As we have seen, digital transformation makes it possible for companies to reimagine customer experience. Many industries have been disrupted by a new wave of companies that redesigned customer experience through the whole value delivery chain. Think of Uber and Airbnb as perfect examples of consumer companies that completely redesigned customer experience in their industries, and raised the bar for customer expectation across the board. This trend has now shifted to the SaaS industry, where differentiation on features and pricing is no longer enough to be competitive. Customer experience becomes the key priority regardless of the organization’s guiding principles, culture, size, or budget.
So far, we’ve used the term customer experience without defining what we mean by it. In recent years, it has become a common term. But as with other concepts and ideas that seem obvious, we face the danger of misunderstanding if we don’t define precisely what we mean by customer experience.
When most people talk about customer experience, they think about customer service, customer satisfaction, customer success, and customer engagement or interaction. It’s logical and makes perfect sense, but this is a narrow view. Customer experience is all of the above plus more — much more. It’s the totality of all touchpoints, interactions, and engagements with a company or brand.
Think about the last time you bought a product or service, whether it was through Netflix or Pandora’s subscription services, a book on Amazon, or SaaS. You likely remember vividly how the whole experience felt. You came into the buying process with certain expectations. The company either fulfilled this expectation, leading to positive emotions and customer experience, or underperformed, making you feel frustrated or angry.
The quality of the customer experience is evaluated based on the perception of how well the company satisfies expectations. Many companies focus on customer satisfaction and customer service. That’s good, but let’s not forget that if customer expectations are very high, even a great performance can fall short; and in most companies, marketing and sales set those expectations, as these groups are the ones interacting with prospective customers before those buyers experience the product.
With this idea in mind, we define customer experience as follows:
Customer experience (CX) is a customer’s perception about a company, brand, or product, based on all touchpoints, interactions, and engagements.
This definition is aligned with how Forrester explains customer experience1. Harley Manning, VP of Research at Forrester, asserts that customer experience is the perception of a customer that is based on all interactions between a customer and a company. While we agree with this view, we believe that customer experience is also shaped by word of mouth, ad impressions, and exposure to other corporate messages. Even if these do not necessarily lead to interactions, over time, exposure to a consistent message forms an expectation before a customer ever interacts with a company.
Experiences, as with perceptions, exist only in the mind of an individual who has been engaged on an emotional, physical, and mental level. Therefore, customer experience can’t be identical for any two individuals. It’s inherently a balanced relationship between what each customer expects, and what he or she gets.
This is why customer experience should include a whole universe of touchpoints, interactions, and engagement that a customer has with a company, brand, or product. This includes everything from conversations with your customer success team to newsletter e-mails, and even to how diverse and open your organization is as a public entity.
Naturally, the question surfaces: what do you mean by touchpoints, interactions, and engagement? “Touchpoint” is sometimes defined as an interaction, and “customer interaction” is often used interchangeably with “customer engagement.”
Let’s sort this out with an example. While driving on a highway, you notice a large billboard with a clever ad. Regardless of whether you formed any opinion about it or not, the message has registered, either in your conscious or subconscious mind. Is this an interaction? Hardly, since interaction is defined as reciprocal action between two or more parties; but you were exposed to a billboard ad in a passive way. This exposure is what can be best described as a “touchpoint.”
Touchpoint (customer touchpoint) is a single moment when a customer comes in contact with, or is exposed to, a company’s brand, product, employees, or message through any channel or device.
Customer touchpoints can take place online or offline, as we see with the billboard example. In the SaaS industry, the majority of touchpoints happen through digital channels, but even with extreme digitalization, we can’t completely avoid touchpoints in the real world.
Now let’s say you walk into a store, and notice a Nike shoe. That’s a touchpoint. When you pick up a shoe to feel the texture, or try it on, that’s an interaction. In a sense, interaction is a two-way “communication” that happens between a prospective customer and the company or product. (Note that this “communication” can be in the form of the product “transmitting” information, such as the shoe’s texture.)
Customer interaction is a two-way communication between a customer and a company’s brand or product.
The confusion arises when you think about how interaction is different from engagement. Customer engagement is another widely used term that is losing meaning, because businesses attribute a wide range of customer interactions and touchpoints to customer engagement. We believe customer engagement requires a stricter definition.
Let’s define what we mean by exploring the use of engagement in other contexts. Think about the traditional definition of “engagement” — a formal agreement to get married. In this case, engagement is commitment to action. Similarly, “rules of engagement” in the military are the directives that define the circumstances under which action or use of force may be applied. Here, too, “engagement” is a commitment to act, or to characterize the action itself.