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What the heck is customer experience exactly?

Published: December 3, 2013 | By: Matt McConnell

In our recent webinar,  No More Lip Service: Customer Experience in the Age of the Customer, guest speaker Kerry Bodine shared her research and views on the important topic of customer experience. This article is based on the content of the webinar.

When I talk with clients and different companies, everyone has a slightly different view of what customer experience means. So, what the heck is customer experience exactly?

Forrester defines customer experience as how customers perceive their interaction with your company. Those interactions happen across the entire customer journey. It is the perceptions that are core here—the perception of the experience in the minds of your customers. Those perceptions are often referred to as the customer experience pyramid. At the bottom of the pyramid we have “meets needs,” where you are providing them with some functionality for which they are looking. The second tier is whether they perceive that your company is easy to do business with. Finally, at the top of the pyramid, is the customer having an enjoyable experience?

Enjoyability is not about plastering a permanent smile on your customers’ faces and sending them skipping down the road. Enjoyability is about connecting with customers in some emotional way, understanding that they are just not a number in your CRM system. They are humans with attitude, behavior and most importantly emotions that you need to connect with in order to deliver a great customer experience. In order to determine how companies across a variety of industries fare on these three levels of customer experience, Forrester conducts a large consumer survey every year.

They asked 8,000 consumers, “How well did company X meet your needs? How easy was company X to do business with? How enjoyable was company X to do business with?” They found that the average customer experience was mediocre. That seems crazy; why aren’t more companies providing an enjoyable customer experience? It is probably because providing an enjoyable customer experience is not cheap. It takes commitment. It takes investment. So why even make the commitment? Why invest time and money in providing a good or excellent customer experience?

In addition to asking consumers about their perceptions of the companies that they do business with, Forrester also asked them three questions related to loyalty. What they found was that customer experience correlates with loyalty. Specifically they found a strong positive correlation between the customer experience index scores, willingness to consider another purchase and likelihood to recommend to a friend. They found a negative correlation between customer experience index scores and likelihood to switch business to a competitor.

What this means is that the better your customer experience is, the more likely your customers are to buy from you again and tell their friends about you, and the less likely they are to take their business elsewhere. Once you have these loyalty metrics you can start to do some really fun math with them. Forrester feeds these correlation coefficients into a financial model they created that looks at what would happen if a company increased its score from being below average to above average on their customer experience index. They found that increasing your customer experience index score is worth millions of dollars of increased revenue.

This article was adapted from the webinar, No More Lip Service: Customer Experience in the Age of the Customer.


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