12.1 Identifying a real-world customer experience challenge
7 min read•august 15, 2024
Customer experience challenges can make or break a company's success. From inconsistent service across channels to lack of personalization, these issues frustrate customers and erode loyalty. Poor responsiveness and confusing interfaces further compound the problem.
Addressing these challenges is crucial for improving satisfaction and loyalty metrics. By tackling issues like unmet expectations and lack of proactive communication, companies can boost retention, lifetime value, and Net Promoter Scores. This ultimately impacts revenue, costs, and competitive advantage.
Customer Experience Challenges
Common Issues Across Touchpoints
Top images from around the web for Common Issues Across Touchpoints
What is health systems responsiveness? Review of existing knowledge and proposed conceptual ... View original
Is this image relevant?
Introduction to Integrated Marketing Communications | Principles of Marketing View original
Is this image relevant?
Agile World: September 2014 View original
Is this image relevant?
What is health systems responsiveness? Review of existing knowledge and proposed conceptual ... View original
Is this image relevant?
Introduction to Integrated Marketing Communications | Principles of Marketing View original
Is this image relevant?
1 of 3
Top images from around the web for Common Issues Across Touchpoints
What is health systems responsiveness? Review of existing knowledge and proposed conceptual ... View original
Is this image relevant?
Introduction to Integrated Marketing Communications | Principles of Marketing View original
Is this image relevant?
Agile World: September 2014 View original
Is this image relevant?
What is health systems responsiveness? Review of existing knowledge and proposed conceptual ... View original
Is this image relevant?
Introduction to Integrated Marketing Communications | Principles of Marketing View original
Is this image relevant?
1 of 3
- Inconsistent experiences across channels (website, mobile app, phone, in-person) frustrate customers and erode trust in the brand
- Providing different information or levels of service on various channels confuses customers
- Lack of seamless transitions between channels forces customers to repeat themselves or start over
- Inconsistencies make customers question the reliability and competence of the company
- Lack of personalization makes experiences feel generic and unsatisfying
- Treating customers like numbers rather than individuals with unique needs and preferences
- Failing to tailor content, offers, or recommendations based on customer history or profile data
- One-size-fits-all approaches ignore customer context and miss opportunities to deepen relationships
- Poor responsiveness to customer inquiries, issues, or feedback breeds dissatisfaction
- Slow or lacking responses via phone, email, chat, or social media leave customers feeling unvalued
- Unresolved problems fester and escalate when not addressed promptly and thoroughly
- Inadequate service recovery erodes confidence that the company cares about making things right
- Confusing user interfaces create friction and frustration in the customer journey
- Difficulty finding information, completing tasks, or navigating on websites, apps, or in physical locations
- Unintuitive designs that don't match customer mental models or expectations
- Accessibility barriers that prevent customers with disabilities from having equivalent experiences
Misalignments Between Expectations and Delivery
- Gaps between brand promises and the actual delivered experience lead to disappointment
- Overpromising and underdelivering erodes credibility and trust in the company
- Inconsistencies between marketing messages and operational realities create dissonance
- Failure to meet basic expectations of quality, reliability, and value prompt customers to look elsewhere
- Lack of proactive communication leaves customers feeling neglected and uninformed
- Not keeping customers updated on order/service status, changes, or issues
- Failing to set clear expectations about policies, timelines, and deliverables
- Reactive rather than proactive approach to sharing relevant information and offers
- Missed opportunities to reassure customers, provide transparency, and manage perceptions
Impact on Satisfaction and Loyalty
Influence on Key Customer Experience Metrics
- Customer satisfaction measures how well experiences meet or exceed expectations
- Inconsistent, impersonal, unresponsive, and friction-filled experiences decrease satisfaction scores
- Unmet expectations and neglect further reduce satisfaction by eroding confidence and trust
- Lower satisfaction increases vulnerability to competitive offerings that promise better experiences
- reflects likelihood to continue business and advocate for the brand
- Challenges that decrease satisfaction make it harder to retain customers and earn their loyalty
- Dissatisfied customers more likely to churn and switch to competitors who deliver superior experiences
- Lack of loyalty reduces positive word of mouth and referrals while increasing negative sentiment
- Other key metrics negatively impacted by customer experience challenges:
- Retention/churn rates as at-risk customers leave the company
- Customer lifetime value (CLV) due to reduced longevity, frequency, and spend
- (NPS) as detractors outweigh promoters in likelihood to recommend
- (CES) as challenges make it harder for customers to accomplish goals
Consequences for Business Outcomes
- Revenue and growth impacted by lower acquisition, retention, and share of wallet
- Prospects discouraged from starting a relationship due to poor reputation or initial experiences
- Existing customers encouraged to end the relationship and take their business elsewhere
- Dissatisfied customers less likely to deepen their engagement through cross-sell/upsell
- Operational costs increased by inefficiencies, waste, and remediation
- Time and resources wasted on addressing preventable issues and complaints
- Higher support costs from increased contacts and escalations due to unresolved problems
- Investments in service recovery efforts to compensate customers for failures and rebuild goodwill
- Competitive disadvantage relative to companies delivering better customer experiences
- Loss of market share to competitors who attract and retain customers more effectively
- Difficulty charging premium prices or securing loyalty without differentiated experiences
