Insights · 11 min read

How to master experience management in a digital world

The Qualtrics Team
Posted November 19, 2020
How to master experience management in a digital world

Article summary: As the battle for customer and employee loyalty intensifies, companies are embracing a new discipline: experience management (XM). Read on to find out what XM is, why it is vital in our increasingly digital world, and what you can do today to start closing experience gaps at your company.

What is experience management (XM)?

Experience management (XM) is the process of measuring every interaction people have with a company in order to spot opportunities for improvement. The ultimate goal of experience management is to close experience gaps - the space that often exists between a person’s expectations of a company, and what that company actually delivers.

Since 80% of CEOs believe their company provides an exceptional experience, but only 8% of their customers agree, most companies will find that there is a lot of work to be done.

But experience management isn’t just about making sure your customers are happy. A fully-formed experience management program will also measure and improve the experiences of your employees, the quality of your products, and the overall perception of your brand.

The rise of the experience economy

Hundreds of years of economic development have brought us to the point today where experience management is the new business imperative.

Our ancestors lived in the agrarian economy, where raw materials like wood, cows, and wheat were the lifeblood of commerce. As a result of industrialization we eventually arrived at the goods-based economy. People became more interested in buying what others could make out of those raw materials - things like chairs, steak, and bread. 

Our grandparents grew up in what we call the service economy. The big economic driver then was no longer what people made but what they did. Consumers were excited to show up at a restaurant where they could sit in a chair, and have their steak dinner delivered to them. Nevermind that the meal was more expensive than ever.

In the late 90s, there began to be talk of a fourth economic shift. Joseph Pine, who many consider the father of the experience economy, suggested that the goods and services of competing brands were becoming so similar that in order to have a competitive advantage companies needed to think about the way interacting with their companies made people feel. They needed to provide experiences.

Joseph finally put out his theory in the groundbreaking book: The Experience Economy: Work Is Theater & Every Business a Stage:

Today, we are in an economy where experiences are the primary drivers of growth, jobs and GDP.

- Joseph Pine, Father of the Experience Economy

Today, experiences are more important than ever. One in three customers are abandoning brands after a single bad experience, causing U.S. companies more than $75 billion in losses every year. Most employees are switching companies after just 3 years—a far cry from the culture of lifetime company loyalty of previous generations. 

But if you treat them right, customers and employees will do a lot more than stay. Customers will spend more money on your products. Employees will work longer hours for the privilege of doing business with you. If you make people feel good they’ll support what your company is doing. Welcome to the experience economy.

New data for a new discipline

Experience management can help companies get a leg up in this new competitive environment, but how can you manage something if you’re not measuring it? Can you truly measure “experience” at all? That’s where experience data (X-data) comes in.

X-data contains peoples’ beliefs, emotions, and thoughts. It can be captured through surveys, website forms, frontline employees, and many other feedback channels. It may come in the form of open-text feedback or more recognized XM metrics like Net Promoter Score (NPS) and Customer Effort Score (CES). While most of the data that businesses take into account is focused on “what is happening” – we call this operational data (O-data) – X-data can uncover the “why” behind it. For example:

  • O-data may tell you that your customers are returning a newly-released winter coat at record levels. X-data can explain that customers didn’t think it was warm enough.

  • O-data may tell you that cart abandonment is up on your ecommerce website. X-data can explain that customers became frustrated with a certain step in the checkout process.

  • O-data may tell you that a certain new hire hasn’t been able to close as many tickets as others. X-data can explain that customers thought he was talking too much on their support calls.

The four pillars of experience management

X-data should be collected across the four core experiences of business: customer experience, employee experience, product experience, and brand experience. Taken together, these four experience management subcategories give leaders a thorough view of the state of experiences at their company. 

1. Customer experience

Customer experience (shortened to CX) refers to how a customer perceives your business based on the sum total of their exposure to it. Unlike customer service or customer relationship management, CX does not map neatly to a single area of your business. To improve CX, you need to learn about how your customers interact with every aspect of your company and step in to close the gaps you find.

2. Employee experience

From the moment someone looks at your job ad, to the moment they leave your company, everything that worker learns, does, sees and feels contributes to their employee experience. For an organization to master employee experience, it must listen to its people at each stage of the employee lifecycle, identify what matters most to them, and create personalized experiences.

3. Product experience

Product experience is what drives target customers’ perceptions of product design, features, and functions, which influence their purchase and usage behavior. In order to develop compelling products in the future, businesses need researchers, product leaders, and marketers to go beyond simply collecting customer feedback. The next generation of leaders must be product experience experts who focus on the entire product lifecycle. Focusing on the lifecycle allows them to provide actionable recommendations that continually improve the experience and measurably impact the business.

4. Brand experience

Brand experience is the high-level perception and awareness of who your company is and what they do. Building lasting brands is more challenging than ever, and companies need to relentlessly monitor and improve how their brands are perceived. Managing brand experience helps increase sales volume, command a higher price for products, and create motivating brand perceptions.

