You won’t be wrong if you use these terms interchangeably, but there are differences in the connotations of each, especially within the context of marketing.
Customer Experience is the broadest definition, encompassing service. Per Forrester, Customer Experience measures three things from the perspective of the customer:
Was it useful?
Was it usable?
Was it enjoyable?
As marketers, we often measure these three areas this way, for purposes of ROI:
Useful = Consumption
Usable = Retention
Enjoyable = Loyalty
Consider this quote (below) from Microsoft.
“If you provide a positive customer experience, your customer should become more engaged.”
Customer Service is generally assumed as the transactional events that make up an engagement and influence the overall experience. Study.com defines this as the “act of taking care of the customer’s needs by providing and delivering professional, helpful, high quality assistance before, during and after the customer requirements are met”. This definition assumes the combined impression of a series of events. This is almost identical to how we describe Experience, but the connotative difference is we generally refer to Customer Service in the context of post purchase and on a per incident basis.
A more modern twist on this would also have to include:
“…. the customer requirements are met across any channel of the customer’s choosing and available at any time the customer chooses to engage”.
And a more progressive measurement would encompass not only were the customer expectations met, but how did the customer feel following the interaction. Did the customer feel the interaction respected their time, that communication was simple and straightforward, that the company cared if the resolution provided was satisfactory?
Read more about Arke’s thinking on Customer Experience:
Customer Service tends to be a look backward to past experiences and typically associated to problem solving, while Customer Experience tends to be a look forward as a journey that threads through the entire customer lifecycle.
As we breakdown Customer Experience, we can also consider definitions of Customer Engagement, a closely related term to Experience. According to MaritzCX, engagement is “the emotional connections that a customer develops during repeated and ongoing interactions with a company”. This could be either a positive or negative engagement. The most common measure of Customer Engagement is via Net Promotor Score (NPS).
NPS is a popular measure of Experience, but ‘Customer Effort Score’ is a more precise measure of the overall Experience. Customer Effort Score (CES) is calculated by the percentage of customers that at least “somewhat agree” (those who give a 5 or above) that the company ‘made it easy’ to resolve their issue. There’s a much bigger opportunity to build loyalty if customers can move out of active disagreement or neutral territory.
Marketers are continually challenged to associate ROI with CX.
Three ideas on how to measure that are:
1) ROI of New Customer Marketing:
Compare CAC (cost of acquisition) of a referred client compared to a non-referred client by tracking lead source, number of touches and length of sales cycle.
What would ROI look like if you could reduce your CAC by 50% for 25% of your pipeline?
=100 customers at $100ea/CAC= $10,000 marketing budget
=25 customers at $50ea/CAC + 75 customers at $100ea/CAC= $8,750
This averages $87.50/ea, a drop of 15% in CAC
That would mean the same Marketing Budget of $10,000
would net you 15% MORE new clients.
2) ROI of Retention:
Track the CAC of a new order vs. a repeat order, including frequency and recency of ordering. You could apply a similar formula as above to your retention ROI.
3) ROI of Loyalty:
Track cost of Product Development using Customer Feedback vs. only internally sourced research. There could be many ways to calculate this ROI, but one of the best benefits is that you have a pre-built pipeline off the customers that provided the feedback that influences your product development and helps to lower your CAC (See #1 ROI of New Customer Marketing).
We’re always happy to discuss customer experience. If you have comments about this blog or a business problem you’d like to discuss, reach out; we’ll be happy to set up some time to chat. firstname.lastname@example.org | www.calendly.com/arke