1. What is Customer Experience?

woman holding fork in front table

There has been a great buzz around the growth of Customer Experience (CX) as the key differentiator. Here are some key facts that prove the customer experience has fast become a top priority. 

81% of companies view customer experience as a competitive differentiator.

84% of companies that work to improve their customer experience report an increase in their revenue.

Brands with superior customer experience bring in 5.7 times more revenue than competitors that lag in customer experience.

But, what exactly is customer experience? 

Customer experience is a combination of a lot of elements, but it’s predominantly the perception a customer has of your brand. You might think that your brand is offering an exceptional customer experience, but if the customer perceives it as something different then that is the actual customer experience according to your customers. 

The customer experience (CX) emphasizes the relationship between a business and its customers. It encompasses each and every interaction irrespective of how long or short the interaction is, and whether it will lead to a purchase or not.

2. Customer Experience (CX) Definition

Gartner defines customer experience as, “Customer’s perceptions and related feelings caused by the one-off and cumulative effect of interactions with a supplier’s employees, systems, channels or products.”

Customer experience is the outcome of an interaction that a customer has with your business. It starts from the time customers navigate your website, talks to your executives, buys the product, and uses the product. 

Customer experience covers every component of a company’s offering, including ads, packaging, product and service functionality, ease of use, and reliability, among others. However, few of the people in charge of those items have given much thought to how their individual actions impact customer experience. To the degree that they consider it, they all have different perspectives.

So clearly, customer experience is a combination of two important elements:

3. What is Customer Perception and Customer Interaction?

i) Customer Perception

The customer collects information about a product and interprets the information to make a meaningful image about a particular product. This is called customer perception

ii) Customer Interaction

Customer interactions with a brand relate to all the touchpoints starting from browsing your website, searching for your product information, talking to customer care executives, and goes all the way up to buying and post-purchase support. 

To summarize, Customer Experience (CX) is the overall perception of a brand created as a result of the numerous touchpoints that a customer has with a brand.  

In today’s technological world, customers are well-read and well-connected than ever before. With an increasing number of outlets to express their experience, customers are openly providing their feedback about brands like never before. 

During a customer journey, touchpoints are connections between companies and customers. These moments have a big impact on the customer experience and brand perception. By highlighting the key touchpoints on a map, businesses can take advantage of timely opportunities to optimize the customer journeys.

The touchpoints might be slightly different for each industry. 

4. Customer Experience – Touchpoints by Industry

a) D2C Brand

A D2C brand can sell directly on its own brick-and-mortar store or an eCommerce website. For a D2C brand, their first touchpoint is engaging consumers through content by building unique brand-centric information that educates, informs, and inspires shoppers. For example, Patron serves creative cocktail recipes that are based on personal preferences, educates and inspire consumers to try new things while keeping Patron top of mind. 

The next important touchpoint for a D2C brand is a fully functioning e-commerce website. The website should be able to offer an assortment of company products while providing convenience for shoppers who want to purchase directly. For example, Nespresso’s digital store offers a great coffee shopping experience. Shoppers can see and select Nespresso’s full range of coffee products, coffee machines, and other accessories. Not just products, it also offers educational content on care tips for their Nespresso products. 

b) Banking 

Banking touchpoints are particularly different due to their highly private and formal nature. In a banking environment, customers interact either in person or using a mobile application, or via a website. The call center is the most common touchpoint in a bank as many still prefer to talk with a support team to get quick information. Online banking systems such as the website and mobile banking apps enable customers to receive online support any time they need it.

c) Hotel Industry 

Hotel industry touchpoints are entirely different from other industries. The touchpoints start from the time of contact for the hotel as a prospective guest.  The touchpoints for customers start right from visiting the website, sending emails, check-in and checkout, and all the way up to promotions and discounts.

d) Utility Services

Utility services such as telecom, power, and water need to understand the complete customer lifecycle with its associated touchpoints. Of the many touchpoints, the most important ones are product search, product selection, billing and payments, renewals, reporting incidents, and customer service.  

e) Automotive and Transport Industry

These industries engage with customers in many different ways. Consumers are increasingly expecting a seamless experience across both digital and physical touchpoints. Customers interact using mobile and tablet applications, emails, online chat, kiosks, physical showroom, personalized contact with salesperson, wearable virtual reality device, among other means. 

Taking advantage of the growing communication channels, many brands are turning towards customer experience platforms to tap into the customer experience insights, thereby getting an opportunity to improve customer experience.

