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What is customer service vs. customer experience?

CX Best Practices

For decades, the expression "the customer is always right" has echoed through retail, travel and hospitality, contact centers and countless other industries. The phrase promotes the belief that delivering great customer service means meeting customers' every whim. But, what does great customer service actually mean — and how does it differ from customer experience?

Let's dive in!

Defining customer service

To deliver delightful customer service, we must first understand the fundamentals.

Customer service is usually delivered during or after the sale of a product or service, and involves a group of stakeholders: the customer, the sales rep and possibly a contact center agent. It often requires explaining the product or service, answering customers' questions and troubleshooting any usability or technical problems that may come up after the purchase has been made. The goal is to drive customer satisfaction and increase the likelihood of the individual becoming a repeat customer.

A closely related term, customer care, speaks to an elevated form of customer service. It's where a company representative (usually a sales rep or contact center agent) makes sure the customer's needs are met and includes a more personalized approach. It goes beyond solving problems and clarifying a product's functionality. Rather, it's essentially a brand's attempt to seek out the best possible solution to customer issues and deliver thoughtful solutions and even preempt them from occurring all in the name of reducing customer effort. These types of augmented interactions actually deepen the customer-brand relationship.

Defining customer experience (CX)?

In recent years, brands began to think about customer service not as a transactional form of assistance, but as a relationship built on multiple interactions and touchpoints.

This gave birth to the term "customer experience," coined to represent everything from packaging and presentation, to in-store experiences, to online shopping interactions, to social media communication, to call center protocols to up-selling — and everything in between.

In short, the customer experience encompasses every single interaction a customer has with a brand. The practice of customer experience management, therefore, can be defined as "the practice of designing and reacting to customer interactions to meet or exceed their expectations, leading to greater customer satisfaction, loyalty and advocacy," according to Gartner.

Rather than just supporting individual transactions, more and more brands believe that the best way to create brand advocates is to devote attention and resources across a breadth of customer interactions. The thinking is that happy customers will be repeat customers and they will provide recommendations to their social circles, thus leading to additional and sustainable revenue.

Why does the customer experience matter?

In a best case scenario, customer experience becomes your brand's most reliable marketing source. Customers becoming vocal brand ambassadors who can't wait to tell their friends and family and use social media to post about their positive experience with your brand.

But, to rise to the top in this regard, companies must be committed to pursuing excellence across channels. Brands benefit when customers experience consistently high-quality service across their entire set of interactions throughout the customer journey. As research done by PwC (among others) suggests, consumers are more likely to develop an affinity for the brand that drives engagement, advocacy and higher lifetime value. "Good customer experience leaves people feeling heard and appreciated. It minimizes friction, maximizes efficiency and maintains a human element," notes PwC.

Driven by that human element, increased customer engagement and advocacy may also lead to higher overall company value. As market research company Forrester explains, CX quality sometimes impacts stock price and total returns, with high CX performers often outpacing brands with poor track records for CX.

Bad customer service = bad customer experience

Before social media empowered customers to broadcast negative interactions and leave bad reviews, brands could somewhat 'get away' with less than perfect customer service.

Today, the consequences are immediate and severe. "In the U.S., even when people love a company or product, 59% will walk away after several bad experiences, and 17% after just one bad experience" according to PwC.

The impact of those negative experiences adds up. According to NewVoiceMedia's 2018 "Serial Switchers" report, businesses with poor customer service and CX lose out on more than $75 billion a year. With negative customer experiences actually causing companies to lose money, good CX must be prioritized. In fact, many market research firms, along with research published in the Harvard Business Review, have been able to quantify the significant difference good customer service and CX make.

In today's hyper-competitive and congested marketplace, brands must make the necessary shift from customer service to customer experience in order to gain and maintain significant market share in the years to come. By delivering consistently excellent customer experiences across channels and touchpoints, companies will capture the hearts, minds and wallet share of consumers.

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