Which service frequently requires direct contact between the customer and the service provider

More about Customer Relationships

About Customer Relationships

Your company should clarify the type of relationship it wants to establish with each Customer Segment. Relationships are established through your different Channels. Relationships can range from personal to automated, from transactional to long-term, and can aim to acquire customers, retain customers, or boost sales (upselling). The type of Customer Relationships you put in place deeply influence the overall customer experience.

We can distinguish between several types of Customer Relationships, which may co-exist in a company’s relationship with a particular Customer Segment.

Transactional

This means there is no real relationship between the company and the customer. The company interacts with the customer on a transactional basis. A kiosk at an airport, for example, usually doesn’t really establish a relationship with its customers.

Long-term

This means a long-term and maybe even deep relationship is established between the company and the customer. The company interacts with the customer on a recurring basis.

Personal assistance

This relationship is based on human interaction. The customer can communicate with a real customer representative to get help during the sales process or after the purchase is complete. This may happen onsite at the point of sale, through call centers, by e-mail, or through other means.

Dedicated personal assistance

This relationship involves dedicating a customer representative specifically to an individual client. It represents the deepest and most intimate type of relationship and normally develops over a long period of time. In private banking services, for example, dedicated bankers serve high net worth individuals. Similar relationships can be found in other businesses in the form of key account managers who maintain personal relationships with important customers.

Self-service

In this type of relationship, a company maintains no direct relationship with customers. It provides all the necessary means for customers to help themselves.

Automated services

This type of relationship mixes a more sophisticated form of customer self-service with automated processes. For example, personal online profiles give customers access to customized services. Automated services can recognize individual customers and their characteristics, and offer information related to orders or transactions. At their best, automated services can stimulate a personal relationship (e.g. offering book or movie recommendations).

Communities

Increasingly, companies are utilizing user communities to become more involved with customers/prospects and to facilitate connections between community members. Many companies maintain online communities that allow users to exchange knowledge and solve each other’s problems. Communities can also help companies better understand their customers. Pharmaceutical giant GlaxoSmithKline launched a private online community when it introduced alli, a new prescription-free weight-loss product. GlaxoSmithKline wanted to increase its understanding of the challenges faced by overweight adults, and thereby learn to better manage customer expectations.

Co-creation

More companies are going beyond the traditional customer-vendor relationship to co-create value with customers. Amazon.com invites customers to write reviews and thus create value for other book lovers. Some companies engage customers to assist with the design of new and innovative products. Others, such as YouTube.com, solicit customers to create content for public consumption.

Switching costs

Switching costs indicate how easy or how difficult it is for a customer to switch to a different alternative. For example, when a customer of a data storage provider stores all his data in a proprietary format it might be difficult for him to switch to an alternative provider.

Customers have come to expect more out of companies, but who can blame them? We have all had customer experiences that range from outstanding to infuriating. It has put more pressure on companies to find a balance between the experience they want to offer and limited internal resources and other priorities, especially when the well-known customer-centric companies are the ones reaping the rewards.

In this article, we will explore:

1. Customer experience definition
2. Why customer experience is important
3. Examples of good customer experience
4. Customer experience strategy
5. Analyse and measure CX
6. Customer experience management
7. Frequently asked questions on customer experience

What is customer experience?

Customer experience (CX) is everything related to a business that affects a customer’s perception and feelings about it.

"Customer experience is the sum of all the interactions that a customer has with an organisation over the life of the relationship with that company or with that brand" – Annette Franz, founder and CEO of CX Journey

Customer experience (CX) focuses on the relationship between a business and its customers. It includes every interaction, no matter how brief and even if it does not result in a purchase. Whether it is a call to a contact centre, exposure to an ad or even something as mundane as the payment of a bill, every exchange between customers and businesses builds (or damages) the relationship. Most importantly, it is how customers view those experiences in aggregate that matters.

“Customer experience is how a customer feels about the sum of their interactions with a business”, says Dave Dyson, Sr. Customer Service Evangelist, Zendesk. “It involves every way a customer interacts with a company, at all stages of the customer journey – including the marketing materials they see before they become a customer, the sales experience, the quality of the product or service itself, and the customer service they receive post-purchase.”

