Defining and measuring the customer experience (CX)

customer satisfaction measurement

Customer experience (CX) refers to all the experiences a customer has with your business. This could be during one transaction, or over several years.

A company’s ability to deliver a positive experience each and every time that someone does business with it sets that company apart in the customer’s mind. Research shows that customers do business with companies they like, so the more positive experiences a customer has with your business, the more they’ll continue to do business with you!

Defining the customer experience

To define your customer experience, it’s important that you know what your customers want and need. The best way to find this out is to ask, through primary market research. Make sure you know what customers are looking for, what their pain is, what’s missing, how you can solve their problems, and where you can fill a gap in the marketplace.

Once you know what your customers need, you can visualize the best ways to satisfy those needs through customer experience. Start by putting yourself in your customer’s shoes – revisit our earlier posts about the Empathy Map here and here to get started.

Delivering a great customer experience

Once you’ve got a good handle on what your customers really want and need from you, it’s time to deliver on that experience. Then, ask the customer if they had the experience you wanted them to have. A Harvard Business School study of large companies in the US found that over 70% of business executives believed their companies delivered a good customer experience. However, when the researchers asked the customers of those businesses, the story was quite different. Only 8% of customers felt they had the experience they were looking for. Not good!

Why the difference? To us, it seems like the big companies weren’t communicating with their customers — either they were designing the wrong customer experience, or they weren’t delivering the experience properly. In any case, the customer walked away with a less than positive impression and the business loses future sales potential.

So, how do you measure customer satisfaction?

Common metrics to measure customer satisfaction

Net Promoter Score (NPS): The NPS is an index that ranges from -100 to 100 that indicates how willing a customer is to recommend a company’s products or services to others. It divides customers into three categories: Promoters (loyal + satisfied), Passives (satisfied + unenthusiastic), and Detractors (unsatisfied + unenthusiastic).

First Contact Resolution (FCR): FCR gives an indication of how well you resolve customers’ support requests the first time by tracking the number of interactions in a case. Tracking your FCRs helps you see what you can do to keep the average number of interactions low.

Customer Satisfaction Score (CSAT): CSAT is the average score awarded to your brand according to customer answers on a survey. Small businesses use CSAT scores to determine how satisfied customers were with specific products or services.

 

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How businesses can help during the COVID-19 pandemic

online cooking

If your small business is doing okay, all things considered, during the current COVID-19 pandemic, you may be wondering how you can help others in your community. Here are some ideas:

  • Can your small business utilize its unique difference to help others? For example, an event planning business is ideally suited to organize a virtual charity fundraiser. Your restaurant can make videos featuring step-by-step recipes using pantry staples. Fitness coaches can host live classes online. Bakeries can deliver yummy treats to those who need a little pick-me-up. Get creative!
  • Look for ways you can continue to support your employees and keep them safe during this time, when they may be feeling high amounts of job insecurity. For example, you can offer paid sick leave or bonuses, connect them with community resources, or make sure their telecommuting situation is working as smoothly as possible. If your employees are still coming into a physical workspace, ensure sanitation and social distancing practices are top-notch.
  • If your business is continuing to operate in a limited capacity, ensure you have proper safety and hygiene procedures in place for your customers. Not only will you help slow the spread of the virus, but you’ll be showing your customers you care about them.
  • Support other businesses as often as possible. For example, move your Friday team lunches online, and offer employees restaurant gift cards so they can have their lunch delivered.
  • Reach out to your customers and community in unique and fun ways. For example, maybe your purse design business can host a Q&A hour on Instagram Live or Facebook Live, where people can ask questions and get to know you and each other.

Here are some other ideas we saw in small business blog posts and articles:

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How to offer warranties in your small business

How to offer warranties in your small business

It happens to the best of us – no matter how good your product or service, sometimes a customer or client won’t be happy. What do you do? This is why your small business should have warranties.

What is a warranty?

A warranty sets expectations for your product or service. It helps your customers understand what they can do if they run into an issue, and it helps you cover your bases. Warranties show that a company is willing to stand behind what they sell.

Some examples of warranties include a full refund, partial refund, store credit, or even no refund.

How to set up a warranty

The length of the warranty you offer depends on your industry and your products or services. Sometimes, products will come with warranties from the manufacturer. Warranties on services cover satisfaction with the service.

Here are some questions to ask when creating warranties:

  • Will your warranty cover all products or just certain ones?
  • Will your warranty terms differ across products or services?
  • Should the same warranty be offered in all markets, or just some? This decision will rest on local laws.
  • What must the customer do or not do to keep the warranty valid?
  • Who will honour the warranty – the manufacturer, wholesaler, retailer, or dealer?
  • Who should be responsible for responding to a warranty claim?

