Customer Experience Optimization & why you should start urgently with it

In a market environment that is becoming increasingly competitive due to exponentially growing product offerings, information and services, it is increasingly difficult for companies to differentiate themselves from the competition. The problem-free comparability of prices, availabilities and assortments of increasingly replaceable products and services also stimulates competition. A strong positioning in the market now requires a great instinct.

From the customer’s point of view, an excellent customer experience often serves as a key differentiator. This needs to be improved in order to move from an average to an excellent customer experience – the process for this is a step-by-step customer experience optimization.

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What is a Customer Experience?

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The Customer Experience (CX) includes all impressions, experiences and contacts that a user or customer receives during the entire customer relationship with a company. The CX includes all individual perceptions and interactions at various customer touchpoints – e.g. web, app, newsletter, landing pages, customer service, stationary business, etc.

Customer Experience: Just a Hype?

The fact that the customer experience is essential for a successful market position obviously seems to have been accepted by a large number of companies. Numerous studies in recent years have proven this: As early as 2016, almost 90% of the top 500 companies surveyed (according to Forbes) assumed that improving the customer experience was essential for future entrepreneurial success and an improved brand reputation. 80% of companies also assumed in a Gartner survey of 2018 that they would mainly compete on the basis of the customer experience in the future.

But not only companies seem to regard the customer experience as the holy grail. Customers also regard it as essential for their purchasing. In a PwC study, for example, about half of the participants stated that they would not come back a second time after a bad customer experience. Approximately 32% of customers are prepared to say goodbye to a beloved brand as a whole, even in the case of a single very bad experience.

We divide CX into the following three facets:

Perception:Perception:Logistics:
The (visual) design of contact points such as website, app, forms, contacts with customer service or sales etc. – including all visual elements and wordingsThe design of transactions, communication with users and customers, information search (e.g. simple vs. complicated).The path of the product or service to the customer and the decision-making process; digital or analogue (e.g. dispatch, tracking, return etc.).

Such an important and complex topic requires its own management within the company. This is why Customer Experience Management (CEM/ CXM) has developed into a holistic approach that stands for a customer-centric alignment of processes and interactions along the entire purchasing process. This takes into account not only the direct digital or personal contact points with a brand or a company, but also the associated emotions, expectations, trust, loyalty and, at best, customer satisfaction.

CXM focuses on the continuous analysis and optimization of touchpoints between customers and the company. The aim is to create a positive customer experience, strengthen customer loyalty and increase customer satisfaction.

The Kano-Model of Customer Satisfaction

Customer satisfaction can have different triggers and depends on a variety of different factors. As a company it is important to understand, measure and link all factors in order to achieve a positive ROI.

ROI (Return on Investment) refers to the profitability of the capital invested. This indicator is often used to measure the success of projects, tests and measures. It is usually calculated from the ratio of (surplus) profit to total invested capital.

Threshold factors are so taken for granted that customers only become aware of them if they do not meet them, e.g. simply placing products in the shopping basket. If this does not work, it quickly causes dissatisfaction among customers. On the other hand, existing hygiene factors do not lead to satisfaction. The customer is aware of performance factors (e.g. easily accessible customer service). These factors eliminate the dissatisfaction or create satisfaction depending on the extent of the quality.

According to the Kano-Modell it is the excitement factors that make the difference. These are factors with added value that a customer or user does not necessarily expect, e.g. an individual product configurator or a unique app. This phenomenon is clearly visible in the following figure.

Kano-Modell

Due to the strong experience orientation in the western culture, such excitement factors are particularly useful to set a company apart from the competition. An AWA survey from 2019 shows how strong this trend is. 24.68 million people aged 14 and over stated that it is particularly important for them to experience strong experiences, adventure and excitement in life. After all, this is about 30% of the total German population.

Of course, this result is also reflected in the shopping and usage behavior of consumers. Because strong experiences also play an important digital role. A positive customer experience should therefore have the highest priority for companies, especially in digital channels.

How can the customer experience be measured?

