First, there were goods. Then came services. And today, it’s all about experiences.
Services were once the key driver of differentiation — a new layer on top of the physical products we bought that added additional benefits and for which we happily paid a premium.
You could have two companies selling flat-pack furniture for example. One simply offers the product, for you to take home and assemble yourself, while the other offers services alongside it from free delivery to an in-home assembly service to save you having to build them yourself.
The latter differentiates itself on its services, with more revenue-generating opportunities than its rival that only sells products.
Over the past decade, however, services have become commoditized and are no longer the key driver of differentiation.
In today’s economy, it’s all about experiences. In fact, experiences as a proportion of the economy are growing at 4X the rate of goods and services.
So when it comes to customers, there’s been a shift away from ‘customer service’ towards a more holistic view — the customer experience.
Customer services vs customer experience
The two phrases ‘customer service’ and ‘customer experience’ are often used interchangeably, typically when referring to a customer interaction such as in a contact center or in person.
However, the two are very distinct:
Customer service is a singular point of assistance for a customer on a specific issue - for example when a customer phones to say their delivery has not arrived. A customer may have multiple customer service interactions over time with a company.
Customer experience is the total journey of all a customer’s interactions with your company. It will include individual ‘service’ interactions as well as plenty of other touchpoints too
The rise of the experience economy has brought the latter into sharp focus — it’s no longer simply about providing a service to customers, but understanding how the various service interactions they have impacted their overall experience.
For example, it’s been shown multiple times that a customer service failure isn’t the be-all and — after all customers understand that things happen from time to time — and that when that failure is put right, it can in fact deliver a superior overall experience.
Understanding the complete customer journey and how each interaction, be they traditional ‘service’ interactions or more day-to-day customer contact, creates an overall experience for customers.
It’s one of the reasons contact centers have been shifting towards seeing themselves more as ‘experience centers’ in recent years — where once they were typically packed with agents dealing with phone queries from customers, today’s contact centers handle queries across multiple channels and customer journeys from digital and social media to the more traditional phone support.
They understand that each channel and interaction is part of a bigger jigsaw puzzle and that while they want every interaction to leave a positive impression, taking a ‘big picture’ view helps them to design experiences that have a greater impact on key metrics like customer spend and loyalty.
Customer experience management - a step beyond customer service software
For decades, customer service teams have been able to monitor and improve their services through technology, tracking various success metrics including the time to resolution, first call resolution, average call length and many more.
But as the world shifts towards focusing on customer experience, new platforms are being used to understand the complete picture — of which service is just one element.
Customer experience management platforms help organizations to see at a glance how each interaction impacts the overall experience for their customers, and in many cases allows companies to model how improvements impact the bottom line.
They pull together all channels and customer interactions into a single platform, allowing organizations to go beyond transactional metrics and to see a birds-eye view of the entire customer journey.
They can see which interactions have the biggest impact, where the opportunities for improvement are, and provide a closed-loop system that helps companies to step in to resolve customer issues and improve their experiences.
Traditional customer service channel owners can now see how their teams’ interactions impact the overall experience and how they’re impacted by other interactions and channels in the customer journey.
Customer service is one small piece — albeit a vital one! — in the wider customer journey and it’s increasingly being integrated into broader customer experience programs, giving organizations the tools they need to understand how each interaction adds up to experience for their customers.
By taking a customer experience approach, it’s possible to broaden your view and understand the actions you need to take not just to deliver one-off positive interactions, but to design and deliver experiences that encourage customers to spend more and stay loyal to your company.
Garret Stembridge is the Head of SEO and Content Optimization at Qualtrics. Qualtrics is the leader in Experience Management (XM), helping the world's best brands close experience gaps and deliver breakthrough results. Prior to Qualtrics, he spent his career managing content and SEO for companies with 1,000+ locations in the storage and wireless industries. Outside of work, he enjoys hanging with his family and spending as much time as possible in the beautiful Utah mountains.