- Weakened employee morale and increased turnover from dealing with dissatisfied customers
Challenge Selection for Project
Prioritization Criteria for Selecting a Challenge
- Business impact in terms of potential benefits to customer experience metrics and outcomes
- Extent to which the challenge is a driver of satisfaction, loyalty, and financial results
- Magnitude of improvement possible by addressing the root causes and pain points
- Alignment with company priorities and goals around growth, efficiency, and differentiation
- Feasibility of diagnosing and solving the challenge within constraints
- Availability of data and insights to quantify and validate the current state and impact
- Complexity of the people, process, and technology changes required to implement solutions
- Realistic scope and timeline given limitations on budget, resources, and organizational capacity
- Relevance and urgency as perceived by key stakeholders and decision makers
- Linkage to strategic initiatives and executive mandates related to customer centricity
- Visibility and prioritization of the challenge across different levels and functions
- Degree of support and sponsorship secured from leaders who can provide resources and influence
- Suitability as a capstone project based on course objectives and requirements
- Opportunities to demonstrate application of key concepts, frameworks, and methodologies
- Appropriate scope and difficulty to showcase critical thinking and problem-solving skills
- Potential for generating meaningful recommendations and deliverables that add value
Characteristics of a Well-Defined Challenge Statement
- Specific in describing the problem and population in concrete, measurable terms
- Focused on a particular issue, touchpoint, or segment rather than broad generalizations
- Quantified using baselines and benchmarks to objectively size the current state
- Time-bound in specifying the relevant period or planning horizon under consideration
- Actionable in connecting the problem to drivers and solutions under the company's control
- Centered on factors that the organization has power to influence or change
- Grounded in insights about root causes that enable targeted interventions
- Positioned in terms of end states and outcomes to be achieved by taking action
- Meaningful in illustrating the impact on customer and business needs and priorities
- Linked to key customer experience and operational metrics that are routinely tracked
- Framed in terms of costs of inaction and benefits of resolution to create urgency
- Aligned with company mission, vision, and values to tap into deeper purpose and motivation
- Inspiring in rallying stakeholders around an aspirational and transformational vision
- Evocative in painting a picture of the desired future state that appeals to emotions
- Bold in setting stretch goals that challenge the organization to aim higher
- Compelling in answering the "so what" and "why now" to gain buy-in and commitment
Justification for Challenge Choice
Quantitative Rationale and Supporting Data
- Frequency and pervasiveness of the challenge across the customer base
- Percentage or number of customers impacted by the issue over a given time period
- Relative prevalence of the challenge compared to other problems or pain points
- Trends showing the growth or trajectory of the challenge over time
- Impact of the challenge on key customer experience and business metrics
- Satisfaction, loyalty, and advocacy scores for customers facing the challenge versus overall
- Operational indicators (response times, error rates, touchpoints) associated with the challenge
- Financial linkages to revenue, churn, cost to serve, and profitability for affected customers
- Performance relative to external benchmarks and competitive standards
- Comparisons to industry averages or best-in-class companies on relevant metrics
- Assessments of competitive positioning and differentiation on key aspects of the challenge
- Insights from third-party studies or voice of customer research on the challenge
- Potential value at stake and return on investment from addressing the challenge
- Estimates of incremental benefits and cost savings from achieving target improvements
- Calculations of break-even points and payback periods for required investments
- Sensitivity analyses and scenarios showing ranges of potential impact and returns
Qualitative Themes and Illustrative Examples
- feedback expressing frustration or dissatisfaction with the challenge
- Verbatims from surveys, interviews, or unsolicited feedback related to the challenge
- Recurring themes and sentiment patterns across different customer segments or channels
- Specific examples or stories of customer pain points and moments of truth
- Linkages to customer and employee journey maps that highlight the challenge
- Visual depictions of where and how the challenge manifests in the end-to-end experience
- Identification of high-impact touchpoints or interactions that make or break the experience
- Moments of misalignment between customer expectations and actual delivery
- Observations from ethnographic research or in-person experience audits
- Findings from shadowing customers or frontline employees as they navigate the challenge
- Photos or videos that capture the physical environment and emotional states of those involved
- Artifacts or outputs that illustrate the gaps and inconsistencies in the current experience
- Anecdotes or case studies of the challenge's impact on customers and the business
- Real-life examples of customers who churned or decreased spend due to the challenge
- Instances of negative word of mouth or public complaints related to the challenge
- Employee stories of barriers to delivering great experiences and serving customer needs
Key Terms to Review (18)
Chatbots: Chatbots are artificial intelligence (AI) programs designed to simulate conversation with human users, often via text or voice interactions. They play a crucial role in enhancing customer experiences by providing immediate assistance, answering queries, and streamlining communication in various digital platforms.
Churn Rate: Churn rate is the percentage of customers who stop using a company's products or services during a specific time frame. It's a critical metric that reflects customer retention and satisfaction, directly linking to how effectively a business manages customer relationships and experiences across various touchpoints.
