What is customer experience and why is it important?

In today’s competitive market, and as a result of changing consumer expectations, it is not enough to simply provide a product or service; businesses must also ensure that their customers have a positive experience when interacting with them. But what does a positive customer experience mean, and why does it matter? In this blog, we’ll discuss what customer experience is, how it differs from customer service, and how it can impact a business’s bottom line.

What is Customer Experience?

Before we dive into the definition of ‘customer experience’, it is important to first understand the meaning of ‘customer service’. There is often confusion surrounding these terms, as they are frequently used interchangeably. Although they are related, they are distinct concepts.

Customer service refers to the specific interactions between a customer and a company’s representatives, typically during a transaction or when a customer has a query or problem. It can include the quality and speed of the support provided, the helpfulness of the representative, and the overall resolution of the issue.

On the other hand, while customer service is limited to transactions and queries, customer experience takes a holistic approach to understand a customer's journey; it encompasses every interaction a customer has with a company's products and services.

For example, if a customer orders a product online, their experience starts with the search or advertisement, continues through the process of choosing and buying the item, includes follow-up information, tracking and waiting for delivery, and ends with unpacking and disposing of packaging. While customer service may only be required when a customer has a problem, the overall experience shapes their perception of the brand.

In short, customer experience is the sum of every experience a customer has with a company's products and services, and it greatly influences their beliefs about the brand.

Why is Customer Experience Important?

Customer experience is crucial to the success of any business, regardless of its size or industry.

A positive customer experience can lead to customer loyalty, increased revenue, and even brand advocacy. On the other hand, a negative customer experience can result in lost customers, damage to a company's reputation, and ultimately, decreased revenue.

In today's digital age, where customers have access to an abundance of information and numerous options for products and services, businesses must differentiate themselves by providing exceptional customer experiences. A great customer experience can set a business apart from its competitors and create a lasting impression that can drive customer retention and growth.

The Customer Experience Palette

Look at what we call ‘The Customer Experience Palette’ below. You’ll have spotted that customer service is just one of the headings and one aspect of the total customer experience. Customer experience is the combination of each of these aspects; they combine to form a perception of your business that drives their purchase decision.

Each section of the palette suggests qualities and principles that businesses can apply to their services to create a cohesive and positive experience for customers.

However, the challenge for businesses is that control of these aspects often sits with different parts of the organisation, creating fragmentation and inconsistency. As companies grow, the different interpretations and priorities of various functions can drive disjointedness, which can negatively impact the customer experience. Therefore, businesses need to have a holistic approach to customer experience, ensuring that all aspects work together to create a positive perception of the brand.

Let’s look at two examples to illustrate how customer service and customer experience are perceived differently by different types of businesses.

For organisations that offer clearly defined products, customer service has historically been synonymous with customer experience. Customer Operations teams focus on managing inbound enquiries and resolving customer issues, typically using people and artificial intelligence systems. Product features and benefits are viewed as the main drivers of growth, and product support is seen as a necessary but secondary aspect of the business. Other parts of the organisation may not have a clear role in shaping customer perceptions.

On the other hand, for businesses offering less tangible products, such as mobile phone operators, marketing is the driving force. They invest in building their brand and advertising to emotionally connect with consumers, as product benefits are often indistinct or hard to understand. These businesses focus on the customer value proposition, with service promoted as a key point of difference for the brand. However, the actual service customers receive may not match the expectations set by marketing.

Designing and delivering a great service and experience is not just a matter of imagination but also an organisational challenge. Each area of the business needs to play a part in creating a cohesive and positive customer experience. However, many organisations are not organised or equipped to work together on the 'total experience', leading to inconsistencies and disjointedness.

The table below outlines which functions within a business typically take responsibility for each aspect of the total customer experience.

In our experience, when a CEO sets a focus on the customer, and budgets follow, each area of the business will seek to take ownership of the customer and their experience, adopting some aspect of the service and experience as their focus.

The challenge, however, is that the CEO's direction is often not accompanied by changes in approach, permission to work differently, incentives, and skills. As a result, different parts of the business may end up competing for ownership of the customer experience, rather than collaborating to deliver the best possible total experience.

Therefore, to ensure a cohesive and positive customer experience, businesses need to empower each area to take ownership of the customer and work together towards a common goal, breaking down silos and promoting collaboration across the organisation.

Great customer experience is no accident. 

So, which businesses manage to do all of this well and importantly, bring it all together well? This is a tricky question as we all like different brands, but let’s take the British airline, Virgin Atlantic:

No service is perfect and there are plenty of poor reviews to be found online. But as a business, Virgin Atlantic has always really understood the difference between ‘customer service’, which is essential for any airline, and designing the ‘total customer experience’. (Sources: Skytrax World Airline Awards 2017. The Airlines Ratings Website. UK Superbrands Survey, 2017. UK Coolbrands Survey, 2001-2017).

Improving Customer Experience

Improving customer experience can seem like a daunting task, but with the right strategies and approach, it is achievable. As outlined in this blog, the key is for businesses to break down silos between departments and work together towards a common goal. This collaborative effort enables each area of the business to take joint ownership of the customer experience, promoting a positive perception of the brand. By prioritising customer experience and promoting collaboration across the organisation, businesses can differentiate themselves from competitors and build a loyal customer base.

At Engine Service Design, we understand the importance of providing an exceptional customer experience across all touchpoints. Honed over 20 years and applied to a range of sectors, our Service Design System helps organisations create remarkable service experiences that generate revenue, save costs, increase customer satisfaction and obtain investment.

Our team of service design experts have a wealth of experience and expertise, and we pride ourselves on our ability to understand our client's needs and deliver results that exceed their expectations.

If you're looking for a service design consultancy that can help you achieve your business goals and connected customer experiences, we'd love to chat with you. Click below to book a meeting with one of our service design experts.