Customer service and customer experience aren’t just buzzwords that blanket advertising, websites, and offers; they’re turnkey components of any company’s growth strategy. But what do they actually mean? What are the differences?
Customer Service (CS) vs. Customer Experience (CX) – is there a difference? On the surface, they seem like interchangeable terms to describe the same idea, namely meeting customers’ needs in a pleasant and efficient way. However, a closer look reveals that while both play a critical role in a brand’s CX strategy, there are significant differences between them. Companies need to understand these if they want to retain and continuously develop a loyal customer base.
Even before the catastrophic economic impact of the COVID 19 pandemic, the World Bank had predicted sluggish growth in 2020. Now, as economies shrink and businesses struggle to survive, decision makers are realizing that taking customer service (CS) and customer experience (CX) seriously has never been more important.
CUSTOMER SERVICE – THE TRADITIONAL WAY CONNECTING AND MEETING REQUIREMENTS
At the most basic level, customer service is, in the words of Salesforce, “the support you provide to customers both before and after they purchase and use your products or services.” While Forbes defines customer service as “the advice or assistance that a company provides to its customers with the goal of increasing customer satisfaction, usually achieved by answering questions.” While the concept of customer service is fairly simple – as it is a necessary function of any business – its impact can be profound. According to Statista research, 41% of UK consumers name excellent customer service as the biggest driver of customer loyalty. Maintaining a loyal base pays off, as investing in new customers is between 5 and 25 times more expensive than retaining existing customers, according to invesp. As company boards try to find a balance between cutting costs and investing in growth, CS remains the most effective way to drive profits and generate revenue. Hub Spot research shows that 93% of customers are likely to make repeat purchases from companies that provide excellent customer service. In essence, customer service is the best advertising.
CUSTOMER EXPERIENCE – THE SUM OF ALL INTERACTIONS
Customer Experience is a modern reboot of an old principle, building on customer service experiences and adding more expectations that reflect changing lifestyles, different channels and new technologies that shape the habits, needs and goals of today’s customers. In the words of Forrester, a leading market research firm, customer experience describes “how customers perceive their interactions with a company.” Zendesk explains that “customer experience is anything related to a company or business that influences how a customer perceives and feels about it.” In addition, customer experience takes into account three perspectives: Usefulness, practicality and enjoyment. If something is useful, it delivers value; if it’s practical, it’s easy to use; and if it’s fun, it’s emotionally engaging so customers want to keep using it. Business leaders recognize that technological developments have transformed all aspects of the business – CX is no exception. Gartner, the leading consulting firm, believes that technology is an important component of CX initiatives. Gartner’s research identifies key emerging technologies impacting CX projects as:
- artificial intelligence (AI)
- virtual customer assistants and chatbots
- omnichannel customer engagement
- real-time event-driven application architecture
- internet of things (IoT)
Providing a memorable customer experience can have an immediate financial impact, as 78% of customers have withdrawn a purchase due to poor CX, explains Glance, while noting that it takes 12 positive customer experiences to make up for one negative experience. The domino effect of a bad experience should not be underestimated. Salesforce research shows that 62% of customers share their bad experiences with others, which could cause irreparable damage to a brand’s reputation.
CUSTOMER SERVICE VS. CUSTOMER EXPERIENCE DEVELOPING EFFECTIVE STRATEGIES
Both customer service and customer experience help meet customers and expectations while building meaningful relationships that inspire loyalty and encourage word-of-mouth recommendations. However, a major difference between them is that CS is reactive and used when an individual customer is not satisfied, but CX is proactive and aims to reach every customer. Customer service and customer experience are also evaluated differently. While customer service is measured by the Customer Satisfaction Score (CSAT), which assesses how satisfied customers are with the interaction, customer experience is measured by the Net Promoter Score (NPS), which tracks how likely a customer is to pass on a recommendation. Although different, these goals are obviously related. Therefore, customer service vs. customer experience is not the issue. In reality, customer service is simply one piece of the larger customer experience puzzle. By investing and improving CS, management can be sure that their company will improve CX in the process. It’s important to analyze and understand data and know which channels customers prefer to resolve certain situations. Intelligent routing – transferring the caller to the agent with the appropriate skills, enables fast and smooth service for the customer. Rising customer expectations and demands for fast, convenient and personalized support, combined with the need to manage interactions across multiple channels, mean that organizations face significant challenges. It’s all about delivering world-class customer service and rewarding customer experiences. By leveraging cloud technology and implementing largely channel-less solutions, companies can optimize efficiencies and streamline communication processes by linking all interactions (voice, email, social messaging) into a seamless customer journey. A 360-degree customer view, intuitive console, and AI-powered bots provide comfortable conditions for agents who, as brand ambassadors, are ultimately responsible for shaping meaningful customer relationships through high-quality customer service and best customer experience.
SERVICE MAKES THE DIFFERENCE!