5. Why is Customer Experience (CX) Important for Your Business?

“Achieving customer love is the single most important criteria for business success,” says Howard Tiersky, the bestselling author of Winning Digital Customers.

Customer experience is fast becoming a top priority for businesses. But, why are so many brands focusing on the customer experience, and what happens to companies that choose to ignore it? 

In the past brands were competing on product quality and pricing front but now customer experience has taken over as the key differentiator. When customers are not delighted, they easily switch brands and move to a brand that offers a better customer experience. This makes customer experience far more crucial for businesses. 

Brands that get this fast and right will go on to create long-lasting customer relationships.  

Today, customers want brands to move one step forward and anticipate their needs. Customers look for delightful and memorable experiences when they shop online from their favorite devices.  

In fact, 50% of customers are ready to switch to a competitor brand immediately after just one bad experience. But when there is more than one bad experience, the number magnifies to 80%!!

A single bad customer experience has the capability to damage a brand and ultimately it can impact its bottom line. Therefore, businesses are making all efforts to improve customer experience.  

Brands have come to learn that customer experience matters in many ways: 

  • Increases revenues
  • Strengthens brand preference
  • Deepens customer loyalty
  • Lowers costs by reducing customer churn

No doubt, customer experience is the new path to go.  

And more so because – 73% of companies with above-average customer experience perform better financially than their competitors.  

6. Top 10 Reasons Why Customer Experience Is Important to Your Business  

1. Great Customer Experience Builds Great Reputation 

According to a study, After having a positive experience with a company, 77% of customers would recommend it to a friend. 

Consider how pleased a client would be with your brand if they get outstanding support. As a result, the consumer will spread the word of their positive experience to their friends and families.  

90% of people are more likely to trust and buy from a brand recommended by a friend. People trust when it comes from known people, and are more likely to buy.  

It’s no surprise that word-of-mouth is the most effective marketing tool. You can transform your customers into your best and most cost-effective means of word-of-mouth ads – but only if you have excellent customer experience.  

“Word of mouth will never go out of style. It is, and will remain, the #1 way people make choices about brands.” Jamie Turner, Author, Speaker, and CEO of the 60 Second Marketer.  

customer experience

A great example of this is the Carolina Panthers online shop. To improve the customer experience they redesigned their website to look amazing and be easy to use across all devices. 

They started getting positive feedback for their new website. Based on word of mouth, they saw an 83% increase in mobile conversions.  

2. Customer Experience Improves Customer Retention 

 Are you aware of the significance of customer experience in retaining customers?  

75% of customers will stick to a business that provides outstanding support. 

Getting a new client can be five times more expensive than keeping a current one. Selling to an existing client has a 60-70 percent success rate, whereas selling to a potential customer has a 5-20 percent success rate.  

Customer satisfaction is the product of an excellent customer experience. Strong customer care, on the other hand, stops people from going to the competition. Customer experience, not a brand’s exclusive quality or service, keeps them coming again.   

JP Morgan Chase is living by this trend by introducing the “Everyday Express” branches. Here customers have access to a “Digital Advice Bar” to receive financial advice.  

customer experience

In these express branches, customers get to access simple services such as opening an account, video conferencing with the bank’s specialized staff to resolve some complicated customer issues. This was a super hit as it offered an excellent customer experience for a whole lot of customers who use online transactions but yet need advice when it comes to more complicated financial issues.  

3. Exceptional Customer Experience Boosts Revenues  

Bain & Co reports that “Companies with superior Customer experience grew revenue 5 times faster on average than their competitors with inferior customer experience.”  

The golden key to a profitable company is excellent customer service. Customer service is essential in addition to having a fantastic product or service that can boost revenue.  

Jon V. Ferrara is an American entrepreneur, and the founder of Nimble LLC, says, “Improve customer service, increase sales.” 

Better customer service = improved bottom line.  

AO.com wanted to expand into the AV category. It started by acknowledging that they want to put the user experience at the heart of the new offer.   

The starting point was the consumer insights that demonstrated AV consumers wanted to view the product from any device and wanted the site to perform equally as well across all devices.   

When AO.Com reviewed the AV market, it concluded that it was tired, static, and really not meeting the needs of the consumer. Consumers were tired of the overcomplicated offers, jargons, and the ranges that were hard to distinguish. 

The band swung into action and started supporting the consumer journey by demystifying the jargons, explaining technologies, 360-degree visuals to recreate a showroom experience online, videos explaining the features, offering curated collections to help them buy the right TV for their individual viewing needs.   

The results were astonishing. Their average order value moved up by £50 higher than the market average.  

