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 anyone who needs it.
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! This is just a taste of our continuously growing, centralized reference guide of customer experience terms to help save you time and avoid the hassle of scouring the web for terms.
- Customer-Centric Organization
- Customer Experience Management (CXM)
- Customer Satisfaction (CSAT)
- Net Promoter Score (NPS®)
- Product Economy
- Service Economy
- Customer Experience Economy
- Quantitative Approach
- Qualitative Approach
- Worth It Conclusion
- Hot Data
- Cold Data
1. Customer Centric Organization
A company whose culture focuses on effortlessly and seamlessly fulfilling customers’ needs and current expectations. All individuals in the organization are aware of the direct and indirect impact that their work has on the overall customer experience at every touch point.
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 simplistic survey metric used to assess whether a customer is satisfied or not. Defined as “the number of customers, or percentage of total customers, whose reported experience with a firm, its products, or its services (ratings) exceeds specified satisfaction goals.”
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, regardless 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 they need.
For example, the famous quote attributed to Henry Ford, “A customer can have a car painted any color he wants as long as it’s black” is the hallmark of a product-based economy. In other words, the customer’s personal preference and opinions are secondary to the quality of the product, which is up to the manufacturer.
6. Service Economy
An economy that is based on convenience, where customers pay others to do the job for them, even if it’s something they have 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
The idea that businesses must create memorable events for their customers, and that the memory of the experience is itself the product, for which companies can charge.
The term was first used by B. Joseph Pine II and James H. Gilmore to describe the next economy following the agrarian economy, industrial economy, and the most recent service economy.
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 numerical data, usually through statistics, mathematics, and computations.
10. Qualitative Approach
An approach to measuring experiences by observing signs and phenomena via non-numeric data, such as human actions, reactions, and behaviors. In most cases, this is done through interviews and focus groups.
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.
Test some of these 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. But if you’ve got these ones down, check out the 50+ terms in our CX Glossary. We’re almost sure you haven’t heard them all before.
Net Promoter Score and NPS® are registered trademarks of Bain & Company, Inc., Fred Reichheld and Satmetrix Systems, Inc.
I’m an extrovert, beach lover, and baseball fan with a passion for writing. I’ve spent over 10 years writing content for screen (tv/film) and demand-generating copy for digital, social media, and search marketing. My strengths lie in creating and developing original content for tv/film, inbound marketing content and strategy, and brand messaging. I love creative collaboration, possess great communication skills, enjoy problem-solving, and have a reputation for being innovative, effective and efficient.