In the customer experience economy of on-demand data and multi-metrics, it’s easy for some to get lost in the sea of excessive acronyms, techie-babble, and smarketing (sales and marketing) jargon. And, so many of these terms are loosely tossed around, overused and, in some cases, misused by those who don’t know their true definitions.
As a Content Producer in Customer Experience, I decided to put together this “bloglossary” of some key terms to help educate, inform, empower, and refresh any and everyone who needs it. This is your continuously growing, centralized reference guide of customer experience terms to help save you time and avoid the hassle of scouring the web for terms.
If you’re going to be a part of the “in” crowd, you’ve got to know the vernacular. I want you armed and ready to confidently walk into your next meeting to talk CX like a pro!
1. Customer Centric Organization
A company that withholds the culture where individuals are collectively working to fulfill customers’ needs as their ultimate goal and everyone is aware of the direct and indirect impact their work has on the overall customers’ experience at every point of interaction within the customer journey.
2. Customer Experience Management (CXM)
Everything the company can manage to motivate customers to make a positive choice to buy, re-buy, use, subscribe, or renew. The CXM is comprised of products, people, processes, location, communication, and competition.
3. Customer Satisfaction (CSAT)
A survey metric used to assess whether a customer is satisfied or not.
4. Net Promoter Score (NPS)
A survey metric to measure customer word-of-mouth potential. Created by Fred Reicheld and Bain & Company, NPS asks customers how likely they are to recommend a company to a friend and then lumps them into one of three categories: promoters, passives, and detractors.
5. Product Economy
An economy that is product-driven with a goal to deliver the best product to buyers, despite of who the buyer is. It is revenue-focused on the amount of transactions, internally focused on financial results, and product development oriented. A customer pays for the products he needs.
In the words of Henry Ford, “A customer can have a car painted any color he wants as long as it’s Black.”
6. Service Economy
An economy that is based on convenience where customers pay others to do the job for him, even if it’s something he has the skills to do.
For example, instead of buying ingredients to bake a birthday cake, the bakery sells you a freshly baked cake for your child’s birthday so you can focus on orchestrating other parts of the party.
7. Customer Experience Economy
An economy where customers feel that the company understands who he/she is and delivers solutions that seem to be tailored to effortlessly fulfill his/her needs; considering not only what customers want to get or solve, but also how they want to feel and be perceived socially.
For example, you hire a company to package your child’s entire birthday party experience to keep the children entertained as the grown ups (yourself included) relax and enjoy themselves as well.
Disconnected departments within an organization working for the same personas throughout the same customer journey. A silo develops when information is not shared across departments and Key Performance Indicators (KPI) and goals aren’t in alignment to deliver the entire company’s value proposition. It results in an inconsistent and flawed customer experience.
9. Quantitative Approach
An approach to measuring experiences by observing signs and phenomena via statistical, mathematical, and computational techniques. Surveys are most used (e.g. Customer Satisfaction or Net Promoter Score). In contrast to qualitative, which involves behaviors and reactions, this provides a quick metric for benchmarking.
10. Qualitative Approach
An approach to measuring experiences by observing signs and phenomena via human actions, reactions, and behaviors. In most cases, this is done through interviews and focus groups. In contrast to quantitative, which involves numbers, this gives you more actionable insights and better understanding of how your customers make choices.
11. Worth It Conclusion
The “yes, it’s worth it” conclusion is the last and most powerful conclusion customers come to before making most of their decisions. When something is the most “worth it” alternative, it means the customer has already agreed to pay the perceived costs to have access to the expected emotional and rational benefits. Therefore, knowing if your business is the most “worth it” alternative to your customers, is more important than knowing how satisfied they are or whether they will be recommending your business.
12. Hot Data
Real-time survey data reported directly from the mind of the customer addressing their perceptions and opinions on what’s worth it to them and why they buy. Contrary to cold data, which is based on analyzing past buying habits to predict future behaviors, hot data uses current perceptions to explain current and future decisions; in summary, the why behind customer decisions.
For example, FICO uses Worthix to collect hot data to improve its analytical models.
13. Cold Data
Data that a company collects on its customers based on their transactions registering who they are, what and how much they purchase, and how often they buy in order to help predict consumer trends. Contrary to hot data, this data does not contain customers perceptions or feedback.
If you haven’t yet mastered these terms, test them out in conversation with friends and co-workers so you get comfortable using them. Soon they’ll roll off of your tongue and become a natural part of your business conversation.
Visit our comprehensive complete Worthix glossary to further enhance your customer experience vocab arsenal.Originally posted on 03 Oct, 2017