What is customer experience (CX)?

By Laura Ojeda Melchor|6 min read|Updated Oct 7, 2024

A good customer experience (CX) can be the difference between a low customer retention rate and a legion of brand loyalists.

Customer experience can’t be an afterthought – a whopping 73% of surveyed customers say customer experience is a key factor when making a purchase.

But what exactly is customer experience, and why is it so important to consumers?

We’ll tell you everything you need to know.

What is customer experience (CX)?

CX is the feeling customers get when they interact with your brand.

It’s how they feel the moment they become aware of your brand for the first time.

It’s also how they feel when they reach out to you for questions about a purchase or try to upgrade, downgrade, or cancel a plan.

There’s a fine line between trying to upsell, cross-sell, or down-sell customers and making them feel unheard. If you’re prioritizing CX, you’ll find a way to walk that line.

In short, CX is how your customers feel throughout their entire journey with your brand—AKA, the customer journey.

What is the customer journey?

The customer journey is the path a person takes with your company. It includes every interaction they have with your company, from looking at your ads to talking to your customer support team.

The customer journey is what customers see and do when it comes to your brand. How they feel about their journey is the customer experience.

All sorts of factors can impact the customer journey and CX, including whether:

In-store service is friendly
Online and mobile shopping experiences are easy and efficient
Technology is current or dated
The shopping experience is personalized
Loyalty programming exists and adds value
Payment options are efficient and reliable
Customer service is knowledgeable

So let’s explore why CX matters so much, and whether it’s worth the investment.

Why does customer experience (CX) matter?

All your customers want is to be seen, heard, and valued. That’s what a 2018 study by PwC found. Of the global group of people surveyed for the study:

73% said customer experience is a key factor in whether they purchase from a company
42% would pay extra for a friendlier and more welcoming CX
30% would stop interacting with a beloved brand after just one negative experience

What’s more, 65% of U.S.-based respondents said that a positive CX is more impactful to them than excellent advertising.

And guess which factors of the customer journey were the most important to the respondents? Whether the company and customer journey is:

Efficient
Convenient
Friendly
Knowledgeable
Easy to pay

Other factors were important too, like human interaction, personalization, and up-to-date technology. But they all took a backseat to the five core factors we just listed.

So if you’ve been pouring money into new technologies or ad campaigns with little to show in return, it’s time to slow down. Laser your focus on CX and the customer journey.

The best way to start the process is to measure your CX as it stands right now.

Do defensiveness and denial hurt your customer experience (CX)?

They absolutely do.

Take a look at the results of a 2019 study conducted by researchers at the University of Rijeka Faculty of Tourism and Hospitality Management. The goal of the study? To understand the influence of a hotel management team’s responses to negative online reviews.

First, the researchers identified five main response styles:

Personalization: The level to which a business’s response to a negative review is generic or personalized.
Empathy: Whether active listening and empathy statements make a difference—aka, saying things like, We’d feel frustrated if we were you, too.
Confession: Whether apologizing and admitting to dropping the ball helps or hurts a customer’s trust.
Denial: The point to which defensiveness and denial of wrongdoing impact a customer’s trust.
Excuse: Whether admitting a problem occurred but explaining it away or shifting the blame to a third party impacts trust.

They then set up a focus group to provide feedback on one actual negative hotel review and five hypothetical responses. Each response aligned with one of the response styles we outlined above. A total of 435 questionnaires went out to the study participants.

The study found that the most effective response styles are personalization, empathy, and confession. These styles positively influence the trust of potential guests.

Denial and excuse, on the other hand, negatively influence the potential customer’s trust in the business.

How to measure customer experience

Several tools and strategies exist to help companies measure the customer experience. We’ll focus on the five most effective methods, which you can modify to fit your needs:

Send out surveys: Find out how your customers feel about their journey with your brand with surveys and questionnaires. Popular survey types include customer satisfaction score (CSAT), Net Promoter Score (NPS), and Customer Effort Score (CES). Participation incentives can help you draw high-quality respondents.
Analyze measurable data: Dive into quantitative data to identify patterns, customer pain points, and interaction trends. Important metrics to examine are:
Churn rates: The percentage of customers or subscribers who stop using a company's product or service over a specific time period.
Customer lifetime value (CLV): A metric that estimates the total revenue a business can expect from a single customer account throughout their relationship with the company.
Ticket reopen rates: The percentage of customer support tickets that are reopened after being marked as resolved, which suggests issues weren’t fully resolved on the first try.
Time-to-resolution metrics: The average time it takes to fully resolve a customer's support issue or ticket from the moment it is reported.
Run A/B tests: Use A/B testing on web pages, email campaigns, and other customer-facing assets to see which versions drive better engagement and satisfaction.
Use community forums as a focus group: Find or create community forums for your brand on platforms like Reddit. Make these a place where customers can safely discuss their experiences, pain points, feature requests, and valuable tools. These forums provide deep insights into customer needs, as long as you can avoid getting defensive.
Talk to customer-facing staff: Spend time with employees who interact with customers daily, whether that’s in-person, on the phone, or in support chats. They can offer firsthand insights into customer sentiments and feedback.