What is the difference between customer experience and customer service?

The difference between customer service and customer experience is that customer service is one factor in the customer journey, while customer experience is the sum of all a customer’s interactions with the brand. In other words, customer service is one piece of the customer experience puzzle.

“Customer service is what happens when the experience breaks down. So if we get everything right, if we have executed the experience flawlessly, or if we've done a great job with designing and executing on the experience, then we don't need customer service. Because there's not an issue with the product. The billing is accurate, it’s thorough.” Annette Franz, Founder and CEO of CX Journey

Good customer service is vital to your company’s overall customer experience. Agents are often the first (and only) human voice customers hear, especially when they reach out with an issue.

Why is customer experience important for your business?

Customer experience is important. And according to our Trends Report, it is only becoming more important to both customers and businesses.

Here are a few reasons why it is critical to prioritise CX.

• It can increase customer retention
• It can boost customer lifetime value
• It builds brand loyalty
• It impacts brand reputability
• It can give companies a competitive advantage

How customers feel about your brand is tied to customer retention, lifetime value and brand loyalty. According to Zendesk’s Customer Experience Trends Report 2020, 52 per cent of customers report going out of their way to buy from brands they are loyal to. Attracting and retaining customers in an ultra-competitive business environment is no small feat. Companies that ignore the importance of providing a seamless, effective customer experience can lose out to rivals who understand that it is the customer who defines good service. This means even one customer experience that does not live up to expectations could have drastic results on brand reputability, and that reduced room for error is exaggerated by the ease of switching in the web 2.0 era. If you do not like a product or the way a company interacts with you, finding an alternative is as easy as a Google search. In fact, according to Zendesk’s Trends Report, half of the customers say they would switch to a competitor after just one bad experience. In the case of more than one bad experience, that number snowballs to 80 per cent. “A good customer experience drives competitive advantage. Customers can always choose to go elsewhere”, says Dyson. “If you’re having trouble and can’t reach customer support, you’re going to get frustrated, perceive that as a bad experience, and you might leave. Businesses that provide good experiences set expectations for what a customer experience should be at similar businesses.”

50% of customers will switch to a competitor after one bad experience. In the case of more than one bad experience, that number snowballs to 80%.

Due to this developing market saturation, many companies are realising customer experience is their best chance to stand out from competitors. In other words, if a good product and competitive pricing are no longer enough to produce loyalty, then a personalised experience will have to be your differentiator.

Examples of a good customer experience

According to Dyson, a good customer experience makes it easy for a customer to do business with you. “A great customer experience makes it effortless for customers to accomplish their goals for what they want to use your product or service for”, he says. “Customer loyalty is less about big ‘wow’ moments and more about being dependable and making things easy for customers.”

A positive customer experience might include:

• Marketing setting realistic expectations about the product or service
• Intuitive product design
• Easy-to-access self-help resources
• Proactive messaging around known issues
• Sales being transparent about pricing
• Always-available live customer support with short waits

What is important is that all these teams are working together to create a seamless, consistent experience for the customer. Since a separate department usually handles every customer interaction, it may seem like having satisfactory metrics within each department would be enough to create a great customer experience. However, the tricky part is that the consumer does not experience their relationship with your company as a series of smaller interactions, but rather will remember it as one ongoing interaction. This can create problems for organisations in which various departments are siloed and do not communicate with each other. Silos can result in customers having to repeat information, fill out forms multiple times or just a customer journey that drags on longer than needed. For instance, agents should be able to easily access context like what items are in a customer’s shopping basket or what outbound email promotions they have opened, even if the marketing team is directly responsible for that information. Likewise, a marketing team should have insight into past support interactions so they can send customers more targeted emails. Being aware of CX from an end-to-end viewpoint and making sure customers’ needs are at the centre of attention every step of the way is key for creating a good customer experience.

