You likely have heard the term “customer experience” or CX for short, and thought, “of course we want to continually improve and offer the best customer experience possible.”

But, what does Customer Experience (CX) actually mean? And how do you improve it?

And what about all these other acronyms customer experience experts toss around? NPS, VoC, DCX, CSAT?

Understandably, it can be overwhelming.

That’s why we’ve put together this customer experience glossary.

The following three sections cover all the terms you’ll need to know to pave the way for your organization’s customer experience strategy:

Core Customer Experience concepts

These are commonly used, fundamental terms that show up in the customer experience space. Let’s start off by defining “Customer Experience” itself.

What is Customer Experience (CX)?

Customer Experience is loosely defined as the overall perception of your brand in the eyes of your customer — built on the accumulated interactions they have with your business across various platforms.

That means it isn’t limited to what a customer thinks about your product, the visual elements of your website, or the ways in which are able to interact with your customer service team — it’s all of it. It’s how they feel about their entire experience with your brand, both offline and online.

Further reading and resources:

Digital Customer Experience (DCX)

Digital customer experience refers to the overall perception of your brand in the eyes of your customer, based on interactions across digital platforms.

As you may have noticed, the main distinction between DCX and CX is the focus on experiences via digital channels. But, we think it’s important to single out, as many businesses struggle to keep up with digital transformation (think brick-and-mortar retail versus ecommerce) and its impact on their customers and internal operations.

The digital customer experience specifically must be considered when tackling customer experience management as a whole.

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Customer Experience Management (CEM or CXM)

Customer Experience Management is an inter-departmental effort to understand customer sentiment throughout the entire customer journey, and act on that intelligence to deliver improved experiences.

A company’s ability to continually deliver improved customer experiences has a dramatic effect on the entire sales cycle. It can help you increase sales at the beginning of the customer journey and provide better support to build customer loyalty at the end. In order to deliver great experiences for your customers, you’ll need insight as to what it is that they expect.

But, what if customers don’t proactively share their expectations with you? What if they hardly understand what they are looking for themselves? And what if you have valuable customer insight already, but it is trapped within a siloed department at your company?

Customer experience management helps you find a solution to all those problems through a customer experience program, which we’ll be discussing next.

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Customer experience program

A customer experience program refers to the tools and processes used to implement your customer experience management strategy.

A customer experience program should be unique to your organization. It requires that you align your team on a customer-centric vision and collectively understand who your customers are and how your relationship with them evolves over time.

The goal of a customer experience program is to gather customer experience intelligence, uncover customer insights from that data, and take action to close the loop and improve customer experiences through customer experience design.

Further reading and resources:

Customer sentiment

Customer sentiment is how customers feel about your business. It could be how they feel about a specific interaction, or about your brand overall.

There’s an important distinction between understanding how the customer feels and whether they take any action. For instance, a customer could feel frustrated with your checkout process and still purchase your product. However, would they come back to purchase again, or go to a competitor?

Customer sentiment answers the question “how are customers feeling when they interact with my company?” so you have additional context around present and future customer behavior.

The key to evaluating customer sentiment is a critical CX measurement: customer satisfaction.

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Customer satisfaction

Customer satisfaction is a measure of how well a company’s products or services meet or miss customer expectations.

Customer satisfaction is at the core of the human-to-brand experience, but is notoriously difficult to measure since it is an emotion.

Companies most commonly turn to metrics such as Customer Satisfaction Score (CSAT) and Customer Effort Score (CES) to accomplish this, relying on customer surveying to collect customer satisfaction feedback and calculate these scores.

Further reading and resources:

Customer delight

Customer delight is a company’s ability to surprise their customers with an experience that goes above and beyond, exceeding expectations.

When expectations are met, you have customer satisfaction. When expectations are exceeded, you achieve customer customer delight, which is what will truly set you apart from the competition and increase customer loyalty.

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Customer loyalty

Customer loyalty is the ongoing, positive relationship established between a business and its customers, characterized by repeat business.

What’s more, your most loyal customers may also tell their family and friends about your company. They are your most valuable customers, as they drive brand advocacy.

Further reading and resources:

Brand advocacy

Brand advocacy is when customers recommend businesses they like across their network, including family, friends and co-workers.

