Customer Service vs. Customer Experience

Over the past decade, the term “customer experience” has grown into one of the most discussed concepts in the modern business world, but many still hold an incorrect opinion that “customer experience” is just another word for “customer service.” This blog will explain the difference between customer service vs. customer experience, define customer experience in general, provide good and bad customer service and customer experience examples from the real world, and offer customer experience KPIs to measure the type of experience your customers are getting.

February 08, 2022

Not many people want to contact customer service. Usually, that means something went wrong, and it makes things worse when a customer doesn’t get what they expect. To avoid this problem, many companies are rethinking the business-consumer relationship to focus on another concept: customer experience. 

Firms that lead in customer experience report 5-10% higher revenues and 15–25% lower costs. Long hold times, constant transfers, and having to repeat oneself are just a few factors that impact satisfaction. In this blog, we’ll define the differences between customer service vs. customer experience and offer ways you can offer better experiences for your customers. 

Define Customer Experience vs. Customer Service

People often view customer service and customer experience as synonymous, but they’re not the same.

Gartner defines customer service as "retaining and extending customer relationships once a product or service is sold." It’s about making sure a customer is satisfied with a single transaction, usually facilitated in a contact center.

To define customer experience, Gartner says it is "the sum of all the interactions a customer has with a company” and "the customer's perceptions and related feelings caused by the one-off and cumulative effect of interactions with a supplier's employees, systems, channels or products."

Customer experience covers the whole customer journey. This includes customer service, but that’s not all. Customer experience consists of all interactions a consumer has with the company through the contact center, in-store, marketing materials, and even while using your product or service.

 

 

 

The Impact of Customer Experience on Customer Service Contact Centers

For many businesses, the contact center is the primary provider of customer service; therefore, contact centers play a bigger role in adding value to the customer experience.

Let’s break this down. The defining characteristics of great customer service and experiences develop over time. With digital transformation on the rise, "innovation" and "adaptability" are at the forefront. 

The channels we use also evolve, with experts claiming that digital channel adoption fast-forwarded seven years during the first eight weeks of the pandemic. This shift forced companies to accelerate their strategies and turn transformation plans into adoption seemingly overnight as a way to meet new customer service expectations. 

Before, businesses viewed contact centers as a platform to provide customer service. Now, with the focus on customer experience and minimizing the impact of pandemic-related disruptions, companies are enhancing their customer service contact centers to support the needs of individuals and businesses operating from home.

Consumers have learned from experience that contacting support can be time-consuming. Therefore, reducing the effort required by customers to access support increases the likelihood that a customer will be loyal. Consequently, failing to provide a positive experience can easily fuel disloyalty. Contact center solutions can better meet customer needs if they are easy to navigate, quick, offer complete answers, and feel in control. 

 

 

Customer Service and Customer Experience Examples

To better understand the differences between customer service and customer experience, it is beneficial to look at examples of excellent customer service and customer experiences.

"Great" customer service accounts for the little details: unique gestures such as gifts, frequent thank you's, the anticipation of customer needs, or involvement in social causes. Customer service truly stands out when businesses include a level of personability that makes customers feel valued and more than just a number. 

For example, a customer flying JetBlue once tweeted that he was upset he hadn't been able to get his coffee before boarding. Within seconds of sending the tweet, JetBlue contacted its customer service team at Boston's Logan airport. The customer service team promptly delivered a mocha to the customer, all before takeoff, which resulted in the customer raving on Twitter, promoting the airline in a way that otherwise may not have been possible. JetBlue saw the opportunity to go above and beyond and deliver high-quality service to the customer.

In this example, JetBlue tailored its customer service to satisfy one customer. The team prioritized a single transaction, which boosted the airline's overall reputation.

To better understand customer experience, consider Zalando’s 100-day return policy. This policy limits long return lines after holidays and eases anxiety to return products immediately. Another example is Starbucks’ loyalty program, which uses gamification to make earning points fun. Plus, the Starbucks app remembers your order, as do many Starbucks baristas. These policies are designed to impact every customer touchpoint, from online shopping to in-store purchases to returns and beyond.

Customer experience can encompass lengthy return policies, loyalty programs, personalization, and more. Businesses should add multiple levels of convenience for customers. This convenience might include installing self-serve ordering systems at fast-food restaurants or engraving a new pair of AirPods. Customers appreciate feeling as though businesses have thought of many ways to make things easy and interactive for customers.

Customer Experience KPIs

Are there any key performance indicators (KPIs) that track customer experience? The measurement of customer service and customer experience KPIs share many similarities, including customer surveys and contact center metrics like call abandonment rate, the average speed of answer, and first-call resolution.