Examples of a bad customer experience

A bad customer experience happens when a customer feels a business failed to meet their expectations. According to our Trends Report, the top indicators of a poor customer experience include:

• Long wait times
• An automated system that makes it hard to reach a human agent
• Having to repeat information multiple times

7 ways to improve your customer experience strategy

The good news is that customer experience can be improved. And it starts by putting the customer at the centre of your strategy. Here are 7 tips:

1. Create feedback loops

Customer feedback provides insight into customers’ expectations and how they might change over time with changes in your industry. It can also tell you where customers are getting stuck and confirm what is working well. The key is to acknowledge the feedback and do your best to act on it. “It’s important to create a feedback loop with customers and act on what they tell you”, says Dyson. “This builds trust and ensures it’s not just lip service.” Dyson also recommends creating an internal employee feedback loop. Agents can help aggregate customer feedback and provide insight into what’s making it challenging for them to deliver excellent service, such as policies or processes that don’t suit customer needs or friction between siloed teams that leads to slow resolution of customer issues.

2. Build an omnichannel experience

When you develop an omnichannel CX strategy, you are not only meeting customers where they are – that’s just table stakes. Omnichannel means going a step further and providing a consistent communications journey for your customer, one where the conversation history and context travels with them from channel to channel. Context – about who your customer is, what outbound emails they have opened, what is sitting in their shopping basket or what they have talked to you about in the past – is crucial for delivering a good experience across channels.

3. Create a content management strategy

Customers would often rather solve issues on their own than ask a live agent. You can help them help themselves with data-driven content. Usually, it is in the form of help articles or chatbots that quickly point customers in the right direction. Ensuring that your content is accurate and up-to-date is crucial; an unhelpful article translates into a bad experience.

4. Deliver personalisation

According to our Trends Report, 76 per cent of customers expect personalisation using data. This might include engagement over their preferred contact method, account type or status, product recommendations based on purchase or search history, or some kind of personalised online experience. Tailoring support efforts towards customer personas can go a long way. Gathering context about who they are (their preferences, personalities, habits, etc.) can help agents better target their support, leading to faster resolution. It may be helpful to conduct UX research on your business’s support initiatives to work out ways to make interactions more personalised.

5. Empower customers through AI

Gartner estimates that by 2022, 72 per cent of customer interactions will involve an emerging technology such as machine-learning applications, chatbots or mobile messaging. AI-powered chatbots and virtual customer assistants are handy for quick, repetitive tasks. But when they reach their limits on providing capable customer support, humans need to be there to help their customers.

6. Deliver proactive experiences

Simply reacting to customers’ needs is no longer enough to stand out. When businesses are proactive – anticipating customers’ needs and getting ahead of a problem before it escalates or even happens – they can create a unique experience that feels personal.

Proactive support for me is about getting ahead of technical issues, breakdowns, issues that you have identified – and then reaching out to customers to let them know: Hey, here’s what’s going on and here’s what we’re doing about it – Annette Franz, Founder and CEO of CX Journey

An e-commerce company might deploy a chatbot on its checkout page to answer customers’ questions before they abandon their basket. Or, an internet company might send a text to let customers know about an upcoming outage.

7. Use data and analytics

The stories found in the data about your customers and your support agents will clue you into many trends: the efficiency of the support organisation, general satisfaction with the interactions, behavioural trends amongst your customers, and lots more. Refining processes with your customers in mind starts with understanding what the data is saying.

How to measure customer experience

“There’s no single, magic number to measure customer experience”, says Dyson. “You have to look at all the little pieces of the elephant. It’s hard to measure as a whole, so the more data you have, the better.” Here a few places to start:

• Send customers satisfaction surveys
These give you insight into things like customer satisfaction score (CSAT) and Net Promoter Score (NPS).
• Measure customer effort score (CES)

This tells you how easy a customer thought it was to get a resolution to a recent contact.

• Analyse churn rates, expansion rates and customer lifetime value

“You can take a look at churn and expansion amongst different cohorts and compare them, such as those who interacted with your support team and those who didn’t”, says Dyson. “If those who contacted support are staying longer, you know your support team is creating a good experience.”

• A/B test new CX efforts

For example, when integrating your customer support tool with your marketing automation system, you can A/B test emails to targeted customer segments.

