GLOSSARY OF CUSTOMER EXPERIENCE TERMS
As with nearly any business discipline, Customer Experience (CX) comes with it's own complex set of terms. As a new CX professional, it was quite frustrating learning what these terms meant as they were often used interchangeably or incorrectly. This guide will help to unpack the various meanings and allow you to speak with confidence!
Attrition Rate - The percentage of customers lost in a given period of time. It you have a retention rate of 80%, your attrition rate is 20%.
Account Management - The process of managing the relationship with specific customers. Account managers often act as the interface between customer service and sales on behalf of their customers. The purpose of account management is generally to foster customer success and ensure valuable, lasting relationships.
Chief Customer Officer (CCO) - Senior executive responsible for the design and coordination of all customer-related activities across the business. Develops strategies to maximize retention, increase profitability, and promote a customer-centric culture among employees.
Chief Experience Officer (CXO) - This is another title encapsulating the same roles and responsibilities as the Chief Customer Officer (CCO).
Churn Rate - For subscription based services, this is the percentage of customers who discontinue service in a given period of time. Used commonly in SaaS (Software as a Service) business and is also referred to as the “rate of attrition."
Core Values - A set of principles that determine how an organization does business with it's employees, customers, and vendors.
Culture - Quite simply, culture is "the way we do things." It's the culmination of the beliefs, processes, mission, attitudes and everything else that makes a company unique. Culture is the backbone of both the customer experience and the employee experience.
Customer Advocacy - The organization makes decisions based on what would be best for the customer. A “Customer Advocate” is an individual within a company who ensures the voice of the customer is heard and their needs are protected.
Customer Effort Score (CES) - The Customer Effort Score was introduced by the CEB (now Gartner) in 2013. According to extensive research by a variety of firms, CES has a powerful correlation to customer loyalty. The “effort” question would be asked on your surveys and is simply “how quickly and easily were you able to resolve your issue.” It’s more transactional when compared with NPS, and is great for measuring the experience on a touch point by touch point basis.
Customer Engagement - Organizational stakeholders from different functions work together to understand a customer’s needs and enhance the business relationship.
Customer Experience (CX) - “How customers perceive their interactions with your company” (Forrester)
Customer Experience Management (CEM or CXM) - ““The practice of designing and reacting to customer interactions to meet or exceed customer expectations and, thus, increase customer satisfaction, loyalty and advocacy.” (Gatner)
Customer Persona - Written and/or graphical representation of the different customer segments a business is targeting.
Customer Relationship Management - The process a business uses to manage all relationships with both current and potential customers.
Customer Satisfaction Score (CSAT) - While it focuses on a specific interaction or event, CSAT is a helpful companion to NPS and CES. There are several CSAT related questions that can be asked on a survey, but the core question is “how would you rate your experience with (fill in the blank)”. There are typically five answer choices ranging from very satisfied down to very dissatisfied. This could be a support interaction, a purchasing experience, a demo, or just about anything else. It’s calculated by establishing a percentage of those answering either “satisfied” or “very satisfied.”
Customer Service - The function of a company responsible for assisting the customer when they experience issues related to a product or service. It is different from Customer Experience (CX) in that customer service is just one type of interaction whereas CX is the sum of all types of interactions a customer has with an organization.
Customer Success - The function of a company responsible for managing customer relationships. It is essentially the same as Customer Experience Management (CEM) but is most commonly used in the context of SaaS (Software as a service) businesses.
Employee Experience (EX) - How employees perceive their total interactions with an organization.
Employee Engagement (EE) - The practice of understand and creating employees who are enthusiastic about their work.
First Call Resolution (FCR) - Metric typically associated with Customer Service and shows up on many CX dashboards. FCR is the percentage of incidents resolved within the first interaction with the customer.
Human-centered Design (HCD) - A user-centric approach leveraged to build processes from the ground-up based largely on human perspectives. The goal is to ensure all solutions are developed in a manner to enhance the user's overall experience.
Journey Mapping - A visual tool used by businesses of tell the story of a particular type of customer’s experience. It’s effective for helping organizations quickly understand what their customers go through and to identify key potential pain points.
Lifetime Value (LTV, CTLV or CLV) - A predictive measure of how much an organization can expect a customer to spend with them over the course of their entire relationship.
Moments of Truth - The points in a customer relationship in which a business has the largest opportunity to either increase or decrease customer loyalty.
Net Promoter Score (NPS) - Introduced by Fred Reichheld, Net Promoter Score is calculated on a 10 point scale by asking “How likely is it that you would recommend our company/product/service to a friend or colleague?” The goal is to turn “detractors” into “promoters” under the assumption that promoters will help you to generate more business and spend more with your brand over time.
Process Mapping - A technique used to visually depict how work is done. Shows how events, resources, timelines and more interact to achieve a predictable outcome. Journey mapping is a type of process mapping specific to Customer Experience, but there are thousands of variations of process maps including workflow diagrams, flowcharts, and business diagrams.
Service Blueprint - Technique used to visually depict all the various components (people, process, technology) that make up a specific touchpoint inside of the larger customer journey. Service blueprints can be seen as a tactical extension of the journey mapping process.
Service Level Agreement (SLA) - The official, documented aspects of customer service extended from a vendor to it’s customers.
Touchpoints - The different points in which a customer interacts with a business. Touchpoints are commonly used as part of the journey mapping process and typically include three phases - before purchase, during purchase, and after purchase.
Unstructured Feedback - Feedback received from customers that is neither solicited or prompted. This could be anything from a conversation, to a review left on Yelp, to a tweet about a particular brand.
User Experience (UX) - The overall impression of a person while utilizing a product or service. Often used in the context of improving the interaction between a human and technology.
Voice of the Customer (VOC) - The process by which a business solicits and collects feedback from it’s customers.