GUIDES

Why customer experience is key to sales growth

Personalize the customer experience and drive incremental sales growth with Lexer.

What is Customer Experience (CX)?

Customer experience definition

Customer experience is defined as the total journey taken and opinions formed by consumers while engaging with your brand. Every customer touchpoint—from the first sight of a paid social advertisement to the service provided by sales associates in-store—is an opportunity to offer a differentiated experience that keeps customers coming back for more.

By optimizing your brand’s approach to customer experience management, you can acquire better customers, grow lifetime value, and improve retention rates.

Customer service vs. customer experience

Customer experience encompasses the entire journey a customer takes with your brand throughout the customer lifecycle, including every sale, email, website visit, ad click, return, and more. Customer service refers to isolated interactions in which customers contact you directly for guidance and support.

In that sense, customer service is a subset of customer experience. The customer service you offer should be as personalized and relevant as possible to contribute to a positive customer experience overall.

Customer success vs. customer experience

Customer success is also a subset of customer experience. While customer experience refers to the total perception a customer has of your brand throughout their lifecycle, customer success involves actively helping your customers make the most of your product. In other words, customer success facilitates a positive customer experience by ensuring that your customers use and maintain your products properly.

Why is customer experience important?

The importance of customer experience in retail cannot be overstated. The customer experience, whether in-store or online, can make or break your business. Happy customers buy more, tell their friends, and offer greater value to your business without driving up costs over time. On the other hand, unhappy customers will offer little to no lasting value to your business and, if their experience is poor enough, can wreak havoc on your brand reputation.

Here are some customer experience statistics to demonstrate its importance:

  • 20% percent of your customers will contribute 60–80% percent of your sales—meaning that offering an exceptional customer experience to this top 20% can have a major impact on profits.
  • For most brands, more than 2/3rds of lapsed customers are opted out of email—so your customer experience management strategy needs to extend beyond email communications to paid media, ecommerce, brick-and-mortar, and even direct mail.
  • Customers who are subscribed to email communications often have a 20–50% greater lifetime value than those who are opted-out—improving your customer experience and encouraging more customers to engage with your email communications can increase revenue and loyalty.
  • On average, 50%–80% of customers are one-time buyers—by improving your customer experience, you could upsell more one-time buyers into repeat purchasers, effectively growing the lifetime value of your customer base.
  • Two-time buyers are 9x more likely to make repeat purchases than one-time buyers—so the customer experience you offer that leads to the second purchase is a critical milestone in reducing churn and driving retention.
  • The probability of selling to an existing customer is 60–70%, whereas the probability of selling to a new customer is only 5–20%—so investing in customer experience can increase your upsell and cross-sell rates.
  • Customer acquisition costs have increased 50% in the past 10 years—by improving the customer experience, you can retain and upsell existing customers to increase your profitability while keeping your acquisition costs low.
  • Building customer lifetime value is the top priority for today’s brands and retailers—and the best strategy for building CLV is improving your customer shopping experience so customers want to keep coming back for more.

And because customer experience is so critical, the importance of customer experience management goes without saying. In order to maintain, measure, and optimize the customer experience across all sales channels, you need to have a focused and data-driven customer experience strategy in place.

How to improve customer experience in retail stores

Today’s retail consumers expect frictionless, personalized, convenient brand experiences at every touchpoint. Improving the customer experience in retail stores is just as important as improving it in digital channels.

Here are some ideas to improve your customer experience in brick-and-mortar stores:

  • Combine your customer data for a complete and accurate single view of your customers.
  • Create data-driven customer personas to understand, segment, and communicate with each type of customer more effectively.
  • Use retail clienteling tools and software to capture in-store data and offer tailored recommendations to boost order value in your retail stores.
  • Retarget customers online with personalized product recommendations to close the loop between digital and physical retail.

To drive profitable customer loyalty, you need to optimize the digital customer experience as well. Here are some ideas to improve your online shopping experience:

  • Using your existing customer data and direct customer feedback from surveys, evaluate the customer experience journey to understand the quality and cohesiveness of the current experience you’re offering.
  • Focus your customer acquisition strategy on only high-value audiences to increase both immediate and long-term returns while keeping acquisition costs low.
  • Retarget one-time buyers at the right time to encourage a second purchase. Identifying the right time—during the period known as the “buyer’s high” following a customer’s first purchase—will require customer data analytics.
  • Track customer retention metrics and early indicators of churn. By understanding what signs customers exhibit in the weeks and months before they churn, you can intervene early to improve retention rates. Predictive analytics can improve retention by helping you identify and prevent churn ahead of time.
  • Optimize the omnichannel customer experience by orchestrating seamless customer journeys across every channel. This omnichannel strategy will require you to have access to complete, centralized customer data from every channel, as well as the ability to easily activate cross-channel campaigns.
  • Orchestrate automated customer experiences to offer personalized engagement at the right time in the right channels, without stretching your time-constrained team and limited resources.  

