consumer research and customer experience

Customer experience: fundamental premises and implications for research

• Review Paper
• Open access
• Published: 13 January 2020
• Volume 48 , pages 630–648, ( 2020 )

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• Larissa Becker 1 &
• Elina Jaakkola 1  

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Customer experience is a key marketing concept, yet the growing number of studies focused on this topic has led to considerable fragmentation and theoretical confusion. To move the field forward, this article develops a set of fundamental premises that reconcile contradictions in research on customer experience and provide integrative guideposts for future research. A systematic review of 136 articles identifies eight literature fields that address customer experience. The article then compares the phenomena and metatheoretical assumptions prevalent in each field to establish a dual classification of research traditions that study customer experience as responses to either (1) managerial stimuli or (2) consumption processes. By analyzing the compatibility of these research traditions through a metatheoretical lens, this investigation derives four fundamental premises of customer experience that are generalizable across settings and contexts. These premises advance the conceptual development of customer experience by defining its core conceptual domain and providing guidelines for further research.

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For the past decade, customer experience has enjoyed remarkable attention in both marketing research and practice. Business leaders believe customer experience is central to firm competitiveness (McCall 2015 ), and marketing scholars call it the fundamental basis for marketing management (Homburg et al. 2015 ; Lemon and Verhoef 2016 ). Such attention has also prompted calls for research (e.g., Ostrom et al. 2015 ) and special issues devoted to customer experience, with a resulting dramatic increase in academic publications pertaining to this concept across many different literature fields and significant advances in scholarly understanding.

Yet this trend has also produced considerable fragmentation and theoretical confusion. No common understanding exists regarding what customer experience entails. Some studies assert that customer experience reflects the offerings that firms stage and manage (Pine and Gilmore 1998 ), but others define it as customer responses to firm-related contact (Homburg et al. 2015 ; Lemon and Verhoef 2016 ; Meyer and Schwager 2007 ). The concept has been used to describe anything from extraordinary (Arnould and Price 1993 ) to mundane (Carú and Cova 2003 ) experiences. Some researchers delimit the scope of customer experience to a particular context, such as service encounters (Kumar et al. 2014 ) or retail settings (Verhoef et al. 2009 ), and others view it more broadly as emerging in customers’ lifeworlds (Chandler and Lusch 2015 ; Heinonen et al. 2010 ).

The lack of a unified view creates considerable challenges for theory development (Chaney et al. 2018 ; Kranzbühler et al. 2018 ). The diverse conceptualizations of customer experience mean that its operationalization differs from study to study, creating measurement and validity concerns. Confusion also prevails about the scope and boundaries of the customer experience construct, its antecedents, and its consequents. Researchers have difficulty defining which insights they can combine, thus limiting replication and generalization across contexts. These challenges also hinder researchers’ ability to disseminate meaningful implications for managers seeking to foster superior customer experience.

To mitigate these challenges and move the field toward a more unified customer experience theory, an integrative understanding is needed. With this article, we seek to develop a set of fundamental premises that reconcile contradictions and dilemmas in the current customer experience literature and provide integrative guideposts for future research in the field . As integrating such fragmented research requires understanding the distance between the phenomena addressed by different studies as well as the degree of compatibility in their underlying assumptions (Okhuysen and Bonardi 2011 ), we pose two research questions to guide our efforts: (1) What is the nature of the customer experience phenomenon and the underlying metatheoretical assumptions adopted in literature that addresses customer experience? (2) What are the common elements of customer experience that are applicable across contexts and literature fields?

To address these questions, we started with a systematic literature review to identify customer experience research in eight key literature fields: services marketing, consumer research, retailing, service-dominant (S-D) logic, service design, online marketing, branding, and experiential marketing. We then analyzed the compatibility of these fields with a metatheoretical approach, which supports comparisons across fragmented, scattered literature pertaining to a particular concept (Gioia and Pitre 1990 ; Möller 2013 ). On the basis of this comparison, we integrated these eight fields into two higher-order research traditions, defined by their approach to customer experience as either (1) responses to managerial stimuli or (2) responses to consumption processes. Through these analyses, we explicate the underlying assumptions of each research tradition and also provide a state-of-the-art description of how customer experience has been studied so far.

Furthermore, we identify commensurable elements that are applicable to both research traditions and across contexts to define four fundamental premises of customer experience that provide solutions to problems in the current research on this concept. These premises provide an integrative definition of customer experience, reveal a multilevel and dynamic view of the customer journey, highlight contingencies for customer experience, and determine the role of the firms in influencing customer experience. Each fundamental premise offers guidelines for future research as well as managerial practice. Our delineation of the conceptual domain of customer experience advances research by reconciling contradictions found in the literature and bridging different research fields and traditions, allowing them to speak the same language, and offering a more comprehensive view of the phenomenon (MacInnis 2011 ). This view complements existing reviews of customer experience (Table 1 ) that tend to focus on narrowly selected sets of articles, that seldom consider the metatheoretical underpinnings of the reviewed studies, and that do not integrate the dispersed studies. The fundamental premises proposed herein can support more rigorous studies, whose results will have more meaningful implications for firms.

The next section presents our research approach, followed by the results of the metatheoretical analysis, including a description of the key phenomena and metatheoretical assumptions embodied in each literature field, as well as a derived theoretical map of customer experience in marketing. Subsequently, we develop four fundamental premises of customer experience by integrating compatible assumptions across research traditions. In the conclusion, we detail the theoretical contributions and managerial implications of this study, as well as its limitations.

Research approach

Developing an integrative view of customer experience requires organizing the scattered literature into groups and analyzing their compatibility (MacInnis 2011 ). This analysis involved three phases: (1) a systematic literature review of customer experience that groups individual studies into eight distinct literature fields, (2) organization of the eight literature fields into two distinct research traditions on the basis of the customer experience phenomena addressed and the underlying metatheoretical assumptions adopted, and (3) forming an integrated view of customer experience by building on the compatible elements across research traditions.

Phase 1: identifying and grouping relevant customer experience research

We conducted a systematic literature review to select relevant articles that study customer experience in marketing, according to strict guidelines (e.g., Booth et al. 2012 ; Palmatier et al. 2018 ). A systematic literature review enables overcoming possible biases in comparison to traditional reviews because it uses explicit criteria and procedures for selecting and including articles in the sample (e.g., Littell et al. 2008 ). We identified 142 articles that we subjected to a two-step process: identification of literature fields and classification of the articles (see Appendix 1 ).

We started with four literature fields—S-D logic, consumer research, services marketing, and service design—that were previously identified as relevant domains for customer experience research (Jaakkola et al. 2015 ). When the articles did not fit these fields in terms of their primary research foci (the aspects of customer experience studied), we added a new category, ultimately resulting in four additional literature fields: retailing, online marketing, branding, and experiential marketing. For example, branding emerged as a clearly distinct field that focuses on brand stimuli, such as logo and packaging (e.g., Brakus et al. 2009 ).

We then classified the articles into these literature fields according to three criteria: the primary customer experience stimuli studied, the customer experience context, and the key references used to define customer experience (e.g., citing Arnould and Price ( 1993 ) to substantiate the definition of customer experience indicates an article is likely to belong to the literature field of consumer research) (Table 2 ).

To be classified into a specific literature field, an article had to meet at least two of these three criteria without considerable overlap between fields. We excluded 12 articles that did not fulfill these criteria. However, we added 6 additional papers, identified through a bibliography search (i.e., back-tracking) (Booth et al. 2012 ; Johnston et al. 2018 ), resulting in a total sample of 136 articles (see Web Appendix ). The iterative process of reading the articles, identifying the literature fields, and classifying the articles stopped when we reached theoretical saturation (i.e., the majority of articles could clearly be categorized in one of the fields).

Phase 2: Analyzing the nature of the customer experience phenomena and metatheoretical assumptions in the literature fields

Following Okhuysen and Bonardi ( 2011 ), we analyzed these eight literature fields in terms of the focal phenomena addressed and the ontological, epistemological, and methodological assumptions adopted (Table 3 ) (see Appendix 2 for a more detailed account of the analysis). Using these elements, we compared the literature fields and sought to identify broader groups. By situating the eight literature fields in a theoretical map, we could navigate across them and develop conclusions about their compatibility (Gioia and Pitre 1990 ; Möller 2013 ; Okhuysen and Bonardi 2011 ). In turn, we identified two distinct research traditions that encompass all eight literature fields.

Phase 3: Developing an integrated view of customer experience

To integrate the two research traditions, we used a method analogous to triangulation (Gioia and Pitre 1990 ). By juxtaposing the two research traditions from a metatheoretical perspective, we sought to identify customer experience elements that are common to the two traditions, distinct yet compatible elements, and unique elements that do not fit with the assumptions from the other research tradition (Gioia and Pitre 1990 ; Lewis and Grimes 1999 ). The integration of compatible elements resulted in the development of four fundamental premises of customer experience.

Results of the metatheoretical analysis

In this section, we first describe the nature of the phenomena addressed and the metatheoretical assumptions adopted in the customer experience literature. We then position each literature field on a theoretical map of customer experience to establish two higher-order research traditions.

Customer experience phenomena and metatheoretical assumptions in the literature fields

Table 4 presents the description of the key customer experience phenomena addressed and the metatheoretical assumptions adopted in the eight identified literature fields. A discussion on the similarities and contradictions between them follows (cf. Möller 2013 ; Okhuysen and Bonardi 2011 ).

Customer experience phenomena addressed

As Table 4 shows, there are considerable differences between the literature fields with regard to the scope and nature of customer experience as a research phenomenon. The literature on experiential marketing tends to view experience as the offering itself. However, the most prevalent view within other fields sees customer experience as a customer’s reactions and responses to particular stimuli. Some studies focus on customer responses to stimuli residing within the firm–customer interface , with the goal of understanding how firms can use different types of stimuli to improve customers’ responses along their customer journey, the series of firm- or offering related touchpoints that customers interact with during their purchase process (e.g., Patrício et al. 2011 ). For example, services marketing focuses on service encounter stimuli, such as the servicescape, employee interactions, the core service, and other customers (e.g., Grace and O’Cass 2004 ), the retailing literature focuses on retail elements, such as assortment and price (e.g., Verhoef et al. 2009 ), and online marketing focuses on the elements of the virtual environment (e.g., Rose et al. 2012 ).

In contrast, S-D logic and consumer research consider stimuli related to the customer’s overall consumption process , encompassing factors beyond dyadic firm–customer interactions (e.g., Chandler and Lusch 2015 ; Woodward and Holbrook 2013 ). These studies consider customer experience to also emerge through non-market-related processes (e.g., eating dinner at home; Carú and Cova 2003 ), affected by a range of stakeholders such as customer collectives (Carú and Cova 2015 ) and even institutional arrangements such as norms, rules, and socio-historical structures (e.g., Akaka and Vargo 2015 ).

Metatheoretical assumptions

In terms of the ontological, epistemological, and methodological assumptions present in the customer experience literature, our analysis reveals some clear divides (Table 4 ). On a general level, services marketing, retailing, service design, online marketing, branding, and experiential marketing assume that particular stimuli likely trigger a certain response from customers. Thus, their view resonates with the idea of an objective, external, concrete reality (Burrell and Morgan 1979 ). Researchers employ hypothetic–deductive reasoning to study the relationship between customer experience and other variables, typically with surveys and experiments (e.g., Srivastava and Kaul 2016 ). In theoretical models, contextual factors usually appear as moderating variables (e.g., Verhoef et al. 2009 ). These fields hence tend to adopt a positivist epistemological approach, seeking to explain an external, concrete reality by searching for regularities and causal relationships in an objective way (Burrell and Morgan 1979 ).

In contrast, consumer research and S-D logic take a subjective view and adopt an interpretive epistemology. Research in these fields sees the customer experience as embedded in each customer’s lifeworld and interpreted by that customer (Helkkula and Kelleher 2010 ). External reality does not exist but instead serves only to describe the subjective reality, which is a product of individual consciousness (Burrell and Morgan 1979 ; Tadajewski 2004 ). Neither S-D logic nor consumer research aims to generate universal, generalizable laws; instead, they seek to understand how customers in their unique situation experience an object (Addis and Holbrook 2001 ). Therefore, these researchers consider customer subjectivity, highlight the role of contextual factors, and prefer qualitative methods (e.g., ethnography, phenomenological interviews) (Schembri 2009 ). Most consumer research studies employ an interpretive and inductive approach that is used to capture the symbolic meaning of consumption experiences (Holbrook 2006 ). In S-D logic, empirical studies often adopt a phenomenological approach, aiming to understand how value emerges during service use in the customer’s context (Helkkula and Kelleher 2010 ).

Theoretical map of the customer experience in marketing

The preceding discussion highlights that the scope of the customer experience phenomena addressed in the research ranges from narrow and dyadic to a broader ecosystem view. In terms of metatheoretical assumptions, we identify a continuum from more positivist to more interpretive approaches. Footnote 1 Our comparisons of these elements produced a theoretical map of customer experience where we group the eight literature fields into two higher-order research traditions (Fig.  1 ), which we define as groups of studies that share general assumptions about the research domain (Laudan 1977 ; Möller 2013 ).

Theoretical map of customer experience

The first research tradition combines experiential marketing, services marketing, online marketing, retailing, branding, and service design. These fields view customer experience as responses and reactions to managerial stimuli . As noted, each literature field addresses different stimuli; for example, brand-related stimuli include packaging, advertising, and logos (Brakus et al. 2009 ), whereas retailing elements include price, merchandise, and store facilities (Verhoef et al. 2009 ). The general goal across this research tradition is to examine how firms can affect customer experience by managing different types of stimuli, typically focusing on firm-controlled touchpoints. To test these relationships, researchers usually adopt a positivist philosophical positioning.

The second research tradition comprises consumer research and S-D logic that view customer experience as responses and reactions to consumption processes . This tradition adopts a broad view on experience as it addresses any stimuli during the entire consumption process, potentially involving many firms, customers, and stakeholders, all of which can contribute to the customer experience but are not necessarily under the firm’s control. Research following this tradition tends to see customer experience as embedded in a customer’s lifeworld and interpreted by the customer, such that it reflects an interpretive philosophical positioning (e.g., phenomenology). Finally, service design lies at the intersection of the two research traditions as it is inherently managerially focused but recent studies increasingly incorporate a more systemic view of stimuli for customer experience.

By building on the common elements across traditions and reconciling the distinct but compatible elements, we next develop fundamental premises of customer experience that provide opportunities to extend research within both traditions.

Fundamental premises of customer experience

Many authors highlight the need to build bridges across research traditions to establish a comprehensive understanding of a research domain (e.g., Gioia and Pitre 1990 ; Lewis and Grimes 1999 ; Okhuysen and Bonardi 2011 ). The pivotal question for developing a more unified customer experience theory is: To what extent can the literature from these two traditions be combined?

Our analysis revealed two research traditions that differ in terms of their metatheoretical assumptions, affecting how customer experience is understood and studied. A juxtaposition of these research traditions allows us to identify common elements, distinct yet compatible elements, as well as elements that are incompatible. From this analysis we developed four fundamental premises of customer experience that build on the shared assumptions and help in solving the key discrepancies in the extant literature. These premises may generalize across settings, allowing each research tradition to offer complementary results that collectively provide a comprehensive understanding of the same phenomena (cf. Gioia and Pitre 1990 ). Together, these premises (P1-P4) cover the “big picture” of what customer experience is, what affects it, its key contingencies, and the role that firms can play in it (Fig.  2 ). For each of these premises, we delineate guidelines for future research to move the field forward.

Conceptual framework for customer experience

Definition of customer experience

The metatheoretical analysis conducted revealed a myriad of definitions for customer experience that ultimately suggest different phenomena (see Table 4 ). The current literature on customer experience does not agree on the definition of customer experience nor on its nomological network. Confusion prevails as to whether experience is response to an offering (e.g., Meyer and Schwager 2007 ) or assessment of the quality of the offering (e.g., Kumar et al. 2014 ). This means that in some studies, customer experience overlaps with outcome variables such as satisfaction or value, while in others it is an independent variable leading to satisfaction, for example. Furthermore, some studies view experience as a characteristic of the product rather than as the customer’s response to it (e.g., Pine and Gilmore 1998 ), which is in deep conflict with the interpretive tradition that always views experience as a subjective perception by an individual and even as synonymous with value-in-use (Addis and Holbrook 2001 ).

To resolve this confusion, we suggest customer experience should be defined as non-deliberate, spontaneous responses and reactions to particular stimuli. This view builds on the most prevalent definition across the two research traditions, but separates customer experience from the stimuli that customers react to as well as from conscious evaluation that follows from it. This view rejects suggestions that evaluative concepts such as satisfaction or perceived service quality could be a component of customer experience (Lemon and Verhoef 2016 ).

Another conceptual confusion in the extant literature relates to assumptions held regarding the nature of experiences. As Carú and Cova ( 2003 ) note, much of the marketing research assumes that good experiences are “memorable,” if not “extraordinary.” The extant research tends to treat ordinary and extraordinary experiences as different phenomena (e.g., Arnould and Price 1993 ; Klaus and Maklan 2011 ). However, these studies typically focus on the extraordinary or ordinary nature of the offering, such as river rafting or experiential events (Arnould and Price 1993 ; Schouten et al. 2007 ) or routine and mundane offerings (Carú and Cova 2003 ), rather than on the customer’s response to these stimuli. As customer responses can range from weak to strong (Brakus et al. 2009 ), we propose this intensity better marks the difference between an ordinary and extraordinary customer experience. It follows that this classification can be leveraged as a continuum instead of a dichotomy; the weaker the customer responses and reactions, the more ordinary the experience, and vice versa (cf. Carú and Cova 2003 ). A customer can thus have an extraordinary experience as a response to a mundane offering.

In sum, to reconcile confusion in the extant research, we propose the following:

Premise 1a:

Customer experience comprises customers’ non-deliberate, spontaneous responses and reactions to offering-related stimuli along the customer journey .

Premise 1b:

Customer experience ranges from ordinary to extraordinary representing the intensity of customer responses to stimuli.

