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Digital customer experience management: The ultimate guide

What is digital customer experience?

Digital customer experience (DCX) is a person’s perception of your brand based on your digital touchpoints, from purchasing online to navigating your app to interacting with a customer service chatbot. All of those interactions add up to an overall impression of your company.

How does digital customer experience differ from customer experience?

Customer experience, or CX, refers to a customer’s perception of your brand based on every interaction they have with your business, including in-store shopping, web product search, customer service—and everything in between. Those experiences drive an opinion about your company and the decision to do business with you in the future.

Though digital experience can be seen as a key component of a person’s over customer experience, it has unique characteristics that set it apart.

DCX engagement is in real-time. That means there are sometimes dozens of data points within those interactions that comprise digital customer experience, such as scrolling down a page, clicking on a link, navigating to another screen and many other movements. Those moments can provide key information about the customer’s behavior and actions, such as abandonment, conversion, screen time and other metrics.

Unlike CX, DCX is never a one-way experience–such as reading billboard ads or store signage. The person online is always interacting with a screen, whether it’s web or app and that data is being captured.

As digital influence continues to grow, digital customer experience influence will too. In a Forbes Insights and Glassbox customer experience survey, 84% of executives agree that to survive, businesses must deliver excellent digital CX.

👉🏻 Get your copy of the full Forbes Insights report, The Leading Edge of Digital Customer Experience.

What is digital customer experience management?

Digital customer experience management uses digital channels and technologies to enhance the online customer experience. This includes managing, creating, designing and responding to online consumer interactions to increase customer satisfaction and consumer loyalty through digital customer service solutions.

Put another way, digital CX will tell you what the customer experiences, but digital experience management will tell you the effectiveness of your efforts across your digital channels. Digital customer experience management provides the tools to gain insights and make informed decisions in a holistic, strategic way.

Some of the key areas of digital customer experience management are:

  • Developing a deep understanding of how customers are engaging and their behaviors.

  • Uncovering issues along the customer journey that lead to struggles and abandonment.

  • Monitoring and measuring digital channels through feedback and surveys.

  • Designing and implementing improvements to UX, funnels and other identified areas.

Importance of digital customer experience in the digital age

The growth of digital CX can be linked directly to the explosion of mobile phone usage and apps. In fact, mobile accounts for about half of web traffic globally. Apps usher in even more digital interactions, upping the challenges for issues but also opportunities for more loyal customers and revenue.

Expectations for consistent experiences across digital channels create a whole new standard for customers' demands. Today’s customer wants a speedy, friction-free experience, and most will accept nothing less. Almost half of online customers expect a web page to load in under 2 seconds. Companies that take a proactive, customer-centric approach will be one step ahead, and those that don’t will risk losing business to the competition.

It also ups the ante for the quality of data: Collecting analytics is a must but should go far beyond that, ensuring that the insights captured are both relevant and actionable.

Defining the customer journey in the digital space

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Because digital customer experience is so critical, in addition to plotting out the traditional customer journey, many businesses are turning to a digital customer journey map to pinpoint each digital interaction along the conversion path.

The digital customer journey map visually represents each step a customer takes with a brand online, identifying the different touchpoints and channels a customer uses during their journey– from initial awareness and consideration to making a purchase and beyond. It provides the foundation for looking at each interaction and how it can be optimized.

Because each industry and company has its own unique path to conversion, it’s important to create a realistic representation of that journey based on customer research and available analytics. These journeys should also be regularly revisited and revised to align any new customer insights or changes to the customer funnel.

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Key components of a positive digital customer experience

We know that today’s digital customer has sky-high expectations. That alone should be important enough for companies to prioritize improving every aspect of DCX. But it’s also vital to break down the various elements that add up to a great digital customer experience. It’s never one thing—it’s the entirety of feelings, behaviors and actions that each interaction brings.

An optimal user experience at every digital touchpoint

More than half of customers engage with three to five channels during their buying journey. Understanding your users' digital experience and optimizing your most essential touchpoints can make or break a deal. When experiences on different digital channels are dissimilar or not in sync, it can feel disjointed or, worse yet, disrupted, which can sometimes be a frustration or dropping-off point.

