Understanding Customer Experience in SaaS

It seems every company these days is embracing a customer-centric strategy and talking about optimizing the customer experience. But it’s impossible to do either of those without truly understanding everything that the customer experience encompasses.

When most people talk about customer experience, they think about customer service, customer satisfaction, customer success, customer engagement or customer interactions. But customer experience is all of the above plus more, much more.

On the most granular level, customer experience is about each customer’s perception of your company, brand, and product. This perception is based on all the interactions that customer has with your employees, brand, messages, and product across every channel and device. Essentially, every tangible and intangible element associated with your business has potential to shift the customer perception and shape the experience. Customers form this perception by comparing their actual experience with their expectations.

You might be thinking this is a bunch of marketing gibberish and buzzwords all rolled up in a few sentences. However, it’s critical for us as business professionals to establish definitions of important terms and concepts. Otherwise, discussions around basic marketing strategy can lead to a dead-end, with parties talking past each other because of conflicting definitions and terms.

Over the last few months, Aptrinsic founders (Nick Bonfiglio and Mickey Alon) and I wrote a book on how SaaS companies can deliver more a personalized product experience with a product-led go-to-market strategy. Part of this process was establishing concrete definitions of concepts since business terminology is filled with buzzwords and jargon. We researched and analyzed hundreds of articles, resources, and over two dozens of books and spent a fair share of time debating every concept we cover in the book. We quickly realized that the reason for most disagreements was the fact that we held different concepts and ideas about common terms.

What was especially striking was the realization that definitions of even the most common industry terms can be completely different. That’s when we realized that it helps to establish common terminology and define even the most obvious concepts.

Defining customer experience was the first step.

Customer experience (CX) is a perception a customer has about a company based on all touchpoints, interactions, and engagements with the company, its brand, and its product.

Naturally, the question surfaces: What do you mean by touchpoints, interactions, and engagement? Touchpoint is often defined as an interaction and interaction is often used interchangeably with engagement. But there’s a difference.

Let’s try to sort this out with an example. While driving on a highway, you notice a large billboard with a clever ad. Regardless of whether you formed any opinion about the ad, the message registered either in your conscious or unconscious mind. Is this an interaction? Hardly, since interaction is defined as reciprocal action between two or more parties. But you were exposed to a billboard ad, and that exposure can be best described as a touchpoint.

Touchpoint is a single moment when a customer comes in contact with (or is exposed to) a company’s brand, product, employees or message through any channel or device.

This is the same as wandering around a clothing store and looking at the products for sale. Even if you don’t try on or buy anything, you’ve been exposed to the brand. That’s a touchpoint. Touchpoint is any exposure a customer has with your company, regardless whether it was seeing your message, such as on a billboard, or being exposed to your product or brand.

Customer interaction is a two-way communication process between a customer and a company’s brand or product.

The confusion starts when you think about how an interaction is different from customer engagement. In the marketing world, customer engagement and customer interaction are practically the same. And in my opinion, it shouldn’t be this way. While interaction is a two-way communication process, engagement is a commitment or agreement to act.

Customer engagement is a commitment or agreement of a customer to act.

Again, let’s use an analogy. Think about an engagement that signifies a formal agreement to get married. In that case, engagement is commitment to action. Similarly, rules of engagement in the military are the directives that define when action or use of force may be applied. Here too, engagement is a commitment to act or is characterized the action itself. When it comes to how buyers engage with software companies, aside from buying a product, signing up for a free trial is an engagement since the buyer is showing some committed to action.

Every interaction is a touchpoint, but not every touchpoint is an interaction. Every customer engagement is an interaction, but not every interaction is an engagement.

Touchpoint → exposure

When a customer walks into a store and gets exposed to products and brand messages, that’s a touchpoint.

Interaction → two-way communication

When a customer picks up a Nike shoe to feel the material or talks to the salesperson in the store, he or she is interacting with the product or sales rep.

Engagement → commitment or agreement to act

When a customer wants to try on shoes, he or she is engaging with a brand — that’s customer engagement. Actually purchasing those shoes is the ultimate customer engagement.

Experience → perception

All customer touchpoints, interactions, and engagement combine for an overall customer experience with — and perception of — a company.

Customer-Experience-SaaS