Implications of Premise 1 for future research

Following Premise 1a, researchers should distinguish customer experience from stimuli (e.g., the offering) and evaluative outcomes (e.g., value-in-use). For example, when operationalizing customer experience, researchers should not build on evaluative scales or use satisfaction and service quality as proxies, as is currently often done (see, e.g., Kumar et al. 2014 ; Ngobo 2005 ). Instead, the operationalization of customer experience should focus on the customer’s spontaneous responses and reactions to offering-related stimuli. The current customer experience literature offers a few solid measures that can serve as a starting point for further development (e.g., Brakus et al. 2009 ; Ding and Tseng 2015 ). We recommend building the measures on the most common experience dimensions used in the extant research—cognitive, affective, physical, sensorial, and social responses (e.g., Lemon and Verhoef 2016 ; Schmitt 1999 ; Verhoef et al. 2009 )—to facilitate the accumulation of knowledge and eventually enable comparing the weight of each type of response across different contexts. The extant research implies that the relevance of different types of customer responses may vary across contexts (McColl-Kennedy et al. 2017 ), but a lack of a common definition and measures for customer experience has prevented building this knowledge effectively.

Defining customer experience as spontaneous responses and reactions suggests that the issue of timing is relevant for its measurement. According to our literature review, most studies use research instruments where the respondents have to rely on memory to report their experience (e.g., Trudeau and Shobeiri 2016 ). To improve the validity of the findings, we recommend research designs where customer responses are captured right after the interaction with the offering-related stimuli has taken place. Some methods and technologies for capturing customers’ reactions in real time have been developed, such as the real time experience tracking method (Baxendale et al. 2015 ) and wearable devices for emotion detection (Jerauld 2015 ). Surprisingly, none of the 136 studies in our review used such technology to investigate customer experience in real time. Future studies should further explore the applicability and consumer acceptance of such methods and technologies.

Following Premise 1b, researchers should also change the way they address extraordinary vs. ordinary experiences. The current literature tends to assume that the higher the score on a customer experience scale, the better the customer experience is (e.g., Brakus et al. 2009 ). Future studies should address contexts where ordinary experiences (i.e., weak or neutral responses) are desirable in order to complement current research that predominantly focuses on contexts where firms try to strengthen customers’ responses rather than to keep them to a minimum (e.g., Ding and Tseng 2015 ). Such studies would help firms in designing customer journeys that, at some points, minimize certain types of responses, while increasing particular responses at other times.

Stimuli affecting customer experience

Delineating the conceptual domain of customer experience also requires defining the stimuli that affect its formation. Key discrepancies in the current literature relate to the source of the stimuli considered and the level of analysis. Our review revealed that most studies focus on a particular set of firm-controlled touchpoints and an integrative view is missing. This is problematic in many respects: customer journeys in today’s markets are “multitouch” and multichannel in nature with new types of stimuli emerging every day, suggesting that firms need to understand a broad range of touchpoints within and outside firm control, both in offline and online settings (Bolton et al. 2018 ; Lemon and Verhoef 2016 ). Furthermore, empowered customers are increasingly in charge of selecting individual pathways to achieve their goals (Edelman and Singer 2015 ; Heinonen et al. 2010 ; Teixeira et al. 2012 ). This means that journeys become increasingly complex and individualized, and the current literature silos focusing on a selected set of stimuli and touchpoints will fail to capture what the customer really experiences. The literature fields that consider customers’ holistic experiences in their lifeworld take a broader view but lack precision and insight into how experiences related to particular offerings emerge.

To resolve this dilemma, we propose integrating the currently disparate perspectives into a multilevel framework that draws on different fields of the customer experience literature and considers the stimuli at multiple levels of aggregation: First, cues refer to anything that can be perceived or sensed by the customer as the smallest stimulus unit with an influence on customer experience, such as product packing and logo design (Bolton et al. 2014 ; Brakus et al. 2009 ). Second, touchpoints reflect the moments when the customer interacts with or “touches” the offering (Patrício et al. 2011 ; Verhoef et al. 2009 ). These contact points can be direct (e.g., physical service encounters) or indirect (e.g., advertising) and comprise various cues (Meyer and Schwager 2007 ). Third, the customer journey comprises a series of touchpoints across the stages before, during, and after service provision (Lemon and Verhoef 2016 ; Teixeira et al. 2012 ). Fourth, the consumer journey level captures what customers do in their daily lives to achieve their goals, implying a broader focus than that of the customer journey and accommodating consumer interaction with multiple stakeholders beyond touchpoints with a single firm (Epp and Price 2011 ; Hamilton and Price 2019 ; Heinonen et al. 2010 ).

The extant literature has tended to measure customer experience either in one touchpoint or as an aggregate evaluation of the brand. However, recent research indicates a need for a more dynamic view: Kranzbühler et al. ( 2018 ) argue that customer experience is based on an evolving evaluation of a series of touchpoints, Bolton et al. ( 2014 ) suggest that some stimuli have multiplier effects, and Kuehnl et al. ( 2019 ) state that the connectivity of stimuli across touchpoints is an important driver for positive customer outcomes. These findings suggest that customer experience emerges in a dynamic manner and benefits from a multilevel analysis.

We present Premise 2 that addresses these shortcomings in the existing research and integrates insights across research traditions:

Premise 2a:

Customer experience stimuli reside within and outside firm-controlled touchpoints and can be viewed from multiple levels of aggregation.

Premise 2b:

Customer experience stimuli and their interconnections affect customer experience in a dynamic manner.

Implications of Premise 2 for future research

Premise 2 guides future research to study diverse offering-related stimuli through multiple levels of aggregation. Most of the reviewed research has examined a narrow scope of stimuli and touchpoints (e.g., Grace and O’Cass 2004 ) and a lack of insight into touchpoints beyond firm control is particularly glaring. We recommend cross-fertilization between the two research traditions: Researchers within the managerial research tradition could expand their research foci by drawing from consumption process studies that offer a broad outlook on the various stakeholders contributing stimuli that affect customer experience (e.g., Akaka and Vargo 2015 ; McColl-Kennedy et al. 2015 ). The research tradition focusing on experience as responses to consumption processes could adopt the more detailed analysis on journey composition offered by the managerial tradition and “zoom in” on the journey, focusing on the meanings that emerge at specific touchpoints, for example.

As extant studies often focus on measuring customer experience on the cue or touchpoint level (e.g., Grace and O’Cass 2004 ), the literature is unclear about how the interplay of diverse stimuli affect customer experience. Future research should thus study the interaction between types of stimuli and their dynamic effect on customer experience. Longitudinal research designs would be particularly useful for creating new insight into the evolving effects of stimuli configurations for the formation of customer experience as well as the interaction between the types of customer responses at different touchpoints. In addition, future research could investigate how the combination of responses and reactions that emerge over time lead to evaluative outcomes such as satisfaction.

The effective study on the emergence of customer experience necessitates the development of more dynamic measurement instruments. Current measures of customer experience often only provide a snapshot (e.g., Brakus et al. 2009 ; Ding and Tseng 2015 ). Considering the multitude of potential relevant customer experience stimuli and the active role of customers in forming their own journey (Edelman and Singer 2015 ; Heinonen et al. 2010 ), a possible avenue for research would be the development of self-adaptive scales or surveys where respondents can self-select parts of the journey that they found relevant and the types of responses they experienced. Research supporting the development of such instruments is available (e.g., Calinescu et al. 2013 ) but has not as yet been applied in the customer experience context. While a measurement instrument that captures a complete multilevel framework of the customer journey would become unmanageable, a self-adaptive scale would allow respondents to focus on touchpoints and even on specific cues that are the most relevant for the customer experience. A more dynamic measurement of customer experience would also enable analyzing what types of customer responses emerge in different touchpoints or phases of the customer journey.

Key contingencies for customer experience

Researchers generally agree that customer experience is subjective and specific to the context. This means that contextual variables related to the customer and the broader environment influence customer responses to stimuli and evaluative outcomes of customer experience. However, the current research on these contingencies is fragmented and lacks a uniform view. Within the managerial research tradition, the role of contextual variables is rather peripheral. These studies often investigate a limited number of contextual variables or dismiss their effect altogether. Some typical contextual variables that are studied include consumer attitudes, task orientation, and socio-demographic variables (e.g., Ngobo 2005 ; Verhoef et al. 2009 ). The research tradition that views customer experience as responses to consumption processes places a greater emphasis on the customer context, acknowledging the role of complementary offerings and service providers, institutions and institutional arrangements, and the customer’s goals in the consumption situation (Akaka and Vargo 2015 ; Tax et al. 2013 ; Woodward and Holbrook 2013 ).

Again, insights across research traditions have seldom been combined. To reconcile this shortcoming, we categorize the contingencies used in the extant studies and identify the key ways in which they operate. Our literature review enabled the identification of three groups: (1) customer, (2) situational, and (3) sociocultural contingencies. Customer contingencies refer to the customer’s characteristics such as personality, values, and socio-demographic characters (e.g., Holbrook and Hirschman 1982 ), resources such as time, skills, and knowledge (e.g., Novak et al. 2000 ), past experiences and expectations (e.g., Verhoef et al. 2009 ), customer participation and activities during the journey (e.g., Patrício et al. 2008 ), motivations (e.g., Evanschitzky et al. 2014 ), and the fit of the offering with the customer’s lifeworld (e.g., Schmitt 1999 ).

Situational contingencies are those related to the immediate context, such as the type of store the customer is interacting with (e.g., Lemke et al. 2011 ), the presence of other customers and companions (e.g., Grove and Fisk 1992 ; Schouten et al. 2007 ), and other stakeholders that contribute to the customer experience, such as other firms (e.g., Tax et al. 2013 ). Sociocultural contingencies refer to the broader system in which customers are embedded, such as language, practices, meanings (e.g., Schembri 2009 ), cultural aspects (e.g., Evanschitzky et al. 2014 ), and societal norms and rules (e.g., Akaka and Vargo 2015 ; Åkesson et al. 2014 ).

Our literature review indicates that these contingency factors can affect the customer experience through two alternative routes. First, these factors can make some stimuli more or less recognizable; in other words, they play the role of a moderator between offering-related stimuli and customer experience (Jüttner et al. 2013 ). Second, such contingencies can affect the evaluative outcomes of particular customer responses (Heinonen et al. 2010 ). For example, a feeling of fear can have negative effects in a dentist’s office, but in a context such as river rafting, that response may have positive implications (Arnould and Price 1993 ). Therefore, any particular response to offering-related stimuli is not “universally good” or “universally bad”; its evaluation instead depends on its fit with the customer’s processes and goals.

Altogether, this discussion organizes the fragmented literature around contingencies for customer experience, as summarized in Premise 3:

Customer experience is subjective and context-specific, because responses to offering-related stimuli and their evaluative outcomes depend on customer, situational, and sociocultural contingencies.

Implications of Premise 3 for future research

While the extant literature agrees on the subjective nature of experiences and recommends that managers ensure their customer experience stimuli have a good fit with the customer’s situational context (e.g., Homburg et al. 2015 ; Kuehnl et al. 2019 ), it does not offer much guidance on the identification and role of key contingencies for customer experience. More systematic research is thus needed on the relevant contextual variables and their effects on the strength and direction of the relationships between offering-related stimuli, customer experience, and evaluative outcomes. The extant empirical research has addressed a relatively narrow set of contextual contingencies, and new insights can be generated, for example, by drawing from research within the interpretative research tradition that has placed a strong emphasis on sociocultural factors beyond the firm–customer interface (e.g., Akaka and Vargo 2015 ; Åkesson et al. 2014 ). In particular, researchers could study the role of institutions and institutional arrangements, as they direct the customer’s attention to particular stimuli in the environment (Thornton et al. 2012 ), but are seldom studied as contingency factors in empirical research on customer experience. Future research could look beyond customer experience research to identify potentially relevant contingencies for customer experience formation.

Customer experience research is often preoccupied with the question of how to provide “good experiences,” simply assuming that higher scores on a customer experience scale are always better (e.g., Ding and Tseng 2015 ). As Premise 3 suggests, it is more relevant to ask for whom a particular experience is good . Future studies should aim to identify relevant key contingences that drive particular customer responses to stimuli and influence a customer’s evaluation of their responses. This insight will aid managers in developing a more individualized set of offering-related stimuli for their different target groups and user personas, which is deemed important in current markets (Edelman and Singer 2015 ).

Role of the firm in customer experience

The fourth premise seeks to settle a seemingly profound discrepancy between the two research traditions: Can firms manage the customer experience? Some studies refer to the customer experience as something created and offered to customers (e.g., Hamilton and Wagner 2014 ; Pine and Gilmore 1998 ), but others emphasize its emergence in customers’ lifeworlds and suggest it cannot be managed directly (Heinonen et al. 2010 ; Helkkula and Kelleher 2010 ). This discrepancy can be solved by building on the common ground of the two research traditions that sees customer experience emerging as customer responses to diverse stimuli. As firms cannot control customer responses, they cannot create the customer experience per se, but they can seek to affect the stimuli to which customers respond.

Studies within the managerial tradition provide guidance on designing and integrating stimuli in firm-controlled touchpoints to ensure positive customer experience (e.g., Brakus et al. 2009 ; Grace and O’Cass 2004 ; Pine and Gilmore 1998 ). Although this research tradition acknowledges that touchpoints outside the firm’s control (e.g., other customers) might greatly influence customer experience (e.g., Grove and Fisk 1992 ), it says very little about what firms can do regarding these stimuli.

Studies that view customer experience as responses to consumption processes offer some guidelines for addressing the uncontrollable touchpoints. For example, Carú and Cova ( 2015 ) advise firms to monitor and react to customers’ collective practices with other consumers. Tax et al. ( 2013 ) suggest that firms should identify other firms that are part of the consumer journey, then partner with these organizations to improve the overall customer experience. Some authors suggest that firms should try to identify all stakeholders that influence the customer journey (e.g., Patrício et al. 2011 ; Teixeira et al. 2012 ). Mapping offering-related stimuli as holistically as possible helps firms design offerings that better fit into customers’ lives (Heinonen et al. 2010 ; Patrício et al. 2011 ). Thus, firms can use their knowledge of external stimuli and contextual factors to their advantage, even though they cannot control such factors.

In sum, to reconcile the disparate streams of extant research, we propose the following:

Firms cannot create the customer experience, but they can monitor, design, and manage a range of stimuli that affect such experiences.

Implications of Premise 4 for future research

Only few attempts have been made to delineate what customer experience management entails (e.g., Homburg et al. 2015 ), and this topic remains insufficiently understood despite its practical relevance. The extant research offers some guidelines for “well-designed journeys” (e.g., Kuehnl et al. 2019 ), but more research is needed to specify management activities that are suited to different types of touchpoints.

According to our literature review, a particularly critical gap in extant knowledge relates to the firm’s possibilities of affecting touchpoints outside of the firm’s control. Service design research offers tools for mapping a broader constellation of touchpoints, but there is scant research on how firms can deal with touchpoints external to the firm–customer interface. Potential future research topics include, for example, how firms can design touchpoints that are adaptive to stimuli residing in external touchpoints and whether firms can influence how customers respond to stimuli at external touchpoints along their journey.

We recommend that future research should ground customer experience management models on a more nuanced conceptual understanding of experience. These models should not consider “good experience” as the goal of customer experience management, but instead define the content of the intended customer experience (cf. Premise 1). In our sample, only a few studies address the specific responses and reactions that firms want to trigger: For example, Bolton et al. ( 2014 ) show three types of intended experiences (e.g., emotionally engaged experiences) and give suggestions on how to trigger them. By focusing on the “good vs. bad” dichotomy of customer experience, studies about customer experience management seem to skip this important step and focus directly on the stimuli to which customers respond (cf. e.g., Lemke et al. 2011 ). A focus on intended responses and reactions would complement this research and provide more precise implications on the management of firm-controlled stimuli.

Another critical gap in the research knowledge on customer experience management relates to the issue of contextual factors. The effect of managerial action depends on how well it resonates with the customers, their situation, and sociocultural context (Heinonen et al. 2010 ); hence, insights into the environment where customers interact with the offering-related stimuli are critical. The extant knowledge on the relevance and fit of particular management activities with particular contexts, situations, and types of customers is very scarce. For example, future research could explore how customer contingencies for customer experience formation (see Premise 3) can be used in segmentation and how management processes should be adapted to ensure the desired effects.

Table 5 summarizes the developed premises that conceptualize customer experience as well as guidelines and suggestions for future research.

Conclusions

Theoretical contributions.

This study undertakes a rigorous development of an integrative view of customer experience, captured in four fundamental premises that can anchor future customer experience research. We highlight four specific conceptual contributions. First, this study differentiates the customer experience concept and the bodies of research that study it (MacInnis 2011 ) (Table 4 ). Then it defines two distinct research traditions that study customer experience: customer experience as responses to managerial stimuli and customer experience as responses to consumption processes (Fig. 1 ). This differentiation facilitates comparisons across research streams and creates the conditions for their integration (MacInnis 2011 ). The metatheoretical analysis makes different assumptions underpinning customer experience research visible and articulates the key differences between literature fields and research traditions, providing a state-of-the-art description of research in the customer experience domain (cf. Palmatier et al. 2018 ). This helps researchers make sense of the conflicting research findings in the previous literature, position their research, and take note of the conceptual boundaries of their chosen literature field.

Second, we integrate the customer experience literature and draw connections among entities, then provide a simplified, higher-order synthesis that accommodates this knowledge (MacInnis 2011 ). Specifically, our analysis provides four fundamental premises of customer experience that integrate common and distinct yet compatible elements across the previously distinct bodies of research, solving key conflicts in the existing research (Table 5 ). Previous literature reviews (Table 1 ) have highlighted differences across customer experience characterizations (Helkkula 2011 ), contextual lenses (Lipkin 2016 ), and theoretical perspectives (Kranzbühler et al. 2018 ), but our study is unique in that it seeks to transcend these individual differences and reconcile the disparate literature. The integration of extant knowledge in a conceptual domain is an important step for advancing science (Palmatier et al. 2018 ); it is particularly valuable for the fragmented customer experience domain hosting a great variety of definitions, dimensions, and analysis levels that create considerable challenges for researchers and hamper the conceptual advancement of the field (Chaney et al. 2018 ; Kranzbühler et al. 2018 ; McColl-Kennedy et al. 2015 ).