Personalization and customer segmentation

Ninety percent of customers are more likely to buy from a business that personalizes their experiences. It also has a positive effect on revenue. According to McKinsey, organizations that excel at personalization by “tailoring offerings and outreach to the right individual at the right moment with the right experiences” generate 40% more revenue than their competitors.

Examples of personalization by customer segments or individuals include custom product recommendations based on past browsing behavior, outreach when a prior purchase is on sale (on the channel they want), personalizing landing pages and context-based customer service chats.

Data privacy and security

Personalization, while invaluable to businesses, also means customers share their data. And even though there is an increase in privacy and security regulations like GDPR and other emerging laws, 74% of consumers indicate a high degree of concern over online privacy. That’s why it’s incumbent on companies to set a high standard of respect and trust with customer data.

Your privacy policy is a great tool to help your customers understand what data you’re collecting, how you’re collecting it, who it’s shared with and how it’s being used. It should have a clear benefit to them, such as creating more efficiency, convenience or special deals. Make sure you're up to date on the latest privacy laws and regulations that affect the way you do business with your customers.

Why traditional customer experience strategies fall short in the digital world

As we’ve noted, some companies may look at CX as the overall brand perception and DCX as an element of it. But in many ways, the digital customer experience is an entirely other ecosystem.

Digital is constant, fast-moving and real-time. Many micro-interactions create an experience that can be positive or negative. You can lose a customer in a nanosecond with a bad navigation experience or a lag on the purchase button for too long.

The speed and volume at which digital interactions happen can’t be accommodated with traditional CX strategies. With so many touchpoints and channels, there are activities that have to be measured at a far greater speed and depth.

4 Benefits of effective digital customer experience management

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Embracing digital customer experience management has many advantages for companies. They include the following four elements:

1. Improved customer loyalty and retention rates

A critical part of customer retention is understanding how customers experience the digital platform. By identifying pain points and areas of friction, you can work proactively to resolve issues and create a smoother, more satisfying customer experience that keeps users engaged and reduces the likelihood of customer churn.

2. Increased customer lifetime value (CLV)

Eighty percent of your future profits will come from just 20 percent of your existing customers. Inherently, your current customers are much easier to sell products to because they are already familiar with and satisfied with your brand. The longer the customer buys from the company, the higher their CLV is. Nurturing and cultivating these customers is essential to your DCX strategy.

3. Positive impact on brand reputation and advocacy

When customers are having a great experience on your digital channels, the effects multiply far beyond future purchases. These customers can eventually become brand advocates and will speak your praises in online reviews, social media and word-of-mouth. Even better, 92% of consumers trust a friend or family’s recommendation over a brand. Companies also get a powerful brand boost when most customers are happy with a reputation for customer service, quality and other positive attributes.

4. Gaining a competitive advantage in the digital market

Research from a Forbes Insights and Glassbox customer experience survey reveals that more than four in five executives agree they are increasingly competing based on digital CX as much as on product or price. That’s no surprise considering digital is a hyper-competitive landscape.

Differentiating brands through a great customer experience is vital. In fact, 80% of customers have gone to a competitor because of poor CX, reinforcing how every interaction your customer has—no matter how small it may appear to be—could have a big impact. The more your company can excel at customer service, intuitive UX and a seamless experience, the bigger competitive edge you’ll gain.

👉🏻 Get your copy of the full Forbes Insights report, The Leading Edge of Digital Customer Experience.

Implementing a successful digital customer experience management strategy

A solid digital customer experience management strategy starts with clear digital CX objectives. Relying on “standard industry norms” or a competitor’s approach isn’t going to cover it. Evaluating these three areas below can help you design a comprehensive DCX management strategy.

1. Understanding your target audience and their digital behavior

Knowing who your potential customers are and their digital customer journey should include all customer touchpoints where there is engagement–from interest in the product to making contact with the brand and further down the path to conversion. This is where the customer journey map is invaluable. Likewise, drill down on funnel analysis and understand how prospects and customers interact with your product, focusing on areas for improvement.

