What is customer experience? The complete guide
Customer experience (CX) is the relationship between a company and its customers. Learn why it's important to your business and how to improve your CX strategy.
Published April 17, 2020
Last updated September 6, 2022
Customer experience lives on a spectrum from flawless to infuriating—you’ll never forget either extreme. You’ll always remember the tailor who happily rushed a last-minute alteration on your Sunday best as well as the restaurant staff who unapologetically gave you bad service and still charged you the full price.
It’s no wonder the businesses that deliver the best customer experience are the ones who create the most faithful customers.
As companies step up their customer experience game and patrons start expecting more, the pressure to find a balance between the experience you want to offer and the experience you can offer mounts. How can you provide a positive customer experience and reap the same rewards as other well-known customer-centric companies?
In this article, we’ll show you how.
- The definition of customer experience
- The importance of customer experience
- Customer experience management (CXM)
- Good vs. bad customer experiences
- How to improve your CX strategy
- How to measure CX
- How to analyze customer experience
What is customer experience?
Customer experience (CX) focuses on the relationship between a business and its customers. This includes every interaction, no matter how brief—even if it doesn’t result in a purchase.
Whether it’s a call to customer service, observing an ad, or something as simple as paying a bill, every exchange between a customer and business builds—or damages—the relationship. Most importantly, it’s how customers view those experiences collectively that matters.
Whether it’s a call to a contact center, exposure to an ad, or even something as mundane as the payment of a bill, every exchange between customers and businesses builds (or damages) the relationship.
“Customer experience is how a customer feels about the sum of their interactions with a business,” says Dave Dyson, community engagement manager and customer service expert at Zendesk. “It involves every way a customer interacts with a company, at all stages of the customer journey—including the marketing materials they see before they become a customer, the sales experience, the quality of the product or service itself, and the customer service they receive post-purchase.”
Customer experience vs. customer service: What is the difference?
Customer service is one element in the customer journey, while customer experience is the sum of all interactions a customer has with the brand.
Simply put, imagine customer service as just one piece of the customer experience puzzle.
“Customer service is what happens when the experience breaks down,” says Annette Franz, founder and CEO of CX Journey. “So if we get everything right, if we have executed the experience flawlessly, or if we’ve done a great job with designing and executing on the experience, then we don’t need customer service. Because there’s not an issue with the product.”
Good customer service is vital to your company’s overall customer experience. Agents are often the first (and only) human voice customers hear when they reach out with an issue. This interaction can be the cornerstone to building a relationship with the customer and is a chance to leave a lasting, positive impression.
Why is customer experience important?
Both customers and businesses feel the importance of CX, according to our Zendesk Customer Experience Trends Report 2022. More than half of businesses surveyed (56 percent) are making better customer experiences the top business priority in the coming year.
The benefits of delivering a great customer experience include:
- Improved customer retention
- Increased customer lifetime value
- Stronger brand loyalty
- Better brand reputability
- More competitive advantage
How customers feel about your brand is tied to customer retention, lifetime value, and brand loyalty. Think about it—if you’ve built relationships with your buyers through great CX, they’ll likely come back again and again. 81 percent of customers say a positive customer service experience increases the likelihood they’ll make another purchase.
Attracting and retaining customers in an ultra-competitive business environment isn’t easy. But it’s worth the time and effort. Companies that ignore the importance of providing a seamless, effective customer experience can end up losing business to their competitors.
- After one bad experience: 61 percent of customers would switch to a competitor.
- After two bad experiences: 72 percent are out the door.
“A good customer experience drives competitive advantage. Customers can always choose to go elsewhere,” said Dyson. “If you’re having trouble and can’t reach customer support, you’re going to get frustrated, perceive that as a bad experience, and you might leave. Businesses that provide good experiences set expectations for what a customer experience should be at similar businesses.”
Companies are realizing that delivering high-quality CX is their best chance to stand out from the competition. In other words, if a good product and competitive pricing are no longer enough to generate loyalty, then you need a positive, personalized experience to set you apart.
What is customer experience management (CXM)?
Customer experience management (CXM) is the process of measuring, analyzing, and improving the experience you provide customers. CXM looks at the entire customer journey to determine customer pain points and how to resolve them.
What is a good customer experience vs. a bad customer experience?
