How to Develop a Winning Customer Experience Strategy

In this article, we’ll explain the basics of customer experience and how a smart customer experience (CX) strategy can be the key to making meaningful improvements along the entire customer journey. Conversely, we’ll also discuss the cost of a poor customer experience—in terms of reputation, customer retention, and profit potential—as a way to explain why so many brands today now compete primarily on customer experience alone. And finally, we’ll offer some tips to help you develop a winning customer experience strategy of your own.

Table of content

• Defining the customer experience
• Why do brands need to develop a customer experience strategy?
• How to create a customer experience strategy
• Measuring the impact of your customer experience strategy
• Make improving the customer experience your top priority

Defining the customer experience

Customer experience can make or break your brand. Getting it right can fuel your customer acquisition and retention strategies. But neglecting to consider the digital customer experience —or just getting it flat out wrong—it will become a lot harder for you to bring customers back for the long-term and create brand loyalty, no matter how great your products or services are.

What is a customer experience?

The concept of ‘customer experience’ is fairly self-explanatory: It’s the way your customers feel after encountering your business, whether they engage with your brand in-person or online. 

In the past, brands primarily competed on price alone. But today, the power dynamic has shifted. Price is no longer the competitive differentiator it once used to be, as 86% of shoppers now say they’re willing to pay more if a brand offers a better experience for its customers. 

This is partly because consumers today have no shortage of choices when making purchase decisions. After all, if a customer has a single poor experience with a specific brand, they can easily find another brand—likely, one of your competitors—within a matter of seconds. This alone has forced companies to work a lot harder to win a potential customer and keep them around in the digital age.

What are the elements of a customer experience?

Customer experience includes every possible touchpoint that a potential or current customer could have with your brand across every channel imaginable. For years, businesses with a brick-and-mortar presence have mastered the art of creating a stellar (and well-optimised) in-store shopping experience. But now that so much of the focus has shifted to digital—which gained even more momentum during the COVID-19 pandemic—the lingering question for most brands is: How can we create a great customer experience, one that can not only capture consumer attention but also cultivate stronger relationships over the long-term by meeting customer needs? 

For the purposes of this article, we’ll focus squarely on how you can deliver a stellar digital customer experience. There are number of factors that can make or break both your online and mobile presence, including (but not limited to):

• Site layout and design
• Ease of navigation
• Digital signposting
• Page load times
• Easy access to customer service (including customer self-service)
• Checkout process

Does customer experience stop at the checkout?

The easy answer is “no.” Just because you managed to ‘seal the deal’ by getting a customer to make a purchase doesn’t mean you can claim victory quite yet. And knowing that today’s higher customer acquisition costs (CAC) make it up to six to seven times more experience to win over new customers—than it does to nurture existing customer relationships—by no means should you ever leave customers high and dry after they’ve made a purchase. 

Truth be told, the customer experience extends far beyond simply making a transaction; it plays a big role in the time it takes for the products or services to be received as well as in the way customers use the goods they’ve purchased. This is why it’s important to remember that the end-to-end customer experience is a multichannel experience across all brand touchpoints.    

“Good customer experience minimizes friction, maximizes speed and efficiency, and maintains a human element, embedded within the automation, AI or other technologies."

— PwC, The Future of CX Report

Why do brands need to develop a customer experience strategy?

In short, developing a customer experience strategy can be the difference between a healthy, thriving business and one that fails to turn a profit. A study by PwC found that a third of people who claim to ‘love’ a brand would abandon it after just one bad experience. But even those who are a bit more forgiving won’t stick around forever. Ninety-two percent of those surveyed said that they wouldn’t do business with a brand again after two or three poor experiences. 

This is just one of many reasons why customer experience is fast becoming the most critical point of differentiation for brands today. People predicted that customer experience would eventually overtake price and product, as key brand differentiators, by the end of 2020. And although that prophecy has yet to come into full fruition, all of the signs are pointing to customer experience as the battleground for brands today: 

• 86% of customers are willing to pay more for a great customer experience.
• Just under half (49%) of buyers have been tempted into an impulse buy as a result of having received a personalized customer experience.
• Buyers will pay up to 13% more for items based on the customer experience received.
• Buyers of luxury products and services are often willing to spend up to 18% more on their purchases in return for a premium customer experience
• Investing in customer experience can boost a brand’s revenue by up to seven percent.

What is the goal of a customer experience strategy?