It’s also important to keep the omnichannel, zig-zag path from prospects to customers. According to research from Salesforce, 87% of consumers start their research online, but they may request product information from your website and then make the purchase from their mobile device. It underscores the importance of analyzing and optimizing the digital customer journey at every touchpoint.

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2. Utilizing customer feedback and digital analytics

Analyzing customer feedback through quick surveys like CSAT, voice of the customer (VoC) and other methods provides invaluable insight to inform DCX decision-making. There’s also indirect feedback that can be monitored and collected through social media, online reviews and other online sources. All of this feedback can provide additional context for improvements, successes and building new products.

Direct analysis through digital analytics tracks all interactions and behavioral data to generate actionable insights to improve the digital customer experience. This includes your website, mobile app, product/e-commerce data, chatbot interactions, customer service, contact forms, pop-ups to gather customer feedback on your website and other data sources. Knowing the data in its context delivers a more robust analysis for better insights and improvements.

3. Building a customer-centric culture within the organization

Having all the right tools in place is essential, but a customer-centric, collaborative work culture is the foundation to build that success. It means putting customers first as part of your business strategy and connecting DCX outcomes to your purpose and mission. Prioritizing customers as job one ultimately leads to a strong connection and alignment between a business and its customers.

Prioritizing hiring employees for a customer-centric mindset matters, along with a focus on building strong, trusting customer relationships. As part of those building blocks, DCX data analytics are democratized and accessible for all teams with digital customer experience responsibility. Some companies even have CX teams focused solely on furthering the customer experience and loyalty, enriched by feedback and improvements.

The role of technology in digital customer experience management implementation

It makes sense that technology plays a big part in digital customer experience management. But not every company has figured out all the puzzle pieces for which infrastructure and systems work best for them. There are several key elements that comprise a robust system for digital customer experience management implementation and extracting the richest insights possible.

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Customer relationship management (CRM) systems

CRM systems are part of the DCX ecosystem. This is where your customers’ data, such as identifying customer demographics by age, gender, spending habits, shopping, conversion data and other profile information important to your business, is housed. It’s a fundamental part of analyzing the digital customer experience. To make the most of this data, CRM data analytics can be integrated into a digital experience intelligence platform (more on that later).

Artificial intelligence (AI) and machine learning (ML) applications

We’ve all seen the growing influence and use of AI and machine learning in every corner of the digital world. Both of these technologies make excellent collaborators with data analytics. They're used in the most advanced digital experience intelligence platform to identify and prioritize errors and behaviors, find patterns and uncover other data insights automatically.

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Chatbots and virtual assistants

Chatbots and virtual assistants are also in the next frontier in digital experience analytics. While chatbots aren’t a recent phenomenon, they’ve gained popularity and sophistication for customer service, sales and other websites and app functions and are expected to increase by 470% in the next five years. Conversational analytics analyze and interpret data generated from chatbots and virtual assistants like engagement, conversion and retention.

Collaboration between marketing, sales and customer support/success teams

Part of a customer-centric organization is ensuring that teams work together for the good of the digital customer experience. These businesses prioritize DCX data metrics and feedback shared with teams and cross-collaborate when it makes sense–all in service of digital customer experience excellence. Here are some examples of teams across organizations:

  • Customer service: Speed up the resolution and proactively identify help issues.

  • Product and UX: Pinpoint struggles, prioritize enhancements and improve A/B tests.

  • Marketing: Improve campaigns, increase personalization and optimize conversions.

  • Engineering and DevOps: Detect problems faster and prioritize fixes by business impact.

  • Data and analytics: Uncover key digital customer experience insights and collaboration recommendations and prioritize issues.

  • Compliance: Handle complaints and sensitive DCX issues and manage data collection and logging.

Customer journey analytics

Customer journey analytics is the heart of the DCX in many ways. They log every interaction on the path to a conversion (or abandonment)—every struggle, every sale and everything else in between. These analytics provide the biggest clues to your DCX successes and potential improvements. Customer journey analytics serve as a foundation to get a deeper customer understanding, remove touchpoints that aren’t effective, help improve retention rates and better predict how customers will behave in the future.

