What is customer experience (CX)?

Customer service. Customer journeys. Customer management. Customer care. In today’s increasingly digital world, there are seemingly countless ways to manage and monitor the people you’re selling to. Almost to the point of it being overwhelming.

Yet the one term that brings all of these methods and motivations together is customer experience, also referred to as CX.  

What is CX?

Customer experience describes the overall impression a customer has of a business – from their very first encounter to their last interaction. On a general level, this is driven by their first impressions, the quality of the services you offer, the level of customer service provided, and the overall feeling they have towards your brand.

On a more granular level, it covers how well your website is to use and your tone of voice in communications and on social media. How many touchpoints do you offer? Are they well managed? Even the physical layout of a store and a brand’s returns and privacy policies play a role. 

Why is customer experience important?

Creating a positive customer experience is, and always has been, the lifeline of business. A recent survey even named CX as the number one priority for business owners in the next five years.

In an increasingly competitive market, good CX can be the difference between thriving and surviving. If a customer gets a poor experience from one brand, there are often dozens of similar brands waiting in the wings to meet their needs.

In 2022 alone, 71% of customers switched brands at least once in search of better product quality, improved customer service, product availability and convenience. Other data has shown that half of customers will switch to a competitor after just one bad experience. This rises to 80% after two or more.

On the flip side, customers who have positive experiences with brands are more likely to remain loyal and offer more lifetime value to the company. A study found that 52% of customers would go out of their way to buy from brands they’re loyal to. They are then likely to drive new leads through free, authentic word-of-mouth marketing. Is it any surprise that 81% of companies believe CX is a key competitive differentiator?

How to improve your CX

To improve your customer experience, you have to understand the experience you’re currently offering. Gut feel is no longer enough: technology is playing an increasing role.

It started with CRM (customer relationship management) systems such as Salesforce, but in recent years we’ve seen a further shift. For example, Adobe has acquired a number of CX firms in its bid to build end-to-end solutions that track the customer journey.

There has also been a rise in the number of firms that specialise in more specific and targeted aspects of CX. For example, Hotjar and Loop are among the brands that have emerged as leaders in the customer feedback space.

Then there’s the customer journey sector. This refers to the path a customer takes from initial awareness of a business to becoming a loyal customer. Qualtrics and Medallia are popular choices here.

Meanwhile, Zendesk has become synonymous with support and service, while TheyDo is making significant inroads in the relatively nascent sector of customer journey management.

Ultimately, customers want to feel valued by businesses that truly understand their needs. How they determine how valued and how understood they are comes back to the customer experience. It’s only set to become more important in the years to come.