Customer Experience

Updated on March 26, 2024
Article byShrestha Ghosal
Edited byShrestha Ghosal
Reviewed byDheeraj Vaidya, CFA, FRM

What Is Customer Experience (CX)?

Customer experience (CX) involves the process of evaluating and enhancing a customer’s interaction with the business. It is an essential part of Customer Relationship Management (CRM). The process aims to convert potential customers into loyal consumers and expand the company’s customer base. It results in increased sales and overall business growth.

Customer Experience

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CX includes the collective experience that a customer encounters while interacting with a business. These experiences influence their perception of the company and the brand. This process focuses on improving the brand reputation in the competitive marketplace, which enables the company to stand out from its market competitors.

Key Takeaways

  • Customer experience (CX) is a strategy that involves enhancing a customer’s interaction with an organization. It allows a business to gain new customers and hold on to the existing ones.
  • This process encompasses three crucial components: discovery, engagement, and delivery. All these components are essential in providing value to a customer, and any shortcomings in these stages may impact a consumer’s perception of the brand.
  • A business must evaluate and analyze its CX measures to ensure customer satisfaction. It must recognize the strengths, weaknesses, opportunities, and inefficiencies and build on that information to provide a satisfactory consumer experience.

Customer Experience Explained

Customer experience is a CRM process that focuses on developing and improving a customer’s interaction with a company. It enables the company to attract new customers and retain existing ones. A good customer experience ensures that the business gets a boost in the brand image, which drives sales and revenue growth. It also results in the growth and expansion of the business.

The customer experience strategy comprises three key elements, which are discovery, engagement, and delivery. The discovery process enables a company to grab the attention of new customers. The engagement process ensures that the customer has a satisfactory experience while interacting with the business. This step is crucial for turning interested individuals into actual consumers of the product or service. The delivery stage focuses on assisting and supporting the customer after making the purchase. It enables the business to retain customers for future business needs.


Let us go through the following examples to understand this process:

Example #1

Suppose Jake started a cafe that he named “Dreams Cafe.” The cafe implemented specific measures to ensure that its customers had a good experience. It organized live music for the customers every weekend and conducted events where the customers could participate if they wished to. While paying the bill, the customers were offered complimentary chocolate from the cafe. Dreams Cafe also had a suggestion box where customers could write their suggestions for improvement. Moreover, the cafe had an online portal where customers were asked to rate the services and the quality of the food they were offered. This is an example of a customer experience strategy.

Example #2

The CEO of Amazon, Andy Jassy, announced in an interview with Jim Cramer of CNBC that generative artificial intelligence will alter the company’s consumer experience. It will also contribute to the discretionary customer business. Andy suggested that generative artificial intelligence will make the business more accessible to developers and business users alike. It will actively contribute to societal good. Amazon boasts of being able to predict what the consumers want to purchase. However, with the incorporation of generative AI, the process will be further enhanced. It will also make Amazon’s virtual assistant, Alexa, more advanced.

How To Improve?

The strategies for improving customer experience are:

  1. Businesses must understand how customers respond to their consumer experience initiatives. It must ascertain the strategy’s strengths and weaknesses by conducting customer surveys and research. This knowledge will allow them to identify the customer’s needs and expectations of the brand.
  2. A company must recognize and work towards addressing its inefficiencies and customer pain points. They must identify the areas that need improvement and develop strategies to meet those concerns for an exceptional consumer experience.
  3. An essential component of improving customer experience includes ensuring that the consumer’s experiences align with the brand’s values, ethics, and missions. The brand must deliver what it has promised to its customers, as delivering value is necessary for retaining loyal consumers.

Some recent trends in customer experience include the following:

  1. Businesses gather and analyze customer data to gain deeper insights into customer behavior and experiences. They use those insights in their decision-making processes to improve the consumer experience.
  2. Another emerging trend in customer experience involves using artificial intelligence (AI) to address staff shortages in a company. Businesses use AI to complete automated tasks that require little to no human intervention.
  3. Companies engage in customer loyalty programs to ensure their retention. They invest in customer loyalty experiences as these programs enable businesses to maintain a stable consumer base during a financial crisis.


The importance of a good customer experience is as follows:

  1. This process promotes active listening, where customers express their opinions and experiences with the brand. This information can help a business enhance its product and service offerings and improve its delivery system.
  2. A good experience with a business can turn potential consumers into loyal customers. It can aid in boosting a company’s customer retention rates.
  3. CX enables a business to acquire new customers and expand the existing consumer base. It helps generate new business, which eventually leads to revenue growth and further business expansion.
  4. It enables the company to create a product or brand differentiation. This differentiation allows the company to stand out from its competitors and gain a competitive advantage in the market.

Customer Experience vs Customer Service vs User Experience

The differences between the two are as follows:

Customer Experience

  1. This process is a group of all the interactions and experiences that a customer undergoes with a business.
  2. It influences a customer’s idea and perception of a business and helps build the brand’s reputation.
  3. It primarily concentrates on the relationship between the customer and the brand. The process centers around how the customers engage with and think about the brand.

Customer Service

  1. Customer service is the assistance and support that businesses provide to their customers. It starts from the point where customers initially contact the business and extends up to months and years after the final purchase.
  2. This process aims to guide and help customers in making a purchase decision. It enables customers to gather knowledge about a product or service and make an informed buying decision.
  3. Effective customer service helps a business attract new customers, boost retention of existing customers, increase sales and revenue growth, and expand on a loyal customer base.

User Experience

  1. User experience is a process that involves all activities an end-user engages in associated with a specific product or service.
  2. It also includes the user’s overall workflow and all the steps the user follows before and after using the product.
  3. Furthermore, it focuses on how the customer interactions with the business will evolve along with an evolution in the customer’s usage and with a change in the product and company.

Frequently Asked Questions (FAQs)

1. How to measure customer experience?

Assessing this technique has two methods: the businesses either directly survey the customers after their interaction with the business or monitor first-party customer support information. It helps them understand the quality of CX the employees provide to the customers. The metrics to calculate CX include Customer Satisfaction Score, Customer Effort Score, and Net Promoter Score. Additionally, metrics like First Response Time, First Contact Resolution, and Average Resolution Time can also be employed to evaluate this process.

2. What does a customer experience manager do?

These managers usually have the responsibility to manage and mentor the customer service teams. They ensure that the employees provide excellent support and service to the customers, and they follow the customer-centric strategies of the business. They also work with the management and other executives to formulate customer management strategies and enhance the business plans.

3. Is customer experience part of marketing?

This process is one of the most crucial elements of marketing in an organization. Any interaction of the customer with the organization must align with the values and ethics that form the marketing materials of the business.

This article has been a guide to what is Customer Experience. We explain its examples, how to improve it, importance, & comparison with customer experience. You may also find some useful articles here –

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