Advanced digital analytics solutions

In the past few years, digital experience intelligence (DXI) platforms have become the de facto solution for companies up-leveling their DCX programs. The market is expected to grow to $16B by 2028. These comprehensive platforms combine integrated capabilities to monitor, measure and deliver insights across a wide range of analytics programs.

DXI platforms are immensely helpful for digital experience monitoring, offering advanced features like heatmaps (or interaction maps, which are next-generation heatmap tools), session replay, struggle and error analysis and other capabilities that transform analytics into richer actionable insights, all with privacy and compliance in mind.

Advanced insights from a DXI platform give you the complete picture and not only show you how users behave on your digital platforms but why they behaved the way they did. They can be easily shared with DCX stakeholder teams for faster and better decision-making and, ultimately, a better customer experience.

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Overcoming challenges in digital customer experience management

Despite technology marvels in the quest for robust digital customer experience management, it doesn’t happen overnight. Commitment, resources and active participation from all stakeholders is required. There are also inherent infrastructure and work culture factors that contribute to challenges. But there are ways to overcome these challenges.

Accessing actionable insights to continuously deliver value

One of the more complex areas for enterprises of all sizes is to gain access to the data that matters to deliver a better digital customer experience. As CX expert Jay Baer said, “We are surrounded by data but starved for insights.” Understanding which analytics are most relevant can make the difference between a customer purchase and a punt. This year alone, data analytics will generate 3X the volume over 2019. At 2.5 quintillion of data globally daily, it’s only going to get more overwhelming.

With digital experience intelligence platforms, data analytics from different tools and software are integrated and analyzed for a unified view for visualizations, analysis and reports and uncover the most valuable actionable insights. Surfacing these insights allows teams to prioritize by business, UX and new opportunities aligned with DCX goals.

Data silos and incomplete view of user behavior and engagement

Similarly, accessing actionable insights goes hand in hand with accessing data sources from silos, whether they’re sitting with various teams on spreadsheets, in disparate platforms or systems or rolled up into an executive report. In fact, data silos are identified as the cause of incomplete views of the customer by over half of respondents in a customer experience study by Omdia.

This is where collaboration and data analytics sharing come in as part of a customer-centric organization. But that’s easier said than done with so many fragmented systems, software and infrastructure challenges. Again, this is where a DXI platform can combine multiple analytics sources to create heatmaps, show session replays and other tools that provide valuable analytics, showing a complete picture of the customer journey.

Balancing personalization and data collection

While personalization is highly valued by customers, it can come at a cost to share their data, making it critical to ensure that the data collected is handled with the utmost care and delivers value to the customer. Almost 70% of customers are okay with it as long as they have explicitly shared it. However, 71% of respondents in another survey said they won’t purchase in the future with a brand that breaks their trust.

In the past several years, GDPR and other privacy initiatives have strengthened, making it the company’s responsibility to ensure that their customers’ data is secured. That means communicating your data collection and privacy policy, as well as compliance with the latest security regulations. Providing assurances at key touchpoints, like a checkout page, is also a good practice when they’re sharing sensitive data.

Ensuring consistency across multiple digital channels

Almost 90% of customers want and expect a seamless experience with your business across their preferred channels. And in another survey, almost three-quarters customers prefer shopping through multiple channels. Reaching customers where they are at that moment is more important than ever to a business. That means consistent branding, messaging and clear UX and navigation, from clicking on a CTA button to activating a chat with support.

To analyze digital touchpoints most effectively, advanced DXI platforms integrate mobile and web analysis, uncovering advanced insights with complex customer journey mapping, delivering a comprehensive view of the customer’s path. This makes prioritizing and implementing improvements easier and faster.

Handling negative feedback and customer complaints

No company is immune to some negative reviews, unflattering survey comments or outright customer complaints filed with the company. It can result from a sluggish website to a bad customer chatbot experience to a clunky checkout process. But all of these experiences matter—a lot.