Third, the fundamental premises we propose delineate the customer experience concept; they “describe an entity and identify things that should be considered in its study” (MacInnis 2011 , p. 144). The proposed premises serve to reconcile and extend the research domain, as well as resolve definitional ambiguities (Palmatier et al. 2018 ), by delineating what customer experience is, what it is not, how it emerges, and to what extent it can be managed. We argue that the four premises establish the core of the conceptual domain of customer experience and are generalizable across settings and contexts. Few, if any, earlier studies have offered general guidelines for the rapidly growing field of customer experience research, let alone such that are based on a systematic, theoretical analysis of the body of experience research.

Fourth, this paper provides clear guidelines and implications for continued research on customer experience (Table 5 ). Each premise explicates the constituents and boundaries of the customer experience concept and what they mean for its study. We also explicate how researchers within each research tradition can enrich their studies by learning from previously somewhat overlooked experience research conducted within the other tradition.

Applying the premises developed in this study in continued research should facilitate the advancement of science and the generalization of the findings by enabling the different fields and research traditions to speak the same language and establish a more complete view of the conceptual domain. Naturally, customer experience researchers from various fields will continue to hold different assumptions about the nature of reality and how customer experience should be studied; however, these differences should not mean that the concept of customer experience means different things in the marketing literature. The integrative understanding offered in this study is the needed step toward the development of a more unified customer experience theory.

Managerial implications

A better delineation and integration of customer experience research also benefits managerial practice. We determine that customer experience comprises many types of customer responses and reactions that can vary in nature and strength (Premise 1). Instead of just seeking to create “positive” or “memorable” customer experiences, firms should define their intended customer experience with finer nuances. Depending on their value proposition, firms can determine which customer responses and reactions they hope to trigger. For some firms, a weak or mitigated response will be preferable for some touchpoints, such as a hassle-free cleaning service that the customer does not need to think about, or a dentist’s office that reduces excitement and fear. Other value propositions may aim to trigger strong, extraordinary emotional or sensorial experiences, as in the case of an amusement park (Zomerdijk and Voss 2010 ). Firms should thus develop unique customer experience measures to capture different types of customer responses. Using perceived quality or customer satisfaction as proxies to measure customer experience limits the understanding of the true nature of the customer experience that the offering evokes.

After establishing the intended customer experience, firms should map the consumer journey to identify which offering-related stimuli are likely to influence these customer responses and reactions. We propose an integrated view of versatile sources of stimuli along this journey, which is broader than what any single literature field can provide. A useful starting point would be to analyze offering-related stimuli at multiple levels of aggregation (Premise 2). Firms should be careful not to focus exclusively on individual touchpoints (e.g., a physical service encounter) or cues (e.g., website functionality) but rather should consider the multiplicity of and connectivity between stimuli and touchpoints customers encounter along their journeys. Such an effort may require collaborative collections of customer data with partners in the service delivery network. Ethnographic research can be used to understand stimuli in external touchpoints, and ultimately how offerings fits with customers’ lifeworlds. For example, Edvardsson et al. ( 2005 ) describe how IKEA designers observe customers in their houses, then create offerings that match those customers’ everyday experiences.

When mapping the consumer journey, firms should be aware that customer responses to stimuli also depend on customer, situational, and sociocultural contingencies (Premise 3). Therefore, customers in different situations and positions, with different resources, will likely react to particular stimuli in varied ways. Moreover, contextual factors may influence the evaluative outcomes of particular stimuli, such as the degree to which a particular reaction leads to satisfaction and loyalty. We urge firms to conduct customer research to learn about the connections among customer personas, usage situations, and responses to stimuli. These insights can be used as a basis for segmentation and to design different types of journeys for distinct customer types and situations.

Firms should also consider how norms, practices, and values in the customer’s context affect their experiences (cf. Akaka and Vargo 2015 ). Presenting offering-related stimuli that clash with such higher-order institutional arrangements will likely trigger strong reactions because they deviate from norms. The famous Benetton UnHate campaign is an example of an advertising stimulus that triggered strong affective and cognitive responses by creating surprising confrontations with prevailing institutions (cf. Hill 2011 ).

Determining intended customer responses and relevant stimuli for achieving them thus are prerequisites for managing customer experiences (Premise 4). The integrative view of customer experience offered in this study highlights the importance of both controllable stimuli (e.g., servicescape; Grace and O’Cass 2004 ) and those that exist outside the firm’s control (e.g., customer goals, ecosystems; Akaka and Vargo 2015 ). Firms should make an effort to design controllable touchpoints to facilitate the intended customer experience, but also develop methods to understand, monitor, and respond to stimuli their customers face in touchpoints that are beyond firm control. Firms can potentially adopt a facilitator role in some external touchpoints, for example, by providing platforms where customers can interact (e.g., Trudeau and Shobeiri 2016 ) or partnering with stakeholders that control external touchpoints (e.g., Baron and Harris 2010). Firms should constantly monitor the stimuli their customers confront in external touchpoints—for example in social media—and consider opportunities for adapting firm-controlled touchpoints accordingly, to leverage external stimuli supportive of the intended experience and mitigate stimuli causing dissonance.

Limitations

The results should be understood in light of some limitations. First, our systematic literature review did not capture studies that might address customer experience-related phenomena but that use different terminology or that focus on particular customer responses without connecting them to customer experience. However, the procedure of back-tracking articles reduced the risk of excluding seminal research on customer experience. Second, the decision to adopt strict criteria for article inclusion may have limited the results (e.g., excluding book chapters or papers published in languages other than English). Although this approach allowed us to analyze the 136 articles with greater rigor, we also acknowledge that the results may have differed if we had considered related concepts or adopted looser inclusion criteria. Despite these limitations, we are confident that the development of these fundamental premises of customer experience and their research implications will help scholars address this extremely important managerial priority.

We recognize that this is a simplistic division. We do not categorize researchers as positivists or interpretivists but approximate researchers’ assumptions as more positivist or more interpretive to varying degrees.

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Appendix 1: Conducting the systematic literature review

Figure 3 presents an overview of the systematic literature review process.

Systematic literature review process

After reading articles about customer experience to familiarize ourselves with the phenomenon and help us decide on the methodological procedures (Booth et al. 2012 ; Littell et al. 2008 ), we established the criteria for the systematic literature review. We searched articles in the EBSCO Business Source Complete and Science Direct databases with the following keywords, separated by the term “OR”: “experiential marketing,” “service experience,” “customer experience,” “consumer experience,” and “consumption experience.” One of these keywords had to be present in the title, abstract, or keywords (e.g., Danese et al. 2018 ). We conducted the search in early May 2016 and did not set any temporal limits.

In the screening phase, we excluded all articles that were written in a language other than English, were outside the marketing scope, were not published in peer-reviewed journals, and were editorials, comments, or repeated articles. Then, we evaluated the relevance of each article to our study according to three criteria, such that it had to (1) refer to business-to-customer or general customer experience, (2) include customer experience (or related terms) as a central concept (Danese et al. 2018 ), and (3) provide a definition and/or characterization of customer experience (Helkkula 2011 ). In applying these criteria, we first reviewed the title and abstract, and, if necessary, skimmed or read the full article (Booth et al. 2012 ; Littell et al. 2008 ). These processes resulted in 142 articles to be analyzed.

Appendix 2: Metatheoretical analysis

We used content analysis to analyze the articles (Booth et al. 2012 ), reading them in chronological order within each literature field. The first step involved extracting material from the articles and transferring it to a codebook (Littell et al. 2008 ). To increase coding objectivity, we developed a frame of reference with explicit detailed procedures and coding rules (Littell et al. 2008 ). The codebook included variables that operationalized the key elements of the metatheoretical analysis; that is, phenomena and metatheoretical assumptions (see Table 3 ). To code the articles, we constantly went back and forth between the studies being analyzed and the frame of reference.

In the second step, we extracted material from the codebook to describe the phenomena and metatheoretical assumptions. To analyze the phenomena , we grouped similar codes to form theoretical dimensions. These theoretical dimensions aided our understanding of what customer experience is and how it is characterized in each literature field. For the ontological , epistemological, and methodological assumptions , we counted instances of codes to describe the metatheoretical assumptions in each literature field (contextualizing according to the understanding obtained by reading articles in each literature field).

Next, we developed a theoretical map, which we defined as a spatial allocation of different literature fields according to particular theoretical criteria. The description and comparison of the phenomena and metatheoretical assumptions in each literature field (i.e., the theoretical criteria) resulted in two higher-order research traditions: customer experience as responses to managerial stimuli and customer experience as responses to consumption processes.

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Becker, L., Jaakkola, E. Customer experience: fundamental premises and implications for research. J. of the Acad. Mark. Sci. 48 , 630–648 (2020). https://doi.org/10.1007/s11747-019-00718-x

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Issue Date : July 2020

DOI : https://doi.org/10.1007/s11747-019-00718-x

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Customer Experience Research: Steps, Methods, Best Practices

Have you ever wondered what sets successful businesses apart? The answer often lies in their commitment to understanding and enhancing the customer experience. How do industry leaders consistently deliver exceptional service? The key lies in strategic customer experience research.

Customer experience research is a systematic process of gathering and analyzing data to understand and evaluate the interactions between a customer and a company throughout the entire customer journey. 

It involves studying customer perceptions, expectations, and satisfaction levels to enhance and optimize the customer experience.

In this blog post, we will explore the essential steps, methods, and best practices for conducting effective customer experience research.

What is a Customer Experience Research?

Customer experience research is a systematic and strategic process of collecting, analyzing, and interpreting data related to customers’ interactions with a brand, product, or service. The objective of this research is to gain a comprehensive understanding of the overall customer journey, perceptions, preferences, and satisfaction levels. 

Through various research methods such as customer satisfaction surveys , interviews, focus groups, and observational studies, businesses seek to uncover insights that can inform improvements in products, services, and customer interactions. 

The ultimate goal is to enhance customer satisfaction, loyalty, and the overall quality of the customer experience, contributing to the business’s long-term success. 

Importance of Customer Experience (CX) Research

The significance of customer experience (CX) research cannot be overstated, as it plays a pivotal role in various aspects of a business’s success. Here is a more detailed exploration of the importance:

Customer Retention and Loyalty Building

Customer experience research dives into understanding the intricate nuances of customer needs and expectations. Businesses can tailor their products, services, and interactions to create meaningful and positive experiences by gaining insights into what truly matters to customers. 

This, in turn, increases customer loyalty, as they feel understood and valued and are more likely to continue their association with the brand. Retaining existing customers is often more cost-effective than acquiring new ones, making customer retention a key focus for sustainable business growth.

Competitive Advantage in a Crowded Market

In a fiercely competitive marketplace, where products and services may be similar, the quality of positive customer experience emerges as a powerful differentiator. 

Companies that invest in understanding their customers and consistently deliver exceptional experiences gain a distinct competitive advantage. Positive customer interactions become the brand’s trademark, setting it apart from competitors and attracting a loyal customer base.

Driving Revenue Growth through Customer Satisfaction

Satisfied customers are likely to make repeat purchases and become brand advocates. Customer experience research helps identify the touchpoints that leave a lasting positive impression, encouraging customers to choose the brand repeatedly. 

Satisfied customers are more inclined to recommend the brand to their networks, effectively becoming brand ambassadors. This word-of-mouth marketing can significantly contribute to organic growth and increased revenue streams.

Operational Efficiency and Cost Savings

CX Research provides valuable insights beyond enhancing customer satisfaction by pinpointing pain points in the customer journey. It can lead to operational improvements within the organization. 

Streamlining processes, eliminating bottlenecks, and resolving pain points can increase operational efficiency and cost savings. This dual benefit of enhancing customer experience while optimizing internal operations is a strategic advantage that can positively impact the bottom line.

Steps Customer Experience (CX) Research

Conducting practical customer experience (CX) research involves a series of well-defined steps to ensure that you gather meaningful insights that can drive improvements in your products, services, and overall customer interactions. 

Here are the key steps for conducting customer experience research:

1. Define Objectives

At the outset of any customer experience research initiative, it is imperative to outline and define the goals and objectives meticulously. These should serve as the guiding principles throughout the research process, helping to maintain focus and relevance in enhancing the overall customer experience.

2. Identify Touchpoints

To comprehensively understand the customer journey, mapping out each touchpoint where customers interact with the brand is essential. This involves a detailed exploration of various phases, from initial awareness to post-purchase engagement. 

Identifying these touchpoints provides a holistic view of the customer experience, highlighting crucial moments that significantly impact satisfaction and loyalty.

3. Select Metrics

Choosing the right metrics is important to measure customer satisfaction, loyalty, and overall experience accurately. Metrics should align with the defined objectives and touchpoints, encompassing quantitative and qualitative aspects. 

Relevant metrics may include Net Promoter Score (NPS), customer satisfaction scores, and key performance indicators (KPIs) specific to each touchpoint.

4. Collect Data

Employing a multifaceted approach, customer data is collected through various methods, such as surveys, interviews, and analytics tools. Surveys offer structured insights, interviews provide in-depth qualitative information, and analytics tools offer quantitative data on customer behavior. 

This comprehensive data collection process ensures a well-rounded understanding of customer preferences and sentiments.

5. Analyze Data

Once the data is collected, a rigorous analysis is undertaken to discern patterns, identify trends, and pinpoint areas for improvement. Advanced analytical techniques may be applied to extract actionable insights. 

This phase transforms raw data into meaningful information that can guide decision-making and strategy formulation.

6. Implement Changes

With the insights from data analysis, strategic improvements are implemented in the customer experience. 

This phase involves making necessary adjustments to processes, communication channels, or any other touchpoints identified as potential areas for enhancement. The objective is to align the customer experience more closely with the defined goals and objectives.

7. Monitor and Iterate

The customer experience journey is an evolving process that necessitates continuous monitoring. Customer feedback, both solicited and unsolicited, is consistently reviewed. 

This iterative approach allows organizations to adapt swiftly to changing customer expectations, ensuring the customer experience strategy remains dynamic and responsive. Regular reviews and refinements based on ongoing feedback contribute to the sustained improvement of the overall customer experience.

Customer Experience Research Methods

Customer experience (CX) research employs various methods to gather insights into customers’ perceptions, expectations, and interactions with a brand. The choice of methods often depends on the research’s specific goals and the business’s nature. 

Here are some common customer experience research methods:

• Structured Questionnaires: Design surveys with clear and concise questions to collect quantitative data on specific aspects of the customer experience, such as satisfaction levels, ease of use, and overall impressions.
• Scale Utilization: Implement rating scales, Likert scales, or Net Promoter Score (NPS) scales to quantify responses and measure the degree of customer satisfaction or loyalty.
• In-Depth Exploration: Conduct one-on-one or group interviews to dive deeply into customer experiences, emotions, and perceptions, allowing for a nuanced understanding of their thoughts and motivations.
• Open-Ended Questions: Open-ended questions encourage customers to express themselves freely, providing rich qualitative data beyond predefined categories.

Observation

• Ethnographic Research: Immerse researchers in the customer’s environment, whether physical or digital, to observe natural behaviors and interactions, revealing insights that may not emerge through traditional surveys or interviews.
• Task Analysis: Break down customer interactions into specific tasks to identify pain points, bottlenecks, or areas where improvements can be made.

Social Media Monitoring

• Sentiment Analysis: Employ sentiment analysis tools to gauge the overall sentiment of customer conversations on social media platforms, helping identify positive and negative trends.
• Engagement Metrics: Track engagement metrics, such as likes, shares, and comments, to understand which aspects of the customer experience resonate most with the audience.

Usability Testing

• Task-Based Testing: Design usability tests with specific tasks for participants to complete, assessing how easily they can navigate products or services.
• Iterative Testing: Conduct iterative usability testing throughout development to identify and address usability issues early on.

Net Promoter Score (NPS)

• Standardized Scoring System: Use the NPS scale to categorize customers as promoters, passives, or detractors based on their likelihood to recommend the product or service.
• Follow-up Qualitative Questions: Supplement NPS surveys with open-ended questions to gather additional insights into the reasons behind customers’ scores and their suggestions for improved customer satisfaction. 

Best Practices for Customer Experience (CX) Research

Practical customer experience (CX) research requires careful planning and adherence to best practices to ensure the insights gained are meaningful and actionable. Here are some best practices for CX Research:

Customer-Centric Approach

• Understanding Customer Personas: Develop detailed customer personas to comprehend different customer segments’ diverse needs, preferences, and behaviors.
• Journey Mapping: Create comprehensive customer journey maps that outline every touchpoint, from initial awareness to post-purchase support, ensuring a holistic understanding of the customer experience.
• Empathy Building: Encourage customer service teams to adopt an empathetic mindset to see the world from the customer’s perspective and better anticipate and meet their needs.

Multi-Channel Analysis

• Integrated Data Systems: Implement integrated data systems that consolidate information from various channels, including online and offline interactions, social media, and customer support, providing a unified and comprehensive view of the customer journey.
• Omni-Channel Strategy: Develop an omni-channel strategy that ensures a seamless and consistent experience across all customer touchpoints, regardless of their chosen channel.

Regular Feedback

• Real-Time Feedback Mechanisms: Implement real-time feedback mechanisms, such as post-purchase surveys, online reviews, and social media listening, to capture immediate customer sentiments and preferences.
• Periodic Surveys: Conduct routine surveys to dive deeper into specific aspects of the customer experience, allowing for more in-depth insights into identifying evolving trends.

Employee Involvement

• Training and Awareness Programs: Provide employees with comprehensive training on the importance of customer experience and equip them with the skills to understand and respond to customer needs effectively.
• Employee Feedback Loops: Establish feedback loops where employees can share insights from customer interactions, fostering a collaborative approach to improving the overall customer experience.
• Recognition and Rewards: Recognize and reward employees who contribute positively to the customer experience, reinforcing a customer-centric culture.

Data Security

• Compliance Measures: Implement robust data security measures to ensure compliance with privacy regulations, such as GDPR or HIPAA, and build customer trust in handling sensitive information.
• Transparent Data Practices: Communicate openly with customers about data collection and usage, providing clear information on how their data is stored, protected, and utilized.