What makes a good customer experience for one consumer might be different for another. But according to Dyson, it boils down to one simple sentiment—just make it easy for people to do business with you.
“A great customer experience makes it effortless for customers to accomplish their goals for what they want to use your product or service for,” he says. “Customer loyalty is less about big ‘wow’ moments and more about being dependable and making things easy for customers.”
Examples of a good customer experience
- Easy-to-access self-help resources
- Proactive messaging around known issues
- Sales being transparent about pricing
- Always-available live customer support
- Short wait times
- Marketing that sets realistic expectations about the product or service
- Intuitive product design
Companies with the best CX know the importance of different teams working together to create a seamless, consistent experience for buyers.
For instance, support agents should be able to easily access customer details—like what items are in their shopping cart or what outbound email promotions they’ve opened—even if the marketing department is directly responsible for that information. Likewise, a marketing team should have insight into past support interactions so they can send customers more personalized emails.
Being aware of CX from an end-to-end viewpoint and ensuring buyers’ needs are prioritized every step of the way are critical to creating a good customer experience.
Examples of a bad customer experience
A bad customer experience happens when a consumer feels a business failed to meet their expectations.
According to our Trends Report, there’s a disparity between how companies think they perform and how their customers view their experience.
- 60 percent of companies surveyed gave themselves high marks for service.
- 68 percent of customers say there’s room for improvement.
- 54 percent of buyers report that customer service feels like an afterthought for most of the businesses they buy from.
Here are some common indicators of a bad customer experience:
- Long wait times
- Complicated automated system
- Customers have to repeat information
- Lack of empathy from agents
- Difficult to connect to customer service
- Business ignores customer feedback
How to improve your CX strategy: 7 tips
The good news is that CX can be improved, and it starts by putting the customer at the center of your strategy. Follow these seven tips to make your customer experience strategy better.
1. Create feedback loops
Customer feedback provides valuable insight into buyers’ expectations and how you can better meet them. It can also tell you where customers are getting stuck and confirm what’s working well.
“It’s important to create a feedback loop with customers and act on what they tell you,” says Dyson. “This builds trust and ensures it’s not just lip service.”
Dyson also recommends creating an internal employee feedback loop. Agents can combine and share customer feedback they’ve collected to find out what’s making it challenging for them to deliver great service. There could be policies or processes that don’t suit customer needs or friction between siloed teams that slow down issue resolution.
2. Build an omnichannel experience
Customers don’t want to tell the same story multiple times. But considering separate departments usually handle different customer interactions—and effective communication between teams is a common pain point—it’s hard for companies to avoid this pitfall.
The key is to create an omnichannel experience that meets the customer where they are and provides a consistent communications journey, where their conversation history and context travels with them from channel to channel.
Context—about who your customer is, what emails they’ve opened, what’s sitting in their cart, or what they’ve talked to you about in the past—is crucial for delivering a seamless experience across channels.
3. Offer self-service options
Customers often prefer to solve basic issues on their own than reach out to a live agent. You can help them help themselves with data-driven content.
Usually, it’s in the form of help chatbots that provide quick answers or point customers in the right direction. It’s crucial to ensure that your content is accurate and current—an unhelpful article translates into a bad experience.
4. Provide personalization
According to our Trends Report, 68 percent of consumers expect experiences to be personalized. Personalization could include:
- Engagement via their preferred contact method
- Product recommendations based on their purchase or search history
- Sharing personalized self-help content and FAQs
Personalization makes people feel valued, so tailoring support efforts toward customer personas can go a long way. Gathering context about who your buyers are (their preferences, personalities, buying habits, etc.) can help agents better customize their support and provide faster resolutions.
It may be helpful to conduct user experience (UX) research on your company’s support initiatives to find ways to deliver more personalized interactions.
5. Empower customers through AI
Artificial intelligence (AI) continues to enhance the customer experience. In fact, from 2020 to 2021, companies that used automation saw a 53-percent increase in the number of tickets handled by AI-powered chatbots.
AI-powered chatbots and virtual customer assistants are handy for quick, repetitive tasks. When they’re unable to resolve an issue or fully address a question, chatbots can transfer the customer to a human agent to seamlessly continue the conversation.
6. Deliver proactive experiences
A top-tier experience anticipates customers’ needs and gets ahead of a problem before it escalates or even happens. Being proactive creates a unique experience that feels personal, shows transparency, and helps build trust and customer loyalty.