Digital transformation: The key to outstanding customer experiences

The common theme for all of these CX ideas, both in-store and offline, is data. In order to improve the customer experience you offer, you need to have comprehensive customer data combined and enriched into one easy-to-use platform such as a Customer Data Platform (CDP), as well as the ability to quickly gain insights from that data, segment audiences, and activate omnichannel campaigns.

Best retail customer experience examples and case studies

What makes a great customer experience? Generally, a great customer experience is similar to an experience you’d have with your best friend: respectful, caring, personalized, and memorable. Whenever you hear about amazing customer experience stories, the common theme is always that they’re highly personalized and relevant to the individual.

Here are some examples of good customer service in the retail industry:

  • A customer named Alex browses your online store and places a pair of sneakers in their shopping cart but doesn’t check out. The next day, your brand sends them an automated email saying, “Hi Alex, looks like you left a pair of sneakers in your shopping cart. Do you have any questions we can answer about sizing, color, or other products to pair it with?”
  • One of your highest-value customers decides to visit one of your brick-and-mortar stores. As they check out, your in-store sales associate looks up their customer profile using a CDP. Based on the customer’s previous purchases and engagement history, your sales associate is able to offer tailored product recommendations to boost their order value and delight the customer.

Whether in-store, online, or a combination of both, great customer experiences begin and end with data. To read real-life, data-driven customer experience case studies, click here to browse our CDP case study library.

Measure customer experience

Customer experience optimization — or, the process of analyzing, iterating, and improving the customer experience you offer — is only possible with effective customer experience analytics.

Let’s go over how to measure the customer experience.

First, you need to measure the proper customer experience metrics. Some of the most important customer experience KPIs and metrics include:

Along with these “hard” metrics, you’ll also want to keep track of “soft” indicators of customer experience, such as product reviews, comments on social media, and any trending topics or anecdotes among your sales and services team.

Once you’re able to properly track each of these metrics, you need easy-to-use measurement and visualization tools to analyze this data and draw meaningful conclusions. Lexer’s measurement and reporting product, track, allows you to build flexible, actionable reports to understand the impact of your data-driven strategies on the overall customer experience. With the ability to track any metric against any customer segment over time, you can make better decisions and improve business performance with speed, ease, and confidence.

Click here to learn more about measuring the impact of a CDP.

Customer experience solution and consulting

To succeed in the future of customer experience, you need the right solutions and expertise to manage all of your data. Customer experience tools can help you improve the customer experience you offer, drive profits, and grow loyalty.

However, there are a number of different customer experience solutions on the market, and different vendors offer different value and use cases. In the Customer Data Platform space alone, there are 4 main types of CDPs with different strengths and weaknesses.

The best customer experience management platforms allow you to integrate customer data from any system, unify and link this data to individual customer profiles, analyze and segment profiles for in-depth customer intelligence, and activate segments and engagement strategies across every channel. Additionally, the best vendors will offer consulting and support services to help you make the most of the platform.

For example, Lexer’s Customer Data and Experience Platform is the solution of choice for leading brands like Quiksilver, Igloo, Nine West, Rip Curl, Supergoop!, and more. As the only CDP built for retail, we help the world’s most iconic brands drive incremental sales from improved customer engagement.

If you need more help deciding on the right solution for you, click here to read “Checklist: How to choose a customer data platform (CDP).” Once you’ve decided on a CDP vendor, you need to build a compelling and actionable CDP business case that resonates with stakeholder.

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📄 Data-Driven Retail

📄 Customer Insights Platform

📄 Retail Data Systems

📄 Retail Data Solutions

📄 Clienteling in Retail

📄 Retail Clienteling Software

📄 Customer Loyalty and Strategy

📄 Customer Retention Metrics

📄 Retail Analytics Tools

📄 Customer Segmentation Tools

📄 Customer Insight Tools

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