• Use your community forum as a virtual focus group

Community forum discussions around pain points, feature requests or how customers are using your product or service can provide insight into how customers feel about their experience with your business.

• Look at customer service data like ticket reopen rate and time-to-resolution

“Look at how long customers have to wait before they get an answer. No one likes to wait when they need help”, says Dyson.

• Talk to customer-facing staff

“Beyond the numbers, it can be equally as helpful to ask customer-facing staff about what customers are telling them”, says Dyson. For instance, customer support might have insight into their pain points with the product team. “It’s also key to ask agents if they’re having any difficulties. If they are, chances are customers are too. When you make your agents’ jobs easier, they can provide a better experience for customers.”

What is customer experience management?

According to Gartner, customer experience management is “the practice of designing and reacting to customer interactions to meet or exceed their expectations, leading to greater customer satisfaction, loyalty and advocacy.” Companies that are unable to successfully manage the customer experience are often taking a fragmented approach; that is, they are looking at the different factors and figuring out how each one can be improved. While doing so, they are not giving due consideration to how each factor influences the others. That approach upholds the chaos that causes unsuccessful customer experience management. By taking a more organisational and holistic approach to a customer experience strategy, it leads to more customer satisfaction and loyalty. Here are some areas to keep in mind when building your strategy:

• Marketing

Marketing’s role might be the most dynamic; it needs to constantly adjust to match customers’ shifting needs. Marketers are often responsible for making the first impression on a prospect through adverts, outbound campaigns and word-of-mouth. Their influence continues through public communications, social media marketing and creating a brand presence. The data gathered through all these customer touchpoints can help you create more personalised customer experiences, which in turn create more loyal customers.

• Sales

Sales organisations are responsible for solidifying the expectations of becoming and being a customer. Outside quick retail experiences, the sales process is often very attentive to the customer journey and meeting the needs of their prospects. This provides valuable insights concerning what customers are looking for (be it specific features, follow-ups, support requirements, etc.), which in turn can influence the efforts in other parts of the business. When your customer experience is in sync, sales can be more enabled to close repeat purchases and reduce customer churn rates.

• Product

The goods and services provided by a company and the customer experience are closely linked; many customers will pay more for an experience than the product they’re receiving (think of the differences between high-class dining and fast-casual fare). Beyond the immediate experience, details like reliability, affordability, user experience (UX), general ease of use and a product’s life cycle all tie into the overall experience a company creates for its customers. The experience provided by the product is the primary contributor to a business’s reputation, which in turn impacts every other part of the customer experience.

• Customer service

After a sale, customer service is often the primary department which interacts with the customer.

Support agents can collect real-time feedback: they can see how customers interact with the product, how (and if) expectations are being met, and how the customer base is changing. Feedback is critical; businesses cannot effectively evolve without it. A CRM platform like Zendesk’s Sunshine can help connect customer data from all these teams and areas of the business together to streamline management.

Frequently asked questions on customer experience

What is a great customer experience?

A great customer experience is easy and fast. But it is also built with empathy in mind and reflects customers’ values. In fact, according to our Trends Report, 65 per cent of customers want to buy from companies that offer quick and easy online transactions, and 54 per cent want to buy from companies that prioritise diversity, equity and inclusion in their communities and workplaces.

What can cause a bad customer experience?

A bad customer experience fails to meet customers’ needs. Long wait times and having to repeat information multiple times are two factors that can cause a poor experience.

What is the role of customer experience?

The role of a customer experience team is to ensure that the company meets customers’ needs and expectations. This might include sharing customer feedback that the customer service team collects across the organisation to solve pain points.

What is an example of customer experience?

One example of customer experience is customer service. CSAT surveys give companies insight into how happy customers are with the quality of service they receive, which is a key part of a good experience.

Investing in good CX through an CX software is important for any company, no matter how big or small. After all, your success depends on your ability to keep and attract loyal customers. And failing to put your customers first can send them straight to your competitor.

What is the relationship between service provider and customer?

What are the 4 types of customers in customer service?

What types of services are provided to customers?

What do customers need from service provider?