Customer experience

Understanding what customer experience is and why it’s no longer enough.

What is customer experience? And why it’s evolving

Typically, when people talk about customer experience (CX) they mean traditional sales and marketing touch points along the customer journey (for example, attentive store clerks in attractive stores and simple and beautiful apps and websites). In the past, when executed well, CX investments have yielded good results: customer retention and acquisition, increased sales and loyalty.

But the world has changed. How we interact with brands has evolved and so too has customer experience. Even before Covid-19, digital was already impacting how we all live, shop, work and play—and the pandemic has upended things even more. Many of the consumer behavioral changes we are seeing today are likely to stay with us for a long time, possibly forever. Some have been in motion for years. Many have now been accelerated.

All of this affects customer experience.

Right now, we’re on the brink of an experience renaissance. CX is not going away, but its value proposition is stalling because many of the fundamentals of CX are now commonplace and no longer enough for differentiation and growth. A mandate of every organization must be to deliver exceptional experiences for their customers. This renaissance is galvanizing companies to push beyond the CX philosophy and reimagine their entire business through the lens of experience.

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The numbers tell the story about why CX is no longer enough

Research conducted by Adweek and Accenture Interactive found that 80% of brands think they deliver a superior customer experience but only 8% of their customers agree.

80%

of brands think they deliver a superior customer experience.

8%

of their customers agree.

With such a huge disconnect between expectation and reality, pushing beyond CX has never been more vital–it simply isn’t enough to meet customers’ expectations.

Understanding customer experience

Customer experience is many things, but it can broadly be described as the perception a customer or a B2B company has of a brand. These perceptions can lead to life-long loyalty to a brand.

Imagine you’re a business looking to place beverage vending machines in your offices. The beverage retailer can offer you a one-size-fits-all experience, such as showing you pictures of various beverage displays. But a better approach would be to use augmented reality (AR) or virtual reality (VR) to create a bespoke, personalized and customized experience so that you can see exactly how each type of machine would look in your office space. Because of this great customer experience, you and your business colleagues are happy, and your business will use the same retailer next time you want a vending machine.

This evolution from CX is called the Business of Experience (BX)

In many ways, BX is the inevitable consequence of the fact that we had been defining the domain of customer-centricity too narrowly as a set of touch points over the past 20 years. Now, customer-centricity needs to be the driving force throughout an entire company in ways that most organizations have yet to embrace.

And while embracing BX is the future of business, it’s still important for us to have an understanding of what CX is in order to thrive in the coming years.

Every interaction is important

It’s vital that brands remember that every interaction people and businesses have with them elicits some sort of emotion. Whether good, bad, happy or sad, the feelings people experience are then associated with that brand. This can result in your customer asking some all-important questions: To buy or not to buy? To love or not to love? To return or not return?

Brands who want to increase customer acquisition, customer loyalty, customer engagement and drive growth need to think about delivering more exceptional experiences. With so much at stake, brands need to ask: is great CX enough to meet customer expectations and elicit positive emotions?

With so much at stake, brands need to ask: is great CX enough to meet customer expectations and elicit positive emotions?​

Beyond great customer experience: Delivering exceptional experiences

Twenty years ago, the answer to “what is great customer experience?” would have been a straightforward explanation about optimizing touchpoints, mapping out customer journeys, and designing and producing covetable products that customers want.

But today, how we interact with brands and what we need from them has transformed exponentially.

A brand that gets experience right knows what its customers’ expectations are and makes them a reality. If the divide between expectation and reality is too vast, it can result in bad word-of-mouth, zero customer retention and loss of sales.

As customer expectations have changed, CX has moved from fulling wants and needs to meeting these increased expectations—and these expectations cross all kinds of boundaries. Today, people compare experiences between diverse brands in different spaces. A person who has a positive online experience buying a jacket raises their expectation for all online interactions for how they buy everything: groceries, cars, even healthcare. For brands, there are no free passes based on industry boundaries.

With expectations continuously changing, it takes a new type of mindset to create customer experience strategies for the 21st century. Customer obsession is a must–brands need to adopt a new way of thinking and become a Business of Experience.

With expectations continuously changing, it takes a new type of mindset to create customer experience strategies for the 21st century.

Who is responsible for customer experience strategies?

Historically, CX was limited to the Chief Marketing Officer’s (CMO) or the Chief Operating Officer’s (COO) purview with different functions in the business operating in siloes focusing on their own priorities.

Let’s take a quick look at how traditional CX thinking has informed how leaders and functions within an organization think about their customer experience strategies:

  • CEO: prioritize maximizing profitability
  • Marketing and brand: focus on making people want things
  • Sales: focus on the product the company wants to sell
  • Product development: create products based on market research that are easy to use.
  • Talent: use traditional metrics based on employee performance within a function (onboarding, annual reviews, etc.)
  • Tech and IT: focus on enabling business processes at greater scale
  • Operations: focused on providing efficiency for the company that often limits growth
  • Supply chain: focus on moving products and goods to consumers.

Align every person around delivering exceptional experiences

As you can see above, every department and function have their own priorities, targets and metrics to fulfill their CX goals. With blinkers to the rest of the company, each department has a specific customer experience strategy template which they execute without seeing the bigger picture – i.e., the incredible benefits of organizing your whole business around unearthing and serving big, unmet consumer needs.

To remain relevant and compete in today’s ever-changing world, customer experience strategies need to be top of mind for every stakeholder in your business. From the CEO to every C-level executive and leader inside both front- and back-office functions, everyone needs to be invested in shifting their thinking about experience. What’s more, every person in your organization needs to be unified in their approach and 100% customer obsessed.

A more holistic approach

With all these changes a big question is how important is customer experience in 2021 and beyond? CX has evolved, but that doesn’t mean the importance of customer experience is diminished. Consumers still expect seamless UX, easy interactions and positive service, but the value proposition is stalling because so many of the fundamentals of CX are now commonplace.

For more than 25 years, designers everywhere have been keeping a keen eye on customer experience trends and they’ve been making incremental improvements to touch points–norms have been well established. From banking onboarding journeys for new customers to how clothing should be presented online, it’s increasingly difficult for brands to differentiate themselves with customer experience alone.

A more holistic approach to CX is needed. Businesses have traditionally focused on just optimizing customer touchpoints around product and service. In the past this has been a successful approach to increase sales and loyalty. Today, it’s no longer enough. The graph below shows how savvy leaders need to embrace a more holistic approach and organize the whole business around experience.

Every person in your organization needs to be unified in their approach and 100% customer obsessed.

The future of customer experience is the Business of Experience

As we move forward into 2021, brands are looking for ways to harness the changes the world is experiencing to emerge stronger and more prepared for the road ahead.

This is a pivotal moment for the C-suite. Leaders who push beyond CX strategies and redefine their organizations, not just by which products or services they sell and offer, but by the experiences they deliver will emerge stronger and ignite growth in their organizations.

To deliver these exceptional experiences, companies need to harness the power of their customers’ data and embrace technological advances to create experiences which respond to people’s new, often unmet, and ever-changing needs.

To achieve this, a big, bold mindset reset is needed: Welcome to the Business of Experience, the gold standard for the rest of the 21st century.

Explore more about the Business of Experience and find out how you can increase customer satisfaction, market differentiation and make meaningful disruption.

Leaders who push beyond CX strategies and redefine their organizations, not just by which products or services they sell and offer, but by the experiences they deliver will emerge stronger and ignite growth in their organizations.

Case studies

Working with Subway, we devised an operating model that continuously optimizes customer experiences.

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