The hottest term in customer service in 2019 was “customer experience” or “CX” (not to be confused with the Mazda CX in Google search results).
Yet, when something becomes popular so quickly, it bears considering whether it's merely a fad. Is it rebranding the same old idea or have things changed enough to justify a new paradigm. Just as "pre-owned vehicles" are still just used cars, is customer experience still simply customer service? The truth is somewhere in between.
First, let’s check in with Wikipedia to see how they define it:
“Customer experience (CX) is the product of an interaction between an organization and a customer over the duration of their relationship. This interaction is made up of three parts: the customer journey, the brand touchpoints the customer interacts with, and the environments the customer experiences (including digital environment) during their experience. A good customer experience means that the individual's experience during all points of contact matches the individual's expectations.”
In short, customer service is about single interactions and customer experience is the sum of them over time. It’s the difference between a one-night stand and long term relationship.
At its core, customer experience is about reducing friction and maintaining consistent quality of service across all of the areas where your business interacts with customers over the lifetime of the relationship.
It’s no surprise that the idea of customer experience has accompanied the explosion in communications technology over the past decade.
In the days of the simple phone call, there was no customer experience to speak of. You bought something in a store or catalog and maybe, just maybe, had to call the company about a return or issue (probably on a rotary phone). The only experience, was the one you had with the product while using it.
👉 In the past, customers not only had less contact with companies, they had less contact with each other.👈
You couldn’t tweet about a product or experience, share it with friends via email or WhatsApp nor post reviews on Yelp or Google. Therefore, the impact of poor customer experiences was lower. Today, every misstep, rude employee or bad experience can be on twitter or Youtube within minutes. And lord help you if they go viral such as the United Breaks Guitars video.
The Rise of CX and Communications Technology go Hand in Hand
A rapid rise in consumer expectations has accompanied the proliferation of technology. We often speak about legal and regulatory frameworks failing to keep pace with current technology (think digital music and video sharing plus copyright) . It is in exactly this gap that customer experience arose.
The world of always-on and always-available means not just that we expect our friends to text us back within a minute, but that any problem we have at all can be instantly solved.
What song is that? What’s the weather tomorrow? Where is my package? Where’s the nearest pharmacy? These and so many other problems can be solved within seconds. This brings us back to the world of customer service, or experience.
What Do Studies Show?
- Americans tell an average of 15 people about a poor service experience, versus the 11 people they’ll tell about a good experience.
- After one negative experience, 51% of customers will never do business with that company again.
- A moderate increase in Customer Experience generates an average revenue increase of $823 million over three years for a company with $1 billion in annual revenues.
- Increasing customer retention rates by 5% increases profits anywhere from 25% to 95%.
But, it’s easy to get caught up in studies! While happy customers are usually repeat customers, customers go with competitors for more reasons than simply being unhappy.
So does great CX always equal more customers or repeat business?
Choosing Competitors for Other Reasons
On a recent trip to Boston, I had the option of flying directly via Jetblue or via Atlanta on Delta. Now Delta is always my first choice but as I was short on time, I opted for the direct flight. Price was comparable and I’d honestly have preferred to get the Delta miles. However, in this case the time and convenience were more important. I even settled for a dreaded middle seat!
Nevertheless, Delta is still my preference. My experiences with them have always been top notch. They’re more convenient based on where I live and travel and finally, because they're Georgian too. 😉
They’ll always remain my first choice, but never the only one. That’s just how the market works.
👉 Customers remember the service a lot longer than they remember the price.👈
A Great Experience Doesn’t Make a Customer
Now, let me share another personal anecdote. My parents recently took a weekend trip to Charleston, South Carolina which has a Trader Joe’s grocery store. My hometown does not have one (are you listening Trader Joes?) and my sister had given them a shopping list of things to get.
Since my father had never shopped there before, he was unaccustomed to the store layout and products. He walked up to the nearest employee and held out his iPhone. Pointing to the first item on the list, he explained that he was doing a favor for my sister and had no idea where anything was.
What happened? The employee was not only incredibly friendly but simply took the phone and asked my father to follow along pushing the cart. The Trader Joe’s employee walked with him and picked up every item on the list for my dad and put it in the cart.
He was done in five minutes and it probably saved my dad over half an hour of walking around like a lost puppy. Today, he has nothing but praise for Trader Joe's and good things to say when the name comes up in conversation.
Will he ever shop there himself? Nope. While he’s only had positive experiences, my dad is just not the typical Trader Joe’s customer. He’s also a picky eater and usually leaves the shopping to my mom!
Wait, Great CX Doesn't Equal Customers?
The moral of both stories is that it’s easy to get caught up in the hype but great customer experiences don’t guarantee one outcome.
However, in today’s world of instant communication and choices, it still remains important. I’ll still fly Delta most of the time and my father will still recommend Trader Joe’s to others, even if he doesn’t shop there.
So is Customer Experience just Hype?
The current obsession with CX coincides with the transition period we are in.
With many organizations still struggling with basic digitalization, companies need to understand how both the market and consumers have changed and adopt a fitting strategy. How long have we heard about paperless offices? And in 2019, how many of us are still plagued by printouts and administrative processes based on pieces of paper and ink signatures?
While it is fair to say CX is currently over hyped, we cannot dismiss it simply based on that. The rise of CX and reasons for its development remain valid. It is simply the result of new technology’s impact on customer service.
Do you have a good or bad customer experience to share?
Share it in the comments! Does it support or contradict our conclusion?