4. Excellent Customer Experience Drives Customer Lifetime Value (CLV) 

 CLV definition – Profit a company can make of one customer over time. The longer a brand can keep a customer, the greater is the CLV. To grow the CLV, your customers should shop more frequently. Your customers should spend more money on your business.  

So what is the secret to getting consumers to buy and pay more? 

Highly engaged customers buy 90% more frequently, spend 60% more per transaction, and have 3 times the annual value compared to other customers. Customers who had better previous experiences spent 140 percent more than customers who had worse previous experiences. 

Customers are happy because they have a positive shopping service, which leads to more sales. 

For example, see how One customer in Turkey ordered from ‘Amazon Germany’ and was surprised when he saw the estimated delivery time and shared a tweet.  

customer experience One of the Amazon employees replied to the tweet saying even she was curious to know if the product will be delivered in one day and she did sign her name at the end of the tweet which is quite unknown among other brands.   

When the customer received it within one day, he again tweeted with disbelief that he had indeed received the package as promised by Amazon.   

 This went viral as the customer experience here was exceptional. A company like Amazon offers exceptional customer experience which makes shoppers come back again and again. 

5. Customer Experience Develops Competitive Advantage 

 Customer experience excellence is one of the most important ways for a company to set itself apart from the competition. A customer’s decision to return to you or to go to a rival is dependent on their previous encounter with you. 

 According to research, – “57% of customers have switched to a competitor to get a better experience.” 

 As a result, positive consumer engagement is critical to the company’s growth. Businesses must begin setting the groundwork for delivering outstanding customer service now and in.

customer experience

Sainsbury’s, a UK supermarket chain,  received a letter from three-and-a-half-year-old Lily Robinson. Their “tiger bread,” Lily thought, didn’t imitate a tiger’s stripes at all, but rather a giraffe’s style. Sainsbury’s decided to completely rebrand one of their brands. It agreed with the little girl and created new brands to spread Lily’s wisdom with other customers.   

Takeaway – Lily and her mother were probably surprised by the response they received. Sainsbury’s was able to take a customer recommendation and deliver on it quickly and significantly. 

Based on a research report, 67% of churn in customers is preventable.  

When the problems of the customer are solved during their first interaction, they become happy. Besides, if you provide excellent customer service, you will retain your customers. Furthermore, you will acquire your competitors’ customers, as well.  

6. Customer Experience Establishes Greater Brand Awareness  

It is no longer enough to create successful goods and services to compete in today’s business world. The importance of a positive customer experience cannot be overstated.  

“A brand is no longer what we tell the consumer it is — it is what consumers tell each other it is.”- Scott David Cook, Director of eBay and Procter & Gamble.   

Consumers don’t know your existence there is no brand awareness, hence they can’t purchase your product or service. When a customer remembers your brand from a previous encounter with it, brand identity is born. That might be anything as simple as seeing your badge or hearing from any of your new customers. You will increase brand value by providing a positive customer experience.  

You will be surprised to know that 85% of consumers trust reviews as much as personal recommendations.  A study showed that people read as many as 10 reviews before making a purchase. Consumers wish to learn from other people’s experiences before trusting a product enough to do the same.  

For example, see how the bright orange stars on a product review, the ratings, and the number of reviews establishes greater brand awareness to search users. 

The customer experience of your customers helps you stand out from every other listing and build trust early on in the funnel even before shoppers visit your website.   

customer experience


The 5 star rating becomes even more impressive when you consider the number of reviews received which is about 3K reviews for Natural Baby Shower. 

7. Great Customer Experience Brings About Reduction in Marketing Costs 

From studies it is evident that businesses that invest wisely in improving customer experience will help you cut costs and expand, particularly in industries like insurance, oil, telecoms, and banking. 

That’s particularly true when it comes to creating a great customer experience journey—those set of interactions a customer has with a brand to get something done. If something seems to be too amazing to be real, the evidence proves it.  

We know that brands that can boost the consumer journey can see a 10 to 15% rise in sales while still lowering their cost to serve by 15 to 20%.  

Is it really possible? The truth is that there are major inefficiencies throughout the average consumer experience, which also entails several touchpoints handled by several departments within a company (website, sales, call center, etc.).  

For example, a call center may respond to a consumer complaint but fail to find the root cause, which ensures that other customers may continue to complain about the same problem. Alternatively, a frustrated customer could be forced to repeat information already delivered. And, as consumer experiences get more complicated as a result of the introduction of emerging technology and platforms, inefficiencies become more likely.  