These metrics are used as customer service KPIs to track how a customer feels about one interaction with the brand. As customer experience KPIs, they track data across the entire customer lifecycle. Below are several more customer experience KPIs to measure. 

CSAT

Customer satisfaction (CSAT) is a core metric companies use to measure customer experience. Companies typically gauge satisfaction following an interaction with a support representative or after a customer uses a product. The KPI is based on the customer's perception of the quality of service.

Many companies use surveys to track CSAT. The survey includes one or more variations of the question, "How would you rate your overall satisfaction with the [goods/service] you received?"

Respondents use the following 1 to 5 scale to answer the question:

  1. Very unsatisfied
  2. Unsatisfied
  3. Neutral
  4. Satisfied
  5. Very satisfied

The business then averages the survey results to get a composite CSAT score, which is typically a percentage.

NPS

Net Promoter Score (NPS) is another standard indicator companies use to measure their customers’ propensity to recommend the brand. NPS is calculated from the question, “Would you recommend this company to a friend/colleague/relative?”

Based on the response, customers are put into one of three categories according to their degree of enthusiasm:

  1. 0-6: Detractors – Dissatisfied customers who can negatively impact the brand.
  2. 7-8: Passives – Satisfied customers vulnerable to competitive offerings.
  3. 9-10: Promoters – The most loyal customers who will continue to buy the brand’s products while advising those around them to do the same. They will become ambassadors of the brand.

The final score is then calculated by subtracting the percentage of detractors from the percentage of the promoters. Brands can easily compare their NPS score to their direct competitors and market leaders.

CES

Another measure of customer experience is the Customer Effort Score (CES). This is the third most prevalent method of calculation that involves customer input. CES uses a 5-to-7-point scale system and asks, "How easy was it to solve your problem today?" 

CES is a transactional metric that helps businesses analyze a single customer interaction's complexity or simplicity. This makes it a customer service KPI, foremost, but a valuable measure improving customer service improves one aspect of customer experience.

Churn and Retention Rate

Retention rate is another KPI that indicates how well a business can maintain its customer base over a period of time. Churn rate is closely related to retention, as churn reflects the number of customers who have ended their use of a business's services or products over a particular period. The goal is to have as low a churn rate and as high of a retention rate as possible. 

Customer Lifetime Value

As the name suggests, customer lifetime value (CLV) is a KPI that measures a customer's entire relationship with a company. Since it is less expensive to keep an existing customer rather than recruit a new one, CLV is important, as it informs businesses on how they can increase the value of existing customers. CLV is typically seen as an average. Companies can calculate it over a specific period, or over the entirety of a business and consumer relationship.

 

 

Tips to Improve Customer Experience KPIs

When it comes to contact center solutions, there are technologies that companies can use to solve the issues mentioned previously, such as long hold times, repetitive communications, and slow response times.

In addition to conducting surveys to assess customer needs and implement changes, companies can boost customer experience with AI-powered technology. More and more customer service and support teams are using AI to facilitate day-to-day operations. In fact, 55% of established companies have already started investing in AI technology. Moreover, AI bolsters a company’s ability to develop creative and strategic initiatives and manage the customer experience in a proactive way.

AI-powered contact center solutions and personalization of customer service boost the effort to increase satisfaction by speeding up the service process and collecting data on customers to better understand and serve their needs.

AI features like skill-based routing remove the inconvenience of transferring between multiple reps. Instead, the customer reaches the right person the first time. Personalization of service and quick answers come into play as contact center AI can direct inquiring customers to a strong knowledge base filled with answers pulled from a history of others with the same issue or query.

AI-powered support chats and AI-assisted support agents like our conversational AI tool, Mosaic, can solve customer requests in much less time than human agents alone. AI-enabled assistants create contextual and personalized interactions without help from a human agent. Companies can automate common customer inquiries, minimize wait times, establish easy AI-to-agent handoff, lower average call costs and increase customer retention. As a result, companies will improve the customer experience and see greater customer loyalty and satisfaction.

Conclusion

Understanding the differences between customer service and customer experience is the key to increasing business success. Businesses can maintain this success by analyzing customer experience KPIs, listening to customer feedback, and incorporating new technologies that meet modern customer needs.

In today’s climate, it is essential that companies prioritize the customer experience. AI-enabled contact center solutions can help boost the customer experience. By empathizing with customers and providing what they need, companies ensure a healthy relationship with customers that will benefit both parties in the long term.

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