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Understanding customer experience
What customer experience (CX) is, why it's important for your business, and how you can improve it for your customers.
Last updated30 Sep 2021
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Great CX requires a customer-centric mindset... and a lot of careful work. This guide is your introduction to the basics: why CX is important, how to improve it through customer feedback and surveys, plus tips from 100+ CX experts and a report with plenty of CX trends and stats—so you have everything you need to start delivering an exceptional experience for your customers.
What is customer experience?
Customer experience, also known as CX, is your customers’ holistic perception of their experience with your business or brand.
CX is the result of every interaction a customer has with your business, from navigating the website to talking to customer service and receiving the product/service they bought from you. Everything you do impacts your customers’ perception and their decision to keep coming back or not—so a great customer experience is your key to success.
Why is CX important for your business?
Delivering a great customer experience is hugely important for any business. The better experience customers have, the more repeat custom and positive reviews you'll receive, while simultaneously reducing the friction of customer complaints and returns.
The benefits of delivering a great CX include:
increased customer loyalty
increased customer satisfaction
better word-of-mouth marketing, positive reviews, and recommendations
All business models can benefit from improving the customer experience: subscription businesses can increase retention and reduce churn, ecommerce marketplaces can increase repeat custom and reduce returns, and service industries can gain recommendations and reduce complaints.
In fact, we challenge you to think up a type of business that doesn't benefit from providing a great customer experience. We believe that putting customers first is always good for business (and we also have the data to prove it in the 'CX stats and trends' chapter).
What is the difference between customer experience and customer service?
In short, customer service is just one part of the whole customer experience.
As we mentioned, customer experience is a customer’s overall perception of your company, based on their interactions with it. Comparatively, customer service refers to specific touchpoints within the experience where a customer requests and receives assistance or help—for example, calling an operator to request a refund or interacting via email with a service provider.
In other words: CX is larger than customer service. It includes every touchpoint a customer ever has with your company, whether it's the moment they first hear about you in a blog post they found on Google, all the way through to the time they call your customer service team to complain about your product (and hopefully get a prompt response).
What is a good customer experience?
There is no single universal checklist to follow to guarantee good customer experience: your business is unique and so are your customers. However, we've found a number of common principles by polling 2000 CX professionals across many industries. You can read the full results of our survey here, but we've included some of the key takeaways below.
In short, good customer experience can be achieved if you:
Make listening to customers a top priority across the business
Use customer feedback to develop an in-depth understanding of your customers
Implement a system to help you collect feedback, analyze it, and act on it regularly
Reduce friction and solve your customers' specific problems and unique challenges
It's not rocket science: a good customer experience comes from asking your customers questions, listening to their responses, and actioning their feedback.
6 things that cause bad customer experiences
Bad customer experience comes in many shapes and sizes, but we noticed a number of commonly-reported issues in our customer experience stats.
Bad customer experience is primarily caused by:
Long wait times
Employees who do not understand customer needs
Too much automation/not enough of a human touch
Service that is not personalized
If you need any more ideas, just think about the last time you were frustrated as a customer—it's quite likely that one (or more) of the above was the cause.
Ultimately, though, what counts as poor customer experiences in your business will be unique—and you'll only learn about it by opening the door to customer feedback, then working to minimize the impact of factors that cause a bad experience for your them.
Why you should use customer feedback as part of your CX strategy
You may know some theory behind what makes good and bad CX, but for it to make an impact on your business you need to have a reliable method of collecting insight from your customers so you can take action and make impactful changes.
Customer feedback is information you collect from your customers about their experience with your product, service, website, or business as a whole. You can use this feedback to improve customer experience by removing or reducing areas of friction and increasing positive touchpoints.
You're probably already collecting customer feedback without realizing it: when a customer sends an email, calls customer support, or leaves a review, that's feedback. The problem is, if that feedback is not measured and analyzed, you're missing out on the opportunity to use it to improve customer experience and leverage its growth potential.
