channels when seeking assistance. It creates a much better customer experience when they are recognized in every channel and aren't required to start from scratch when they change communication methods.
Workforce engagement management (WEM). If you want to make a customer or prospect feel neglected, make them wait on hold for 30 minutes and then route them to an indifferent agent. The best WEM solutions help organizations avoid these CX pitfalls through better forecasting and scheduling, and by motivating agents to take more ownership of their performance.
Smart analytics. Because they capture so much customer (and prospect) information, contact centers have an obligation to transform that customer data into actionable insights that can be shared with the rest of the organization. Analytics solutions such as interaction analytics and real-time operational reporting can inform CX decisions and let brands know how they're performing relative to their customer experience goals.
For a more comprehensive overview of CX-enhancing technology, visit our CXone product page.
Best practices: Strategies and tools to enhance the customer experience
For businesses that are designing or refreshing their CX strategies, there's no need to completely reinvent the wheel. There are plenty of tried-and-true customer experience best practices that can be incorporated into a winning approach to CX, including the following:
Proactive support. Whether it's calling a customer about fraudulent charges on his or her credit card or identifying and correcting an issue before it becomes widespread, being proactive with customers is a proven way to gain trust and improve customer satisfaction.
Personalization. Customers don't want to be treated like strangers every time they interact with a business with whom they have a relationship. Using customer history to provide relevant product recommendations and to tailor customer service interactions shows people that businesses recognize them and understand their needs and preferences. Providing personalized customer experiences is an effective way to boost customer loyalty.
Improve the employee experience. Employees in customer facing roles, from store associates to customer service agents, may not go the extra mile when assisting customers if they're unhappy with their jobs. Ensure they have proper tools and a supportive work environment to enable and motivate employees to consistently deliver exceptional customer experiences.
Close the loop. A good customer experience management program constantly takes the pulse of customers through mechanisms such as customer satisfaction surveys and product reviews. Receiving negative feedback is a prime opportunity to close the loop with unhappy customers and win back their goodwill by addressing their concerns.
For more on this topic, read CX Best Practices: Micromoments that Create Forever Customer Loyalty.
Real-world examples: Businesses excelling in their customer experience strategy
The business landscape is dotted with plenty of brands that have figured out how to deliver satisfying customer experiences. The following three customer-centric companies are ones to emulate when designing a CX strategy.
Sephora
When shopping in a store, have you ever pulled out your phone to do some product research or see if you could get a better price elsewhere? Sephora noticed this trend and used it to their advantage. They embraced this cross-channel shopping behavior by launching a mobile app that can scan store items and make product recommendations. They also integrated their loyalty card with Apple Passbook to make the shopping experience even more convenient.
Not only has their CX strategy improved experiences for customers, but it has also been great for the bottom line. For example, customers that use Passbook make purchases twice as often as a typical Sephora customer, demonstrating that improving convenience can make everyone a winner.
Costco
If you're a Costco member, you've probably experienced the phenomenon of running into the store for just one thing but leaving with ten different items, especially if it's a free sample day. This is by design - Costco's, not yours. But like many of us, you likely felt good about the experience despite spending more than you had planned. That's the magic of Costco's customer experience strategy.
Everything from the store layout to friendly employees to value-priced, innovative products has been considered in their holistic CX strategy. The results: the number of cardholders has grown to 124.7 million as of May 2023, and Costco claims the highest customer satisfaction score of all general merchandise retailers, according to the American Customer Satisfaction Index (ACSI).
Canadian telecommunications company
Now let's review how one of our clients, a Canadian telecommunications company, used NICE CXone as an integral part of its customer experience strategy.
As discussed, customer data and feedback are essential for knowing what customers want and can also be used to determine if CX initiatives are having the desired effect. Our client had an issue collecting this input about customer service interactions because agents had to manually transfer callers to the survey system, and they often forgot. Additionally, the business wanted to offer chat and email support to their customers, something beyond the capabilities of their outdated legacy system.
Moving to an complete cloud contact center solution has provided the business with much more flexibility. For example, users can make their own changes to the IVR system without the need for IT or vendor support, and callers are automatically transferred to the survey system at the conclusion of the call. Additionally, using technology that's built for providing exceptional customer experience has resulted in a higher survey completion rate, a 93% increase in first-call resolution rate, and a 149% increase in Net Promoter Score (NPS).
Measuring success: Metrics and KPIs for evaluating your strategy
A primary reason our client, discussed in the previous case study, wanted a more modern contact center system was to get a better handle on the voice of the customer (VOC). Customer survey scores, including the following, collectively paint a picture of how customers feel about the experiences a brand provides, and should be included when assessing the effectiveness of a customer experience strategy.
Customer satisfaction (CSAT) score. A customer satisfaction score measures how satisfied or dissatisfied customers are with a specific aspect of a business, such as customer service, product quality, or website experience.
Customer effort score (CES). Consumers want low effort transactions, and the customer effort score measures whether or not a business is meeting this expectation.
Net Promoter Score (NPS). An NPS survey asks how likely customers are to recommend a brand to friends and family. The resulting score says a lot about how customers feel about the business.
In addition to survey feedback, businesses need to measure the effectiveness of their customer experience strategy by looking at customer behavior.
Customer attrition. If CX improvements are working, customer churn should decrease.
Customer lifetime value (CLV). Loyal customers stay around longer and are inclined to buy more products, therefore a successful CX strategy should result in higher customer lifetime value over time.
Individually, these metrics don't tell the complete CX story. But collectively, they let businesses know how customers perceive the brand.
Continuous improvement: Adapting and evolving your strategy over time
A customer experience strategy needs regular care and feeding, which is why many businesses have established formal customer experience management (CEM) programs.
CEM teams provide oversight of CX initiatives and ensure change efforts are consistent with the strategy and customer experience standards. Because customer experience enhancements can impact groups across the organization, CEM teams can be more effective if team members come from a cross-section of different departments. This helps ensure these groups are represented and collaborated with.
In addition to enterprise-wide collaboration and ensuring CX-impacting initiatives are aligned with the strategy, customer experience management teams may also be responsible for measurement, designing new enhancements, and identifying enabling technology. And perhaps their most important responsibility is to help evolve the CX strategy as customer expectations, technology, and business conditions change.
That last responsibility is particularly important because change is inevitable, and businesses that have the ability to quickly adapt will remain competitive in the experience economy.
For more insights about designing and managing customer experience strategies, read: What is Customer Experience? Key Components and Why It Matters and Customer Experience Strategy for Contact Centers.