It is time for a stake in the ground again.
Of late, every vendor who used to play in the CRM arena positions itself as a „customer experience“ player and claims that its software “delivers customer experiences”. This is quite a claim. It also raises a lot of important questions.
What is “customer experience”? And who is responsible for it? How does “customer experience” differ from “customer experiences”? What is the difference to customer engagement? How do they relate to customer expectations? And then there is “customer success”, too. What about customer satisfaction? Finally, how does CRM fit into the picture?
As you can see, there is a lot of scope for confusion. And this confusion has definitely materialized.
So, let’s start with some definitions
Friend and industry luminary Paul Greenberg has ventured here already back in 2015 (and before). Still, as time moves, the industry evolves, and things tend to get forgotten, let me take another stab at it. The more fundamental concepts are perhaps engagement, followed by customer expectation and customer success.
You can also watch my take on customer engagement vs. customer experience in this 90 second video.
According to Merriam-Webster, engagement is “the act of engaging” or “the state of being engaged”. Well, let’s look at the verb, then. Amongst some other meanings, engage is defined as “attract and hold by influence or power” or “induce to participate”. So, engagement is essentially about interacting with each other. This is usually mutual, but mandatorily involves communication, reaching out, by the company. Importantly, this engagement can also happen the product or service itself, for instance by unpacking or using it. Customer engagement is an input. One needs to engage in order to achieve any result, whether it is the desired one or not. Of course, any engagement targets at a specific output. Some of these outputs are relevant for the customer, mainly whether the engagement solves the customer’s problem and how the customer feels in the process. I have written about this already some years ago in my article there’s no customer experience without customer engagement.
Of course, there are outcomes of an engagement that are relevant for the vendor as well. Think of advertisements, which may increase the share of mind or even lead to a purchase transaction.
The dictionary defines success as “the degree or measure of succeeding” or “a favorable or desired outcome”. In a business context, customer success is whether applying the solution that the customer hired from the vendor leads to solving the customer’s problem. Of course, there is a little more to it, like the level of effort it requires to come to the solution. Or, spoken in terms of money, the price of hiring and applying the solution. There are lots of facets. Usually, there are a number of KPIs that help determine the level of customer success. Of course, these KPIs are somewhat influenced by expectations. If there are low expectations, the bar for achieving success is quite low, and conversely, high expectations can lead to the KPI values being set very high. As a rule of thumb, however, success can be measured on a quite objective scale.
The important part is, that customer success is one of the important outputs to the input that customer engagement is. Customer success is also one ingredient to customer satisfaction. If the customer’s problem isn’t solved there is obviously not much satisfaction. How you can address customer success is something that I have recently addressed in my post about the customer success movement.
Whenever we interact with someone or something, we have a number of formulated and a set of unconscious expectations about what is to happen, and how it is about to happen. Or, in the words of Merriam Webster: We “anticipate or look forward to the coming or occurrence of” something.
Customers’ expectations are a key input to customer experience. Our expectations heavily influence our perception of how adequate an engagement is. Expectations also, and more importantly, shape how customers perceive the experience that we have during and after the engagement. Lastly, to some extent, the customers’ expectations determine what they consider a success.
Customer experience and customer experiences
First, let’s again have at a good look at the dictionary. Merriam Webster defines experience as “the act or process of directly perceiving events or reality”. So far, so generic.
Looking at customer experience itself, it is a good idea to look at two persons who are deep into this business.
According to Paul Greenberg, “customer experience is how a customer feels about a company over time”.
Bruce Temkin defines it in a bit more transactional context as the “perception that customers have of their interactions with your organization”.
In other words, customer experience is the result of a sequence of engagements or interactions. These engagements use services and goods and are designed toward achieving an individual experience as the desired outcome. In so far, I disagree with Pine and Gilmore who position an experience as an offering.
Regardless of that, customer experience is the result of individual customer experiences (note the plural) – good or bad – that the customer had with a company. It is formed by interacting – engaging – with the company.
This makes it clear who is responsible for the experience: The customer. The experience is solely in his or her realm, or as Temkin says, it “is in the eyes of the beholder”. No vendor, let alone a piece of software, can deliver an experience. Delivering an experience requires being in control of the customer’s complete context. How likely is that?
This is why both, customer experiences and customer experience, are an outcome.
However, both, customer experiences and customer experience feed back into shaping the customer expectation. This is why it is so dangerous to strive for “consistently exceed customer expectations”. The expectations will simply rise to a level that makes it impossible to meet them. This has an obvious negative result on the customer experience and customer satisfaction.
Customer satisfaction is the third output. It is mainly determined by customer success and the customer experience. It will not be high if the successful resolution is there, but the experience is poor. It will be even lower if there is no success. It will be highest if both, success, and experience meet or exceed expectations. And yes, satisfaction feeds back to expectation, too and it influences the overall customer experience. A happy customer is more likely to disregard a poor individual experience or not achieving success than an already unhappy customer.
Customer relationship management
What does the software do instead? It creates and delivers the event or the reality that gets perceived by the customer. These systems are systems of engagement and not systems of experience.
As Merriam Webster says it: They engage, attract, and hold by influence.
And here, we have the role of CRM and CRM systems. By common understanding, they have become systems to manage the business operations related to the customer. They are the foundation for good engagements and good customer experiences across all interactions. Engagements and experiences then can feed back data to the CRM systems that enable a virtuous circle via positive engagements. And the only part that can be controlled by the offering company is the engagement. All other parts are solely in the eyes of the beholder, the customer.
Figure 1: The relationships between engagement, expectation, success, experience and satisfaction
So, let’s be honest: All CX vendors actually sell engagement software. But then experience sounds cooler than engagement. And the term CX has a bit more of mystery attached to it.