Continuous Improvement

• Agile Implementation of Findings: Adopt an agile approach to implementing research findings, allowing quick adjustments to products, services, or processes based on customer feedback.
• Key Performance Indicators (KPIs): Establish KPIs to measure the impact of changes implemented due to customer experience research, ensuring that improvements align with business goals.
• Benchmarking: Regularly benchmark against industry standards and competitors to identify areas for differentiation and innovation, fostering a commitment to continuous improvement beyond immediate customer feedback.

How QuestionPro CX Can Help in Customer Experience Research

QuestionPro is a survey and research platform that offers various tools for conducting customer experience (CX) research. It provides a range of features to help businesses gather feedback, analyze data, and make informed decisions based on customer insights.

Here’s a general overview of how QuestionPro CX can be used for customer experience research:

NPS & Churn Risk

• The NPS Survey Dashboard provides an advanced analytics platform for measuring Net Promoter Score (NPS) and predicting churn risk.
• Isolate, identify, and predict customer churn based on NPS data, allowing businesses to address issues and retain customers proactively.
• Leverage customer interactions to make informed decisions for improving products and services.

Sentiment Analysis

• Sentiment analysis helps classify text feedback as positive, negative, or neutral, offering more profound insights into the quality of interactions between customers and the organization.
• Move beyond numerical ratings to understand the emotional tone and sentiment behind customer feedback.
• Identify areas for improvement based on sentiment trends and patterns.

Advanced Dashboards

• Access customizable dashboards with various widget configurations, enabling you to tailor your dashboard to specific needs.
• Customize filters, chart types, labels, and month-tracking widgets to effectively visualize and analyze customer feedback.
• Gain a holistic view of customer experience data through visually appealing and insightful dashboards.

Workflow Setup

• CX Workflow allows you to assign and send surveys to customer segments within the same data file.
• Automate survey reminders to improve response rates and gather more comprehensive feedback.
• Streamline survey processes for efficient data collection and analysis.

Disposition Metrics

• Monitor emails sent continually to collect valuable data at every engagement point.
• Track changes in customer behavior over time and identify key touchpoints influencing customer satisfaction.
• Use disposition metrics to refine communication strategies and enhance customer engagement.

Closed Loop

• Capture the customer journey at various touchpoints in real time.
• Share feedback with different teams to foster collaboration and implement organizational improvements.
• Implement a closed-loop system to address customer issues promptly and enhance the overall customer experience.

Incorporating customer experience research into your business strategy is a proactive approach to building strong, lasting customer relationships. By following these steps, employing effective research methods, and embracing best practices, you can gain valuable insights that drive positive change and elevate the overall customer experience. 

Remember, a satisfied customer is not just a one-time buyer but a potential brand advocate who can contribute to the long-term success of your business.

QuestionPro CX empowers customer experience research through advanced NPS analytics, sentiment analysis, customizable dashboards, workflow automation, disposition metrics monitoring, and closed-loop feedback. 

This comprehensive toolset enables businesses to proactively identify issues, understand the sentiment, and continuously enhance customer interactions, ensuring a superior and informed customer experience.

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8 Best Practices for Creating a Compelling Customer Experience

• G. Tomas M. Hult

Takeaways from an analysis of the American Customer Satisfaction Index.

How can a company best create a compelling customer experience? Based on the author’s research involving thousands of companies and analyses of millions of customer data points from the American Customer Satisfaction Index (ACSI), the eight areas that companies need to focus on are: Orchestrating the marketing ecosystem, aligning company and customer needs, delivering amazing customer convenience, reinforcing digital marketing, adjusting customer incentives, cultivating customer evangelists, handling customer complaints, and managing product returns.

Every interaction between a company and a customer is an opportunity . For the company, it’s a chance to reinforce brand quality and value with the goal of achieving customer satisfaction and loyalty. For the customer, it’s a chance to provide input on their needs, satisfaction with previous experiences, and expectations for future engagements with your brand.

• GH G. Tomas M. Hult is part of the leadership team at the American Customer Satisfaction Index (ACSI); coauthor of The Reign of the Customer: Customer-Centric Approaches to Improving Customer Satisfaction ; and professor in the Broad College of Business at Michigan State University. He is also a member of the Expert Networks of the World Economic Forum and the United Nations’ World Investment Forum.

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Customer Experience: What It Is and Why It's Important [+Data-Backed Tips]

Learn about customer experience and why it's so important to the success of your business.

CUSTOMER JOURNEY MAP TEMPLATE

Outline your company's customer journey and experience with these 7 free customer journey map templates.

Updated: 06/11/24

Published: 05/27/21

There aren’t many genuinely unique products in today’s market. No matter what you’re looking to buy, likely multiple companies are offering the same thing at similar prices.

In a world with many options, customer experience is often the deciding factor. Personally, I’d rather give my business to a company that offers a top-notch customer experience, and I’d probably be willing to pay a little extra for it, too.

Excellent customer experience leads to loyal customers , who are likely to sing your praises via word-of-mouth marketing , which 92% of people trust more than advertising . So, what makes a great customer experience?

Read on to learn everything you need to know about customer experience and some tips and tricks you can implement today.

What Is Customer Experience?

Importance of Customer Experience

How to measure customer experience.

What Is Customer Experience Management?

How to Make a Great Customer Experience

Online customer experience management.

Customer Experience Management Tool

What is customer experience?

Customer experience (CX) is the impression your customers have of your entire brand throughout all aspects of the buyer’s journey. It results in their view of your brand and impacts factors related to your bottom line, including revenue.

There are two main factors to consider when it comes to crafting customer experience: products and people.

Does the product solve problems, meet needs, and generally blow you away? If so, you have a good product that bodes well for customer experience.

The other aspect is people. You could have the best product in the world, but if the people surrounding that product (think customer support, account managers, etc.) don’t inspire customer delight, then you’ve got an issue.

If you’ve got a great product supported by great people, you have the makings of a great customer experience.

Free Customer Journey Template

Outline your company's customer journey and experience with these 7 free templates.

• Buyer's Journey Template
• Future State Template
• Day-in-the-Life Template

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Are customer service and customer experience the same?

Customer service and customer experience are not the same thing. However, they are related. Customer service is a narrower term for helping customers solve problems and better use your products. Meanwhile, customer experience is an umbrella term that encapsulates every interaction a customer has with your brand throughout their customer journey .

In a HubSpot survey, we asked over 1,500 companies about their top challenges when crafting the customer experience. Top responses included:

• Understanding customer needs (22%)
• Adapting to increasingly demanding customer expectations (21%)
• Scaling my customer experience operations as my business grows (21%)

What do these data show? These responses make it clear that aligning with customer needs is the main challenge and key to customer success.

A remarkable customer experience is critical to the sustained growth of any business. A positive customer experience promotes loyalty, helps retain customers, and encourages brand advocacy.

Today, customers have the power. Thanks to the internet, customers have the necessary resources to educate themselves when choosing from various product options.

This is why providing a remarkable experience is important.

With so many options, I only want to do business with companies that provide a top-tier customer experience. So, how can you measure your customer experience to determine what you’re doing well and where there’s room for improvement?

• Analyze customer satisfaction survey results.
• Identify the rate of and reasons for customer churn.
• Ask customers for product or feature requests.
• Analyze customer support ticket trends.

1. Analyze customer satisfaction survey results.

Using customer satisfaction surveys (which you can easily create in HubSpot or one of the integrated tools like Survicate ) regularly — and after meaningful moments throughout the customer journey — provides insight into your customer’s experiences with your brand, product, or service.

In our 2024 State of Service Survey , the majority of respondents from companies across the world indicated their intention to increase their investment in collecting and analyzing customer feedback.

Analyzing customer feedback remains one of the most straightforward ways to understand customer needs and craft a great CX. So, it is no surprise that most companies plan to continue investing in the process.

A great way to measure customer experience is by using the Net Promoter Score (NPS ). This measures how likely your customers are to promote you to their friends, family, and colleagues based on their experiences with your company.

When measuring NPS , consider data in aggregate across teams. Since multiple teams impact your overall customer experience, you’ll need a clear picture of performance — and that comes from numerous data points.

For example, what is the NPS for in-product usage? For customer service teams across communication channels (phone, email, chat, etc.)? For sales? For attending a marketing webinar? And so on.

Analyzing NPS from multiple touchpoints across the customer journey will tell you what you need to improve and where you’re already providing an excellent experience while showing customers you listen and care about what they have to say.

With your NPS score, dive into your team-by-team performance to ensure you perform well across the board. Also, you may follow up on customer feedback — whether positive or negative — to connect with customers, deepen your relationship with them, and improve your retention and loyalty.

2. Identify the rate of and reasons for customer churn.

20% of companies in our State of Service 2024 survey identified preventing churn and boosting retention as a challenge when creating a great customer experience.

Churn happens — it’s part of doing business. But you must learn from churn to prevent it from happening again.

Ensure you’re doing regular analysis of your churned customers so you can determine whether your churn rate is increasing or decreasing, the reasons for churn , and actions your team may take in the future to prevent a similar situation .

3. Ask customers for product or feature requests.

Creating a great customer experience is all about giving customers what they need. One of the best ways to figure out what their needs are is to ask them!

Create a forum for your customers to request new products or features to make your offerings more valuable and helpful for the problems they’re trying to solve. Whether that forum is shared via email, social media, or a community page, allow customers to offer suggestions proactively.

While you might not implement all the suggestions you receive, it’s worth looking into recurring trends or requests that pop up.

4. Analyze customer support ticket trends.

You should also analyze the customer support tickets your support reps are working to resolve every day. If there are recurring issues among tickets, review possible reasons for those hiccups and how you can provide solutions across the board.

Doing so allows you to decrease the total number of tickets reps receive while providing customers with a streamlined and enjoyable experience.

We asked over 1,500 companies what they felt was their most effective customer service channel, and results pointed to AI chatbots (15%) followed by online chat with a human rep (14%), which I think is telling. Not only is chat-based support quick and easy for customers, but the analysis of the data is much simpler on the company end.

The data show that people overwhelmingly use their smartphones to search, so a mobile-optimized website should be a top priority.

If you’re online, you’re accessible via a smart device, which means customers can find your company anywhere there’s cellular or Wi-fi service. The experience these customers have should be nearly identical to those using standard desktop devices.

This means your website should have a comprehensive, well-working app. If it doesn’t, your site should be responsive and user-friendly cross-device. There’s nothing more disappointing than a company with a fantastic desktop website, but it’s cut off and unresponsive on mobile.

Additionally, your app or mobile site should be as effective as your desktop version. You should be able to accomplish the same amount of tasks using either a mobile or a traditional device.

Don’t sacrifice features for your team’s convenience. Instead, put in the extra effort and resources — customers will genuinely value an omnichannel experience .

It doesn’t matter how effective your product or service is if your customers can’t navigate their way around it. Websites and apps should be intuitive, making it clear to the user which steps to take to achieve their goals.

Your team can create a user-friendly design by running usability tests on your website or app. Usability testing evaluates how easy it is to operate your product or service. By running these tests before production, you can create a website design that’s easy to use and ensures every customer can achieve their goals.

User Onboarding

For some companies, customers need to be taught how to use their website or app. Not everyone is tech-savvy, and many SaaS businesses provide onboarding to users who aren’t familiar with their products or services.

Onboarding is the process of teaching new customers how to use your product or service. A representative from the company’s customer success team works with the user to ensure they understand the value and purpose of their purchase. This way, customers don’t have to go through a time-consuming learning curve and can get value from your business immediately.

Whether or not you’re a SaaS company, it can be difficult to improve upon your customer experience. That’s because you must make changes across multiple departments and ensure every employee is on the same page. This is where software can simplify the process for your team.

There are plenty of tools available that can monitor and analyze customer experience. Let’s review a few options.

Tips for Making a Great Customer Experience

I used my HubSpot portal to host my blog and as a CRM when booking shows for my band. Using the product myself gave me a unique insight into the customer perspective that I don’t think is possible to understand otherwise. In doing so, I could foster great customer experiences through a shared understanding of customer needs and goals.

You want to make it as seamless as possible for customers to access their accounts and locate relevant information. When you execute your website correctly, no one will notice. But that’s what you want. When the UX is optimized, everything will be where the customer expects it, which makes for an effortless customer experience.

In my experience, monitoring and engaging with customers via social media is crucial to understanding their needs, which is the cornerstone of customer experience.

When creating content for social media, it's essential to ensure that it is both high quality and authentic. Customers know when they are being sold something, and they can tell if your brand truly cares about solving their problems and meeting their needs. Check out the chart below to see how different age groups prioritize quality versus authenticity in content.

As a customer service representative, I found that customers appreciated it when I identified their needs/challenges and suggested new features to optimize their workflow. So, if you notice a way to help customers as they grow and their needs change, let them know.

What do these groups of people have in common? They just want everything to work.

The key is understanding your customers and communicating clearly on a level they expect and understand. Clear communication doesn’t just mean simplifying your explanation as much as possible (although sometimes it does). Instead, you must have a comprehensive enough grasp of your products and services to level with anyone.

No one wants to feel like they are being given the runaround. Let’s say your product is experiencing a service disruption, or maybe a shipment got lost in the mail. These things happen. Be upfront instead of burying your head in the sand and ignoring customer complaints.

Let your customers know exactly what has gone wrong and the steps you are taking to address it. Sure, issues like these are frustrating for everyone. Still, customers will feel valued and respected if you can level with them honestly, which is necessary for long-term customer success.

However, if you’ve worked in customer support like me, you know you can’t solve every issue at the drop of a hat. That doesn’t mean you can’t respond quickly, though.

My strategy was to respond to customer email tickets as quickly as possible, and even if I needed extra time to solve an issue, I would send out an email along the lines of:

“Hi [Customer Name],

I wanted to let you know that I’ve received your support request, and I’m looking into it. I see you are encountering an issue with [describe customer issue].

I will dive into this on my end, which will require a little time. However, you can rest assured I’m actively working on this and will update you within [describe anticipated time frame].”

See what I did there? I could have just placed this customer inquiry on the back burner and waited to respond until I had approached a resolution. However, I’ve found that giving a timely initial response and setting expectations go a long way in creating a positive customer experience.

71% said they would increase their investment in AI chatbots for customer service, 70% said they would increase their investment in generative AI for crafting customer communications, and 72% planned to increase investment in AI/automation throughout the customer experience.

So, I think the data are rather clear. AI tools allow for streamlining multiple business processes, and the customer experience benefits significantly from the increased efficiency.

As shown above, most Gen Z consumers prefer self-service, and if you ask me, that number will only grow over time. Consider investing in a thorough knowledge base and other self-service tools to empower your customers to help themselves.

We also asked over 1500 firms whether they would prioritize offering service reps better tools to solve issues for customers or offering customers better tools to solve issues independently. The response? 68% indicated they would be prioritizing self-service tools.

Instead, focus on creating something that genuinely benefits people's lives and is worth their hard-earned money. Especially today, as the cost of goods rises and purse strings tighten. Check out the data from our research below.

Every age group feels the effects of today’s economy. Now more than ever, offering value to your customers will be a top factor in determining customer satisfaction and success.

Customer Experience Management Tools

1. hubspot service software.

HubSpot’s Service Software is a customer service platform that includes various features used for customer experience management. For example, the tool offers ticketing and help desk automation to help record customer inquiries, track recurring support cases, and more.

It also has customer feedback capabilities to determine NPS® for customer interactions. These features make it easy for your team to identify common customer roadblocks and roll out changes that help users overcome them.

Price: Free plans are available. Starter plans cost $45 monthly. Professional plans cost $450 monthly. Enterprise plans cost $1,200 monthly.

What I Like : I like that HubSpot is continually integrating and iterating on AI features in the product to help you streamline and scale your service efforts.

Nice Feeback Management provides you with a summary of your overall customer experience. It does this by comparing direct feedback, indirect feedback, and KPIs — all in one report. This gives you a complete picture of the customer experience from the customer’s perspective and how it relates to business impact.

Price : Pricing is available upon request.

What I Like : Nice allows you to create automated triggers based on customer feedback to get ahead of potential churn.

WalkMe is a customer experience management solution for businesses primarily interacting with customers online.

It has self-service features that empower users to find their solutions, saving your support team time. It also has an extensive onboarding program, so your team can quickly get up to speed on the software.

With WalkMe, you get to build a satisfying relationship with customers from when they first become aware of your brand till they become brand advocates.

Price : Pricing is available on request.

What I Like: I like WalkMe’s DeepUI feature, an AI-powered element recognition feature that ensures it can continually adapt to UI changes in other apps it integrates with.

Birdeye is a reputation management software, which means it specializes in managing online reviews across many channels. Online reviews are often the first place potential customers look in the consideration stage, and Birdeye helps you get more positive reviews quickly.

It features tools that automatically trigger customer review requests, auto-reply to customers, and share reviews on your website.

What I Like : I like that Birdeye solves a specific customer need. Not every business is based on customer reviews, but for those who are, Birdeye is super valuable.

Create a Remarkable Customer Experience

Identifying key touch points along your customer journey, collecting customer feedback to improve or keep iterating on those experiences, and analyzing trends will help you improve customer sentiment about your company — and keep them telling their friends and family about your organization.

Net Promoter, Net Promoter System, Net Promoter Score, NPS, and the NPS-related emoticons are registered trademarks of Bain & Company, Inc., Fred Reichheld, and Satmetrix Systems, Inc.

Editor's note: This post was originally published in May 2021 and has been updated for comprehensiveness.

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How to win the customer experience today and post-pandemic

Stephanie Nerlich is the CEO at Havas Creative Network, North America. Here, she shares the agency’s global consumer research findings and advice for how brands can adapt to deliver meaningful customer experiences.

Nearing the end of a most challenging year, people are slowly beginning to shop again. But they’re doing so carefully and consciously, buying local and embracing e-commerce more than ever.

Going forward, brands will need to be ready to adopt a variety of in-store and online measures to cater to today’s shopper. Savvy yet cautious customers expect a safe in-store experience on top of quality service, have a growing desire for personalization, and want an online experience that’s as engaging and humanized as an in-person one. Meeting these needs leaves many brands faced with a massive undertaking in order to survive.

