What is Customer Experience?

Think of a brand you love. Why do you love it? What turns you into a repeat customer? Most likely, it isn’t a single interaction you have with a business but a combination of positive touchpoints you’ve had over time, from reliable service, clear communication, an easy-to-use mobile app, or a pleasant trip to the brick-and-mortar.

Good customer experiences stay out of the customer’s way and allow experiences and products to fit seamlessly into their lives. When a customer experience leaves you frustrated, unheard, and unappreciated, it’s easy to notice. 

In this article, we’ll cover all of your customer experience questions: 

• Why is improving CX important?
• What kind of experiences are customers loyal to?
• How do you improve customer experience?
• How do you measure customer experience?
• What is customer experience journey mapping?
• What is the difference between customer service and customer experience?
• What is the difference between customer experience and employee experience?
• How should different industries approach CX? 
• What are the common CX pitfalls to avoid?

These days, customers are inundated with experiences — the good, the great, the bad, and the ugly. By nature, most will compare their experiences to the best and most intuitive; think Uber, Amazon, and Netflix. With this innate comparison, the stakes are high for delivering experiences people love.

Research shows that attuning experiences to customer needs has many benefits: increased revenue, decreased costs, increased satisfaction, room for innovation, and higher retention. It helps organizations stand out in crowded markets and gives leaders control over how customers perceive their business. 

Take utility and energy company Avangrid, for example. After redesigning its move-in/move-out customer journey, the company raised its Net Promoter Score by 200%.

When you know exactly what your customers need and deliver on those needs, you’re likely to:

• Drive loyalty: Customers who have their needs met are happier and more likely to return. 
• Increase Customer Satisfaction (CSAT): Better experiences lead to higher satisfaction.
• Boost Net Promoter Scores (NPS): Customer loyalty increases when needs are met. 
• Build resilience for market shifts: Great CX decreases companies’ financial risks by reducing customer turnover and staying competitive. 
• Drive more revenue: Losing fewer, acquiring new customers, and cross-selling products and services are all ways to build a financial safety net.
• Decrease costs: Leveraging self-service to lower customer support costs and automating manual processes has big money-saving benefits. 

The world is filled with great experiences, but those with the most loyal base have a few things in common:

• An emotional connection: Customers feel understood. The companies that do this well are familiar with customer values and deliver authentic and empathetic experiences that build community. 
• Consistency across channels: When customers know what to expect, companies build trust and reassurance. Whether it’s an engaging mobile app, user-friendly products, or a positive call to customer service, every experience is connected.

Related: How to Create Consistent Fintech Experiences With a Brand Ambassador Team

• Simplicity: Experiences are intuitive and accessible for everyone. Customers can navigate through platforms and processes without frustration. 
• Constant iteration: The best product and service providers are no strangers to customer feedback. They monitor market shifts and innovate to keep up with customer needs. 
• Customized: They put customers in the driver’s seat and allow them to adjust their experiences based on their preferences. 
• Personalized: They tailor experiences automatically based on customers’ past behaviors. Customers get exactly what they need before they realize they need it.

Gather honest feedback

Understanding your customers’ needs, pain points, and underlying motivations is the foundation of improving customer experience. You can do this through various qualitative and quantitative research methods — or a combination of both, aka mixed methods research. Deciding how many research participants you need and making participants comfortable in your research studies will also go a long way toward gathering accurate, usable insights. 

Related: Is User Research Worth the Cost?

Set the strategy

When stakeholders and business units align, user insights drive CX improvements, reducing the risk of failure. Alignment and strategy workshops give stakeholders time to share priorities and agree on a clear strategy with set project goals.

Prioritize key aspects of the customer journey

Now that you have foundational research and a CX strategy, it’s time to redesign customer touchpoints to be consistent, intuitive, and enjoyable — all based on what customers need and when they need it.

Great customer support starts from the inside out

Reviewing your internal processes can uncover inefficiencies in how your company delivers service. Insufficient resources, training, and outdated systems often frustrate employees, resulting in poor communication and a negative customer experience.

Invest in great tech

Outdated, legacy systems and technical issues can block CX improvements. Focus on replacing the most outdated processes while exploring new technologies that increase efficiency. 

Aim for unified experiences that help customers understand your brand

Prioritize consistency across online, in-store, and customer service channels. Educate customers on your products through thoughtful communication, storytelling, and value-based messaging. 

Bring leadership along for the ride

Stakeholders want to see the ROI of CX improvements. By tracking key CX metrics, teams can measure progress, show success, and share results with the business. 

Like any effective form of measurement, CX measurement comes down to the metrics. Picking the most relevant KPIs for your industry and regularly measuring your customer experience over time will allow you to make data-driven decisions that improve your products and deliver value to your customers. 

 Here are a few examples of KPIs to measure customer experience: 

• Customer satisfaction (CSAT): Measures customer satisfaction with a product, service, or interaction. The higher the score, the more likely you are to retain and acquire customers through positive word of mouth.
• Net Promoter Score (NPS): Measures customer satisfaction and loyalty, precisely how likely customers are to recommend your product or service. A high NPS indicates a higher chance of repeat business.
• Adoption rate: How quickly do your customers get on board when you roll out a new product, service, or feature? That’s the adoption rate. A high rate can indicate that customers find value in what you create, boosting customer engagement and retention. 
• Retention rate: The number of customers that come to you for repeat business. Retention indicates customer loyalty. This is the number to watch if you’re aiming for sustainable business growth.
• Customer churn rate: The opposite of retention is churn. How many customers have you lost over a given period? Reduced churn is an indicator of high satisfaction and quality experiences. 
• Call center volume: On average, how many calls do you receive per month? How quickly are those calls resolved? Fewer calls and quicker resolutions lead to happier customers and reduced costs since employees spend less time solving problems. 

