Customer experience is one of the most important trend words of this decade. It has been well known for years in the market, that a high quality and well-known brand does not guarantee success.
Technology enables companies to manage and lead their customer relationships better. At the same time, with the generalization of the Internet and social media, online shopping, the internationalization of retail chains and the differentiation of concepts all provide customers with more choice, resources and information for decision-making.
The amount of unlimited information and the ability to compare and compete with alternatives have shifted power from companies to customers. The best competitive advantage for a company is the ability to create customer experiences.
Customer experience is a trend that every company wants to be a part of: A unique customer experience will help to stand out from your competition and work as the brands personification. While material competitive advantages can be copied, customer experience is not replicable. The customer experience at the heart of the company’s strategy is a win-win situation for both the company and the customer.
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Definition of customer experience
The customer experience is formed in all interactions between the customer and the company – partly even before the customer relationship begins.
The customer experience covers all the customer’s contacts with the company, and also all the reactions and feelings they raised. Immediate contacts are associated during buying, consuming, and service, and they usually begin from the customer’s initiative. Indirect contacts cover unplanned encounters with company representatives, products, services, or brand, such as testimonials, criticism, advertising, news, and reviews.
The customer experience can be divided into three levels: action, emotion, and meaning. The level of activity describes the company’s ability to meet customer needs. The level of emotion covers the feelings and experiences of the customer. The level of significance describes the highest level of customer experience: images, meanings, stories, promises, personality, insights, and so on.
The concept of customer experience is more comprehensive than, for example, a service experience that differs from customer experience due to its service-relatedness, or customer satisfaction, which reflects the customer’s satisfaction with the relationship between expectations and actual service at a single point of contact.
Customer experience is not as easy to measure as service quality, or customer satisfaction, but it is worth measuring. The customer experience is even more effective than customer satisfaction as an explanation for positive testimonial and customer loyalty.
Digital customer experience
The development of digital solutions offers customers more possibilities to have contact with companies. Technology enables you to get closer to your customer, it makes contacting and buying easier, provides information in various formats, and helps develop customer experience through analytics and feedback.
When you are serving a customer through a physical store, by phone and email, as well as on social media or a chat run by many people, it can be challenging to maintain a unified customer experience. That is why every employee of a company must act in accordance with a unified customer experience ideology.
These days the majority of people start searching for information and getting to know a company by googling it. Thus, digitality also has its own reverse side for the company: everyone has the opportunity to get their voice heard.
Good as well as bad experiences are publicly shared on a low threshold. It makes the business more transparent because customers have the opportunity to see what other customers who have already bought their products thought of the business. This is a big challenge for the companies, because mistakes are heavily punished. The threshold for sharing both positive and negative customer experiences on social media platforms is very low.
In online conversations the negative experiences are emphasized: we tend to give more value to the negative than the positive stories, because according to many studies they raise stronger emotions in us. This is a familiar phenomenon for every entrepreneur. You have to be able to response immediately to the problem situations and customers demands.
What does the customer experience include?
What the actual customer experience includes is a subjective matter. There are no two experiences equally alike, and it is impossible to replicate a customer experience. A customer experience is something that is partially formed before the customer relationship has even started – immediately after recognizing the demand.
What affects the customer experience:
Social environment: the environment required for a successful customer experience, such as personnel, reviews, recommendations, customer’s relatives and other customers visiting the store simultaneously.
- Service encounter
- Atmosphere such as the design and outlook of the business premises, the smell, temperature, music)
- Selection: diversity of it, the quality, specificity.
- Price and economic benefits
- Customer experience in other channels and multi-channel customer experience.
- The company’s brand and its own expectations.
- Previous customer experiences that are reflected in future experiences.
- Situation variables such as store location, culture, economic, seasonal, weather or competitive situation.
- Consumer variables such as customer’s socio-demographic background, goals, motives, attitudes towards consuming, mood and personality.
Three steps can be separated from the process of creating a customer experience:
- Preliminary experience: information searches, getting to know the service, evaluating of alternatives, contact with the company prior to the core experience, and ease of access to the service.
- Core experience: service delivery, purchase transaction and the service event itself. During the core experience, even the smallest details are crucial for the bigger picture.
- Post experience: Experiences that arise in the post core phase, such as a service or product evaluation, interaction with other customers, and post-core contacts with the service provider, such as customer feedback, reclamations, and aftercare.
The post-consumer experience can be an important step for both the customer and the company, as it often increases customer satisfaction and creates additional sales opportunities. On the other hand, poor aftercare can cause customer reclamations, product returns, complaints or negative word-of-mouth.
- Good customer experience beyond expectations
According to Infinit Contact, 80% of companies say they are producing a good or better than expected customer experience. In reality, only 8% of companies succeed in that.
90% of those customers who had a bad customer experience will no longer buy from the same service provider. However, many disappointed customers do not express their dissatisfaction. Per one disappointed customer, there are 26 equally disappointed consumers, who are just not bothered to make a complaint.
Creating a successful customer experience is not rocket science, because customers value the same things universally. They want them to be understood and treated with respect. They also expect they can rely on the quality of the customer experience. Customers will be delighted when their expectations are exceeded, and disappointed when they are undercut. Therefore, you should be careful not to promise more than you will be able to deliver, but instead aim to deliver more than promised.
In addition to physical reaches (availability, services, quality, environment, selection, etc.), psychological perspectives should be taken into account. These include supporting the customer’s self-image (create a sense of success as a decision-maker), the element of surprise and experiential, memorable, and the desire to get more.
Only a particularly good or particularly bad customer experience will be remembered, and a customer with a positive experience will more likely return to use the services again. Critical moments in terms of customer experience are those situations where things do not work as expected. Not even all of the customer-oriented companies can always avoid failures. A poorly managed problem situation may end the customer relationship, but a well-managed situation can further enhance the experience and be the decisive factor that transforms the customer into a referee.
Leading Customer Experience
In order to lead a customer experience, you first need to understand and picture the importance of customer experience as a whole. Monitoring and measuring the customer experience is a requirement for its development.
Quality experiences can only be offered when there is sufficient understanding of how, when and where customers encounter products or services offered by the company. Because the customer experience is formed at each meeting point, you must identify all the situations in which the client may be interacting with the company, its products, or services.
Managing a customer experience is a comprehensive thinking model that covers all areas and functions of your business. Although sales and customer service generally have the most individual encounters with customers, other business functions are also responsible for building a customer experience that exceeds expectations.
Production and product development innovate, and deliver solutions that meet customer needs, marketing cherishes the brand of the company and passes on the company’s promises to the customer, HR is responsible for the development of personnel skills and positions, the economy ensures the accuracy of invoicing, the IT department is responsible of the systems and so on.
In order to provide the best possible customer experience, the entire organization must work according to a common customer experience ideology. But even a successful management of the customer experience is not always enough, as it was said earlier, the formation of the bigger picture is also affected by things that the company cannot control.
Improving customer experience begins with measuring.
The most common mistakes in developing a customer experience are related to making decisions based on feelings and guessing, instead of asking customers’ opinions. Alternatively, the measurement results are numerical and therefore difficult to put into practice. Often, customer experience is not measured at all or it is measured solely by customer satisfaction.