To understand what’s top of mind for customers, Havas CX surveyed a combination of 2,000 prosumers — early adopters who are forward thinking, influential, and proactive in what they do and share — and mainstream consumers across the U.S., U.K., France, and China. 1 What we learned will help brands deliver meaningful customer experiences now and in a post-COVID world.

Catch up to customer expectations

As customers shop more across digital platforms, they’re confidently demanding an end-to-end experience that rises to their expectations. Digitally mature, customer-focused brands able to meet people’s needs during the pandemic have left their competitors scrambling to improve or lose market share. Last, best interactions mean brands must meet evolving customer standards to remain relevant. That is, the last, best experience a shopper has anywhere becomes the minimum expectation for the experience they want everywhere.

If your website is currently your primary storefront , prioritize the experience. According to our survey, 78% of prosumers and 59% of mainstream consumers want to easily connect with a human, whether that’s through chat or video interaction, even when there’s no physical store. Be mindful of additional fees, especially if your online store is the only available option. Today’s customers see maintaining digital storefronts as cheaper than brick-and-mortar, and paying more for services feels backward and penalizing. They’re much more likely to buy from a brand if they offer free returns (91% prosumer, 84% consumer), free shipping (89%, 85%) and fast delivery (86%, 74%).

Think with Google

Source: Havas Worldwide/Market Probe International, Prosumer survey, 2019.

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Simple and helpful also wins when it comes to site content and merchandising. People are burned out from spending so much time online; don’t make them dig to find what they need. If a human isn’t available, 62% of prosumers and 39% of mainstream consumers want real-time chat with automated customer service. They’re also more likely to buy if they can find easy answers to their questions (89% prosumer, 77% consumer) and see customer reviews (87%, 71%).

Customers no longer have tolerance for brands whose digital experiences are driven by costs and legacy tech. They’ve become accustomed to user-centric champions and expect nothing less going forward.

Humanize experiences with (the right) personalization

Personalization isn’t just a marketing buzzword, and many brands are getting it wrong . To customers, personalization is knowing them beyond inserting their name into an email. It’s removing friction from the experience, based on their previous interactions with your brand.

Personalization should connect online to real life, leveraging digital to make the day-to-day easier. The majority of prosumers (81%) and mainstream consumers (59%) alike expect retailers to make their in-store visits faster and safer via personal appointments and digital queues. Online, they not only want real-time human connection, but one-to-one shopping advice, curated choices and help making decisions (73% of prosumers; 56% of mainstream consumers).

Use customer data to personalize future experiences as well. In a post-pandemic world, 65% of prosumers and 47% of mainstream consumers want recommendations based on their past purchases. And loyalty needs to be reciprocated: 88% of prosumers and 75% of mainstream consumers want brands to reward their loyalty with special prices and promotions.

Personalization should connect online to real life, leveraging digital to make the day-to-day easier.

Model personalization on the way local store owners treat regular customers, not the latest tech capabilities. Technology is a means to meet the needs of customers. While it helps us know a lot about them, data should be used to improve their experiences first and foremost. In a world where consumers are more mindful of privacy and how their information is used, showing how it can create positive, helpful experiences for them is essential.

Rethink ‘time spent’ metrics

The days of people wanting to explore a website are long over. In a one-click world, where time is a precious commodity, customers are here for the stuff, not the site itself. They want to choose when and where to spend time with brands, and they trust brands that respect that time.

For 92% of prosumers and 78% of mainstream consumers, your site or app must, above all, be fast and easy to navigate. Don’t belabor people with time-consuming interactions or get in the way with flashy experiences that create slow loads or “clever” navigation. This includes checkout. Rote interactions should be as frictionless and minimal as possible; 92% of prosumers and 83% of mainstream consumers want a checkout process that’s quick and easy.

Consider creating benchmark metrics from your customers’ POV. Instead of trying to maximize time on site, see how fast you can get your customers through the experience. Allow them to choose where they pause and spend time. Most likely, it will be looking at the things only your brand can provide.

The pandemic has opened new avenues for brands and customers. This isn’t temporary; our behaviors are changing, and the role of brands is shifting. The opportunity, and mandate, is to rethink what the customer experience should be. Now, more than ever, strategic plans must be put in place that address customer experience at the heart of a brand’s digital and retail footprint.

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1 Havas Worldwide/Market Probe International, Prosumer survey, 2019.

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Customer Research 101: Definition, Types, and Methods

Pragadeesh Natarajan

Last Updated: 30 May 2024

12 min read

Table Of Contents

What is Customer Research?

Why is customer research important, types of customer research.

• 6 Customer Research Methods
• How SurveySparrow Can Help

Do you want to improve your marketing or product? Then, customer research can help.

Your customer is at the heart of all your business decisions. In fact, everything revolves around a customer. A business is about having a paying customer, and it wouldn’t exist without one.

The effectiveness of your product or marketing depends on how well you know your customers. When you know your customers better, you can make better product or marketing decisions.

In this article, we break down:

• What customer research is
• Why it’s valuable for your business
• Different types of customer research
• Six customer research methods you can use to refine and grow your business

Customer research (or consumer research ) is a set of techniques used to identify the needs, preferences, behaviors, and motivations of your current or potential customers.

Simply put, the consumer research process is a way for businesses to collect information and learn from their customers so they can serve them better.

Businesses typically conduct customer research to uncover new insights on their customers. They then use these newly uncovered insights to improve their product, craft an effective marketing strategy, and more.

Here are 2 key questions customer research helps you answer:

• Who are my ideal customers? Who is the best fit (or worst fit) for our product?
• What channels can I use to find and communicate with my ideal customers?

Online survey tools like SurveySparrow can help you answer these questions. With omnichannel survey distribution, snazzy data visualization, and 1,500+ integrations with your favorite tools, SurveySparrow simplifies customer research for your GTM and product teams.

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A. How well do you know your customers? Not knowing enough about your customers can cost you time and money.

For example, a recent survey revealed that 46% of customers broke up with a brand because they received irrelevant content pushes.

Successful marketers realize that research is necessary to understand and cater to the ever-changing needs of today’s customers. According to a study by Coschedule:

• Successful marketers are 242% more likely to conduct audience research at least once every quarter.
• 56% of the study’s most elite marketers research at least once a month.

B. You shouldn’t make assumptions about your customers’ preferences or needs. You have to go out there and get opinions from real customers.

C. You need to go beyond your general idea about your customers. The more you understand your customers, the better you’ll be able to serve them with your product or service.

D. If you want to make your product the best in the market, you need to identify any unmet needs and learn how well your product serves the needs of your current customers.

E. Customer research helps you learn more about your customers, both the potential and existing ones. Serving your customers better than the alternatives starts with understanding them better and more deeply.

F. Here are other key reasons why you should research customers:

• Know the Why : Your analytics dashboard merely tells you what your customers do. Only research can help you understand why they do that.
• Validate Assumptions and Best Practices : In most cases, guesswork leads to terrible decisions. Your customers might not need what you think they need. And what works for most businesses might not work for you. The only real way to know is to talk to your customers.

Customer research can be done in two distinct ways: primary and secondary.

Primary research

Primary research is research you conduct yourself. In other words, in primary research, you collect the data yourself. Some examples of primary research are face-to-face interviews, surveys, and social media interactions.

Secondary research

Secondary research (or desk research ) is done by someone else. In secondary research, you make use of data that’s been collected by other people. A few examples of secondary research are forums or communities, industry reports, and online databases.

Primary and secondary research can be further broken down into two kinds of data: qualitative and quantitative.

Qualitative data

Qualitative data is descriptive and conceptual. And the nature of the data makes it subjective and interpretive. Examples of qualitative data include descriptions of certain attributes, such as blue eyes or chocolate-flavored ice cream .

Quantitative data

Quantitative data can be expressed using numbers, which means it can be counted or measured. As opposed to qualitative data, it’s objective and conclusive. Examples of quantitative data include numerical values such as measurements , length , cost , or weight .

Customer Research Methods that Work in 2024 (and Beyond)

Now that you know what customer research is and why it’s important, read on to learn the different consumer research methods you can use to make the most of it.

In a survey, you ask a series of questions to your customers regarding a subject or concept.

You can conduct a survey in person, over the phone, through emails, or online forms.

Here are some advantages of conducting customer research through surveys:

• Quickly collect a ton of insightful data without the high costs.
• The data you collect using surveys is simple to analyze.
• You can ask various questions since you get a wide range of question formats.

When it comes to surveys, it’s all about how you ask. Clear and concise questions can help you get reliable information.

An online survey tool is your best bet for quickly gathering customer information. All you need to do is create a survey with a ready-to-use template and send your customers a link to take it.

If you’re in need of a cost-free and easy-to-use solution for conducting customer research surveys and beyond, consider exploring SurveySparrow . This tool aids in gathering essential data by enabling you to conduct thorough data analysis via its user-friendly and conversational survey format.

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In an interview, you speak directly to your customers and ask them open-ended questions.

• Interviews allow you to have deep, one-on-one conversations with your customers and explore a topic in-depth.
• You can go into the details, obtain data beyond surface-level information, and gather deeper insights.

While interviews allow you to probe deeper into a subject, success depends on the expertise and skills of the researcher (or interviewer) conducting the interviews.

Conducting interviews isn’t easy. It’s time-consuming and costly. However, the information you collect can be invaluable for your company’s growth.

You can meet your customers in person to conduct your interviews. Or you can use video conferencing tools such as Google Meet or Zoom to converse with your customers online.

Your analytics dashboard lets you in on your customers’ actions within your product.

Just a glance at it and you’ll know what your customers do and how they engage with your product.

The irony is that customers don’t know what they want or why. They might think they need something but that might not be the case.

What they say they need doesn’t equate to what they do.

The point is that customer-reported behavior is different from actual behavior. That’s why it pays to track and observe your customers’ behavior.

You can use heatmaps, click tracking, scroll mapping, and user-recorded sessions to gain insights into your users’ actions and behavior.

Focus Groups

In this method, you combine a small group based on certain criteria such as demographic, firmographic, or behavioral attributes.

And you ask this group about whatever topic or concept. It could be about your product, marketing message, or something else that’s related to your customers or business.

The idea is to get them to talk to each other and have meaningful conversations.

A moderator helps facilitate the conversations between the individuals in this group. The moderator will try to draw meaningful insights from these conversations and discussions.

You mainly use this technique to understand a certain topic or subject better.

Competitive Analysis

Studying your competitors’ strategies and tactics is a great way to learn more about the target market and the existing solutions.

You can analyze both your direct and indirect competitors depending on the needs you address and the customers you cater to.

You can conduct a competitive analysis from a marketing or product perspective.

If you conduct your analysis from a marketing perspective, you study your competition’s SEO strategy , landing page copy, blog content, PR coverage, social media presence, etc.

You can also conduct your competitive analysis from a product perspective and analyze your competitors’ user experience, features, pricing structure, etc.

Review Mining

The reviews of you and your competitors are another great way to get inside your customer’s head. This method can be especially valuable if you are a SAAS company.

It helps you better understand your competitor’s strengths and weaknesses as well as your own. This understanding helps you improve your own products and better address the needs of your ideal customers.

This kind of data is easy to acquire as it’s publicly available, and you can get them on:

• Review sites such as G2Crowd and Capterra.
• Forums and niche communities such as ProductHunt, Reddit, Quora, etc.

Why SurveySparrow is the Best Customer Research Tool

SurveySparrow facilitates comprehensive customer research by enabling businesses to efficiently collect, analyze, and act on customer feedback, leading to better informed and customer-centric decisions.

• Collect Feedback Easily : Create simple surveys to find out what customers think about your products or services.
• Understand Satisfaction : Use surveys to figure out how happy customers are with what you offer.
• Learn Buying Habits : Find out why customers buy certain products, which helps in planning what to sell.
• Get Product Opinions : Ask customers what they like or don’t like about your products to make improvements.
• See How People View Your Brand : Understand how customers see your brand, which is important for your marketing.
• Keep Up with Trends : Regular surveys help you stay updated on what your customers want or need.
• Group Customers : Identify different types of customers to target them more effectively with your marketing.
• Improve Customer Experience : Learn where you can make the buying process better for your customers.
• Test New Ideas : Before launching new products, check if your customers would be interested.
• Check Customer Loyalty : Find out if customers would keep using your products or recommend them to others.

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Final thoughts.

Businesses that deeply understand their customers have a huge advantage over the ones that don’t. Period.

Whatever you’re looking to learn or achieve, it becomes a lot clearer with a little research.

When done right, customer research can be your competitive advantage.

Be sure to pick a method that’s right for your situation. What are you looking to learn and achieve? Think through each research method carefully and pick the one that works best for you.

Have you conducted customer research? What did you learn? And how did it go? Tell us about that in the comment section below.

And if you’re looking to conduct customer research through surveys, feel free to check out SurveySparrow .

I'm a developer turned marketer, working as a Product Marketer at SurveySparrow — A survey tool that lets anyone create beautiful, conversational surveys people love to answer.

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What is CX?

You might have an intuitive sense of what separates good CX, or customer experience, from bad. Imagine, say, you want a latte. When you visit the coffee shop, are staff members attentive? If you are a regular, do they greet you by your name? Was the store designed intuitively? Do they take your order promptly and hand you your cup with a smile? If you have a problem, is it promptly resolved, or is someone sent to help you? Do they proactively reach out to understand your overall experience?

All of those questions touch on elements of customer experience. The four components of CX are brand, product, price, and service.

Basically, CX refers to everything an organization does to deliver superior experiences, value, and growth for customers. And it’s crucial in an age when how a business delivers for its customers is just as important as—if not more important than—the products and services it provides. In a digital world, where customers review and share their experiences with a company in public forums, it has become vital for companies to connect with customers across their journeys at an emotional level. Not only is customer experience the right thing to do for customers but it also results in 3x returns to shareholders .

The COVID-19 pandemic was a test of how to connect with customers in times of crisis . And many did surprisingly well in providing good CX, for instance, by swiftly reorienting their efforts to meet customers’ primary needs with respect to safety, security, and everyday convenience. Take, for example, e-commerce companies and food delivery services that developed methods of contactless delivery to keep customers and drivers safe as the virus spread.

This article offers a brief overview of customer experience-related topics and answers questions such as:

What are customer journeys?

How to measure customer experience, what is the consumer decision journey, what is customer care, how to improve customer experience.

A customer journey  describes the customer’s end-to-end experience, as opposed to their satisfaction at various individual transactions or touchpoints. These can include many things that occur before, during, or after the customer experiences a given product or service. Examples of customer journeys include bringing a new customer on board, resolving a technical issue, or upgrading a product.

Consider onboarding a new customer. At one company , this process took about three months and on average entailed nine phone calls, a technician visit, and interactions via both the web and mail. While there was a 90 percent chance, at any given touchpoint, of the interaction going well, average customer satisfaction fell nearly 40 percent over the course of the journey. More important than solving issues at the level of individual touchpoints was to reimagine the approach to service operations  around the most crucial CX journeys.

Attending to full customer journeys instead of touchpoints can drive stronger business outcomes. For instance, a McKinsey survey  found that customer satisfaction with health insurance is 73 percent more likely when the entire journey works well than when only touchpoints do. Looking to the hospitality industry, customers of hotels that get the entire customer journey right may be 61 percent more willing to recommend those hotels than customers of hotels that just focus on touchpoints.

If your company is looking to reinvigorate its customer experience, three efforts can help you move from touchpoints to journeys :

• Observe. Put yourself in your customers’ shoes: What do they see? This can help organize and mobilize employees around customer needs. In addition to identifying and understanding the customer’s journey, you’ll need to quantify what matters to customers and define a clear aspiration and common purpose.
• Shape. When you design customer experiences, interactions must be reshaped into different sequences. Even if your effort starts small, it can swiftly become much larger and entail the digitization of processes, the reorientation of company culture, and nimble refinements in the field.
• Perform. Making the transition to prioritize journeys can be a journey in itself that takes years and requires deep engagement from everyone in the company, from corporate leaders right down to the front line.

Learn more about our Growth, Marketing & Sales  and Operations  practices.

You might have a hard time imagining how you measure something as ephemeral as the magic your company creates for customers. But it can be done. Best practice calls for three guiding principles to help optimize customer-experience measurement :

• Measure the customer experience at the journey level, rather than at the level of touchpoints or overall satisfaction.
• Invest in hardwired technology that captures feedback on a daily basis from multiple channels, integrating survey results and other data into comprehensive dashboards.
• Cultivate a mindset of continuous improvement at all levels.

Depending on the level of CX adoption within an organization, consider the power of predicting CX , which can help you stay ahead of customer churn and dissatisfaction. Why? Survey-based systems alone don’t necessarily meet the needs of today’s companies; they’re limited, reactive, ambiguous, and unfocused. Predictive customer insight may unlock more powerful insights to improve customer experiences.

The consumer decision journey  (CDJ) is a reconceptualization of the traditional marketing funnel. In this approach, the way customers make decisions is framed as a circular process involving four phases where customers can be gained or lost:

• initial consideration
• active evaluation, or the process of researching potential purchases
• closure, when consumers buy brands
• postpurchase, when consumers experience those brands

And conceptions of the consumer decision journey continue to evolve , especially in light of the new technologies and capabilities available to consumers. Today, it is important for brands not only to react to customers but also to actively shape their decision journeys. This may mean compressing or even eliminating the consideration and evaluation phases to drive competitive advantage . To foster an accelerated customer loyalty journey , four distinct but interconnected capabilities are crucial:

• Automation can be used to streamline the customer journey (for example, being able to snap a photo of a check and deposit it via your bank’s app rather than physically visiting a bank branch).
• Proactive personalization uses a customer’s information to instantly customize CX.
• Contextual interaction uses knowledge about where a customer is in a journey to deliver them to the next set of interactions.
• Journey innovation finds new sources of value, such as new services, for both the customer and the brand. This involves companies mining their data and insights about customers to figure out what other services they might appreciate. The best companies also design customer decision journeys that allow open-ended testing and frequent prototyping of new services or features.

Learn more about our Growth, Marketing & Sales  practice.