Customer experience journey mapping is a way to track and visualize every step a customer takes to achieve a goal. This can include browsing your website, purchasing, calling customer service, or interacting through a mobile app. 

A completed journey map highlights critical aspects of the customer experience: their goal, the stages they go through, the actions, thoughts, feelings, and any pain points they face along the way. 

There are two main types of customer journeys:

• Current-state journey maps show the customer’s current experience with your brand. They help identify friction points and obstacles that prevent a seamless experience while revealing opportunities for improvement.
• Future journey maps outline the ideal customer experience you want to create. It’s a detailed vision of how you want customers to interact with your brand.

By creating journey maps and putting yourself in the customer’s shoes, you can make targeted improvements to their experience and create better, more seamless touchpoints with your products or services.

Customer service falls under the larger customer experience umbrella. It is a specific part of that journey and focuses on helping customers resolve issues by providing support. Customers typically seek customer service through phone calls, chats, or emails when they have a problem.

Customer experience, on the other hand, is the entire journey a customer has with a company — every touchpoint, from marketing and web interactions to customer service and physical use of the product or service. 

Improving your customer service is a big part of the CX puzzle and can help create a better overall experience. 

Customer experience includes every touchpoint a customer has with your company. Employee experience, on the other hand, is every touchpoint an employee has when engaging with customers. Think about the technology and modes of communication an employee uses to engage with or support a customer. If customer experience is what we see — the tip of the iceberg — employee experience is everything below the surface. 

Customer experience and employee experience are inextricably linked. Often, when we set out to improve a company’s CX — take Avangrid, for example — much of our work is on the EX. The more efficiently employees can support customers, the better the customer experience. 

CX isn’t one-size-fits-all. Tailoring your CX strategy to your industry’s unique needs will help you meet customer expectations and drive loyalty. Here are a few ways different sectors can elevate their experience. 

Healthcare

Goal: Retain and acquire new patients in a competitive market. Healthcare experiences often feel complex and confusing, so simplifying the interactions is vital.

• Clear, transparent communication: Make sure appointment details, lab results, and billing are easy to understand. 
• Omnichannel messaging: Patients expect seamless communication across multiple platforms, whether via email, text, or a patient portal.
• Telehealth services: Offering virtual visits helps meet needs for convenience.
• Personalization: From symptom tracking to appointment scheduling and visualizing lab results, a personalized experience makes patients feel cared for.
• Automation: Using automation in healthcare can help with appointment reminders, billing inquiries, and basic health tracking, making the experience more efficient for patients and providers. 

Retail

Goal: Drive brand loyalty and increase revenue. Whether shopping in person or online, customers want convenience and personalization.

• Personalization: Use customer data to offer tailored product recommendations and promotions based on their shopping habits.
• Omnichannel experience: Link your online and in-store shopping experiences — think easy returns, consistent branding, and smooth transitions from one channel to the next.
• Loyalty programs: Reward repeat customers with personalized perks and exclusive offers.
• Customer service: Excellent, consistent service is a must. Customers expect fast, friendly support at all touchpoints.

Financial Services

Goal: build trust, loyalty, and opportunities to cross-sell and upsell. When managing their money, customers value transparency, security, and personalization.

• Transparency: Communicate fees, services, and product details to build trust and tell customers exactly what to expect. 
• Easy access: Customers expect smooth, user-friendly mobile and desktop experiences. Simplifying the process can make a huge difference in customer satisfaction. Here are seven ways to improve your mobile app experience.
• Personalization: Tailor financial services to individual customers based on their spending habits and financial goals. 
• Security and privacy: In an age of common data breaches and generative AI, assuring customers their data is secure is essential for building trust.

Utilities 

Goal: Improve customer satisfaction (CSAT) and Net Promoter Scores (NPS). Utilities are most often regulated, so industry compliance plays a significant role. 

• Transparency: Focus on clear, honest, easy-to-understand information about fees and service changes. 
• Comfort when stakes are high: Moving into a new house or experiencing a power outage can be stressful. Focus on customer empathy and communication during those times. Here are the first steps to improving the utility experience.
• Ease and convenience: User-friendly, self-service platforms empower customers to solve problems without contacting customer service. 

Generative AI is redefining what it means to provide efficient, personalized experiences. So far, we’ve seen companies use AI to improve CX in several ways: faster service, proactive engagements, efficient internal processes, and personalized interactions.

Our recommendation: Research is critical to understanding user expectations and ensuring that AI features genuinely add value rather than frustrate, confuse, or concern users. Consider conducting an envisioning workshop to create a strategic roadmap for your company’s AI-focused initiatives grounded in user needs, business value, and technical feasibility. 

Skipping key stages in a CX redesign can cost you time and money. By avoiding these common pitfalls, companies can steer clear of mistakes that break the bank.

Moving too fast and making assumptions

Not identifying real user needs up front is a recipe for failure. Before the redesign, take time to understand what your users want and need. 

Developing a one-size-fits-all solution

The best products come from a wide range of ideas grounded in research and evidence. Teams that allow themselves the freedom to brainstorm and explore different options before narrowing down to the best ones tend to create more innovative and successful products.

Failure to continually understand

As you develop your products, it’s essential to have systems in place that capture both quantitative and qualitative data. An ongoing feedback loop ensures that you’re constantly refining your approach and fostering a culture of innovation.

Now that you know the ins and outs of customer experience, you can take steps to improve it. Your customers, employees, and business will benefit. Improving customer experience strengthens customer loyalty, drives revenue, and builds meaningful relationships with the people you serve. 

Prioritize customer research to understand their needs, measure the right KPIs to track progress, and embrace continuous iteration. Avoid common pitfalls, and don’t be afraid to start small — gradual improvements can lead to significant results.