What is Customer Experience and Why Does It Matter?

You may have noticed that there’s a lot of talk in the business world right now about ‘customer experience’ and ‘customer-centricity’. It’s hardly a new phenomenon. After all, Gordon Selfridge (he of the elegant beard in TV drama Mr Selfridge) coined the term ‘The customer is always right’ back in 1909. So why all the fuss about customer experience (or CX for short) now?

Well, because our expectations of good customer experience (and by extension a good online user experience) have risen, due to brands like Apple and Amazon. Think of Apple, whose obsessive attention to detail extends to perfecting the ‘unboxing’ experience (even that little ‘whoosh’ as you open the box has been deliberately engineered). Think how easy it is to shop with Amazon (and how lazy it’s made us all!). We’re used to using these brands on a daily basis (Google, Uber, Deliveroo, iPlayer, etc.). When we use a site that’s haphazardly built on legacy systems, with no thought for the user’s needs, we experience a digital cognitive dissonance. The harmony and consistency we crave and expect from our online interactions just aren’t there; we get frustrated, annoyed and we quickly abandon the site.

In fact, a website that isn’t designed and managed from the users’ perspective is damaging to your brand – because not only does it confuse and disorient your customer, it suggests to your users that they aren’t important.

If we were unhappy with the service in Mr Selfridge’s department store in 1909 we might tell our friends. If we’re unhappy with our online or offline customer experience in 2018 our disgruntled tweet (especially if it’s witty or chimes a chord with other customers) has the potential to go viral. (Check out “United Breaks Guitars” – a protest song about United Airlines by musician Dave Carroll, whose guitar was broken on a trip. The video became a huge hit and a PR nightmare for the airline.)

So what is ‘customer experience’? The definition is ‘The entirety of the interactions a customer has with a company, its brand and products… The overall experience reflects how the customer feels about the company and its offerings.’ So it’s about the totality of experiences and how those experiences make the customer feel. It’s all about emotions folks! At a minimum, experiences need to be usable, functional and reliable – make sure it works and it’s consistent.

Exceptional experiences are effortless – think Amazon, Uber, Google, etc. – and emotional (in a good way) – again, think Apple. In fact, I’m sure you can think of any great experience, be it Apple or your local greengrocer. You know it when you experience it. (Just as surely as you know it when you come across a lousy experience.)

CX is about the totality of experiences and how those experiences makes the customer feel.

Compared with consumers who had a negative emotional experience, consumers who had positive emotional experiences are:

15.10

more likely to recommend the company

8.40

more likely to trust the company

7.80

more likely to try new products and services

7.10

more likely to purchase more from company

6.60

more likely to forgive the company after a mistake

Customer Experience is also important because, as you might have noticed, we live in a VUCA world (volatile, uncertain, complex and ambiguous). It’s actually a term used by the US military to describe combat situations, but it’s become a handy way to describe the world of the ‘Fourth Industrial Revolution’ and the increasingly complex/hostile business environment. In this world customer experience (and I’d argue also purpose) has become the key business differentiator.

Satisfaction with experience is directly linked to customer loyalty measures:

  • Improved experience has a measurable impact on a customer’s willingness to increase the overall services purchased from an organisation.
  • Successful projects for optimising the customer experience typically achieve revenue growth of 5 to 10%.
  • Successful projects for optimising the customer experience typically achieve cost reductions of 15 to 25% within just two or three years.

The last point is an important one – because when customer experience efforts focus on delivering an effortless, convenient experience they also focus on streamlining internal workflows; the resulting process improvements and efficiencies result in cost savings to the organisation.


An adaptation of a chapter written by Sarah Corney, Head of Customer Experience at the CIPD, for the eBook: Pushing CX Boundaries

Yiannis Maos

Author Yiannis Maos

More posts by Yiannis Maos

Leave a Reply