Procedures are often duplicated, inadequate standardization causes inconsistency and slows down the overall operation, and entrenched patterns make progress difficult. Who is the one who suffers? Not only the consumer, but the business as a whole, in the form of expensive waste.  

Creating efficiencies that can create a fantastic consumer journey experience is an important driver of development at the same time.   

As per research, when consumer service success is just average, core metrics like “likelihood to remain/renew” or “likelihood to purchase another commodity” are 5 to 10% lower per year in industries. But improving customer experience from average to “wow” is worth 30 to 50 percent more in those same industries. 

Therefore, when it comes to customer experience, brands are too often rooted in an either/or mentality. In order to achieve success and cost efficiency, businesses must have a wider perspective of the advantages of delivering outstanding consumer journeys.  

8. Customer Experience Builds Brand Loyalty  

Customer loyalty happens when a customer comes back to purchase your product irrespective of the situational factors around your brand. Psychological studies have proved that brand loyalty is intrinsic to the behavior of the human mind. Brand loyalty retains with the customers due to the great customer experience that accumulates using various products.  

A study reveals that 52% of consumers continue to use a brand even after finding a cheaper deal elsewhere. Such is the strength of great customer experience.  

SuperValu stores have a unique approach to gathering customer input to ensure that our consumers really get the “WOW” element. So, what did SuperValu do?  

SuperValu held interviews with 12 consumers twice a month to determine the true worth of their goods. They were sent questionnaires about the product’s price and cost, service levels, and ad promotions.  

The constructive customer feedback was registered and used to test the store managers in order to improve their planning process.  

Listening to customers will get you customer loyalty. It makes it easier to match your program to their needs. 

9. Customer Experience Creates a Point of Differentiation  

What differentiates your business from the competition? Most people consider differentiation to be a function of their product. However, differentiating yourself from offering the right goods or the best pricing is no longer a feasible tactic.  

Your competitors are also doing the same by positioning themselves — offering products and services, and pricing commodities. But as Gartner VP Jake Sorofman said,  

“As competition and buyer empowerment compounds, customer experience itself is proving to be the only truly durable competitive advantage.” 

Customer experience is quickly becoming a top priority for nearly all companies. An identical product is offered by two firms – What criteria will consumers use to choose one of them? It can sway a person’s decision if friends and family have suggested one of the two. The choice is almost always based on a positive consumer experience.  

customer experience

For example, Oscar Health Insurance uses simplicity to differentiate itself in the healthcare marketplace. For a common person, healthcare is rather a daunting subject. Keeping this in mind, Oscar wanted to make medical coverage personable and easy to understand. Oscar Health Insurance designed a user experience (UX) that allows customers to browse their website and learn about various plans for which they’re paying, help to buy their desired plan, and extend support by a doctor to customize their products. This differentiation offered by the brand makes the company truly shine in its market. 

Companies that have an exceptional customer experience foster a culture of customer champions. This would result in a complete circle of customer loyalty. Customers not only promote the brand, but they still return for more. Great customer service allows you to keep tabs on your existing clients while still serving as a point of distinction for potential new customers.  

10. Customer Experience Adds Value to Your Products and Services  

A high-quality product or service is just half the battle when it comes to drawing consumers to your business. So, how can you convince them to pick you over hundreds of other deals of equal or lower prices?  

You can bring a lot of value to goods and services by providing different types of customer service depending on the amount of money the customer is likely to pay, how much they shop, or how influential they are.  

Most people are indeed happily willing to pay more for the same product or service only when it comes to great customer experience. Good customer service can justify a higher price tag on your product or service.  

85% of consumers are ready to pay 25% more for better customer experience, says a research study.  

Thus Customer experience has become very important for all brands for customer retention, to build customer loyalty, to develop competitive advantage and a host of other benefits.   

Casper, a small startup sells mattresses and sleep-related items, as well as hosting a one-year conference on sleeping in just 40 minutes. Casper’s sleep specialists developed the Insomnobot3000 chatbot specially for people who have trouble sleeping (insomnias). 

customer experience

How did Insomnobot3000 function? The chatbot was available for customers between 11 pm and 5 am, and anyone who wanted to chat had to just text Insomnobot3000 from their smartphone. The chatbot kept company by giving some advice and also initiating an interesting conversation. This provided an excellent customer experience for Casper customers.


An outstanding customer experience is indispensable for the continued growth of a business. When customers are happy and pleased with the interactions they have with your business, it leads to positive customer experience which thereby promotes customer loyalty, repeat customers, retains customers, and encourages brand advocacy.