Ultimately, the goal of your customer experience strategy should be to make your customers satisfied and happy from the moment they first interact with your brand to post-checkout. Breaking this down a bit more, a strong customer experience strategy should ideally:

• Grow your business by increasing your reputation: Companies that “excel” at customer experience often grow revenues up to eight percent more than the market average. 
• Transform every brand touchpoint into a positive experience: This especially applies to customer service interactions because when customers need help or have a complaint, the best way to turn a frown upside down is to make it a positive experience.
• Reduce the likelihood of customers feeling dissatisfied: True, it’s impossible to make every single customer happy at all times, but when brands deliver great customer experiences, they stack the deck in their favor.  
• Boost revenue and profits: Bain & Company found that a mere five percent uplift in customer retention can boost profits by between 25% and 95%, depending on the business. 

Foster loyalty among your customer base: Forty percent of Gen Z customers say they feel more loyal to their favorite brands now than they did this time last year, showing the power that a great customer experience can have on long-term customer loyalty.

90% of businesses are now competing primarily on customer experience.

— Source: SuperOffice

How to create a customer experience strategy

Many companies now recognize the importance of having a sound customer experience strategy in place. 45.9% of brands say it is their top priority for the next five years, with 55% reallocating and reprioritizing budgets to focus on customer experience improvements. After all, why invest in other channels or tactics when the customer experience is flawed? 

Thankfully, there are a number of cost-effective ways to transform the customer experience in a meaningful way, especially as it pertains to customer service. Smart customer self-service solutions fall into this category. The good news: Many consumers today, especially those of the digital generation, largely prefer these solutions to other, more traditional customer service channels. For example, 67% of consumers have said they would rather use a customer self-service tool than speak to a real human, while 91% would be happy to find their answers in an online knowledge base, if it were made available. 

Obviously, there are a lot of different ways to develop a customer experience strategy. And being that no two businesses are alike means that there isn’t necessarily a single customer experience strategy to follow. Even so, there are a few best practices to keep in mind as you begin to develop your own cohesive customer experience strategy.

1. Build buyer personas

Understanding what makes your customers tick—as well as knowing exactly who they are and what they care about—is the foundation for delivering a great customer experience. And it’s clearly a winning strategy seeing that 71% of companies that consistently beat their lead and revenue targets rely on buyer personas to inform their go-to-market strategies. Therefore, the more you can create a detailed profile of your customers’ wants, needs, and desires, the better you’ll be able to build (and deliver) a customer experience that meets those expectations.

2. Define a clear customer experience vision

Customer experience isn’t simply a hodge podge of tactics that you cobble together. You have to go into this process being very clear about the goals you’re hoping to achieve by improving the customer experience—and also identifying how you’re going to measure success. Having this high level vision around what success looks like will make it easier to not only build an effective and cohesive customer experience strategy but also make tough decisions about what tactics or improvements will drive the greatest long-term value for your business.

3. Build a great team

As a starting point, you need to make sure your customer service team is firing on all cylinders—after all, these people tend to be the ‘first line of defense’ whenever customers have questions or issues to resolve. So, it’s important to provide them with the tools, information, training, and resources to succeed (more on that below). 

But the customer experience doesn’t stop with the customer service team alone; everyone within your business needs to rally around your established customer experience vision. Any team that touches the customer experience within your organization in some way—from marketing to product development and beyond—must be customer-centric in everything they do in order for your customer experience strategy to come to life.

4. Invest in the right systems and tools

One way to help your customer service agents stay focused on the customer queries that require their dedicated attention is to reduce contact volume. And knowing that up to 70% of tier-1 customer service queries can be easily handled in an automated way, without requiring human intervention whatsoever, customer self-service solutions have quickly risen to the surface as one of the most effective ways to overhaul the overall customer service experience.Not only can these smart solutions, like dynamic FAQs and intelligent customer service chatbots, answer simple, FAQ-oriented customer questions on their own, but they’ve also been shown to reduce customer service costs by as much as 30% and decrease both response time and time-to-resolution—all of which tend to have a positive impact on customer happiness.

5. Use AI to improve the customer self-service experience

In 2019, only 25% of all customer interactions were handled by artificial intelligence (AI) or machine learning. This number is expected to rise to 40% by 2023, which is a strong indicator of the momentum that’s building around AI-powered customer self-service solutions. 

However, one of the key things that many companies lack in the in-house technical capabilities to implement AI-based customer self-service tools. PwC has found that 47% of executives don’t have a solid understanding of how AI can improve the customer experience. 