CX-Messen

The customer experience includes not only the direct digital or personal touchpoints with a company, but also the associated emotions, expectations, trust, loyalty and, at best, satisfaction. These factors were decisive for the result of a customer experience and can be measured in various ways. Analytics expert Jim Sterne therefore divides the measurement into the following 3 areas:

  • Customer satisfaction
  • Fulfilment of tasks
  • Achievement of goals

Customer satisfaction is often measured by the Net-Promoter Score (NPS). This provides information about how keen customers are to recommend a company. Loyal, satisfied customers (promoters), satisfied and unenthusiastic customers (passives) as well as dissatisfied and unenthusiastic customers (detractors) are set off against each other. Information can also be provided by feedback forms, customer reviews or the number of service requests.

The fulfillment of a task includes whenever someone calls, visits the website or uses an app and thereby solves a task. Questions such as: How easily can users reach their goal? Are they frustrated? Do they get lost? They can be answered with the help of analysis tools that measure search history, page views, length of stay and interactions. Based on these findings, the next step is to discuss which jobs can be improved for the next visit.

Messen-Kundenzufriedenheit

The third area determines how well companies achieve defined goals. Are sales increasing? Are customers more loyal? Are margins increasing? The combination of the three areas customer satisfaction, task completion and target achievement indicate whether the changes at the interface to the customer are effective.

Gartner suggests a similar approach to measuring customer experience. Even if up to 200 (!) different CX indicators are used in large companies, these should be considered in combination to measure customer experience from different areas of the company. They concretely recommend the combination of key figures from the following five areas:

  • Customer satisfaction
  • Customer loyalty
  • Brand values
  • Quality of service
  • Employee engagement

Small businesses shouldn’t be intimidated by many key figures and data. Regular measurement and evaluation of information alone makes it possible to produce meaningful findings.

This is how CX optimization works

Wie-Es-Funktioniert

CX Optimization: Speed or Accuracy?

After the extensive measurement of the CX, there are findings which are used for the optimization. The focus is on the way the Customer Experience is delivered. Should this be quicker or more accurate?

Companies must carefully consider whether to focus on fast but possibly less data-based personalization (e.g. purely session-based), or whether to opt for a slower but more data-based alternative (e.g. taking into account the entire previous customer journey and purchase history). In general, it is important to consider the possible outcome when making a decision: The faster a good customer experience is delivered, the more return on investment is achieved. In the same way, the earlier the customers perceive a certain stimulus, the more their behavior changes.

The fast but less data-based personalization is also called real-time personalization in the industry. But attention: Customers are entitled to a certain quality. Therefore, despite rapid processes, the quality and relevance of the content must be taken into account.

Real-time personalization is particularly important for new customers/visitors who do not bring any data history or other audience data with them. If a completely unknown user downloads an app directly, there is no information where he came from. Without real-time processing of the currently given data, it will then be difficult to deliver an appropriate personalization.

In addition, high speed is a basic requirement for flawless customer experience optimization in various business processes. For example, it is now essential to analyze and optimize the checkout and payment process in real time. Here, real-time data and automated learning models are used to prevent fake orders.

Teamwork makes the CX-dream work

Manpower is needed to cope with the large number of customer experience indicators, which consist of all events and experiences at various contact points within a company (e.g. online, in-store, customer service, etc.)! This manpower can be generated by bringing different disciplines together at one table. By putting together as many different teams as possible, initiatives for customer experience optimization can be viewed from a variety of angles. Team members come mainly from the areas:

  • Marketing (Online/Offline; depending on the size of the organization)
  • Product (for brands, in e-commerce or responsible for B2B services)
  • Analytics / Business Intelligence / Data Science
  • Testing (because new functions are validated here)
  • IT / Development, Privacy / Data Protection / Legal (to comply with regulations)

Depending on the complexity of the company, areas such as customer service, sales, account management, logistics and much more can also be included.

Once the team has been defined, it is important to consider how often and in what form meetings are necessary. It is possible to have working groups, workshops, meetings, project-based work, agile work, etc.

