What is Customer Experience?

When we discuss with people about what Lumoa is and what we do, a very basic question gets asked surprisingly often: what is customer experience? This is the short and sweet definition I like to use: Customer experience refers to how customers perceive their interactions with your company. I didn’t invent the definition by myself, but proudly copied it from Forrester Research. I like the definition: it is simple but manages to capture all the key things. Customer experience is constructed in a direct or indirect interaction with your company but it always involves the subjective response of the customer. Therefore, you can never fully determine it.  

Direct contact typically takes place during the purchase, use, and service. It can include customer visiting your website or social media channel to do some research before making the purchase decision. It is impacted not only by the quality of your product or service but also by the expectations the customer happens to have towards them. Indirect contact can mean word-of-mouth recommendations or criticisms your customer happens to hear, advertising, reviews, etc. Therefore, it is built as a sum of how customers engage with your brand.

As a company, you can influence but not perfectly define what your company’s customer experience will be like. Experience involves emotion and unexpected behaviors. The perception is never exactly as you anticipate. But no company can afford to give up in the face of unpredictably.

Building a good customer experience is not easy. In an often-cited Bain study (Bain & Company 2005), only 8% of customers said they received a superior customer experience, while 80% of the companies surveyed believed that the experience they were providing was superior. This is a stark contrast indeed! This is where customer experience management comes into picture as a key way to close the gap between these two numbers. I’ll discuss the customer experience management in my next blog post.