Introducing McKinsey Explainers : Direct answers to complex questions

Customer care generally happens within contact-center operations. These are sometimes referred to as call centers, and people working at these organizations support customers throughout their journeys with a company’s products or services—no matter where customers need help (in-store, online, via mobile apps, etcetera). This is as all part of providing an omnichannel customer experience. Contact centers play an important role in customer care, and a forward-looking vision for these centers could entail hyperpersonalization to meet customers’ expectations  in a way that’s both strategic and experience oriented.

How has COVID-19 changed customer experience?

COVID-19 changed customer experience in several ways. Many companies needed to shift the ways they worked with customers, for example, by providing alternative digital experiences when it was not safe for physical stores to be open. More broadly, how your company interacted with customers throughout the pandemic may have triggered an immediate and lingering effect on customers’ sense of trust and loyalty. In times of crisis, meeting customer needs with empathy, care, concern, and connection is important. It can help frame short-term responses, build longer-term resilience, and prepare for success after a crisis passes by keeping a pulse on how preferences are changing in real time. And it’s worth noting that more than three-quarters of consumers changed their buying habits  during the pandemic—and in addition to value and convenience, purpose also drives shopping decisions.

What does digital customer experience mean?

Digital customer experience refers to elements of the experience that happen online or with the support of digital and analytics. This can facilitate interactions that are holistic, predictive, prioritized, and focused on value.

Consider the example of a leading airline that built a machine-learning system to track and prioritize customers  who might choose a different carrier because they experienced multiple flight delays or other issues. The system, built in three months, drove an 800 percent increase in customer satisfaction and also reduced churn for priority customers by 60 percent.

When it comes to digital customer experience, companies are increasingly aiming to transition to predictive insights that could represent the future of CX . Some CX leaders are pushing on predictive CX platforms, which consist of three key elements:

• a customer-level data lake, with customer, financial, and operational data to develop a rigorous understanding of customer experiences
• predictive customer scores using analytics that track what’s influencing customer satisfaction and business performance
• an action and insight engine that’s shared with a broad set of employees, via tools such as customer-relationship-management platforms, through an API layer

These platforms can play a powerful role in linking CX to value and building clear business cases to improve CX. Of course, companies must stay attuned to customers and the privacy imperative . And it will also be crucial to build security into the digital customer experience .

Learn more about our Growth, Marketing & Sales , Digital McKinsey , and Risk & Resilience  practices.

What about customer experience and loyalty?

If you offer a good CX, chances are your customers will be loyal to you or your brand. But that doesn’t happen without real effort. “Consumers are changing, and consumer trends are driving this,” says former McKinsey partner Jess Huang on the new generation of customer loyalty programs . “With the move to digital over the last ten years, consumers are spending more and more time on their phones and various digital channels. This makes it much easier to access the consumer, but there is also a lot more noise. Brands are trying to figure out the right way to break through that noise and develop a relationship with the consumer.”

Loyalty programs are vital to doing so, but two-thirds of them fail to deliver. Focusing on eight elements  can help your loyalty programs perform better:

• Don’t be afraid to offer customers incentives to redeem their loyalty points.
• Consider the customer segments where there’s “breakage” (people whose points expire), and think about potential opportunities for improvement.
• Enlist strategic partners to enhance offers and rewards.
• Offer points-plus-cash options.
• Measure success based on engagement, not just accruals.
• Segment customers into groups you can handle.
• Personalize test-and-learn across customer segments.
• Create a standard P&L to accurately measure the incremental impact of loyalty programs.

Is customer experience the same in B2B and B2C contexts?

Much of CX in B2B isn’t the same as in B2C. Here’s why :

• relationships often go deeper in B2B
• longer, more complex B2B journeys involve more individuals
• customization is more widespread in B2B than B2C
• the stakes are usually higher in B2B deals, as individual B2B customer relationships are often worth millions of dollars

Nevertheless, more B2B customers say they would like a better customer experience—one that is more  like those of B2C customers. And in complex B2B sectors like industrial services—think aftermarket service contracts  for jet engines, industrial robots, or utility-transmission equipment— better customer experience is increasingly critical for growth . In a survey of 1,000 B2B decision makers, lack of speed in interactions with their suppliers emerged as the number-one “pain point” and was mentioned twice as often as price.

Keeping a finger on the B2B pulse can help you understand and respond to emerging B2B customer needs , especially in light of the shift to omnichannel . Adjusting your approach for the mix of traditional, remote, and self-service sales channels is increasingly important—and 94 percent of B2B decision makers  say new omnichannel sales model are as effective or more effective than prepandemic sales models. For even more, here’s a case study  of how a B2B organization in China became more customer-centric.

How do different industries approach customer experience?

Because customer needs and expectations vary by context, different industries may approach CX in different ways. Here are just a few examples of how industries grapple with the issues:

• Automotive. Car companies are putting customer experience in the driver’s seat —whereas manufacturers once competed on their engineering capabilities, CX is now a true differentiator, and customer-centric innovation is crucial.
• Travel. The COVID-19 pandemic turned travel upside down, and travelers’ customer experience is emerging as a challenge during the recovery. Doing better could entail aiming higher on experience, understanding customers more deeply, and moving faster operationally.
• Retail. Retail and consumer CX likely needs to account for a variety of omnichannel operational considerations . Retailers also need to stay attuned to the rise of the inclusive consumer  and make adjustments to serve their needs. And preparing for the future of shopping , where technology is everywhere, will also be important.
• Banking. CX transformation in banking  can pay off by delighting customers and, in turn, delivering revenue and cost improvements for banks themselves. And in regions like Asia–Pacific, digital innovation in banking offers some insight on whether or how banks should rethink customer engagement . Keeping up with customer trends can also unearth new opportunities, for instance, as we’ve seen with buy now, pay later  financing models. Fintech players may be on the vanguard when it comes to taking the friction out of financial services  for customers.
• Insurance. Many insurers have invested heavily  in digitizing customer journeys and processes to improve the experience. A user-first, omnichannel approach could rely on the availability of online purchasing capabilities, the ease of navigating online journeys, and seamless integration of sales support and advice. The rise of insurtechs  has also helped the industry address some customer pain points.
• Healthcare. In coming months and years, “Care at Home” could reshape the way health systems deliver patient-centered care . The rise of telehealth could also affect CX in healthcare . Focusing on whole-person care  could improve outcomes for patients with behavioral-health conditions. Monitoring healthcare consumer insights  will remain important, and providing compassionate, personalized care  can benefit both patients and healthcare organizations.
• Utilities. Transforming CX in utilities  helps customers and can allow utilities themselves to drive out costs. Self-service and digital channels are crucial in this context.
• Government. Prioritizing and improving customer experience in government  can offer big benefits for customers. It can also give employees greater purpose—and improve agencies’ reputations.
• Service businesses. Are customers of industrial-services businesses happy? The bar is rising, but for industrial OEM customer experience , organizations will need to better understand what customers want and need.

What are the differences between customer experience and employee experience?

While the design thinking that transformed customer experience is now also transforming employee experience (EX) , there are some differences between the two:

• A customer journey is often a lot quicker than an employee journey. It might take months or even up to a year for employers to hire a new employee. That’s a lot longer than most customer journeys.
• Many employers’ interactions with their employees continue to be top-down instead of being a constant, two-way iterative process—as successful customer journeys have become. For instance, while many companies are exploring hybrid work options, others are considering a full return to the office, even though many of their employees would prefer to continue working from home.

But happy employees are crucial to providing good CX—meaning that CX and EX are related. In that regard, improving employee experience in service of building a customer-centric culture  can have a powerful effect. Just consider how much mindsets matter here: some employees, for instance, might think, “I’m not involved in asking for customer feedback.” But in a customer-centric culture, reframing that so employees feel empowered to create opportunities to ask for customer feedback can pay dividends.

Learn more about our Growth, Marketing & Sales , People & Organizational Performance , and  Operations  practices.

Three building blocks are essential in transforming or improving customer experience  throughout your organization:

• Build aspiration and purpose. A clearly defined CX aspiration should deliver on your company’s purpose and brand promise. Have you developed a customer-centric vision and aspiration, linked it to value, and translated it into a concrete road map?
• Transform the business. Here’s where you discover customer needs, design solutions, and deliver impact, whether that’s via customer journeys, products, services, or business models.
• Enable the transformation. After introducing a new experience for customers, your company needs to consider how to sustain its efforts. This involves transforming employee mindsets; building capabilities; stepping up on technology, data, and analytics; establishing cross-functional governance and an agile operating model; and deploying systems to measure and manage performance.

Improving customer experience can make a big difference. In over a decade of helping more than 900 companies design and implement enterprise-wide CX programs, approaches that rest on these building blocks  have delivered 15 to 20 percent boosts in sales conversion rates, 20 to 50 percent reductions in service costs, and 10 to 20 percent improvement in customer satisfaction.

It’s also important to stay attuned to customer experience pitfalls  so your organization can avoid them. These include failing to link CX to value, taking a narrow view of CX, and applying limited creativity; don’t miss the examples of how other organizations have sidestepped these issues in transforming CX.

For more in-depth exploration of these topics, see McKinsey’s Customer Experience  collection. Learn more about the Marketing & Sales , Operations , and McKinsey Digital  Practices, and check out customer experience–related job opportunities if you’re interested in working at McKinsey.

Articles referenced include:

• “ Six customer experience pitfalls to avoid ,” March 17, 2022, Itai Miller, Kevin Neher, Rens van den Broek, and Tom Wintering
• “ Next in loyalty: Eight levers to turn customers into fans ,” October 12, 2021, José Carluccio, Oren Eizenman, and Phyllis Rothschild
• “ This time it’s personal: Shaping the ‘new possible’ through employee experience ,” September 30, 2021, Jonathan Emmett, Asmus Komm , Stefan Moritz , and Friederike Schultz
• “ How to boost growth in industrial services: Better customer experience ,” July 28, 2021, Hugues Lavandier , Senthil Muthiah, Kevin Neher, Stephanie Trottier, and Hyo Yeon
• “ Prediction: The future of CX ,” February 24, 2021, Rachel Diebner, David Malfara, Kevin Neher, Mike Thompson, and Maxence Vancauwenberghe
• “ The three building blocks of successful customer-experience transformations ,” October 27, 2020, Victoria Bough , Ralph Breuer , Nicolas Maechler , and Kelly Ungerman
• “ The human touch at the center of customer-experience excellence ,” October 8, 2020, Alex Camp, Harald Fanderl , Nimish Jain , Bob Sternfels , and Ryter von Difloe
• “ The CEO guide to customer experience ,” McKinsey Quarterly , August 17, 2016, includes interviews with Alfonso Pulido , Ron Ritter, and Ewan Duncan
• “ The consumer decision journey ,” McKinsey Quarterly , June 1, 2009, David Court, Dave Elzinga, Susan Mulder, and Ole Jørgen Vetvik

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The basics of customer experience research

Improving customer experience needs a deep understanding of the entire customer journey and makes structured research the key to success. Customer experience is influenced by multiple online and offline channels, and often happens along a long time frame. These facts make it necessary to carefully evaluate what methods and tools are useful for each specific research and innovation goal.

This article will cover the following questions:

What is customer experience research?

• Why is customer experience research so important?

How to conduct customer experience research?

• Different methods for customer experience research

Customer experience (CX) is your customers entire individual perception of their experience with your brand, product or service. It is influenced by each interaction happening between your company, product or service and its customer. This includes for example ordering a product in your online shop, receiving the product via the counter or receiving a newsletter.

Customer experience research describes the collection and analysis of any type of data relevant to the experience your customers have when interacting with your company. The goal of customer experience research is to increase a company’s competitive advantage by better understanding customers needs and pain points and using these insights to improve the overall customer experience.  

Why is customer experience research important?

Customer experience research is essential for understanding and meeting customer expectations, driving business growth, and building long-term customer relationships. It allows businesses to continuously improve and adapt their strategies to deliver exceptional experiences that delight customers.

More specifically, CX Research helps you with:

• Increasing customer satisfaction and loyalty
• Achieving competitive advantage
• Generating business growth
• Higher customer retention and reduced churn
• Improved product and service development
• Saving cost

Especially in times of social media, customer experience is becoming a crucial competitive advantage for organizations. Through the quick distribution of information on social platforms, a negative experience can cause enormous harm within a short period of time. At the same time, a positive experience can lead to loyalty and recommendation.

Researching customer experience can provide valuable insights for enterprises and help understanding customer needs, desires or pain points. With this information at hand companies can increase customer satisfaction and develop a customer-centric business model.

It all starts with defining who you want to research and what information you want to gain.

The why: develop a research question and scope

What is your aim with the research? Why are you pursuing this question? The starting point of successful research is a clear research question and a defined aim. You could ask questions like:

• Why do my customers rate the restaurant’s service negatively?
• How do my customers experience the booking process?
• What is the experience like for my employees during the weekend shifts?

Research can also have different scopes. For example: you’ll have a different scope if you look at a service which takes 15 days (e.g., the period from the booking until the flight), than if you look at a specific part of the service that takes 15 minutes (e.g., a customer gets in contact with your customer service in order to solve a problem with their flight booking).

State if you want to research a specific point or if you want to zoom out and look at your offering from a higher level.

Assumption vs. research-based work

Assumption-based work.

This is where the researcher sketches out what they think the customer journey looks like. Assumption-based customer journey maps can be useful as a first draft because they can help you plan your research. It also might help to highlight the assumptions that might have been made concerning a problem. When it comes to making decisions – base them on research.

Research-based work

To create research-based journey maps or personas, draw on the data you have. For example, with a customer based project – chances are you have knowledge about your customer through analytics, order history, CRM databases and so forth. Co-creative workshops with your customer or folks who have profound knowledge or lived experience of the subject matter can also be a way to create research-based personas or journey maps.

Of course, research-based personas or journey maps need more time and resources. Ultimately tools based on valuable research are better to reference when making important decisions and are much closer to reality.

Tip: It’s helpful to write the research question down or post it up in your work space so you can always look back to it and align your research with your aim.

The who: sample

Who are the relevant people for your research? Who will you talk to? Is it users? Customers? Employees? Other stakeholders? Do you want to get information about the interactions between these groups? This decision will make sure that you only get relevant data out of your time and financial resources.

A few aspects to consider when defining a research sample:

• The number of participants: what’s the right size for my purpose?
• The characteristics of participants: do I only want to focus on certain customers?
• Am I mainly interested in people who have used a specific service, during a specific time period?
• The type of technology participants use: are they okay with using a smartphone?
• The amount of time participants have.
• The way you invite participants: sometimes people participate together, e.g. one parent fills in reports representing the family. Also, do you want a random sample or would you prefer picking participants manually? The method with which you invite people will affect that.

Once your research question has been defined and the participants have been identified, you can focus on what research methods suit your subject best..

Triangulation

Triangulation is used in qualitative research to maximize the quality and validity of the research. The idea of triangulation is that every research you do has its advantages and disadvantages. Triangulating methods, data etc. helps you reduce bias and balance the types of learnings you generate. E.g., if one research method leaves some black spots behind, another research methods can help put some light on it. So even if you don’t manage to triangulate everything, make sure to at least have a second source of data that helps verify your findings from a different perspective.

You can triangulate these research methods:

• Methods (e.g., interview, survey, and observation)
• Data types (e.g., text, pictures, and video)
• Participants (e.g., customers, employees, and management)
• Researchers (e.g., customer service, marketing and developers)
• Environmental (e.g., different time/day/season)

Scroll down for a more detailed description of the potential methods.

Deciding a time frame is necessary in order to get valuable data. The time frame of your research will depend on your research question, the scope of your project, and the resources that you can allocate to the project.

Make sure your time frame is long enough to really tackle the research question holistically, but keep it as short as possible so you can start working with the generated data as soon as possible and have a few iterations instead of over-engineering things.

Tip: Qualitative research processes evolve. You might need to dig deeper into a certain area or shift focus once you find a specific user need or problem.

Customer experience research methods

In order to research your customers’ experience you can use qualitative and quantitative research methods.

Whilst qualitative research helps you to get actionable insights and provides your with in-depth knowledge, the quantitative counterparts can help you verify these learnings, check for generalizability and monitor KPIs over time.

The main difference between qualitative and quantitative customer experience research methods lies in the nature of the data collected and the approach used to gather insights. Here are the key distinctions:

Qualitative Research Methods

Qualitative research methods provide rich, detailed insights into customer experiences and perspectives, using open-ended questions and smaller sample sizes.

• Data Type : Qualitative research methods gather subjective and non-numerical data. They aim to uncover rich, descriptive insights, opinions, and experiences from customers.
• Sample Size : Qualitative research typically involves smaller sample sizes, often consisting of a few individuals or small groups. The emphasis is on depth rather than breadth of understanding.
• Data Collection Approach : Qualitative methods use open-ended questions, interviews, focus groups, observations, or ethnographic techniques to explore customers' thoughts, feelings, and behaviors. These methods allow for detailed, narrative responses.
• Analysis : Qualitative data is analyzed through techniques such as thematic analysis, content analysis, or narrative analysis. Researchers identify patterns, themes, and recurring ideas to derive insights and develop an understanding of customer experiences.

Quantitative Research Methods

Quantitative research methods focus on collecting numerical data from a larger sample size, enabling statistical analysis and generalization of findings. Both methods have their strengths and can be used together to provide a comprehensive understanding of customer experience.

• Data Type : Quantitative research methods collect objective, numerical data that can be analyzed statistically. These methods aim to provide measurable and generalizable insights about customer experiences.
• Sample Size : Quantitative research typically involves larger sample sizes to ensure statistical validity and representativeness. The focus is on collecting data from a broader customer base to generalize findings.
• Data Collection Approach : Quantitative methods use structured surveys, questionnaires, or scales to gather data. Questions are often close-ended, allowing customers to select from predefined response options.
• Analysis : Quantitative data is analyzed using statistical techniques such as descriptive statistics, correlations, regression analysis, or inferential statistics. This analysis enables researchers to identify patterns, relationships, and trends within the data.

In general we suggest picking at least one qualitative as well as one quantitative research method. Qualitative methods, like interviews or focus groups, will provide you with in-depth knowledge about individuals, like their expectations or needs. Also they help to bring up topics you did not consider upfront. Quantitative methods will help you verify these learnings to see if the points also apply to other people.