Enlisting the services of a company with plenty of experience in building customer service chatbots can help to overcome this knowledge gap. You can customise these tools to suit your business exactly while also making sure they’re intuitive and effective for customers to use.

Measuring the impact of your customer experience strategy

Gartner discovered that the companies most likely to launch successful customer experience strategies start by focusing on customer feedback. And although much of this feedback is qualitative in nature, there are a few industry-standard quantitative ways to measure customer satisfaction effectively, including:

1. Customer Satisfaction Score (CSAT)

CSAT is the simplest and, historically, most popular way to measure customer happiness. Getting to a final CSAT score requires customers to take a short survey or questionnaire that focuses on key areas of the business you’re looking to gather data on. The survey method used either asks customers to rate their satisfaction across various questions on an ‘extremely satisfied to extremely dissatisfied’ scale or on a ‘0 to 10’ scale (where 10 represents extreme satisfaction). According to Hubspot, anything scoring 75% or above is considered a good CSAT score.

2. Net Promoter Score (NPS)

Unlike the CSAT score, which focuses almost uniquely on customer satisfaction, the NPS score is a measure of how likely customers are to recommend your brand or business to the other people they know. Scored using a ‘0 to 10’ scale, an NPS score of 20 is considered good, while anything above 50 is considered excellent. Companies that consistently score above 80—which is not an easy feat to achieve—are considered role models to follow. More often than not, the higher a company’s NPS score, the better their customer experience tends to be and the more enthusiastic—and satisfied—their customer base is as well.

3. Customer Effort Score (CES)

This metric is a bit newer to the mix. What makes the CES score unique is that it measures how easy it is for customers to achieve specific tasks whenever they engage with a brand. For example, you might ask customers to tell you how easy it was for them to find your FAQs or to get their questions answered correctly by a customer service chatbot. 

As opposed to the other two measures above, the goal here is to get the lowest score possible, as a low score indicates the least amount of effort required to complete a specific task. Therefore, any actions, activities, or tasks that receive a high score should be seen as prime candidates for broader customer experience improvements—until those scores go down.

Which tools should I use to measure customer experience?

Not sure how to sample your audience? Here are just two of the many tools you could use to get a pulse on how please your customers are with the customer experience you offer: 

• Satisfaction surveys: Asking customers to complete a survey after an important interaction, such as a purchase or conversation with customer service, is a simple way to gather useful data. While not everyone will participate, those who do will give you broad insight into how some of your customers feel, making it possible to pinpoint trends and common themes to help you prioritize which customer experience areas to address first.
• Qualitative interviews: If you’re looking for more in-depth feedback, asking a series of open-ended questions in a qualitative interview might be the right path to take. You could host a ‘focus group’ feedback session or contact customers individually to gain insight into how they feel about your brand, products, services, and overall customer experience without being influenced by other customers. Just bear in mind that this can become a fairly costly and labor-intensive option, so it’s best leveraged on occasion.

How should I use customer feedback to improve the customer experience?

There’s no point gathering tons of useful data if you don’t plan to take any action on it. 

Once you’ve collected customer feedback, be sure to collate the responses in an organized way, as this will make it easier to identify recurring trends, common areas of concern, or aspects of the customer journey that simply aren’t functioning at high capacity. 

For example, if you find that the majority of your customers surveyed find it difficult to get in touch with customer service because of long wait or response times, implementing an automated customer service chatbot could make a huge difference in your customers’ lives. 

Long story short: Equipped with a deeper understanding of what aspects of your customer experience work well—as well as which pieces could use a little TLC—you can come up with an action plan to improve the weak spots, especially those that disrupt the purchase journey.

Make improving the customer experience your top priority

Customer experience isn’t something that magically improves overnight. Meaningful change on the customer experience front only happens when you take the time to listen to what your customers want, need, and expect from you—and then build a plan to create a winning customer experience that delivers on all of those expectations. 

At the end of the day, it’s all about being customer-centric in everything you do as a business. This not only helps you win the hearts, minds, and long-term loyalty of your customers, but it also is the key to your customers’ success, satisfaction, and happiness. 

A great and proven way to improve the customer experience today is by implementing customer self-service solutions, like those built by the team at Smart Tribune. If you’ve considered launching a customer service chatbot, here are eight important questions to ask yourself before getting started. Or if you’re just interested in learning more about how you can prepare your business for the customer self-service revolution, check out our handy checklist.

For everything else, our team is ready to help. To learn more, schedule a demo today.