What’s the difference between customer satisfaction and customer experience?

The difference between customer satisfaction and customer experience

The difference between customer satisfaction and customer experience

Ever wondered what the difference between customer satisfaction and customer experience is?

In the 80’s came the discovery of knowing what customers think about your business and it was measured through customer satisfaction indexes which at the time was a brilliant idea.

Interestingly enough, this is now…

So, why didn’t customer satisfaction go away?

There are still so many research companies evolving wanting to drive great customer satisfaction and get the exact mix to achieve this.

So is there a way?

Yes! And its called “Customer Experience”

It’s called customer experience and it is a measure of the whole of experience that a customer has with an organisation, not just the customer service, which customer satisfaction is typically linked to.

Indeed, customer satisfaction is a component of customer experience, but that’s all – just one component and certainly not the most important.

As a single measure, it’s dated.

We need to let it go.

Core Components of Customer Experience

The core components of Customer experience is made up of six categories:

1. Communications – how the organisation communicates via brand, advertising, marketing, sales and ongoing communications;

2. Product – how well suited to an individual customer the product features are;

3. Processes – how easy and useful the organisations processes are that the customer undertakes e.g. a claims process or an application process;

4. Channels – how well the organisation’s contact channels (website, phone, face-to-face, digital) suit the preferences of the customer;

5. People – how the people of the organisation treat the customer; and

6. Price – what the customer is willing to pay, and regards as good value, for the whole of the experience.

Customer experience measures take into consideration these six categories and an assessment of the customers’ engagement made up of:

  • Emotional response – how the customer felt about the experience;
  • Rational response – the cognitive or rational assessment (satisfaction) the customer made of the experience; and
  • Value for effort – customer assessment of effort compared to value.

So what CX measures are actually useful to business?

Net Promoter Score (NPS), is a commonly used tool to measure how likely it is that a customer would recommend a company to a friend or colleague.

There is a significant correlation between NPS and business revenue and growth, few Australian-based companies can actually claim this or indeed actually measure this correlation.

Criticisms of NPS include that it is only a customer advocacy measure and does not provide deep driver analysis or any true predictive power.

So NPS is currently popular, but we question its worth.

There has been a recent rise in interest in the measure of “customer effort”, which assesses how much effort you [as a customer] personally have to put forth to have your request handled?

The Customer Effort Score is measured on a scale of 1= very low effort to 5 = very high effort.

The customer effort measure has been popularised by the Corporate Executive Board in the US, which claimed: “exceeding customer expectations [customer satisfaction and NPS measures] results in virtually no loyalty gains”.

The way customer measurement is done by organisations needs to be completely renovated.

Customer measurement is cumbersome, expensive, is an imposition on customers and currently is of limited use to organisations.

Instead, let’s redesign the whole approach to customer measurement by asking the customer what, when and how they want to give us feedback.

This is called human-centred design Voice of the Customer.

Radical? No, sensible.

Next steps

Find suppliers that can help you with your CX improvement in our Business Directory – from consultants, technology suppliers, trainers and more.

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