Business change, Commercial strategy, Customer experience, Insights

Customer experience management – signs CX strategies need a refresh

How your customers experience your brand, business, products, people, and operations is one of the most overlooked and taken-for-granted aspects underpinning commercial success. Customer experience (CX) spans the entire lifecycle – from emerging brand awareness and engagement through to establishing loyalty and building an ongoing relationship – all contributing to overall LTV.

Most organisations think they do a decent job with CX. According to research by Bain & Company, around 80% of firms believe they’re delivering not just a good customer experience but a superior customer experience.

Alarmingly, just 8% of customers agree. And it is this gap between company perception vs customer reality that can trip up even the most self-proclaimed customer-led businesses.

Being clear-eyed about how customers experience your brand across every touchpoint – from first awareness to becoming brand advocates – enables your organisation to understand customer needs better and serve them more effectively.

With a mismatch between business and customer perception, bridging the experience gap can give your enterprise a competitive edge by placing customer experience at the heart of the mission.

There’s a lot to play for.

According to CX research, 86% of customers are willing to pay more for a better customer experience, and companies that retain customers can see an increase in profits of over 25%. Around half of all customers say they would consider a competitor after just one bad experience. In the case of more than one bad experience, that increases to 80%.

With more than two-thirds of firms saying that they compete primarily on customer experience, it’s worth regularly reviewing and reinvigorating your customer experience strategy.

Customer experience management – why CX matters

Customer experience (CX) encompasses every interaction that a customer has with your brand and proposition – from browsing a website to making a purchase to receiving post-sales support. In practice, it can be thought as the overall perception and feeling that a customer has about these interactions with your organisation

A positive customer experience occurs when a customer’s expectations are met or exceeded at every touchpoint with the company. This includes a multitude of factors that occur throughout the CX lifecycle, such as product quality, the UX of your website, shipping speed and convenience, the level of customer support, and even overall brand reputation.

These are complex factors at play – and organisations that prioritise CX recognise that it is an essential part of building long-term customer loyalty and can lead to increased customer retention, brand advocacy and revenue growth.

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9 signs your CX strategy needs a rethink

That makes keeping a critical eye on waning customer engagement essential before those initial signals of declining customer experience translate into falling sales and a reduced bottom line.

So, what are the signs that your organisation’s approach to customer experience management – and your CX strategy – is in need of a refresh?

From poor customer reviews and frustrated employees to falling KPI metrics and a lack of valuable insights, here are the nine signals you should have on your CX radar.

1. You’re not seeking out customer feedback

Silence isn’t golden when it comes to customers, and that applies to the entire customer journey.

Customer feedback is the canary in the coal mine regarding the quality of your customer experience. It is the only way you know whether your customers are satisfied.

If you’re not actively and routinely gathering and analysing customer feedback – from the first point of contact to talking to your most loyal advocates – and translating that into customer experience improvements, then your business is on the back foot.

At a minimum, your organisation should be capitalising on a wealth of customer insights about your business – from review sites to social media posts.

  • Monitor review sites to capture post-sale experiences and always respond to bad reviews, following up with individual customers where possible.

  • Share insights from social media channels across the organisation – what are customers complaining about, what do customers find difficult to use, and what do they love?

  • Set feedback metrics and bake them into objectives top and bottom of your organisation – make it your culture to collect, analyse and act on feedback.

  • Use all available channels at all stages of the journey – from on-site surveys, in-person conversations, focus groups or simple customer ratings systems, all feedback can be harnessed.

Customer feedback should feed into every part of your organisation. Product and service teams should regularly review customer experiences, helping shape and evolve future offerings or identifying gaps in which to innovate. Marketing and sales teams should listen to and act on customer feedback – how do customer want to be engaged with, what are their needs, and how does the customer journey get them from initial interest to active purchaser?

2. You don’t have visibility of customer churn

Brand loyalty is a valuable currency. A report by Zendesk found that 74% of customers feel loyalty to a specific brand/company, while 52% admit going out of their way to purchase from their favourite brands.

Monitoring churn will let you know if loyal customers are beginning to go elsewhere.

Is the level of churn increasing? It could be a sign your customer experience strategy needs a refresh.

Qualtrics found that the average churn rate for retailers and online businesses is 25% and 21%, respectively. A lost customer is potentially unhappy and could negatively impact your brand.

Some churn rates may be down to competitors getting something spectacularly right and leaving you behind. Use churn metrics as a catalyst to review competitors and see what you can learn about customer experience transformation from them.

Read our guide on how to design a customer experience strategy.

3. You’re not listening to your employees

Sales, Customer Service and Support staff and staff are well-placed to hear what customers think about their experiences.

Think about how you can gather feedback from employees and invite them to share what they are hearing and seeing from customers.

Some things to consider are the following:

  • Do Employee Experience (EX) surveys show declining morale among employees? Lowered metrics could reflect challenges and frustrations in dealing with customers.