An overview on the most common customer experience reseearch methods

There is a variety of research methods that can be used to collect customer experience data. All of them have their pros and cons, such as a certain bias that each method inherits or the specific types of data that it yields.

To level out potential biases – triangulate. Choose two or three methods that you think are most promising in collecting useful and actionable data.

Data collection

Participants are provided with a questionnaire

paper-based or digital

makes data and respondents comparable

Disadvantages

• static • respondents can only answer the questions that are asked

Researcher’s challenge

• asking the right questions • asking the questions right • participant recruitment

Participants are asked to talk about specific issues or experiences

• structured, semistructured, or unstructured • contextual or non-contextual Advantages depending on the grade of structure, respondents can express what is important to them

• time and cost intensive • interviewer effect: the interviewer influences the situation and consequently could impact the answers

• being aware of when they are guiding or leading the interviewee • remaining objective

Observation

‍ Data collection

Researchers watch and take notice of the behaviors of participants in a certain situation

• participatory, non- participatory, or somewhat in between • covert vs. overtAdvantagesmore objective view on behavior

• time and cost intensive • observer effect: people might behave in a way they think it is expected

• perceiving important information • being aware of the influence one has on the situation

Auto-ethnography

Participants observe themselves and reflect on their behavior, thoughts and so forth

diary studies, photos, videos, audio, artifacts, …

insights into the person’s inner thoughts

• bias caused by researcher’s prior knowledge and experiences • data might be highly subjective or contextual and need direct explanation by the participant

• researcher: briefing the participant correctly • participant: conscious reflection and report of situations

Cultural probes

Participants collect diverse material in the situation of interest

• abstract descriptions become more comprehensible • recall of information is supported

collection might take a lot of effort

collection/report of cultural probes

Mobile ethnography

Participants use their mobile to report experiences in real-time

open vs. structured approach

• mobile device • recall bias minimized through reports in real-time • minimal researcher bias

high effort for participants

You collected so much data, now is the time to structure it! This piece of content will help you to structure your customer experience data.

And now, what's next?

Now it's about implementing what you've just learned: start researching customer experience and create a repository of useful CX insights.

With the customer journey tool Smaply you can create a hub of CX research and take your innovation further from there.

Sign up now, it's free!

Antonia Cramer

Antonia keeps her eyes open for questions people interested in service design are looking to answer, and helps us provide resources to support their learning ambitions. With her background in digital communication she has great knowledge on how to create content that is easy to access and understand.

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Experience is everything. Get it right.

Good customer experience leaves people feeling heard and appreciated. It minimizes friction, maximizes efficiency and maintains a human element.

Ingredients for great experiences

Give customers a great experience, and they’ll buy more, be more loyal and share their experience with friends. That’s what every company strives for. Yet so many consumers seem disappointed. Call it an experience disconnect: companies tout the latest technology or snappy design, but haven’t focused on—or invested in—the most meaningful aspects of customer experience.

What truly makes for a good experience? Speed. Convenience. Consistency. Friendliness. And human touch—that is, creating real connections by making technology feel more human and giving employees what they need to create better customer experiences.

Download the full report

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Experience is everything. It's time to raise the bar.

Experience gap, meet opportunity sweet spot: 6 must-knows.

The price premium for getting it right is real—and it’s big .

Bad experiences are driving customers away—faster than you think .

Save the bells and whistles. Get the must-do’s right first (right now) .

Excellent customer experience starts with superior employee experience .

Gen Z isn’t all that different—but their definitions might be .

If experience isn’t your strategy, you’re doing it wrong .

The price premium for getting it right is real—and it’s big

When customers feel appreciated, companies gain measurable benefits—including the chance to win more of their customers’ spending dollars. The payoffs for valued, great experiences are tangible: up to a 16% price premium on products and services, plus increased loyalty. While every industry sees a potential price bump for providing a positive customer experience, luxury and indulgence purchases benefit the most from top-flight service.

Customers also said they were more likely to try additional services or products from brands that provide superior customer experience. What’s more, while 43% of U.S. consumers said they would not give companies permission to collect their personal data (such as location, age, lifestyle, preferences and purchase history) to allow for more personalized, customized experiences, 63% said they’d be more open to sharing their data for a product or service they say they truly valued.

Get the details

Bad experiences are driving customers away—faster than you think

If you think you’ll have plenty of time to get it right because you’re a beloved brand, think again. Imagine losing one-quarter of your customers in a single day. For good. Because that’s exactly what could happen after just one bad customer experience. In the U.S., even when people love a company or product, 59% will walk away after several bad experiences, 17% after just one bad experience.

32% of all customers would stop doing business with a brand they loved after one bad experience. In Latin America, 49% say they’d walk away from a brand after one bad experience.

Save the bells and whistles. Get the must-do’s right first (right now)

Nearly 80% of American consumers say that speed, convenience, knowledgeable help and friendly service are the most important elements of a positive customer experience. Prioritize technologies that provide these benefits rather than adopting new technologies for the sake of being cutting edge.

While many companies focus significant time and money on design that pops or cutting-edge technology to wow customers, these aren’t as essential to the experience equation as many companies believe. Customers expect technology to always work and often don’t take notice of it (unless it’s malfunctioning). They want the design of websites and mobile apps to be elegant and user-friendly; they want automation to ease experience. But these advances don’t matter much if speed, convenience and the right information are lacking.

When customers’ expectations are met or exceeded, companies gain measurable business benefits—including the chance to win more of their customers’ spending dollars.

Excellent customer experience starts with superior employee experience

Human interaction matters now—and 82% of U.S. and 74% of non-U.S. consumers want more of it in the future. That makes it crucial that the technology supporting human interaction is unobtrusive and works seamlessly across platforms. Today, 59% of all consumers feel companies have lost touch with the human element of customer experience. And there’s a mismatch between customer expectations and how employees deliver: only 38% of U.S. consumers say the employees they interact with understand their needs; 46% of consumers outside the U.S. say the same.

Automated solutions should  “learn” from human interactions  so those experiences also improve. This shift allows your employees to be more engaged when they’re needed, provide better service and get necessary support from technology—as part of the seamless experience. This will require a change in how companies measure customer service performance. A focus on innovation, and equipping employees with technology and the information they need to best serve consumers could help close this gap. So could incentivizing employees to provide a good experience,  boosting relevant training for employees  and fostering a corporate culture of empowerment.

Gen Z isn’t all that different—but their definitions might be

What matters most to all generations surveyed holds true for Gen Z, too. But what passes for speed and knowledge to Gen Z might be different. Instant is expected. Convenience—the seamless transition from tablet to smartphone to desktop to human—is a baseline expectation.

Gen Z is impressionable right now, and is in the process of forming its loyalties to brands. 40% of Gen Zers (vs. 24% for everyone surveyed) feel more loyal to brands now than last year, so there are some nuances worth understanding if you’re trying to appeal to the preteens, teens and young adults that were born in the mid- to late- 1990s.

And just like other age groups, when Gen Z customers feel appreciated, they are more likely to recommend or endorse a brand on social media, subscribe to a brand’s newsletter or sign up for promotions and make repeat purchases. 

If experience isn’t your strategy, you’re doing it wrong

Among all customers, 73% point to experience as an important factor in their purchasing decisions, behind price and product quality. Customers are willing to pay more for the experience qualities that matter most to them: 43% of consumers would pay more for greater convenience, 42% would pay more for a friendly, welcoming experience and 65% of U.S. customers find a positive experience with a brand to be more influential than great advertising.

Yet the number of companies that say creating better customer experiences is a digital priority has  dropped to just 10% in 2017 , down from 25% in 2016, according to PwC’s Digital IQ survey. That’s a problem, especially since 54% of U.S. consumers say customer experience at most companies needs improvement. The expectations consumers have for different industries varies—but one thing is clear: they don’t feel their expectations are being met.

Know the implications

• Your customers have demands. They aren’t what you think.  Technologies and improvements that increase speed, convenience, friendliness and knowledge—core demands of consumers—are openings for companies to improve how people interact with, embrace and spend with their brand.
• Customers generate revenue. Employees drive the experience.  Reduce friction for consumers and empower employees to drive customer satisfaction. This requires new ways of working, a focus on employee experience and a sophisticated view of the human-and-machine relationships.
• Technology can’t solve experience problems. It’s only an enabler. Realign your priorities. Great employee experience leads to stronger, smarter, more innovative ideas. These will drive future business and superb customer experience.

Are you ready to transform your customer experience and make what’s next for your organization?

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Better customer interactions: new insights from hbr study.

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There's a gap between the importance of customer interactions and how successful companies are in ... [+] delivering very positive ones, a new study from HBR and Tata Communications shows.

A recent study by Harvard Business Review, conducted in collaboration with Tata Communications, reveals some unexpected news and at least one unwelcome trend in customer experience.

Despite the widespread adoption of digital tools intended to enhance customer experience (CX), the study found that a mere 38% of those surveyed thought their organization was very successful at delivering positive customer interactions. Even that number could be high. Past research has shown companies often wildly overestimate the quality of their customer experience.

Clearly, simply implementing digital solutions isn’t enough; they must be thoughtfully integrated to truly benefit the customer.

About the HBR/Tata Study

The study surveyed 264 members of the Harvard Business Review Audience, all of whom were familiar with their company’s approach to customer interactions. Typically, these were senior executives and customer experience leaders across various industries worldwide.

The participants represented all major global regions and were primarily from large organizations with significant customer interaction needs. Industries included telecommunications, finance, retail, and healthcare. The study attempted to capture a comprehensive view of current CX challenges and strategies by gathering insights from those directly responsible for shaping and implementing customer interaction initiatives within their companies.

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How important are customer interactions and CX? Fully 92% of the participants said that every customer interaction impacts customer experience. And, 93% agreed that CX impacts the organization's ability to succeed.

The only surprising thing about this finding is that apparently 7% of those surveyed think CX is unimportant . Who are those people? Cable and internet provider executives? Pharma bros?

Complexity and Confusion: The Downside of Too Many Channels

One significant finding was the impact of having too many customer interaction channels. While offering multiple channels seems like a good way to meet customers where they are, the study indicates that it can actually lead to increased confusion and frustration.

Mauro Carobene, VP and Global Head of Customer Interaction Suite at Tata Communications, highlighted this issue in an exclusive interview , noting that often changing channels means starting over. “A bad interaction is when you repeat the same experience, the same information... You contact technical support, you go through a number of menus, explain your problem, and so on. And at the end, you switch to an agent and you need to start again from scratch.”

Carobene emphasizes the importance of seamless interactions, even when customers change channels or encounter new representatives.

Chatbots vs. Humans

A major shift in customer interactions is looming as companies deploy chatbots to assist and/or replace human representatives. At the moment, customer opinion on chatbots is split. While they appreciate instant, 24/7 availability, many feel frustrated by their interaction with chatbots. We’ve all encountered useless chatbots that seem to serve mainly to delay or prevent human interaction.

In my conversation with Carobene, I stated my belief that people didn’t dislike chatbots per se, but rather disliked bad chatbots. I suggested that as AI-driven chatbots improved, they would displace millions of call center workers.

Carobene’s take was different. “Chatbots represent one of the biggest opportunities today to interact better with customers,” he said. He notes that to be truly useful, LLM-based chatbots will need extensive training to understand what customers are experiencing. For example, a non-technical customer might say their wi-fi wasn’t working when in fact the problem was their 5G data. Nuance is necessary, and fixed interaction flow charts will have to become dynamic.

Ultimately, Carobene sees chatbots as useful partners to human representatives, particularly in offering instant availability. “People forget when they were waiting for 20 minutes, or even hours, for an agent to be available.”

Carobene is optimistic on chatbot improvement. “AI will move from solving maybe 5% of the problems today automatically with bots to maybe 80%. And that will represent big savings for the company, but also huge time savings for customers.”

Customer Experience vs. Employee Experience

Customer experience doesn’t stand alone. In the study report, Carobene states, “In a hyperconnected ecosystem, enterprises need to think about creating superior experiences for their employees, customers, partners, and users.”

In our conversation, he pointed out that experience must be seamless for both employees and customers. A tech support person, for example, who is unhappy, upset, or struggling to find information will create a negative experience. A happy representative delivers positive energy and a good interaction.

“Successful companies,” he notes, “manage to increase their engagement internally and externally.”

CX Will Get Better

Perhaps the best news from the study is that 97%. of the respondents said their organization is focused on making one or more improvements to customer interactions over the next 12 months.

At the top of the list for improvements are making interactions more seamless (55%), enhancing personalization (50%), and delivering a more consistent experience (50%). Nearly as many are working on improving marketing messaging (48%) and making interactions more seamless for employees (45%).

While these projects don’t actually guarantee that customer experience will improve, they indicate an understanding that CX has plenty of room for improvement and a commitment to making it better.

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✨ AI in Retail Report: Power to the Marketer Get the AI Report .

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How to Create a CPG Experience That Drives Loyalty

The CPG experience you offer your consumers will make the difference between long-term loyalty and one-off purchases. So how can you deliver great experiences, consistently and at scale, in order to develop true consumer loyalty? 

As a solution consultant, I work closely with CPG brands of all types — cheese brands, beauty products, candy, and everything in between. Time and again, it’s that the brands that seek to understand their consumers, to connect with them in meaningful ways across touchpoints, are setting themselves up for long-term growth. 

In this article, I’ve laid out strategies and best practices for creating the kinds of CPG experiences that keep consumers coming back for more.

Get insights from brands like Ferrara, Colgate-Palmolive, and John Frieda in our new guide for consumer products.

What Is CPG Experience? 

CPG experience refers to the entire interaction that a consumer has with a brand in the consumer packaged goods (CPG) industry. This includes interactions such as seeing ads for the product, purchasing via a third-party retailer, using the product, and engaging with the brand online. 

CPG experience is similar to customer experience (CX) , but with added layers of nuance unique to the consumer products industry. Whereas CX commonly revolves around direct purchases made by the customer from the brand, CPG experience is one step removed from that interaction simply because of the nature of CPG. This means that in order to provide the same level of customer experience that shoppers have come to expect, CPG marketers must find ways to close the gap and create direct consumer experiences

Unless you’re a hermit who lives in the wilderness, unconnected from humanity, you’re likely engaging with CPG brands every day. And as you know, that experience can be outstanding or disappointing, which directly influences consumer loyalty.

Lack of personalization makes a poor CPG experience

71% of consumers expect personalization, and 76% of consumers get frustrated when they don’t get it. Accenture

Don Brett, the host of the CPG View Podcast, hosted a panel session with SAP Emarsys that focused on how CPG brands are building consumer engagement. During the session, Don shared a lackluster experience he had with a brand: 

Watch the complete session on-demand .

In this short clip, Don describes how he was shopping for a product, but the brand served him an ad for a product that was irrelevant to his search. The experience left him wondering whether he should shop elsewhere. 

Serving unpersonalized, irrelevant content sends a clear signal to the consumer — a signal that the brand doesn’t understand them. 

Relevant, meaningful content makes great CPG experiences

Consumers are under constant barrage from brands vying for their attention, so it’s no wonder they’re more likely to notice — and appreciate — content that’s relevant to them. 

Here are a few questions I recommend asking to help ensure all your interactions are on track for a positive experience: 

• Have I segmented my target audiences, and is this interaction right for this segment? 
• Am I engaging on the channels where this consumer is likely to engage?
• Will this interaction solve a problem the consumer has? 
• Am I offering genuine value for the consumer’s time and attention? 

When you speak to the consumer about what interests them, and you offer value that they can’t resist, you lay the foundation for a long-lasting relationship that’s built on trust.

Check out this interactive journey featuring Wella Company to see one way to use TikTok to drive personalized, relevant engagement at scale. 

Best Practices for Creating Positive CPG Experiences

Building long-lasting relationships with consumers, and delivering consistent messaging that’s relevant and tailored, depends on building direct engagement. That kind of relationship depends on how well you can understand your consumers and act on that understanding to deliver the right message to the right person at the right time. 

1. Plan your zero- and first-party data strategy

Data strategy is so critical that it should be items 1, 2, and 3 on your CPG marketing to-do list. In fact, it should be a part of everything you do in marketing. And collecting zero- and first-party data is key to providing the kinds of tailored, personalized experiences that drive loyalty. By collecting this data and activating it throughout your consumer journey, you can build an ongoing, two-way conversation with the consumer. 

When I sit down with brands to uncover ways to create direct consumer engagement, I always ask these two questions: 

• What data and content do you already have? The answer to this question is the starting point, but more than that, I find that many brands don’t necessarily know how much they can do with what’s already on hand. (For example, the data you have on blog traffic for a holiday recipe could lead to your next highly engaging campaign.)
• What goal do you want to achieve? The answer to this question helps inform you about what data you maybe don’t have right now, but need to acquire in order to reach your goals. 

Be sure to consider the stages of your consumer’s journey with your brand and determine when it’s appropriate to gather data. 

Data strategy is an extensive topic. To learn more, check out these real examples of how to capture zero- and first-party data .

2. Create value exchanges that matter

Customers today understand that their data is valuable to your brand, and they won’t simply give it away for no reason. You have to give to get, and presenting a value exchange that resonates with your consumers gives them ample reason to share their personal information. 

A few examples of this include: 

• A QR code on your packaging can provide an immediately redeemable coupon in exchange for an email address. 
• A pop-up on your website can lead consumers to sign up for your newsletter to get inspiration on creative ways to use your products. 
• A “Find the Right Product for You” quiz on your website or mobile app can help guide consumers to the right product and yield data at the same time.  

Don’t stop there, though. Our recent consumer products guide outlines 10 omnichannel journeys to build direct engagement . 

3. Adapt dynamically over time with progressive profiling

Consumers aren’t static. They’re constantly changing — whether following new trends, moving to a new location, or trying a new hobby. A consumer who’s interested in hair volumizing today might be more interested in braiding styles in six months. 

Connecting with your consumer at different stages and gauging their current interests can help you adapt your messaging. Over time, you can build up more and more data and hone your personalization efforts. 