“Proactive support for me is about getting ahead of technical issues, breakdowns, issues that you have identified—and then reaching out to customers to let them know: Hey, here’s what’s going on, and here’s what we’re doing about it,” says Franz.
For example, an eCommerce company might deploy a chatbot on its checkout page to answer shoppers’ questions before they abandon their cart. Or, an Internet company might send a text to notify customers of an upcoming outage.
7. Use data and analytics
The stories found in the data will clue you into many things: the efficiency of the support organization, general satisfaction with the interactions, consumer behavior trends, and lots more.
Refining processes with your customers in mind starts with understanding what the data is saying about your buyers and your support agents. This information can also help you understand pain points, needs, and goals. Any data collected can give you the power to improve CX.
How to measure customer experience
Customer experience exists on a spectrum, so it can be hard to measure.
“There’s no single magic number to measure customer experience,” says Dyson. “You have to look at all the little pieces of the elephant. It’s hard to measure as a whole, so the more data you have, the better.”
Here are a few ways to gather data so you can hone in on your ideal customer experience.
- Send customer satisfaction surveys: There are various types of surveys—including customer satisfaction score (CSAT), Net Promoter Score® (NPS), and customer effort score (CES)—that allow customers to rate their experience on a numerical scale.
- Analyze measurable data: Look at quantitative data such as churn rates, customer lifetime value, ticket reopen rates, time-to-resolution metrics, and other hard data you’ve collected to evaluate CX.
- Perform A/B tests for new CX efforts: Send A/B test emails to targeted customer segments. This will help you gather the info needed to predict how new CX assets will perform.
- Use your community forum as a virtual focus group: Community forum discussions around pain points, feature requests, or how customers are using your product or service can provide key insights.
- Talk to customer-facing staff: Customer-facing team members can give you valuable information on what customers are saying about their experience with your business.
How to analyze customer experience
Some companies simply don’t understand how to analyze their CX data effectively. One common mistake is taking a fragmented approach—looking at isolated factors and figuring out how each one can be improved. By doing this, you aren’t considering how an individual factor influences the others, which can result in poor customer experience management.
Taking a more organizational and holistic approach to your CX strategy leads to customer satisfaction and loyalty. Here are some areas to keep in mind when analyzing the customer experience.
- Customer service
The role of marketing might be the most dynamic—it needs to constantly adjust to match customers’ shifting needs.
Marketers are often responsible for making the first impression on potential customers through ads, outbound campaigns, and word of mouth. Their influence continues via public communications, social media marketing, and brand presence.
The data gathered from these customer touchpoints can help you create more personalized interactions, leading to more loyal customers.
Sales sets the expectations for the customer experience. Outside of quick retail experiences, the sales process is often very attentive throughout the customer journey to meet prospective buyers’ needs.
This provides valuable insights about what customers are looking for—like specific features, follow-ups, or support requirements—which can influence other parts of the business. When your organization is in sync, sales can perform better to close repeat purchases and reduce customer churn.
A company’s goods and services are closely linked to CX. Many consumers value a great customer experience over the product—with some even paying more for an experience than the product or service they’re receiving (think of the differences between high-class dining and fast-casual fare).
Details like reliability, price, UX, and a product’s lifecycle all tie into the overall experience a business creates for its customers. But the experience of the product itself contributes the most to a company’s reputation and impacts the other areas of CX.
After a sale, customer service is typically the department that interacts with the customer the most.
Support agents collect real-time feedback: They learn how buyers are interacting with the product, understand pain points, know how (and if) expectations are being met, and see how the customer base is changing.
Feedback is critical—businesses can’t effectively evolve without it.
Elevate your customer experience
Companies thrive and survive by their reputations. Your success depends on your ability to keep and attract loyal customers. Failing to put your customers first can send them straight to your competitor.
The sooner you invest in a great customer experience by upgrading your CX software, the sooner you can start building better relationships with your customers.
Heather is a customer-centric and results-driven customer experience leader with extensive experience defining CX vision and strategy, managing digital transformations, and delivering solutions to accelerate customer adoption and maximize realization of ROI and business value. She is the Global Head of Customer Experience, CS strategy, and Innovation team at Zendesk.