  • Likewise, disgruntled employees won’t necessarily deliver the best customer experience – look for ways to boost morale and engagement to break out of the negative customer service feedback loop.

  • Do employees lack the tools they need to deliver quality customer experience? How can you better equip them?

  • Has something shifted in the supply chain that is making things more complicated? Has product or service quality declined?

Read our guide to employee engagement in change management.

4. You don’t make it easy for customers to communicate with you

How low-friction and simple is it for people to contact you? Do your customer support staff have the right tools to listen and respond to feedback?

Customers typically want to be able to reach you in the same way they communicate with friends and family – which means fast, friendly, accessible and a feeling that a brand is on their side.

When things go wrong or customers need support, fragmented communications channels can make the problem worse – examples of bad customer experiences include:

  • Long wait times to speak to a customer service representative.

  • Automated telephone menu systems that make it hard to reach a human.

  • Customer support that is only available during working hours.

  • Support not being available through preferred communication methods, such as email or phone.

While only one piece of the CX puzzle, good customer service forms a core part of your CX interface with customers, empowering them to resolve their issues, reducing friction and reducing the risk they’ll take their business elsewhere.

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5. Customer relationship management is an afterthought

Being customer-led means your strategy revolves around the needs and desires of customers and how you can serve them better.

Focusing on being customer-led will also help you adapt to a changing landscape, while implementing a customer-led culture can help effectively deliver customer experience transformation.

Good customer experience anticipates your customers’ needs, with communications and actions tailored to them as individuals as possible.

For example, sending emails that are personalised to customers’ purchases, understanding their point in their customer journey, and recognising their past customer history – fast-tracking loyal customers or surprising and delighting with personalised recognition.

A good Customer Relationship Management (CRM) system can help deliver a personalised experience through:

  •  Engaging with customers throughout their purchase journey.

  • Providing post-purchase communications to check-in and encourage deeper engagement.

  • Gathering feedback to monitor customer experience.

6. You don’t walk in your customers’ shoes

We all know that feeling of frustration when a customer experience goes wrong.

But do you know what the pain points are for your customer experience?

Customer feedback will give you some clues, but there’s no substitute for the experience yourself. Get customer service staff to go through the buying experience, buy undercover, or better yet, regularly act as a customer and engage with your business at different stages.

Be a critical friend to the business, identifying touchpoints to improve and noting frustrations or successes throughout the customer journey.

  • What are the pain points?

  • How does being a customer of your business make you feel?

  • Where do things slow down?

  • What are the gaps in communications?

  • What happens once you’ve purchased?

  • How well do your organisation’s people live, breathe and communicate your brand values?

Understanding them is the first step to helping you overcome them.

7. KPI metrics are declining – and you don’t know why

Customer experience management rests on having relevant, actionable and meaningful metrics to follow – and acting where there is a decline in customer scores.

Drill down into customer satisfaction using metrics for success, and consider regularly capturing, monitoring and reviewing KPIs such as:

  • Net Promoter Score: Many companies are using this to see where they are in terms of customer experience, simply by asking if the customer would recommend them.

  • Customer Satisfaction (CSAT): Typically, a 1-5 rate on how satisfied someone is with a specific customer experience.

  • Churn Rate: The customer churn rate reflects how many customers have stopped using your products or services. The customer churn rate counts the total number of lost customers or the percentage of lost customers within a defined period.
  • Retention Rate: Customer retention rate  measures how a business retains customers over a specific period.

  • Customer Lifetime Value: Customer Lifetime Value predicts the net profit attributed to a customer’s future relationship.

  • Customer Effort Score: How easily your issue was resolved.

Read our guide to brand strategy consulting – 10 common mistakes to avoid.

8. You’re not keeping up with changing customer trends

Innovating your customer experience means enhancing customer interactions and keeping pace with how customers like to interact, buy and communicate with brands. How can you make each contact natural, helpful, easy and frictionless?

Regularly review customer trends, including how people shop and what values they expect organisations to display.

For example, consider investing in digital transformation technologies such as voice search via smart home devices, AI chatbots or addressing customer interest in sustainability, such as switching to more environmentally packaging and production.

Read our guide to the top five digital transformation trends for 2023.

9. You’re not making use of the right expertise

Creating a customer experience strategy isn’t an edge-of-desk or best-efforts exercise.

With core teams often deployed in BAU and day-to-day tasks, gathering insights and injecting renewed energy into a customer experience strategy can be challenging. From data capture and analysis to strategy development and implementation, customer experience consulting services can get your organisation back on the front foot.

Read our guide on how to write an effective consulting brief.

Our management consulting marketplace provides a cost-effective way to scope your CX project and engage with professional customer experience consultants who can support your move to enhance your customers’ experience and ensure that company perception is fully aligned to customer reality..