Customer experience strategy (CX strategy) is when organizations optimize customer engagements to create happy customers, drive customer loyalty and help to recruit new customers.
Providing a better customer experience takes into consideration the entire customer journey and every customer touch-point. It identifies new customers through awareness, consideration, and purchase, aims to retain customers, and drives word-of-mouth through the post-purchase phase.
Customer-centric organizations prioritize great customer experience as an important piece of their brand identity. Meeting customer expectations requires discipline and compassion across the entire customer journey map.
Creating happy customers should be a major business goal of every organization, as those types of customers are more likely to become repeat purchasers and make the effort to recommend products to their friends and family through word-of-mouth. Doing so increases the potential for profitability and customer retention.
Seven hallmarks of a successful customer experience strategy
Customer experience requires the right strategy and dedicated actions to drive success. Here are seven components every organization should include in their CX strategy:
1. Invest in the right technology
Automation and chatbots are two such technologies that are revolutionizing customer experience, especially with the increasing rise of artificial intelligence (AI) that adds more sophistication to these tools. As more customers look to solve their issues online or through self-service, organizations that fail to use advanced technologies to better serve customer needs will fail at customer experience. In a recent IBV CEO Guide to Generative AI for Customer Service study, CEOs identified customer service as the number one priority for incorporating generative AI investment.
2. Address pain points
Meeting customer needs is a key component of customer experience and the best way to avoid customer churn. While not every customer who is dissatisfied with a product will voice their bad experiences, those who do voice them expect the organization to address and solve them quickly. When customer support teams pay attention to issues raised by loyal customers, they are more likely to retain those customers and make them strong advocates for the brand.
3. Create personas
Every customer is different. A way organizations can better personalize their outreach is to group similar-minded customers into person groups so they can better target the right messaging and targeting. Examples of personas are those who are price sensitive, and likely to switch brands if the organization’s prices rise, or those who are early adopters, who buy the latest technologies as soon as they are available.
One way to create personas is to track customer interactions such as purchases, time of purchase, and types of purchases in a customer relationship management (CRM) database. CRMs help organizations better understand their customers and find ways to provide more value. A comprehensive and up-to-date CRM can identify whether a particular customer is ready to buy or whether a highly valuable customer may be in danger of switching brands.
4. Measure everything
Establishing and tracking key performance indicators (KPIs) is an important component of customer experience management. Organizations have several powerful ways to solicit and analyze customer feedback. It’s important to collect a variety of customer experience metrics to understand the user experience and track progress on key organizational goals. Here are some of the most important metrics to track:
- Net promoter score (NPS): This customer data point identifies how likely a customer would be to recommend an organization’s products to friends and family. It is a good representation of how satisfied customers are, given that they would go out of their way to talk about the product with people in their orbit.
- Customer satisfaction score (CSAT): This score focuses specifically on how happy a customer is with an organization’s products. It is often expressed as a percentage from 0-100, which enables organizations to track their improvements (or decline) over time.
- Customer effort score: This is a metric that measures how much work it takes for a customer to interact with a business. This is effectively a customer support metric, which identifies how well that service is helping customers solve issues and get the most out of their products. Examples of issues that could affect a customer effort score are poor response times to customer questions, difficulty achieving technical support or long stock-outs that require a customer to routinely check back to see if the product they want is available.
5. Prioritize employee experience
Providing a good customer experience requires input and dedication from multiple stakeholders. Prioritizing employee experience—making sure employees are happy, well-trained and fairly compensated—is an important component of any customer experience strategy. Team members who are treated well and trained extensively are more likely to provide excellent customer care and go out of their way to serve their customers’ needs.
6. Embrace omnichannel customer relationships
Organizations have a variety of channels in which they can reach customers and build stronger relationships, and it is important to embrace this omnichannel customer service approach. For instance, consumers are increasingly spending time on digital experiences such as social media and mobile apps. That provides an opportunity for organizations to learn more about what they want and respond directly to their questions or complaints. Some organizations also create knowledge bases where customers can search for answers and solve their issues without needing to interact directly with a human worker.
7. Invest in customer success
Leading organizations realize that the post-purchase period can be just as important for the overall customer experience as the awareness and consideration phases. Customers who regret their purchases or have unsolved issues are less likely to become repeat customers. They also are less likely to recommend or promote those products and companies to their networks. That’s why organizations are increasingly investing in customer success teams that work directly with customers post-purchase to ensure they are maximizing the value they get out of their purchases.
Customer experience represents the pathway to repeat engagement
Providing a positive customer experience can become a competitive advantage, especially when customers have been more likely to switch brands since the height of the Covid-19 pandemic.
IBM has been helping enterprises apply trusted AI in this space for more than a decade, and generative AI has further potential to significantly transform customer and field service with the ability to understand complex inquiries and generate more human-like, conversational responses.
At IBM, we put customer experience strategy at the center of your business, helping you position it as a competitive advantage. With deep expertise in customer journey mapping and design, platform implementation, and data and AI consulting, we help you harness best-in-class technologies to drive transformation across the customer lifecycle. Our end-to-end consulting solutions span marketing, commerce, sales and service.
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