The goal of this teamwork is to continuously optimize the touchpoints that are directly related to customer experiences. In addition, the CX team is the advocate for the client’s needs. The team members are 100% customer focused and do not compromise. Their responsibilities demand a high level of interdisciplinary cooperation and can be as diverse as they are:

Teamwork-Team

In our live talk format Open M.I.C. #4 Matthias Bettag and Sven Verborg also talked about the composition of CX optimization teams:

The difference between User Experience and Customer Experience

CX-vs-UX

The terms Customer Experience and User Experience (UX) are often used as synonyms. In fact, these terms, although closely related, are not the same.

While the customer experience considers the customer experience across all customer contact points of the customer journey, the user experience primarily refers to touch points that are directly within the provider’s sphere of influence (e.g. the own website or app.

The UX design of a website consists of the design of the interaction, the information architecture, the degree of learning, the navigation logic and the visual hierarchy. The goal of UX is to help users solve their problems through efficient, logical and fun content. In this way the user should memorize the brand and get an emotional experience by visiting the website.

CX-UX
User ExperienceCustomer Experience
What is it?

How customers interact with your products, services, offers or digital properties (website, mobile app, etc.) and what emotional results these experiences have.

Every single interaction your customers have with your brand, as well as the experiences and emotions they get from these items.

Indicators
  • Success rate (%)
  • Task time
  • Click / Page Views
  • System Usability Scale (SUS)
  • Error rate
  • Overall satisfaction
  • The visitor’s intention
  • Completion of the task
  • Expenditure
  • Net Promoter Score® (NPS®)
  • Next Steps

4 Tips for an excellent Customer Experience

Tips-CX
1

Real-time personalization

In a world dominated by a flood of information and product jungles, customers are increasingly seeking fast, informative and relevant input. They therefore implicitly express the desire for real-time personalization. But since there is not only one customer, but users with different needs and interests, personalization must be designed differently for each user.

By situationalization of ODOSCOPE this is possible without much effort. The situational data of a session is compared with peer groups from the data history using real-time clustering. Within 20ms the most situational-relevant contents for the desired conversion (e.g. purchase, turnover) are displayed. Situationalization with anonymous data allows an immediate personalization even for unknown users like new visitors or new customers. In this way, each customer receives a customer experience tailored to his needs.

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2

Responding dynamically to innovations

It is not surprising that in the digital age many processes become even more digital. In the fast-moving and technology-driven retail world, for example, the next innovation is slowly making its way into the market: digital assistants (digital butlers), which are primarily controlled by voice input.

There will be more and more situations in which customers help each other in various situations via voice control, as is already the case today in cars with voice-controlled navigation and control consoles. Overall, in the future, customers may hire their own personal (digital) agents to interact with potential suppliers: ‘Hey Siri, please find the best dishwasher for our kitchen that fits our size constraints, our decorating style and our budget. Oh, and something that fits our schedule.” The role of individual digital assistants could be the next step in providing digital information.

In any case, companies should react dynamically and always agilely to innovations in order to create added value for their customers with innovations. But beware: the attempt to be compulsively innovative is often very time-consuming, resource-intensive and delivers few results. Instead of reinventing the wheel, it is enough to apply existing innovations.

3

Don’t underestimate the User Experience

Keyword User Experience: Everybody can learn something about User Experience Design nowadays. But rather than just a trend, you should use it as an essential part of your business. Because in order to stand out from the crowd, you need excellent quality. This quality is not only characterized by the fact that your website, your online shop or your app works, but also by a satisfied feeling of the users and a positive experience: the so-called “Joy of Use”.

A targeted UX design strategy helps to make the usability (“usability” or ” user-friendliness”) of your customers as pleasant as possible. An intuitive usability of the website, for example, leads to increased customer satisfaction, while confusing navigation menus tend to cause frustration among visitors.

4

Seamless Customer Journey

As today’s customers have more and more knowledge and opportunities, they often have higher demands on companies. Mobile technologies and social media can be used to access a wide range of information in just a few clicks. The selection of the device plays a central role here. Where mobile research is frequently carried out, the purchase often ends on the desktop, laptop or tablet.

This means that different devices and sources are used throughout the entire customer journey before actual investment decisions are made. This includes social media channels as well as websites. Instead of treating each device and each interaction separately, and thus splitting the customer journey into several parts, each channel should merge with the other. This enables a flawless and consistent CX.

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