Customer experience (CX) is one of the leading ways that marketers seek to differentiate their brands these days. But what is CX?
Here, we answer that question and back it up with research that may surprise you.
Earlier this year, Econsultancy published its 2015 Digital Trends report which included a survey of more than 2,000 marketers.
One question we asked was, “Over the next five years, what is the primary way your organization will seek to differentiate itself from competitors?”
The number one response, by some margin, included this elusive term “Customer Experience” or CX as it is abbreviated nowadays.
So what is CX and what does it mean to marketers in the digital age?
Over the next couple of weeks, we aim to answer that question through:
- Exploring CX principles.
- Discussing what CX means to digital, specifically.
- Offering insights into how to improve your marketing using CX analysis.
- Discovering why CX is now so important to our businesses.
The customer journey
When you start researching CX, you find that there are a wide variety of approaches to the subject.
Almost all, however, start with the fundamental principle of CX, analysing the customer journey and coming up with recommendations for improving it.
What is the customer journey?
Briefly, the customer journey are the experiences that your customers go through when interacting with your company and brand.
This includes everything from discovery, to research, to purchasing, to customer support.
And, importantly, CX looks at these from the perspective of the customer, not the business.
Decoding the customer journey
In order to discuss the customer journey, and CX, in greater detail, it’s useful to break down the whole journey into phases and look at them individually.
HBR has published a useful model of the customer journey, drawn from research published in the McKinsey Quarterly review from a study of purchase decisions of nearly 20,000 consumers.
What it discovered is that there are four distinct phases of the customer journey:
- Enjoy, Advocate, and Bond
Each of these phases has its own characteristics and, if we want improve them, we need to identify what makes them different and work on each of them in different ways.
A word of warning
Now, these may seem obvious to accomplished marketers and, consequently, it is easy to skim over them.
But I think our tendency to do so is part of the reason that CX is not handled well by many organizations (and why it’s such a great opportunity, too!).
Most marketers presume that the customer journey is obvious and make many false assumptions which have been challenged by research on the topic.
To show you what I mean, I’ve provided brief descriptions of each phase with a few surprising characteristics that emerged from the McKinsey research.
The phases of the customer journey
This is the phase where a person changes from a passive observer of an ad or some other brand exposure into a potential customer.
Branding is key here as consumers will reduce the products which they consider using the very little information that they receive from outside sources.
And a well-known brand will perform better in this phase as consumers will learn about it from others, and not just from brand marketing.
Regardless of your brand standing, though, getting your message across early in the customer journey is very important.
The research shows that brands who make it into the consideration phase are up to three times more likely to be purchased than brands who are excluded.
We will talk more in a future post about what you, as marketers, can do to improve your chances in this phase but the takeaway in this post is the three-to-one purchasing ratio of considered versus unconsidered brands.
Once consumers are aware of an initial set of products, they then get to work and start evaluating, or researching, the market.
What’s interesting about this phase is that research shows brands which were not in the consideration phase get a second chance here.
As consumers learn more about the market, brands who were initially considered can be discarded and new, unconsidered ones can take their place.
Have a look at this chart from the report for some stats on this concept.
It shows that, depending on the category, consumers may consider as many new brands during the evaluation phase as they did during their initial consideration.
And, again, this should be obvious to us. We all do this ourselves whenever we buy something we are not familiar with.
But it’s easy to forget this point when we are at work as we focus on developing leads from advertising and miss out on engaging with customers who know nothing about us.
Buying is probably the phase of the customer journey that we, as marketers, understand best. Often we are measured on our performance here and so we tend to perform well.
We A/B test our ‘buy’ buttons, tie our advertising analytics to conversions, and base our future campaign budgets on this ‘bottom line’ metric.
But because we are so focused on our moment of glory, we fail to notice that it’s really just one part of the whole customer journey.
On either side are equally, if not more, important metrics which contribute just as much to the success of our business.
This chart from the research backs up this notion. In it, we can see that the store/agent/dealer, the ‘closer’, is the most influential touchpoint in less than half of the purchases considered by the research.
Now, consider this observation from the perspective of the digital customer experience.
If traditional purchases are influenced heavily by earlier parts of the customer journey, then are we allocating our time correctly if we are spending most of our effort on testing the ‘buy’ button? Probably not.
Enjoy, advocate, and bond
And finally, once the customer has bought from us, they continue on their journey with our brand and become loyal, repeat buyers.
Or not. Research shows that there are as much as six times more passive consumers of brands than active loyalists. And many of these passive consumers are still engaged in the consideration and evaluation of your competitors’ products.
Here are some stats to back that up. This chart shows that brands can experience as much, if not more, purchase share from the after-purchase service as they do from all the funnel marketing.
And this is both an opportunity and a threat. Post-purchase customer engagement done poorly leaves you wide open to competition, but done well gives you another chance at previously lost business.
So, instead of thinking of the final phase as ongoing care and maintenance, we will in the future posts talk about how to convert the quiet, passive consumer into the vocal advocate.
Things to note
So, in this review of the customer journey, we can see it’s not as simple as it seems.
First off, the customer journey is not just another name for the conversion funnel (Awareness, Interest, Desire, Action).
They may look similar, but the conversion funnel divides the purchase flow into segments which are more meaningful to the brand, whereas customer journey tries to identify the points where the customer behaviour changes.
This is particularly evident when we look at how people in the interest or desire part of your funnel can suddenly jump into someone else’s funnel (see Evaluate).
Also, the customer journey is rarely even, and may not even follow in sequential order. That is, the customer may ‘consider’ for a long time, but only ‘evaluate’ very quickly, or skip it entirely.
And because of this, customer experience needs more than just assigning each phase to a different department.
Instead, it’s necessary to look at the customer journey holistically, with many interconnected and overlapping touchpoints, which we will do in the next post about how to improve customer experience.
So, back to CX
So, when marketers say that they want to differentiate themselves from competitors using CX, what they mean is that they want to improve their customer journey and make it better than their competition’s.
And to do this, they break down this journey into the different phases that the customer goes through when evaluating, buying, and using your product or service.
And though it’s easy to gloss over the detail and presume that we are ‘doing CX’ by running analytics on the conversion funnel, research shows us that this is not enough.
Instead, we need review the findings and acknowledge things like:
- Brand marketing is not the only way to get customers started on their buying journey.
- The most important conversion factor is probably not the effectiveness of the buy button.
- And the post-purchase phase may be the most crucial part of getting our customers to buy from us in the future.
And once we come to these, and other, realizations, we should review our own marketing programs and reallocate time and effort more evenly across the whole customer journey.
Doing so will help us to create a better customer experience and make what we do as marketers more valuable to our organizations.