Table of Contents
What is CX?
CX, or customer experience, is an overview of how businesses and organizations engage with their customer base at each point of their purchasing process. Customer experience can vary by individual, but the goal is to provide a uniform approach that results in positive takeaways for each party involved.
Customer experience is not simply defined as the customer’s satisfaction with the product or service being sold. Instead, a customer’s experience encapsulates their product satisfaction, their feelings towards employees or sales teams, the brand as a whole, and every other touchpoint the customer experiences during that interaction.
Traditionally, customer experience was defined by the interactions that occurred between an employee and a customer in a physical location. In the financial service industry, this would mean meeting with a financial advisor, banker, or wealth manager to discuss various items, check balances, withdrawal or deposit money, or plan for the future.
How Has Customer Experience Shifted?
Much of the financial services sector has begun to make its way online. Billions of people utilize online banking daily to complete their banking needs. Insurance policies are emailed to customers and can be shown as legal proof of insurance. The Covid-19 pandemic also quickly shifted many traditional in-person activities to an online format.
All of this and more has led to the evolution of the traditional customer experience. Businesses have recognized that a majority of the interaction they have with their customers is in an online format, shifting the needs of customer experience strategies.
As previously stated, customer experience is every step of interaction between customers and businesses. When a business interacts with customers online, it entails an entirely new set of challenges to overcome.
For example, the chat box that pops up in the corner of a website you visit that prompts you to speak with real people is an example of a customer experience strategy. Businesses recognized that one problem customers had when interacting with a business online was the inability to get their questions answered in a timely fashion by a real person. To solve this problem and enhance the customer experience, many websites have included a chat box where customers have the ability to ask questions and speak to a real person.
What is the Importance of CX?
Customer experience can be the differentiating factor between two competitors. Especially in highly competitive industries such as the financial services industry, many leaders and executives in business are citing customer experience as not only a top priority but also a key differentiator of growth and transformation.
In fact, according to a 2021 study by Harvard Business Review Analytical Services done on over 1,000 executives on the importance of customer experience, 64% of respondents from the financial services industry cite improving customer experience as a top-five business priority for the next year.
The importance of a beneficial customer experience strategy is evident when looking at a simplified example of two different customer experiences.
For example, an individual goes to the grocery store to buy an apple. This individual likes the honey crisp apples at the local grocery store and decides to shop there rather than at Walmart. When the individual arrives, they are not greeted at the door, and a worker walks right by without so much as a smile. As this individual makes their way to the produce, they notice the floors of the store are quite dirty, which makes them put second thought into their purchase of an apple.
After all this, the individual finally finds and purchases their apple, which is excellent! However, a few days later, when the individual is craving another delicious apple from the local grocery store, they decide against the trip and opt for Walmart. Although the individual was extremely pleased with the product they purchased from the local grocery store, the customer was turned off by the experience they received during the purchasing process. The individual chooses a different store because they know their experience will be more pleasant and uniform than expected in such a situation.
On a much wider scale, this is how customer experience is perceived by executives in the financial services industry. Executives and industry leaders believe that due to the shifting of traditional customer interactions to an online format, the business that provides a higher quality customer experience will be able to attract new customers, keep existing customers, and differentiate itself from competitors without customer experience as a priority.
A good customer experience can be defined by the customer answering to themselves three main questions:
Was the experience useful? Did it deliver value?
Is the product or service usable? Did they make it easy to find and engage with the value?
Was the experience enjoyable? Were they emotionally engaging and respectful throughout?
If the customers’ answers to these questions are consistently negative, it is a sign that the customer experience strategies employed by the businesses are obsolete. The challenge of creating a beneficial customer experience strategy is identifying and engaging with the goals and preferences of customers at different stages of their purchasing decision.
To better understand the intentions of your customer base, dive into the value of your product or service. Identify what value the product provides customers, and why they are searching for the product, and utilize this information to optimize the business’s customer experience processes in different stages of purchasing.
Depending on your product, your strategy for customer experience may be tailored to a B2B (business to business) or a B2C (business to customer) model. These would have different stages and areas of focus for the customer experience strategy to enhance. Furthermore, when a customer, whether an individual or an organization, feels their intentions and goals are understood, they walk away with a more positive reflection of the interaction.
Because customer experience captures the entire interaction, it is crucial not to focus all of your efforts on one stage of the purchase decision, such as the closing of the sale or post-purchase interactions. To enhance each stage of the customer experience, you must first identify the stages of interaction from beginning to end.
No customer experience can be exactly the same because people are different. Rather than trying to achieve the most uniform interactions between customers, the best way to consistently improve your customer’s experiences is to constantly analyze the shortcomings and successes of your customer experience strategy, make changes as necessary, and be honest about the success of strategies you have put in place. At the end of the day, customer experience is about the customer and should be tailored to match that sentiment.
Every business owner understands the importance of positive customer experiences. It is crucial for growth and can be the differentiator between competitors. Customer experience is undergoing a massive shift in the strategies companies employ with the shift to online formats.
To enhance the customer experience strategy, businesses must analyze their own products and processes to continuously improve the experience their customers receive. With so many different stages of interactions, it can be a daunting task to approach alone.
Reach out today to schedule a consultation with Naehas on improving your CX strategies.