An in-depth look into customer experience (CX)

Why is customer experience important?

The reason customer experience has been getting so much attention recently is that empirical evidence shows that being customer-centric has very real payoffs. According to a PwC report, customers are willing to pay a premium of up to 16 percent for a good CX.

Customer experience acts as a differentiator as it shifts the business perspective from a sole focus on profit to one that is focused on customer needs, wants, and goals. Making that shift lets you align your investments, products, and services accordingly, ensuring that they solve not only the right problems but also the ones customers are willing to spend money to get solved.

In turn, focusing on every touchpoint of the customer journey impacts the following three metrics that are critical for any business wanting to maintain a healthy bottom line:

• Improve customer retention: When customers have positive experiences, they connect with the brand. Because customers are armed with readily available information about their options, they have the power to switch providers at the click of a button.
  A high-quality CX reinforces trust and reliability, encouraging customers to remain loyal. This means that having satisfied customers is key to ensuring they come back and continue buying.
• Reduce customer churn: A lost customer means not only a loss in revenue but also an increased cost in other areas to compensate for that loss.
  Proactively addressing pain points through customer service and feedback prevents issues from escalating and causing customers to leave. But, if their needs are being met, their overall trust increases, making them less likely to switch to competitors.
• Decreasing customer acquisition costs: Great customer experiences also impact how effectively your company acquires new customers. A happy customer is more likely to become an advocate and recommend your brand to other customers, reducing the need for marketing investments.
  When a good CX meets a strong brand reputation, businesses spend less on replacing lost customers, effectively lowering overall acquisition costs.

What’s the difference between customer service and customer experience?

Although both customer service and customer experience have a significant impact on your ability to attract and retain customers, they have different meanings not only for the business but for the customers themselves.

Customer service sits under the umbrella of CX. It refers to the support provided by a business to its customers before, during, or after a purchase. It often includes assisting customers with answering questions or resolving problems through different channels.

The table below shows the key differences between customer service vs customer experience.

How to improve customer experience

CX is heavily dependent on emotion and perception. This is why improving customer experience is important for organizational performance.
Here are a few CX strategies and tools for improving customer experience you can use that will help you get there.

Collecting customer feedback

Defining a customer experience strategy that is not based on deep customer knowledge is like driving with your eyes closed. This is why it’s important to have a systematic method and regular cadence for monitoring and collecting customer feedback and data across channels to gain a comprehensive view of their needs:

• Send surveys after key brand interactions, such as asking customers how helpful their interaction with a call center rep was.
• Conduct one-on-one interviews.
• Run focus groups.
• Monitor how customers interact with your site.
• Talk to support teams to understand your customers’ main issues.
• Use what you learn from the customer feedback and data to inform your CX strategy.

Customer experience journey mapping

Customer journey mapping is the visual representation of the customer’s interactions with your brand across all channels and touchpoints. It helps you understand their needs, pain points, challenges, and expectations at every stage of the journey.
And if you want to impact the way your customers perceive and feel about you, you need to understand the sequence of events from their perspective and know the answer to questions like:

• How did they find you?
• What was their main motivation?
• What channels did they interact with and what were they trying to achieve?

A customer experience journey map helps you look at the whole picture. As a result, you can locate the biggest points of friction or dissatisfaction and determine the actions you need to take to remove them.

Customer personas

Personas are fictional representations of groups of customers that will typically use your services, products, sites, or brands similarly. But to use customer personas effectively, you should target beyond the demographics. After all, a “50-year-old white male” tells you very little about how a given person will behave or what their needs or wants will be—just think about the differences between Ozzy Osbourne and Prince William of England.

Instead, you should enrich your personas with research that shows what a given customer typically wants to achieve, what their goals are, what their biggest pain points are, and what motivates them (the jobs-to-be-done framework can be a really useful tool here). This will give you actionable insights into how you can best meet your customer's needs and prioritize the areas you need to improve on.

Omnichannel customer experience strategy

Customers expect to interact with your brand over an increasing set of touchpoints, and the number of those that are digital is also on the rise. An omnichannel experience ensures that your customers have a consistent experience across all channels. So, instead of treating each channel as separate, an omnichannel strategy integrates them all.
Just think about the number of internet-enabled devices you have nearby right now. In fact, having a strong digital presence is key to improving your overall experience.

But omnichannel is not just about having a great presence on multiple channels. It’s also about giving customers an experience that is seamless and integrated, allowing them to move from channel to channel without friction. Companies with the strongest omnichannel customer experience strategies retain an average of 89% of their customers, compared to only 33% of companies whose omnichannel strategies are weak.

Personalized customer experience

Personalization improves CX by making interactions more relevant and engaging. It takes into account customer preferences, behavior, past interactions, and real-time data, resulting in a tailored customer journey rather than a "one size fits all" experience.

With a personalized experience, businesses can create meaningful connections by delivering the right experiences to the right customers at the right time. And businesses reap the benefits of these connections with higher customer satisfaction, increased customer engagement and loyalty, improved customer retention, greater competitive advantage, and boosted sales.

Creating great digital customer experiences with OutSystems low-code

At OutSystems, we’re on a mission to eradicate bad experiences—and ensure that any company can deliver high-quality digital omnichannel customer experience without needing to boast the unlimited resources of Google or Amazon.

You can learn more about how the OutSystems low-code platform can help your company deliver brilliant digital customer experiences, as well as discover some of our customers who have found great success in doing so, in our Creating Brilliant Digital Experiences with Low-Code e-book.

Customer experience frequently asked questions