Warranty claims involve a cost to the small business, but the potential cost to your business of providing no warranty at all can be very significant.

A new small business may find it hard to estimate the problems that could come up with its product or service. We believe warranties are an important aspect of a small business, but you can take steps to minimize their necessity. Careful field-testing of a new product or service will help to take care of product reliability or liability issues once your product or service sees the light of day.

As always, we recommend that you have a lawyer or other professional review your product or service warranty program, so you can get advice on the extent of risk your business is potentially carrying.

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What’s the most important entrepreneurship skill?

small-business-planning

Our small business training was created after surveying 200 uber-successful Canadian entrepreneurs. These entrepreneurs were asked what business skills they believed made the difference between success and failure for them.

Today, we’re sharing some of the most vital skills entrepreneurs need to know, and which ones GoForth entrepreneurs were surprised they didn’t know.

Branding

This is the importance of developing a small business brand, including brand experience, identity, image, pillars, equity and delivery. Brand pillars are the most important values and characteristics of your small business that you want to communicate in your branding. The brand experience is strategically developed to provoke thoughts, interact with, and persuade people to take action. Make sure your client’s brand experience is consistently positive!

Read more about brand experience.

How to build a financial plan

Most entrepreneurs don’t spend enough time understanding the numbers in their business — but the lead entrepreneur really should know the numbers inside and out. If you’re easily stumped by simple questions about profit, costs, or break-even, then others will lose confidence in your ability as an entrepreneur. Investigating financial feasibility before you start your business and while your business is running will help you tweak your business model canvas, which will raise your confidence that you’ll run a profitable company.

Customer experience

Customer experience (CX) is the sum of all experiences a client has with your business, either during one transaction or over the lifetime of your relationship. Research shows that customers do business with companies they like, so the more positive experiences a customer has with your business, the more they’ll continue to do business with you. To define your customer experience, it’s important that you know what your customers want and need.

Read more about CX.

How to manage a small business

Successful leaders are teachers, learners and visionaries. Your employees will look up to you for motivation, guidance and also as a model for their own performance. In order to lead effectively, you should consider your business and its staff to be like a team. Everything that’s done should focus on strengthening and improving your team. According to Bond Street Newsletter, these five skills are the essential toolkit for effective leadership in a small business: 1) Empathy; 2) Decisiveness; 3) Collaboration; 4) Planning; and 5) Support.

Government compliance

Staying on top of government compliance can greatly improve a business’ odds of success. There are income tax requirements, GST/HST requirements, rules for working with self-employed contractors, and documents and policies required if you become an employer. It’s not all doom and gloom, though. Government compliance can lead to benefits for you as an entrepreneur. For example, there are many tax deductions that self-employed entrepreneurs can make, as well as employees and commissioned sales employees.

The importance of creativity in business

Creativity is the ability to view the world in new ways, to find hidden patterns, to make connections between seemingly unrelated things and to find solutions. This conceptual combination is seen often in the history of some of today’s most unique product innovations. For example, in 1941 George de Mestral, a Swiss engineer, returned home from a trip with his dog, and noticed burrs sticking to the dog’s fur. Like a good engineer, Mestral examined the burrs under a microscope. There, he noted their hundreds of “hooks” that caught on anything with a loop, such as clothing, animal fur, or hair. And with that, the idea for Velcro was created!

What about you? Are there small business skills you wished you knew before starting your entrepreneurship journey? To learn these, plus dozens of other vital small business skills, check out our online small business training!

 

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How exactly do you measure customer satisfaction?

customer experience cx

As a small business owner, you know that delivering an outstanding customer experience is one of the most important things you can do to be successful.

But – how exactly do you measure customer satisfaction?

Here are a few common customer experience metrics

Net Promoter Score (NPS): The NPS is an index that ranges from -100 to 100 that indicates how willing a customer is to recommend a company’s products or services to others. It divides customers into three categories: Promoters (loyal + satisfied), Passives (satisfied + unenthusiastic), and Detractors (unsatisfied + unenthusiastic).

First Contact Resolution (FCR): FCR gives an indication of how well you resolve customers’ support requests the first time by tracking the number of interactions in a case. Tracking your FCRs helps you see what you can do to keep the average number of interactions low.

Customer Satisfaction Score (CSAT): CSAT is the average score awarded to your brand according to customer answers on a survey. Small businesses use CSAT scores to determine how satisfied customers were with specific products or services.

You should now have a much better understanding of what customer experience measurement is and why it’s important for you to prioritize its measurement. Awesome!

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