Customer experience, also known as CX, encompasses every interaction a customer has with a brand throughout their entire customer journey. It’s not limited to a single touchpoint; rather, it’s the sum of all moments—whether online, offline, or across various channels—that shape a customer’s perception. It includes every interaction a customer has with a brand, from initial awareness and engagement to post-purchase support and loyalty. 

Understanding the importance of customer experience

So, why is CX important? A positive customer experience is crucial for building trust, fostering loyalty, and driving advocacy, as satisfied customers are more likely to return for future purchases and recommend the brand to others. At the same time, good customer experience results in 3x returns to shareholders, according to McKinsey. 

In contrast, poor customer experiences can lead to customer churn, negative word-of-mouth, and damage to a brand's reputation. In fact, a study by PWC found that one in three customers would walk away from a brand they love after just one bad experience. Additionally, according to Forbes, organisations lose $75 billion a year due to poor customer service (which is an important aspect of customer experience).  

Now, let’s look at the main benefits of prioritising customer experience.

"Customer spending increases up to 140% following a positive experience, according to Deloitte." 

The benefits of prioritising CX

Prioritising customer experience (CX) is not just beneficial; it’s essential for any business that wants to thrive in the modern landscape. Here are some key benefits of placing CX at the forefront of your business strategy: 

Enhanced customer satisfaction: When you prioritise CX, you directly contribute to higher customer satisfaction. By understanding and meeting your customers’ needs and expectations, you create positive experiences that leave lasting impressions. 

Increased customer loyalty: Customers who have consistently great experiences with a brand are more likely to remain loyal. This loyalty translates into repeat business and a higher lifetime value per customer. In fact, a study by Dimension Data found that organisations that prioritise offering great CX reported a 92% increase in loyal customers. 

Positive word-of-mouth: Happy customers are your best advocates. They are more likely to recommend your brand to friends and family, which can be a powerful form of organic marketing. In fact, of consumers who experience a positive CX, 77% will recommend the brand to a friend. 

Competitive advantage: In industries where products and prices are similar, CX can be a key differentiator. A superior customer experience can set you apart from competitors and attract more customers. And, with 54% of U.S. consumers saying that most companies need to improve their customer experience, it can create a huge competitive advantage to put CX in focus. 

Higher revenues: There is a strong correlation between CX and revenue growth. Customers are willing to pay more for better experiences, and businesses that deliver on CX can see increased sales and profitability. In fact, according to McKinsey, improving customer experience increases sales revenues by 2-7%. 

Reduced customer churn: A focus on CX can help reduce the rate at which customers stop doing business with you. By addressing pain points and improving the overall experience, you can decrease customer churn. 

Better customer insights: Prioritising CX often involves collecting and analysing customer feedback, which can provide valuable insights into product development, marketing strategies, and operational improvements. 

Employee satisfaction: Employees tend to be happier and more engaged when they are part of a company that values CX. This can lead to better performance and lower turnover rates. 

Brand strengthening: A commitment to CX helps build a strong, customer-centric brand identity. This can enhance your brand’s reputation and lead to long-term success.  

How to measure customer experience

Now that we’ve covered some important elements of a good CX strategy, it’s time to look at how to measure it. This is crucial to understand how well you are meeting customer expectations and identify areas for improvement. Here are some examples for measuring customer experience:

• Surveys and feedback forms: Surveys are a great way to collect valuable customer feedback and get insights into your customers’ experiences with your organisation, products and services. Implementing surveys and feedback forms at key touchpoints in the customer journey allows your business to collect valuable insights directly from customers. Surveys can be distributed via email, website pop-ups, or mobile apps, with questions tailored to specific interactions or experiences. 
• Net Promoter Score (NPS): NPS measures customer loyalty and satisfaction by asking customers a single question: "How likely are you to recommend our product/service to a friend or colleague?" Customers are then categorised as Promoters, Passives, or Detractors based on their responses, providing insights into overall satisfaction and likelihood of recommendation. 
• Customer Satisfaction Score (CSAT): CSAT measures customers' satisfaction with a specific interaction or experience by asking them to rate their satisfaction on a scale (e.g., from 1 to 5 or from "very unsatisfied" to "very satisfied"). CSAT surveys are typically sent after a support interaction or purchase, helping businesses gauge satisfaction levels in real-time. 
• Customer Effort Score (CES): CES measures the ease of the customer experience by asking customers how much effort they had to exert to achieve their goal (e.g., resolving an issue, or making a purchase). CES surveys help identify friction points in the customer journey and prioritise efforts to streamline processes and reduce customer effort. 
• Track customer retention and churn rates: Sometimes customers leave, and sometimes it’s out of your hands. But learning what led to them leaving is crucial to prevent it from happening again. By monitoring customer retention rates (the percentage of customers who continue to use a product or service over time) and churn rates (the percentage of customers who stop using a product or service), you’ll get insights into overall customer satisfaction and loyalty. High retention rates indicate strong customer loyalty, while high churn rates may indicate dissatisfaction or issues with the customer experience.