“One of the things for us is how you create a value exchange that really resonates and is dynamic over time. The relationship with the consumer will change. How do we evolve our personalized content as that relationship with our consumer evolves?”

4. Create seamless experiences across channels

When consumers encounter friction as they fluidly switch from channel to channel, that friction reflects poorly on the brand. An omnichannel strategy gives your consumers a consistent, seamless experience as they interact with you.

Getting started on your omnichannel strategy doesn’t have to mean “all the channels all at once.” Instead, start by focusing on the key channels that make the most sense for your brand and your consumers and then gradually expand. 

Don’t underestimate the engagement power of your website! When you send messages to consumers, you need a destination point, a call to action, and your website is premium real estate for value-added content to engage consumers, deepening that relationship and making it last. At the same time, you’ll gain greater insights into their interests and motivators.

5. Go through your own brand’s CPG experience!

Walking through your brand experience as the consumer can be eye-opening, and it’s something that every marketer should experience. 

In-store purchase, web browsing, social ads, mobile app — on every channel you use to connect, what is the experience? As you do your walk through, put yourself into the mindset of your consumer. What solutions are you looking for? How quickly and easily are you able to find what you need? If you encounter friction or frustration along the journey, or if you find there’s something lacking, you may have uncovered a prime opportunity to optimize the CPG experience and drive greater consumer loyalty. 

Conclusion 

By understanding and connecting with your consumers across various touchpoints, you can create meaningful and personalized interactions that foster loyalty and drive growth. Using the best practices in this article, you can build strong, lasting relationships with your consumers and set your brand up for sustained success. 

This is the second article in this series on marketing for consumer products — more to come!

Get even more great tactics that drive consumer engagement and loyalty!

Other Articles in This Series:

5 Expert Tips to Inspire Your CPG Marketing Strategy

• Coming Soon! CPG use cases, with videos

Nick Odom is a Principal Solutions Consultant for SAP Emarsys and has been with the company since 2016. He has worked with e-commerce, consumer products, and retail companies to discover impactful omnichannel use cases that drive business results.

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Money blog: Morrisons admits it 'went too far' with self-checkouts - as it changes strategy

Welcome to the Money blog, your place for personal finance and consumer news and tips. Today's posts include Morrisons getting rid of some self-checkouts and a Money Problem on topping up your national insurance. Leave your consumer issue below - remember to include contact details.

Monday 19 August 2024 15:54, UK

• Energy bills to rise 9% this winter - forecast
• Morrisons admits it went too far with self-checkouts
• Kellogg's shrinks size of Corn Flakes

Essential reads

• Money Problem : 'Should I top up my national insurance and could it really get me £6,000 extra?'
• Pay at every supermarket revealed - and perks staff get at each
• Couples on how they split finances when one earns more than other

Tips and advice

• All discounts you get as student or young person
• Save up to half price on top attractions with this trick
• Fines for parents taking kids out of school increasing

Ask a question or make a comment

Morrisons has admitted it "went a bit too far" with self-checkouts.

Chief executive Rami Baitiéh says the supermarket is "reviewing the balance between self-checkouts and manned tills".

Some will be removed.

Mr Baitiéh told The Telegraph : "Morrisons went a bit too far with the self-checkout. This had the advantage of driving some productivity. However, some shoppers dislike it, mainly when they have a full trolley."

The executive also said self checkouts had driven more shoplifting.

What have other supermarkets said about self-checkouts?

In April, the boss of Sainsbury's said customers liked self-checkouts...

That prompted us to ask readers for their thoughts - and we carried out a poll on LinkedIn which suggested the Sainsbury's boss was right...

Asda's chief financial officer Michael Gleeson said last week the technology had reached its limit - and said his firm would be putting more staff on tills.

Northern grocer Booths ditched almost all self-checkouts last year amid customer service concerns.

Over at Marks & Spencer, chairman Archie Norman last year blamed self-checkouts for a rise in "middle-class shoplifting".

But Tesco CEO Ken Murphy is an advocate: "We genuinely believe, at the end of the day, it provides a better customer experience."

Many retailers boosted wages after living wage/minimum wage changes in spring.

Figures show German discount brands Aldi and Lidl top the list of major UK supermarkets when it comes to staff hourly pay - after Lidl introduced its third pay increase of the year in May to match its closest rival.

Meanwhile, Morrisons is at the bottom of the pack for staff pay outside London, with hourly wages starting at the National Living Wage (£11.44).

How do other companies compare when it comes to pay and benefits? We've taken a look...

Pay: £12.40 an hour outside London and £13.65 inside the M25

Aldi announced in March it was bringing in its second pay rise of the year as part of its aim to be the best-paying UK supermarket.

From 1 June, hourly pay rose from £12 an hour to £12.40 outside the M25 and £13.55 to £13.65 in London. 

Aldi is one of the only supermarkets to give staff paid breaks. It also offers perks such as discounted gym membership and cinema tickets, and financial planning tools. However, there are no cheaper meals, staff discounts or bonus schemes.

Pay:  £12.04 an hour outside London and £13.21 inside the M25

As of 1 July, hourly wages for Asda supermarket staff rose to £12.04 per hour from £11.11, with rates for London staff also going up to £13.21.

As part of the July changes, Asda brought in the option for free later-life care or mortgage advice. The company also offers a pension and a free remote GP service.

Pay:  £12 an hour outside London and £13.15 inside the M25

Co-op boosted its minimum hourly wage for customer team members from £10.90 to £12 nationally as the national living wage rose to £11.44 in April.

For staff inside the M25, rates rose from £12.25 to £13.15.

The perks are better than some. Workers can get 30% off Co-op branded products in its food stores as well as 10% off other brands. Other benefits include a cycle to work scheme, childcare vouchers and discounts on its other services.

Pay:  £11.50 an hour outside London and £12.65 inside the M25

Iceland says it pays £11.50 for staff aged 21 and over - 6p above the minimum wage. Employees in London receive £12.65 per hour.

Staff are also offered a 15% in-store discount, which was raised from 10% in 2022 to help with the cost of living.

The firm says it offers other perks such as a healthcare scheme and Christmas vouchers.

Pay:  £12.40 an hour outside London and £13.65 inside the M25

From June, Lidl matched its rival Aldi by raising its hourly wage to £12.40 for workers outside the M25 and £13.55 for those inside.

Lidl also offers its staff a 10% discount card from the first working day, as well as other perks such as dental insurance and fertility leave. 

Marks and Spencer's hourly rate for store assistants was hiked from £10.90 to £12 for staff outside London and from £12.05 to £13.15 for London workers from April.

The grocer also offers a 20% staff discount after the probation period as well as discretionary bonus schemes and a free virtual GP service.

Pay:  £11.44 an hour outside London and £12.29 inside the M25

Along with many other retailers, Morrisons increased the hourly wage for staff outside the M25 in line with the national living wage of £11.44 in April.

Employees in London receive an 85p supplement.

While it's not the most competitive for hourly pay, Morrisons offers perks including staff discounted meals, a 15% in-store discount and life assurance scheme.

Sainsbury’s

Sainsbury's hourly rate for workers outside London rose to £12 from March, and £13.15 for staff inside the M25.

The company also offers a 10% discount card for staff to use at Sainsbury's, Argos and Habitat, as well as a range of benefits including season ticket loans and long service rewards.

Pay:  £12.02 an hour outside London and £13.15 inside the M25

Since April, Tesco staff have been paid £12.02 an hour nationally - up from £11.02 - while London workers get £13.15 an hour.

The supermarket giant also provides a 10% in-store discount, discounted glasses, health checks and insurance, and free 24/7 access to a virtual GP.

Staff get their pay boosted by 10% on a Sunday if they joined the company before 24 July 2022.

Pay:  £11.55 an hour outside London and £12.89 inside the M25

Waitrose store staff receive £11.55 an hour nationally, while workers inside the M25 get at least £12.89.

Staff can also get access to up to 25% off at Waitrose's partner retailer John Lewis as well as 20% in Waitrose shops. 

JLP (the John Lewis Partnership) gives staff a bonus as an annual share-out of profit determined by the firm's performance. In 2021-22 the bonus was 3% of pay; however, it has not paid the bonus for the past two years.

Dozens of Ted Baker stores will shut for the last time this week amid growing doubts over a future licensing partnership with the retail tycoon Mike Ashley.

Sky News understands that talks between Mr Ashley's Frasers Group and Authentic, Ted Baker's owner, have stalled three months after it appeared that an agreement was imminent.

Administrators are overseeing the closure of its remaining 31 UK shops.

One store source said they had been told that this Tuesday would be the final day of trading.

Read more ...

The housing market experienced a surge in activity following the Bank of England's recent decision to cut interest rates, according to a leading property website.

Estate agents reported a 19% jump in enquiries about properties for sale after 1 August, when compared with the same period last year, research by Rightmove found.

It came after the Bank cut rates for the first time in more than four years from 5.25% to 5%.

The lead negotiator for major train union ASLEF has denied the union sees the new government as a "soft touch" after announcing fresh strikes two days after train drivers were offered a pay deal.

Drivers working for London North Eastern Railway will walk out on weekends from the end of August in a dispute over working agreements.

Lead negotiator Nigel Roebuck said it is a separate issue from the long-running row over pay, which looks likely to be resolved after a much-improved new offer from the government.

Over 40 bottles of fake vodka have been seized from a shop in Scotland after a customer reported "smelling nail varnish".

The 35cl bottles, fraudulently labelled as the popular brand Glen's, were recovered from the shop in Coatbridge, North Lanarkshire.

Officers from the council's environmental health officers and Food Standard Scotland (FSS) sent them for analysis after a customer raised the alarm by saying they smelt nail varnish from one of the bottles.

The bottles were found to be counterfeit.

Britons don't have long left to claim cost of living assistance from the Household Support Fund.

Introduced in October 2021, the scheme provides local councils with funding which can be used to support those struggling most with the rising cost of living.

The vast majority of councils operate their version of the Household Support Fund on a "first come, first serve" basis and will officially end the schemes once the funding has run out in September.

The help provided by councils has ranged from free cash payments, council tax discounts, and vouchers for supermarkets and energy providers.

Who is eligible?

Local authorities were instructed to target the funding at "vulnerable households in most need of support to help with significantly rising living costs" when it was first rolled out.

In particular, councils were guided to make priority considerations for those who: 

• Are eligible but not claiming qualifying benefits;
• Became eligible for benefits after the relevant qualifying dates;
• Are receiving housing benefit only;
• Are normally eligible for benefits but who had a nil award in the qualifying period.

If you do not meet these criteria, you can still contact your local council , with many having broadened their criteria for eligibility.

By Daniel Binns, business reporter

Weapons maker BAE Systems is the big loser on the FTSE 100 this morning, with its shares down almost 3% in early trading.

It comes following reports over the weekend that the German government is planning to scale back aid to Ukraine in its war with Russia – in what would be a blow to the arms industry.

German media said ministers are set to slash support for Kyiv to 6% of current levels by 2027 in their upcoming budget.

However, the government there has rejected the reports and has denied it is "stopping support" to Ukraine.

Whatever the truth, the reports appear to have spooked traders.

Other companies involved in the defence sector, including Rolls-Royce Plc and Chemring Group, are also down more than 2% and 1% respectively on Monday.

It comes amid a slight slump in early trading, with the FTSE 100 down just over 0.2%, although the FTSE 250 is up 0.07%.

Gainers this morning include housebuilders Barratt Developments, up 1.5%, and Redrow Plc, which is up almost 3%.

Barratt said today it intends to push ahead with a planned £2.5bn merger with its rival despite concerns from the competition regulator.

Meanwhile, the price of oil is down amid concerns of weaker demand in China.

Ongoing ceasefire talks in the Israel-Hamas conflict have also raised hopes of cooling tensions in the Middle East, which would help ease supply risks and worries.

A barrel of the benchmark Brent Crude is currently priced at just over $79 (£61).

On the currency markets, this morning £1 buys $1.29 US or €1.17.

Winter energy bills are projected to rise by 9%, according to a closely watched forecast.

The price cap from October to December will go up to £1,714 a year for the average user, Cornwall Insight says.

It would be a £146 rise from the current cap, which is controlled by energy regulator Ofgem and aims to prevent households on variable tariffs being ripped off.

The cap doesn't represent a maximum bill. Instead it creates an average bill by limiting how much you pay per unit of gas and electricity, as well as setting a maximum daily standing charge (which all households must pay to stay connected to the grid).

Ofgem will announce the October cap this Friday.

"This is not the news households want to hear when moving into the colder months," said the principal consultant at Cornwall, Dr Craig Lowrey.

"Following two consecutive falls in the cap, I'm sure many hoped we were on a steady path back to pre-crisis prices. 

"However, the lingering impact of the energy crisis has left us with a market that's still highly volatile and quick to react to any bad news on the supply front.

"Despite this, while we don't expect a return to the extreme prices of recent years, it's unlikely that bills will return to what was once considered normal. Without significant intervention, this may well be the new normal."

Cornwall Insight warned that the highly volatile energy market and unexpected global events, such as the recent escalating tensions in the Russia-Ukraine war, could see prices rise further at the start of the new year.

To avoid this vulnerability, Cornwall Insight said domestic renewable energy production should increase and Britain should wean itself off energy imports.

Kellogg's appears to have shrunk its packets of Corn Flakes. 

Two of its four different pack sizes have reduced in weight by 50g, according to The Sun. 

What used to be 720g boxes are now 670g, while 500g boxes have become 450g. 

The newspaper says the 670g boxes are being sold for £3.20 in Tesco - the same price customers were paying for the larger box back in May. 

The 450g boxes are being sold for £2.19, only slightly less than the previous price of £2.25.

Other supermarkets have similar pricing, although in Morrisons the price has gone down in proportion to the size reduction.

The 250g and 1kg pack sizes remain unchanged. 

Kellogg's has said it is up to shops to choose what they charge, but Tesco said the manufacturer should comment on pricing. 

Sky News has contacted Kellogg's for comment.

A spokesperson is quoted by The Sun: "Kellogg's Corn Flakes are available in four different box sizes to suit different shopper preferences and needs. 

"As the cost of ingredients and production processes increase, it costs us more to make our products than it used to.

"This can impact the recommended retail price. It's the grocer's absolute discretion and decision what price to charge shoppers."

WHSmith has launched a café brand as it seeks to expand into the food-to-go market.

The first café is in Princess Anne Hospital in Southampton and offers teas and coffees, hot breakfasts and pastries

Its branding is the same as the Smith Family Kitchen food-to-go range launched three months ago.

WHSmith UK travel managing director Andrew Harrison said: "Whether it's in a hospital or on their journeys, customers tell us that quality food and drink options are what they prioritise most in the different locations we serve.

"That's why we have been doubling down on our food ranges and formats to ensure our customers don't need to compromise on quality or value, as demonstrated today with the launch of Smith's Kitchen."

By Jimmy Rice, Money blog editor

Every Monday the Money team answers your Money Problems or consumer disputes. Find out how to submit yours at the bottom of this post. Today's question is...

I'm 62 and have 10 years of gaps in my national insurance record as I worked for my parents' import business without a fixed wage during most of my twenties and thirties, and had periods of unemployment in my fifties. What are the benefits of topping up before I retire in a few years and can I really get £6,000 added to my pension for every £900 I put in?  Tony, Palmers Green

This is a question many people approaching retirement will be asking themselves, Tony.

First, it's worth us outlining why your national insurance record matters and who can top up.

If you reached pension age after 6 April 2016 you need 10 years of NI contributions to get a state pension - and 35 years to get the full £221.20 a week. Before that 2016 date, it's 30 years.

People may have gaps in their record for numerous reasons including: being unemployed, on a low income, self-employed, having worked abroad, or having taken a break from work to raise a family.

Ordinarily, you can pay voluntary contributions for the past six years - but currently there's an extended period meaning a man born after 5 April 1951 or a woman born after 5 April 1953 can pay voluntary contributions to make up for gaps between April 2006 and April 2016.

The deadline for this is 5 April 2025.

How much could topping up earn you?

It would cost £907.40 to cover all NI contributions from the 2023-24 tax year - each year is different but this is a good guide. Going back to your question, if you went on to enjoy 20 years of retirement, you would get back £6,000. It would take just three years to get your £907.40 back.

Who might want to think twice?

Just to stress, as always, that this post is not intended as financial advice. Instead, we're outlining things you should think about.

The first thing anyone should consider is if they'll fill gaps naturally through working - in which case there'd be no point topping up. Given your age, Tony, it could be an option for you - but check your state pension forecast  here .

There are lots of other things to factor in and you should seek independent financial advice.

Wealth management firm  Charles Stanley  says a key consideration is whether a higher pension would either:

• Drag you into paying tax when you retire;
• Mean you no longer qualify for certain benefits.

"You might not benefit from the full amount of extra money as some will be taken in income tax," they say.

"In addition, boosting state pension income can affect entitlements to means-tested benefits. Notably, if you claim pension credit, which tops up the income of very low earners over state pension age, any increase in the state pension would normally reduce an award. This often means that you would be no better off paying voluntary contributions."

Another consideration - and this isn't something most people want to contemplate - is that if you don't think you'll live long enough into retirement (you might be in ill-health or have a terminal illness) to benefit from topping up, then it's probably not worth it.

People should also look into whether they could transfer contributions from their spouse or civil partner .

One more way to top up

Which? advises: "Ensure that you are getting any NI credits you are entitled to before contemplating paying voluntary NI contributions for a particular year. 

"These are free and will apply, say, if you are caring for a child in the family as a parent or grandparent, claiming statutory sick pay or looking after a sick/disabled person."

If you're below state pension age, you can contact the Future Pension Centre to see if you'll benefit from topping up - they're on 0800 731 0175. If you already claim the state pension, call the Pension Service on 0800 731 0469.

Again, before taking any action you should seek independent financial advice.

If you do decide to top up, you'll need a Government Gateway account.

On there, you can see gaps, the cost of filling them and how much you could benefit - you can then pay online.

This feature is not intended as financial advice - the aim is to give an overview of the things you should think about. Submit your dilemma or consumer dispute via:

• The form above - you need to leave a phone number or email address so we can contact you for further details;
• Email [email protected] with the subject line "Money blog";
• WhatsApp us here.

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