These customers refer new business through word of mouth because they think others will benefit from a relationship with your company.

Despite our age of Yelp reviews and Twitter rants, word of mouth still has a significant impact on purchasing decisions. In fact, 92% of customers say that a word-of-mouth recommendation is the top influence in their purchase decision.

So how do you build customer loyalty and turn customers into brand advocates? Start by measuring satisfaction for your most important customer touchpoints with customer journey mapping.

Further reading and resources:

Customer journey mapping

Customer journey mapping is a visual representation of the various interactions and touchpoints a customer has with a company.

Because every engagement with your brand is an opportunity for your business to delight (or disappoint) your customers, you want to ensure every customer interaction is the best it can be.

Customer interactions are singular, unique points in time when a customer engages with your brand. What a customer journey map does is plot out each of these interactions as a touchpoint.

These touchpoints may or may not involve human-to-human interaction. Whether customers are adding their favorite items to their digital shopping cart or making a purchase in-person, every interaction can be an opportunity to build a more personal relationship.

Customer journey maps are vital to understanding different interactions as customers come into contact with your company, product, marketing messaging, and/or employee through any channel or device.

Determining the positive (or detrimental) effect of any changes made to these touchpoints requires you to start evaluating and measuring customer experiences.

Further reading and resources:

Measuring the Customer Experience

Customer expectations for CX are rising faster than companies’ efforts to meet those expectations, so it is important for businesses to gauge the success of their CX efforts. The following CX terms will help you do this.

Customer intelligence

Customer intelligence is the collection and analysis of customer data for a holistic understanding of your customers that evolves with them over time.

With customer intelligence, you’ll not only understand the “who, what, when, and where” of customer behavior, you’ll also understand the “why.” Understanding why is key to making strong business decisions that ensure your company will stand the test of time.

Customer intelligence can be broken down into two categories: quantitative data from customer analytics, and qualitative data from customer feedback. Let’s start with customer analytics.

Further reading and resources:

Customer analytics

Customer analytics is the tracking and visualization of customer behavior data, measured in numerical values or counts, in order to uncover insights that help inform better business decisions.

The data collected in customer analytics is quantitative data — or numerical data. Here are examples of a few important quantitative customer analytics metrics to know:

  • Churn rate: also known as customer attrition, is the rate at which customers or subscribers stop doing business with a company or service.
  • Retention rate: The percentage of customers that remain customers over a given time period.
  • Customer Lifetime Value (CLV): The measurement of a customer’s total revenue value to a company over the lifespan of the relationship.

Customer analytics can serve as a great starting point for checking the pulse on your overall customer experience, but don’t stop there.

Collecting written feedback directly from your customers can be just as, if not more important, to uncovering key insights to improve customer experiences.

Further reading and resources:

Voice of the Customer (VoC)

Voice of the Customer (VoC) is a methodology used to collect written or spoken feedback from customers, whether directly provided through customer surveys and focus groups, or indirectly acquired from monitoring customer word of mouth on channels such as social media, forums, and review sites.

The data collected in Voice of the Customer efforts is qualitative data — written or spoken word. The most impactful customer feedback comes directly from the customers. Customer experience survey methodologies such as Net Promoter Score (NPS), Customer Satisfaction Score (CSAT), and Customer Effort Score (CES) help you gather more direct customer feedback.

Beyond the qualitative feedback provided, these customer experience survey methodologies provide quantitative scores that help your organization benchmark and improve experiences over time.

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Net Promoter Score (NPS®)

The Net Promoter Score or Net Promoter System (NPS®) is a customer experience survey methodology and metric used to measure customer loyalty through first-hand feedback.

The methodology starts with asking a single question: “‘How likely are you to recommend [company/product] to a friend or colleague?” Customers answer on a scale of 0-10 (not likely to very likely).

The second half of the NPS survey is a free-form follow-up question that allows customers to provide valuable detail on their previous answer.

Customers are then segmented into three groups according to their numerical response to the 0-10 rating question: Promoters (score 9-10), Passives (score 7-8), and then Detractors (score 0-6).

