Defining Customer Experience – Challenges & Importance for Businesses

Jun 15, 2020
Customer Experience | 6 min READ
A POV by the Birlasoft SAP Team
Best-in-class companies optimize the entire customer journey, not just touchpoints. Every single interaction with a customer is an opportunity for brands to gain or lose brand credibility.  Understanding your customer at every touchpoint is key to delivering a differentiated experience.
Defining Customer Experience, its challenges and importance for the Business
A customer interacts with a brand during their journey through various channels and devices. During this journey, the customer may engage with the brand several times from browsing for product information, making a purchase decision, evaluating product usage, requesting a repair or upgrade service etc. Customer Experience is an aggregation of thoughts, sentiment, feedback and beliefs that a customer accumulates about a brand during this journey. A customer will be loyal and willing to pay a premium to those brands that serve the best customer experience. Due to the proliferation of social media, mobile and technology disruptors like IoT, Artificial Intelligence (AI), Machine Learning (Machine Learning), etc., the competition among brands is unprecedented. Blue Nile Research found that more than 70% of consumers surveyed use three or more channels to research and make a purchase (in-store, web channel, mobile app, social media, community, chat-bot, kiosk, email, SMS).[1] Delivering a consistent experience across all channels is paramount for a sustainable business. According to Watermark Consulting, customer experience leaders outperformed customer experience laggards by 120% based on cumulative stock return over 11-year period.[2]
Customer Experience
Customer Journey Mapping - A Blue Print for Success
Best-in-class companies optimize the entire customer journey, not just touchpoints. Every single interaction with a customer is an opportunity for brands to gain or lose brand credibility. Understanding your customer at every touchpoint is key to delivering a differentiated experience. Before designing the customer experience solution, it is highly recommended to create a blueprint of all possible customer interactions, activities and subsequent actions – a customer journey map. This mapping exercise helps uncover potential customer pain points to turn them into opportunities to deliver engaging experience and enhance propensity to buy more and offer cross selling and/or upselling. The customer experience solution should be designed to capture detailed feedback including sentiment, interests, suggestions throughout the customer journey. These interactive details help businesses to better understand their customers’ buying behaviors and interests.
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With deeper insights of their current customers’ interests, organizations improve key success factors. Loyal customers cost less to serve, attract and deliver more recommendations than prospects customers. An increase in customer retention of 5% can increase profits by as much as 95%.[2] A small tweak in a service offering have large potential to gain new customers and increase customer retention while contributing significantly to the bottom line. By soliciting customer feedback at key interactions during the customer journey, businesses gain more insight on customer behavior. With advanced analytics capabilities, customer-experience leaders gain rapid insights [3] to build customer loyalty and make employees happier. They also achieve revenue gains of 5 to 10 percent while reducing costs by 15 to 25 percent within two or three years.
COVID-19 impact on Customer Experience
With the Coronavirus pandemic, B2B customers’ buying habits and interaction expectations have changed quickly. McKinsey & Company [4] published a research paper and noted these three major changes:
Not every B2B company has cut spending, according to researchers. About half will cut spending up to 25% in the short-term however more than a quarter will increase spending by 25%.
B2B companies think digital interactions – from sales to service to support – digital engagements will be twice as important than prior to the pandemic.
Most customers will not be in their offices. As many as 90% of B2B sales have become virtual through online meetings, phone calls or IM. The best part: Many customers and their sales and service professionals think the virtual experience is just as good as – if not better than – the in-person experience!
New technologies impacting Customer Experience
The evolution of new technologies like Internet of Things (IoT), AI, ML and Augmented Reality (AR)/ Virtual Reality (VR) have created a paradigm shift for businesses. These technologies have provided a competitive advantage to businesses by providing faster decision-making capability, improved operational efficiency, automated business processes and personalized engaging customer experiences. IoT has provided a silver bullet solution for providing connected experiences with brands across electronic devices. Machine learning is helping businesses to precisely evaluate customer behavior and predict demand. AR and VR are allowing businesses to provide superb virtual experiences to their customers.
Ecommerce Trends in 2020
With intelligent chat-bots like Alexa, new customer engagements like conversational commerce and social commerce are rapidly evolving and continually simplifying customer engagement. Alexa has brought in a new touchpoint for businesses to serve customers using voice search with natural language processing. AR/VR has allowed businesses to create virtual tours, virtual retail showrooms and highly personalized virtual experiences.
Technologies used to help create these experiences include [5]
A-Frame is an open source web framework for building applications enabled with Augmented Reality and Virtual reality. Ml5.js and Tensorflow.js are libraries for machine learning to develop Machine Learning model in JavaScript
Google Dialogflow
Google Dialogflow is a natural language understanding platform used to design and integrate a conversation user interface into a mobile app, Web application, bot, etc. to allow customers to use voice commands. The developed application can be deployed in various channels like the Google Assistant, or through social channels like Facebook, Twitter, Slack etc.
MagicMirror is an open source modular smart mirror platform. With a growing list of installable modules, the MagicMirror allows you to convert the mirror in your bedroom or bathroom into your personal assistant. Wearables like Fitbit have profound business impact on the healthcare and sports sectors.
Improving and Automating the Digital Presence
Content is king for digital presence since it plays a significant role in a brand's overall marketing strategy. Content marketing costs about 62 percent less than traditional marketing tactics, and generates about three times as many leads, which is a win-win situation.[6] Customers and prospects may encounter content regarding your brand indirectly, without having the intentions of seeking it out through blog posts, social media or webinars. Content marketing allows you to position your brand as differentiated one that is knowledgeable about your industry and acts as an innovative thought leader. Offering content about new ideas or industry trends and innovative problem solving will give you an advantage over competitors. Marketing tools like Adobe Experience Manager, SAP Marketing Cloud and SAP Context Driven Services can automate customer segmentation, content creation and campaign execution to improve and personalize the customer experience in real-time.
Recommended Customer Experience Solution
SAP C/4 HANA is a best-in-class customer experience platform to provide engaging experiences to the customer. AI and Machine Learning capabilities are included to predict customer behavior and offer personalized engagements to customers. SAP C/4 HANA, a suite of five tightly integrated cloud solutions including SAP Marketing Cloud, SAP Sales Cloud, SAP Commerce Cloud, SAP Customer Data Cloud and SAP Service Cloud, help brands to create engaging experiences. SAP C/4 HANA deployed with Qualtrics Experience Management allows evaluating the experiential data (why things are happening) with the operational data (what’s happening) to fully understand the voice of the customer. Automating the process to listen, understand and act to customer feedback in near real-time will drive loyalty and revenues.
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