Once you’ve gathered important quantitative and qualitative data on your CX, it’s time to jump into customer experience management mode.

What is customer experience management?

Customer experience management, or CEM, is when a company takes a proactive approach to curating a great CX. It involves tracking, overseeing, and improving every customer interaction with your business.

You’ll usually find CEM services tied in with customer service or customer relationship management (CRM) software. That’s because the three are closely related. But they aren’t the same:

Customer experience management (CEM): Makes sure every touchpoint in the customer journey fosters a positive perception of the company. The focus is on customer satisfaction at every step of the shopping, buying, and post-purchase experience.
Customer relationship management (CRM): Helps manage all your company's relationships with current and potential customers. The focus is on retaining customers and driving growth.
Customer service: Uses various support channels—like email, phone, and chat—to answer questions and solve problems. The focus is on providing friendly, knowledgeable help.

There’s plenty of overlap here. But CEM is a broader concept than CRM or customer service, which is why it’s harder to create software dedicated only to CEM. The nuts and bolts of it can’t really be done using third-party software.

Instead, CEM consists of two main steps:

Gathering information: A company sends out customer satisfaction surveys. The respondants responses negatively review the company’s website. It’s cluttered, unintuitive, and hard to navigate.
Acting on it: The company takes its customers’ complaints seriously. Within a week, it’s hired a pro to re-do the website and make it more user-friendly.

Software services like Salesforce Service Cloud, SurveyMonkey, and Oracle Cloud CX Platform can all help you gather information for Step 1. You can then hire a customer experience manager to carry out the updates and improvements required in Step 2.

You probably already have tools in your current software stack that support CEM. Look for features like:

Feedback collection: Surveys and social media questionnaire tools that gather feedback directly from customers.
Analytics: Tools that analyze customer data to find out what's working well and what's not.
Customer journey mapping: Tools that help you see the steps customers take from learning about a product to buying it and point out where you could improve the process.
Personalization: Tools that pay attention to individual customer preferences and make them feel seen and valued.
Integration with other systems: Features and tools that play nice with other CRM systems, making sure your team can easily share insights to improve CX.

With the insights you gain from these tools, you can take concrete steps to improve your CX.

How to improve customer experience

Customer experience improvement begins with measuring your CX as it stands right now. It continues with using customer experience management (CEM) strategies and software to gather data.

Here’s how you can put everything you’ve learned into action:

Empower your employees: The Ritz-Carlton sets aside a rumored $2,000 amount for each of its employees to use on making things right with guests. That’s because the company believes that everyone—from cleaning staff to the maître d'hôtel—should be able to address customer complaints. No approval from management needed.
Involve company leadership: If you’re on the leadership team, it’s time to infuse your values and vision with CEM principles. Everyone from the CEO down to your customer support agents should be working toward the same customer satisfaction goals. It shouldn’t just be on the shoulders of one group of employees.
Create a Voice of the Customer (VoC) program: A VoC program collects information about what customers think and feel about your products or services. It listens to customer feedback, figures out what it means, and uses that information to make things better. Consider building your own VoC program.

Key takeaways

When you pay attention to customer experience and actively work to improve it, you can avoid alienating your customers

So remember these three key points:

Customer experience can make or break your business. A negative CX can turn off once-loyal customers. But a positive one can help you retain existing customers and win new ones.
All sorts of tools exist to help you measure CX. From focus groups and surveys to A/B tests and community forums, there are dozens of ways to assess your CX. And once you’ve got all that information in hand, you can make changes that spark joy in your customers.
Customer experience management is a lot of work, but it’s worth it. And there are tools that can help you do it. Remember: investing in CX might be costly upfront, but it’ll pay off in spades when you establish a loyal, happy customer base.
Employees are part of CX. No matter their rank or position, every employee of your company should play a role in CX. Value every voice in your business. Empower employees from all ranks to fix snafus and other issues without jumping through administrative hoops. Happy employees mean happy customers.

Finally, we can’t help but introduce you to one of our favorite CX tools: Tremendous. Whether you’re running focus groups or surveys, sending a refund, or compensating customers for a negative experience, Tremendous is the simplest way to offer customers more than 2,000+ incentive options.

Published April 4, 2024
Updated October 7, 2024