How your company records these interactions also is critical. Besides tracking analytics from voice of the customer programs, pop-up surveys or through other software, negative feedback can sometimes go unchecked. Worse yet, collecting and analyzing qualitative data to find patterns, prioritize or any other actions can be challenging. It also causes concerns about those customers who felt the same way but didn’t make their voices heard, also known as voice of the silent.

Digital experience intelligence platforms offer the opportunity to view session replays, customer journey maps, heatmaps and other customer analytics to pinpoint where problems are—even for those who didn’t express concerns. Then proactive steps can be taken to fix the problem by working with engineering or other responsible teams. Issues can be logged for accurate record keeping and future reference if and when that problem occurs again.

Measuring the success of digital customer experience management

Defining the success of your DCX measurement is an ongoing journey. There are many DCX metrics that will provide insight into your customers’ behavior, satisfaction and loyalty. But the key is to focus on the DCX metrics right for your unique business, customers and KPIs and keep improving.

Key performance indicators (KPIs) for digital customer experience management

There are three general types of DCX metrics:

  • Interaction metrics: What happens during the digital customer experience.

  • Perception metrics: How a customer feels about their digital experience.

  • Outcome metrics: What a customer does because of their digital experience.

There’s likely one DCX metric that matters more than others—an established e-commerce company wants to determine the cost of customer retention, whereas a startup trying to grow revenue might be most concerned with digital customer experience score and acquisition.

Of course, any metric measurement requires objectives to be effective and should be detailed as a target (e.g., percentage, number, dollar amount) and for a specific time interval (week, month, etc.). Below are some effective DCX measurement tools.

Customer satisfaction (CSAT) and Net Promoter Score (NPS)

Customer satisfaction score provides a numerical score showing how satisfied a customer is with a particular interaction, service or product. Measuring CSAT scores provides a better understanding of which factors affect the customer experience negatively or positively. Often, companies will ask for customer feedback to determine customer satisfaction and whether an agent has adequately solved an issue.

CSAT is measured at the end of a customer survey using a point scale and is a leading indicator of loyalty and long-term revenue from a customer. Based on each company’s scoring system, companies classify responses based on feelings such as very satisfied, satisfied, not satisfied or very unsatisfied and their numerical score associated with each.

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Net Promoter Score (NPS)

Net Promoter Score is used to gauge the loyalty and brand experience of a customer. NPS is often calculated based on the response to one question: “How likely is it that you would recommend this agent or company to a friend or colleague?” NPS provides valuable feedback from customers relating to their interactions with your organization. Strong NPS scores go together with positive revenue and business growth.

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The scoring for NPS is most often based on a 0 to 10 scale, with 9 and 10 being promoters, 7 – 8 being passive, and 0 – 6 are called detractors. The NPS is derived by subtracting the percentage of customers that are detractors from the promoters. That means a score of over 50 is considered good.

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Customer effort score (CES)

A customer’s customer effort score indicates how easily your product solves a customer’s specific situation and is a key predictor of a customer’s loyalty. Similarly to CSAT, there’s no standard system for measuring CES. Some companies use a five-point scale, others up to seven points.

The CES uses a single question similar to the following: “On a scale of 1 to 5, did the service make it easier for you to solve your problem?” A score of 5 means strongly agree, and 1 is strongly disagree. Higher CES scores mean better customer experiences. Knowing which customers rated service as 1 or 2 and not having a good experience identifies at-risk customers. It can help efforts to proactively mitigate churn.

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Customer retention rate and churn rate

Customer churn rate, also called customer attrition rate, reflects how many of your customers stopped using your products or services. CCR counts the total number of lost customers or the percentage of lost customers within a certain timeframe. Sometimes, the customer churn rate is calculated as a lost business value.

Customer attrition can, of course, have a negative impact on revenue, not to mention it’s much less expensive to keep a current customer than to gain a new one. Ways to reduce churn include getting feedback early and often, providing great customer service throughout the process (including self-help options like chat) and offering attractive incentives to stay with you, such as a discounted future subscription or free upgrade.