Crm software: CRM software, or Customer Relationship Management software, is a tool that helps businesses manage interactions and relationships with customers and potential customers. It centralizes customer information, tracks sales, manages customer service, and analyzes customer behavior to enhance the overall customer experience. By utilizing this software, companies can measure customer lifetime value, optimize retail and e-commerce experiences, identify challenges in real-world customer interactions, and develop a strong customer experience vision.
Customer Effort Score: Customer Effort Score (CES) is a metric used to measure the ease of customer interaction and resolution during a service experience. This score helps organizations understand how much effort customers have to put into getting their issues resolved, influencing overall satisfaction and loyalty.
Customer Experience Framework: A customer experience framework is a structured approach that organizations use to design, implement, and improve interactions with customers throughout their journey. It helps identify touchpoints, gather insights, and establish best practices for enhancing customer satisfaction and loyalty. This framework connects various elements like people, processes, technology, and data to create a holistic view of the customer experience.
Customer feedback loop: A customer feedback loop is a continuous process in which businesses collect, analyze, and act on customer feedback to improve their products, services, and overall customer experience. This loop not only helps companies understand customer needs and preferences but also fosters a relationship built on trust and transparency. It encourages ongoing communication, allowing businesses to adapt based on real-time input from their customers.
Customer journey mapping: Customer journey mapping is a visual representation of the steps a customer takes while interacting with a brand, from initial awareness through to post-purchase experiences. This process helps organizations understand customer needs and emotions at each stage, facilitating a better alignment of services and touchpoints with customer expectations.
Customer loyalty: Customer loyalty is the ongoing preference and commitment of customers to consistently choose a particular brand, product, or service over competitors. This concept is vital in building long-term relationships, enhancing customer retention, and driving repeat purchases, which are foundational elements for creating a positive overall experience.
Customer Satisfaction Index: The Customer Satisfaction Index (CSI) is a quantitative measure that assesses customer satisfaction levels regarding a company's products or services. It reflects how well a company meets or exceeds customer expectations and is often derived from surveys and feedback mechanisms. A high CSI indicates strong customer loyalty and can influence future business strategies, making it essential for companies to track and improve.
Customer Segmentation: Customer segmentation is the process of dividing a customer base into distinct groups based on shared characteristics, behaviors, or needs. This approach allows businesses to tailor their marketing strategies and improve customer experience by targeting specific segments with personalized messages and offerings.
CXPA: CXPA stands for Customer Experience Professionals Association, a global organization focused on advancing the field of customer experience management. The CXPA provides resources, community support, and certification for professionals looking to enhance their skills and knowledge in creating exceptional customer experiences. Through networking and collaboration, members of CXPA are empowered to tackle real-world challenges in customer experience effectively.
Emotional Engagement: Emotional engagement refers to the emotional connection that a customer feels towards a brand, product, or service, influencing their loyalty and overall experience. This connection can be driven by positive interactions, shared values, and a sense of belonging, creating a strong bond that encourages customers to remain loyal. When customers feel emotionally engaged, they are more likely to advocate for the brand, leading to improved customer retention and satisfaction.
Net Promoter Score: Net Promoter Score (NPS) is a metric used to measure customer loyalty and satisfaction by asking customers how likely they are to recommend a company or product to others, usually on a scale from 0 to 10. This score helps businesses understand their customers’ perceptions and improve their overall experience by categorizing respondents into promoters, passives, and detractors.
Personalized marketing: Personalized marketing refers to the strategy of tailoring marketing messages and experiences to individual customers based on their preferences, behaviors, and demographics. This approach aims to create a more relevant and engaging customer experience by utilizing data analytics and technology to understand and anticipate customer needs, thereby enhancing the overall effectiveness of marketing efforts.
Sentiment Analysis: Sentiment analysis is a method used to determine the emotional tone behind a series of words, often applied to understand customer opinions in feedback, reviews, and social media posts. This technique helps businesses gauge customer satisfaction, identify trends in feedback, and enhance overall customer experience by interpreting the sentiments expressed by users. By analyzing data from various sources, organizations can make informed decisions to improve their offerings and customer interactions.
Service Design Thinking: Service design thinking is an approach that focuses on creating and improving services by understanding the needs and experiences of customers, while aligning organizational resources to deliver value. It emphasizes empathy for users, collaboration among stakeholders, and iterative design processes to create seamless and engaging customer experiences. This method connects directly to the culture of an organization, immersive marketing strategies, and identifying real-world customer experience challenges.
Shep Hyken: Shep Hyken is a renowned customer service expert, speaker, and author known for his insights on customer experience and loyalty. His work emphasizes the importance of creating exceptional customer experiences that lead to customer satisfaction and long-term loyalty, which ties deeply into the evolution of customer experience management and the empowerment of employees to deliver those experiences.
Voice of the Customer: Voice of the Customer (VoC) refers to the process of capturing customer feedback and understanding their needs, preferences, and expectations regarding products or services. It is essential for businesses to incorporate this feedback into their strategies to enhance customer experience, improve service delivery, and ultimately drive satisfaction and loyalty. Understanding VoC can help organizations track key performance indicators, address challenges in customer experience, and effectively gather and analyze feedback to meet evolving customer demands.