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4 min read

The importance of customer experience in competitive differentiation

Today, consumers expect much more than just products and services: they are looking for a unique experience that makes them feel that they are listened to, that their observations and views are considered, and that their frustrations and expectancies are considered. 

Customer experience is key in preventing products and services from becoming standard, thus achieving competitive differentiation. It is a crucial part of any company's success. In this article, I invite you to learn what customer experience is, its benefits, and the best practices to provide your customers with an excellent experience.

customer-experience

Index

What is behind this concept?

Before delving into the subject and learning how to stand out from the competition, it is necessary to know about customer experience (CX). According to Gartner, it is defined as the customer's perceptions and feelings due to the unique and cumulative effect of interactions with a supplier's employees, systems, channels, or products. In other words, it is the customer's experience when interacting with a company over time and how that experience influences their perception of and loyalty to the brand. This interaction occurs from the first contact to the post-sale and any other point during the process.

>>Six dimensions to understand customer experience<<

We can expand on this with the following example: Javier is looking for a gift for their partner and wants to give them a spectacular necklace. He researches different websites for the best options, finds an online store, and decides to enter the store's website. Javier notices that the page is eye-catching, easy to navigate, explains the features of the products, and has videos, not only photos and comments that other customers have left. Finally, he finds the necklace and makes the purchase. Once the purchase is processed, he receives the order confirmation through email, the purchased ticket, warranty, and care for the product.

Subsequently, follow-up emails are sent to him to track the order status. Once Javier has the product he purchased, there is also a note from the company thanking him for the purchase and saying that they are at his disposal if he requires additional support. Javier is satisfied with his purchase from this company since the process was easy, safe, transparent, and personalized, increasing the likelihood of repurchasing. He will recommend this company to his acquaintances.

>>Customer Experience in 2023<<

A second example is a shoe store whose organizational culture is customer-centric. Its product return policy is 365 days, so that customers can return shoes anytime during that period without much hassle. This store covers the return shipping costs, so it is okay for their customers to make the return. They have a 24/7 call center that provides support for their customers. Their employees are encouraged to exceed expectations to help customers and create a positive shopping experience. This shoe store has proven that focusing on the customer and providing an exceptional shopping experience can achieve long-term customer success and loyalty.

Below, I show you how the sum of elements, such as service and product customization, process agility, and exceptional customer service, is essential to ensure your company's success in the marketplace and stand out from your competition.

service and product customization

Customer Experience versus Customer Service

It is common to confuse customer service and customer experience or to think that both concepts are the same mistakenly, but they are not. Customer service is only one part of the customer experience; customer service is the attention and assistance companies provide to their customers before, during, and after a purchase. Customer service aims to ensure customer satisfaction, solve customer problems and answer customer questions quickly and effectively.

Competitive advantages of customer experience

In the previous sections, we briefly explained customer experience and how to avoid confusing this term. Here I list the most relevant advantages of having a focus on customer experience in your company:

  • Being a favorite brand: As mentioned at the beginning, it is not only about creating unparalleled products and services that are out of the standard; it is about becoming a favorite company for everything that goes along with acquiring the good.
  • Quality feedback: Having effective and constant communication favors the creation of links between your company and customers, so the feedback is honest and genuine from the customer. Encouraging active listening to your customers will help your company improve and innovate products and services. 
  • Customer loyalty: Customer experience can also be an effective tool for building loyalty with existing customers. If a company provides a consistent and positive experience, customers will be more satisfied and likely to buy again.
  • Reputation: A good reputation for your company allows you to position yourself above your competitors, offering a quality product or service, trust, and support. Your customers, feeling secure and confident, will be able to be spokespersons for your company.
  • Customer loyalty:  A positive customer experience will help you retain existing customers. A satisfied customer is less likely to switch to competitors and purchase their services or products. It is more expensive to attract new customers than to retain existing customers. Loyalty is built over time and is an emotional process.
  • Revenue generation: All the effort your company makes to provide a positive customer experience should be reflected in higher revenues by generating more sales and thus expanding and expanding your company's operations.
shop customer experience

In addition to this, within your company, you can count on these advantages as well:

  • Reduce costs: The company's operating expenses are significantly reduced, with adequate management of the purchasing processes, which implies fewer problems in the future by not having to contact for claims or provide refunds for not meeting the expectations you wanted. 
  • Manage risks: Providing a personalized and close customer experience will help you detect problems early and prevent them from becoming unmanageable snowballs. Avoiding financial losses and reducing the negative impact on your brand's reputation.
  • Flexibility to market changes: A company that focuses on providing an excellent customer experience is more adaptable to changes in the market. By being in tune with the needs and desires of customers, the company can adjust its products and services accordingly and be better prepared to face competition and changes in market trends.

It is important to note that some companies offer products or services purchased sporadically or only once. Yet, providing a pleasant experience is vital because it implies higher revenues for the company and a series of benefits such as those just seen.

>>
Design Thinking & Customer Experience Design<<

Best practices to achieve a good customer experience

Last but not least, I leave you with a guide of steps to achieve and maintain a good customer experience in your company:

  • Constantly evaluate your customers' feedback/comments and ideas.
  • Create an omnichannel experience.
  • Focus on personalizing your buyer personas.
  • Ensure you provide excellent customer service, which is paramount to the customer experience.
  • Establish metrics that determine where to focus customer experience efforts.

Every interaction, whether a marketing outreach, person-to-person interaction in a store, a digital presence, or a customer service interaction, feeds into understanding and developing an excellent customer experience. 

If you have any questions or would like to expand your knowledge of any of the points explained throughout this article, don't hesitate to contact us at Imagineer, and we can review this topic in more detail.

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