Retention rate

Customer retention rate measures a business’s ability to keep existing customers over a period of time and is considered a critical KPI. Monitoring customer retention provides a strong indicator that the company’s CX is working. Typically, businesses aim to reach a customer retention of more than 85%.

Figuring out your customer retention rate begins with selecting the time frame (monthly, quarterly, etc.), and then totaling the number of existing customers at the beginning of the time period. Add up the number of customers at the end of the time period, then add in new customers within that time period. Next, collect the number of existing customers at the start of the time period (S). A high retention rate is correlated with current customers being satisfied with your product and providing an ongoing source of revenue. A low retention rate means customers aren’t sticking around, and you’ll want to find out why.

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Regular assessment and continuous improvement

Once you’ve committed to a robust DCX measurement strategy and implementation, you can develop a comprehensive program aligned with your short-term and long-term goals. DCX measurement reporting and updating those metrics regularly to ensure they’re still relevant or perhaps not monitoring an area that needs to be more closely evaluated.

At the same time, for your business to evolve and adapt, you’ll want to periodically review the metrics you’re focused on to see if they should remain the same, revised or even replaced with new measurements to explore.

As new technologies become available, market conditions shift or other variables influence your customer base, you can also take that into consideration with how and when you’re measuring CX.

Major business shifts, product upgrades, cross-selling to a specific persona or other moves may impact how you handle your current metrics. You may want to put the spotlight on specific CX measurements before and after the change or layer in new metrics to reveal trends, behaviors, UX gaps or other insights.

Looking ahead: Future trends in digital customer experience management

The emphasis on digital customer experience is only going to grow as our world is increasingly digital-first. Our interactions online become more meaningful—and more measured as the standards increase for a seamless experience. Those brands that excel put their customers at the center of everything they do and will have to continue to improve to keep those customers as the competitive landscape increases.

Embracing emerging technologies for enhanced digital customer experience management

As we’ve mentioned, digital experience intelligence platforms are becoming the de facto solution for companies that are seeking to advance their digital customer experience management efforts and get a 360-degree view of their customers. A DXI platform tracks and analyzes customer omnichannel data to improve digital journeys from an integrated, unified platform.

Digital customer experiences incorporating comprehensive, real-time digital experience intelligence solutions make the most of technology investments. These AI-powered features include:

  • Analytics for performance, mobile app and product

  • Analysis for funnel, customer journey, struggle and errors

  • Advanced session replays, interaction maps, voice of customer, digital record keeping, personalization and A/B testing capabilities

Just as importantly, digital experience intelligence platforms should have easy integration with your martech stack, deep integration with the top platforms and operate following the strictest data privacy and security policies.

Emerging technologies to advance digital customer experience management include AI-powered features like machine learning to detect patterns and anomalies, deliver instant insights, offer predictive analysis, track performance and even personalize the digital customer experience. Lastly, the latest AI intelligence tool, ChatGPT, is expected to be integrated into DXI platforms in the near future to make insights more accessible.

The role of AI and automation in shaping the future of digital customer experience management

Below are some technology areas that are increasingly garnering interest and usage.

Workflow automation. While workflow automation is nothing new, now sophisticated tasks can be accomplished automatically. For instance, if a customer wants to return a product, an email with information can automatically be triggered.

Bigger and better predictive analytics. As AI and machine learning mature, so will predictive analytics, helping determine how customers will respond to product changes, brand positioning or other company decisions.

Augmented reality tools. Augmented reality (AR) offers visual and other sensory experiences integrating digital elements with the customer’s physical environment during product browsing or other interactions on a mobile, desktop or other devices.

Master your digital experience management with digital experience intelligence

The journey towards mastering digital customer experience management through DXI is an ongoing pursuit that arms businesses with the tools needed to exceed customer expectations, drive growth and pave the way for a more customer-centric future. By embracing the fusion of technology and customer-centricity, organizations can unlock a realm of possibilities that transcends products and services, forging enduring connections that stand the test of time. Get started with Glassbox today.