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What is the definition of "Customer Experience"​ & why is it important?

Customer Experience Journey Map

"Customer Experience” is the discipline that – when applied systematically – produces long-term customer loyalty.

(If you prefer to consume as video, see this short video from Customer Experience Professionals Association (CXPA) - What is CX? )

So what is the definition of Customer Experience?

What “Customer Experience” is:

The term “Customer Experience” can be used to mean one of three things… or some combination of them:

  1. Customers’ perception of their interactions with a brand, and the emotional response they have to that brand as a result.

  2. The work of designing amazing experiences and then delivering those experiences to customers.

  3. The measurements we use to keep score (often, “Net Promoter Score” and more recently, “Earned Growth”).

This means that the Customer Experience encompasses all interactions with a company, from initial awareness, to the first point of contact, to long after a purchase has been made. To emphasize this, CX is often referred to as “end-to-end Customer Experience.”

What “Customer Experience” is not:

The term “Customer Experience” is often used as a name for individual operations functions or sales functions, such as: Customer Support, Customer Service, Customer Care, Customer Success, and even Sales Funnel Optimization.

Although each of those could be an important sub-set of the overall, end-to-end Customer Experience, none of those individual functions are "Customer Experience."

Why do businesses care about CX?

The data is in (see below): companies that enjoy high customer loyalty are consistently proven to be better long term financial performers than so-called “loyalty laggard” companies – those that have lower loyalty as compared to the rest of their industries.

Customer Experience is a critical differentiator in today's competitive landscape, can lead to increased customer loyalty and retention, and has a direct impact on a company's reputation and long-term financial growth.

Go Deeper: Linking Customer Experience & Business Performance:

  • Harvard Business Review - "The Value of Keeping the Right Customers" (Reichheld, 1996 & 2014). From Fred Reichheld, creator of the Net Promoter metric & system. This study found that a 5% increase in customer loyalty can lead to a 25-85% increase in profits.

  • XM Institute - "The ROI of Customer Experience, 2019" - In this study, Temkin-led XM Institute studied thousands of consumers across 20 US industries to show relationship between customer experience and their likelihood to repurchase, recommend, and more.

  • McKinsey & Company - "The Business Value of Design" (Brown, 2018) - This study found that companies that invested in design to improve customer experience had higher revenue growth rates and total returns to shareholders than their competitors.

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