Digital: A powerful channel for experience delivery

Managing the four core experiences of business can be overwhelming. You’ll want to map out your customers’ journey, study employee engagement, run product concept tests, track brand awareness, and plenty more. But there are a handful of times when all four experiences cross through a single medium. Perhaps none is more important today than digital.

When we talk about digital, we mean assets like:

  • Your website - where potential customers can get to know your products, the first place current customers will go when they have issues, and your primary tool for collecting job applications. 

  • Your app - where you can deliver extra value to your most valuable customers

  • Your social media accounts - where people often see your brand for the first time and integrate you into their day-to-day lives

  • Internal communication tools like Slack and email - where employees collaborate and surface concerns

With recent shifts to remote work that aren’t going away anytime soon and massive increases in consumer screentime, optimizing your digital channels for experience is vital. Getting your digital channels right can benefit customers at every stage in the funnel, employees at every stage in their lifecycle, products throughout their development, and your brand as it grows into a powerful force.

How to get started improving your digital experience

Whether you’re a massive B2B company with a presence on most available digital channels or a small, direct to consumer startup with a brand new website, follow these steps to begin your journey in digital experience improvement:

1. Get stakeholder buy-in

Implementing XM systems and tactics in digital will require extra work from multiple teams across your organization. You’ll be involving web dev for on-site changes, HR employee feedback solicitation, and many others. Before you get started, you’ll want to have everyone on board with you.

Talk to senior leadership first about the importance of experience management. Once you have their mandate it will be much easier to approach your peers in other departments. Create a preliminary plan and then form a cross-functional team to discuss more.

Read more about the importance of C-level support when it comes to digital in this inteview with Michael Moore, CTO at Moosejaw Mountaineering.

2. Listen to your customers and employees

With everyone on your side, you’re ready to start asking customers and employees for feedback. Set up listening posts across the company. Here are a few to consider:

  • In-app pop up asking for feedback

  • Online employee suggestion box

  • Tab for feedback submission on the sidebar of your website

  • Links to feedback surveys in your social bios

  • Slack channel dedicated to specific employee concerns

These surveys can be completely completely opened or ask very specific questions that are important to your stakeholders. The engineering team may want to ask app users if they’ve had any issues using it. Marketing may want to know what website visitors think of your brand.

Explore the Modern Support Stack to learn more about how you can combine your technology platforms to get a clear sense of customer sentiment.

3. Analyze your data

Once your feedback system is in place, you’ll begin to have responses pour in. Make sure each response is available to the most relevant teams. 

Some feedback—like a website bug being flagged—you’ll want to act on immediately. Other kinds of feedback will become useful only when viewed in the context of many other replies. For example, if your product team is trying to see what current customers think of a potential new product, you need to wait until a large enough sample size of customers reply. Basing your product decisions on just a handful of customer opinions could be catastrophic. 

The analysis stage is much easier if you use the right platforms, like Qualtrics + FullStory. Here are key questions to consider when building your technology stack:

  • Can my solution(s) accurately analyze open-text feedback?

  • Can my solution(s) aggregate data into custom dashboards?

  • Can my solution(s) automatically surface insights?

4. Act on your insights

Experience management begins with listening—but it doesn’t end until action has been taken. Acting on feedback will not only fix issues with your company, but it will show customers and employees alike that their opinions are important to you. Be sure to communicate the actions you are taking to those who inspired them. This will lead to increased levels of feedback in the future.

Over time, seek to build a culture of action into the fabric of your organization. By setting up the correct systems and being a good example yourself, the mindset of giving, receiving and acting on feedback will permeate throughout your organization.

Craft a more perfect digital experience by integrating the Qualtrics XM Platform with FullStory

The right technologies allow you to successfully manage your digital experience. With FullStory and Qualtrics, for example, you can seamlessly reconcile qualitative customer feedback with digital experience data to understand and take action on pressing issues and opportunities.

You can use this integration to:

  • Zoom in on sessions where a user left specific feedback, a low NPS score, or any other response data and get a full view of their experience

  • Detect how your experience metrics correlate with conversion rates

  • Get notified whenever negative feedback is provided on a key page and get more context about the user’s experience.

  • View customer experience data across your online touch points within Qualtrics’

  • Automatically trigger Qualtrics feedback solicits, live intercepts, and/or support tickets at the exact moment a customer experiences frustration.

Curious about how FullStory’s digital experience analytics platform + Qualtrics’ experience management platform work together to power user experience design? Learn more about the Qualtrics + FullStory integration here.

The Qualtrics TeamContent Strategy

About the author

Qualtrics is the technology platform that organizations use to collect, manage, and act on experience data, also called X-data™. The Qualtrics XM Platform™ is a system of action, used by teams, departments, and entire organizations to manage the four core experiences of business—customer, product, employee and brand—on one platform.

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