→ Read more about the CX surveys you can run to collect feedback from your customers
How to measure and analyze customer experience
From what we wrote so far, customer experience can look like a subjective concept that's difficult to measure. That's why you need to rely on a number of different CX metrics that can be used individually or together to get an indication of customer experience in your business.
By having a measurable indicator of CX, you can track how it improves (or worsens) over time and use it to evaluate the success or failure of changes you make that might be affecting your customers. Here are four top metrics used by CX professionals to track customer experience over time:
Customer Effort Score (CES)
Net Promoter Score® (NPS)
Customer Satisfaction Score (CSAT)
Time To Resolution (TTR)
Customer Effort Score (CES)
Customer Effort Score measures the experience with a product or service in terms of how ‘difficult’ or ‘easy’ it is for your customers to complete an action.
CES surveys are usually sent out after an interaction with customer service, with questions such as ‘How easy was it to get your issue resolved today?’ and a rating scale going from ‘1: very difficult’ to ‘7: very easy’. They also work well after customers reach important milestones in their journey (for example, after they sign up for a free product trial or after they successfully concluded a transaction).
Net Promoter Score (NPS)
Net Promoter Score is a customer loyalty score that is derived from asking customers a simple closed-ended question: “On a scale from 0 to 10, how likely are you to recommend this product/company to a friend or colleague?”.
You can choose to adapt the question slightly to better suit your business and use a follow-up NPS question to get more insight, but the point of NPS is to get a simple numerical score on a scale from 0 to 100 that represents customer experience.
We use NPS as a primary CX metric at Hotjar, too.
Net Promoter, Net Promoter System, Net Promoter Score, NPS and the NPS-related emoticons are registered trademarks of Bain & Company, Inc., Fred Reichheld and Satmetrix Systems, Inc.
Customer Satisfaction Score (CSAT)
CSAT surveys measure customers’ satisfaction with the product or service they receive from you. They can be expressed with a 5- or 7-point scale (where 1: very unsatisfied and 7: very satisfied), or through binary yes/no answers.
Unlike the Net Promoter Score, which asks customers to consider their overall feeling towards the brand (and thus, their likelihood of recommending it or not), CSAT focuses the customer’s attention on specific touchpoints they were satisfied or dissatisfied with.
Time to resolution (TTR)
TTR is the average length of time it takes customer service teams to resolve an issue or ticket after it’s been opened by a customer. It can be measured in days or business hours, and is calculated by adding up all times to resolution and dividing the result by the number of cases solved.
In our CX stats and trends, we found that the leading cause of customer frustration is a long wait/response time. For that, TTR is a crucial metric to track and improve: the shorter your TTR, the higher the chances your customers will not experience frustration when they reach out for help.
A great customer experience example using NPS
Here is a practical example of what tracking a CX metric and acting on the insight can do for customer experience.
One of our customers, jewelry ecommerce Taylor & Hart, specializes in bespoke engagement rings—not the kind of product people usually think about buying online, and also not the kind of product customers would want to buy more than one of.
The company’s goal was to turn reluctant visitors into one-time buyers, and one-time buyers into lifelong promoters who would recommend the same service to their family and friends. After choosing Net Promoter Score as their primary CX metric, Taylor & Hart identified two essential customer milestones and set up NPS surveys at each point:
The moment a customer places an order
The moment the customer receives their order
The resulting NPS numbers were kept visible on metrics dashboards in the office, and everyone's focus was on keeping the scores improving. It wasn't an easy feat, but the team used each piece of negative feedback to fix parts of their business, from manufacturing to shipping methods, to give customers the best experience they could (if you're curious about the logistics, you can read a full write-up of this NPS case study).
With customer experience kept very much front-of-mind, Taylor & Hart grew their NPS scores to over 80 (the highest in their industry) and annual revenue followed suit and grew to €4.5M.
→ Find more inspiration in these tips from 100+ CX experts on what else you need to deliver a great customer experience
Use customer feedback to improve CX
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