Subtracting the percentage of Detractors from the percentage of Promoters yields the Net Promoter Score. The score can range from as low as -100 (if every customer is a Detractor and would not recommend your business) to a high of 100 (if every customer is a Promoter and wants to refer your company to a friend).

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Customer Satisfaction Score (CSAT)

Customer Satisfaction Score (CSAT) is a customer experience survey methodology and metric that measures customer satisfaction with your products or services.

This methodology evolved from market research surveys, and is easy to understand, simple to use, and can be rich in insight.

By asking your customers to rate on a scale of 1-5 how they feel about the goods/services received, you get a trackable score that maps to how satisfied your customers are.

When aiming to reduce friction for the customer in potentially cumbersome processes, data derived from the CES survey can help you find a solution.

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Customer Effort Score (CES)

Customer Effort Score is a customer experience survey methodology and metric used to measure the effort a customer makes when interacting with your company (e.g. getting a question resolved, purchasing a product).

The theory to this methodology is, the lower the effort, the happier the customer. CES asks questions like, “How easy was it to resolve your issue?” and is typically measured the same way as CSAT, with a single-question survey using a 1-5 scale.

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Customer insights

Customer insights are hypotheses made from interpreting both quantitative and qualitative customer data and applying context to gain a deeper understanding of how customers think and feel about your company, product, or service.

In order to improve customer experiences, you need to know what to improve. What are the specific touchpoints that customers are having issues with? What holds customers back from recommending your product to others?

Customer experience surveys and customer analytics help you collect data on these touchpoints. After deriving insights from this data, the next step is implementing solutions that improve your customer experience.

Further reading and resources:

Improving Customer Experiences

You’ve learned the core customer experience concepts and the terms related to measuring customer experience. Here are CX terms that focus on taking action on customer experience insights and feedback to make meaningful improvements.

Customer Experience Design (CXD)

Customer Experience Design is the designing of products and services based on customer insights to ensure every customer touchpoint delivers on the promises laid out by your company.

It’s worth mentioning that although User Experience (UX) is related, it is only a part of Customer Experience Design. Whereas UX pertains mainly to a user’s experience as they navigate your product, CXD emcompasses UX as well as everywhere else customers engage with your company.

Further reading and resources:

Customer Relationship Management (CRM)

Customer Relationship Management is the processes, strategies, and tools that your company uses to oversee, manage, and improve interactions with new and existing customers.

“CRM” is most commonly thought of as a type of software, but Customer Relationship Management (CRM) is more than that. It includes:

  • Strategy: The company’s overall approach to handling customer relationships.
  • Processes: The ways company employees handle all customer interactions and ensure they’re following the company’s CRM strategy.
  • Technologies: The tools used to record customer interactions and analyze them for constant improvement.

When you combine Customer Experience Management with your CRM strategy, the result is a highly efficient system for incorporating customer feedback into your day-to-day customer interactions to close the loop and better meet the needs of your customers.

Further reading and resources:

Closing the loop

Closing the loop is the process of taking action on customer experience feedback and directly following up with those who provide the feedback.

Here are a few common ways to close the loop on customer feedback:

  • Inform Customer Experience Design decisions: Uncover customer insights from the feedback that lead to decisions on how to design improved customer experiences.
  • Fix critical issues that create detractors: Follow up with customers who had a poor experience to improve their perception of your company, and hopefully turn them from an unhappy customer into a fan.
  • Gain value from promoters: Keep in contact with satisfied customers to maintain a positive relationship and encourage brand advocacy. This is also a great way to source customer testimonials that provide valuable social proof for your marketing efforts.
  • Strengthen relationships with passive customers: Customers that fall in the passive category from an NPS survey can be a good source of valuable insight on how to improve your brand. Proactively engage them to learn how to go from a mediocre experience to a stellar one.

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Conclusion

Now that you have this customer experience terms glossary at your disposal, you are ready to dive into the world of customer experience management and continually improve customer experiences.

Next up, dive deeper by learning all about the various customer experience survey types. Then, kickstart your customer experience program by sending your first customer experience survey.

The Delighted platform makes it easy. Do everything from creating and sending your first survey, to analyzing customer feedback and closing the loop, all from one platform. Sign up for a free trial and start collecting customer feedback today.