What is Customer Experience Management?February 3, 2022
Putting customers at the heart of the business is the central principle value of every organization. However, every customer experiences your brand differently, even if everyone is treated equally. No wonder then that customer experience management has emerged as a key concept for businesses across the world.
In addition, low prices are no longer enough to keep the customers coming. In fact, 8 out of 10 customers would prefer a better buying experience than any other factor.
The stakes are growing increasingly higher by the day, as a study by American Express claims that 86% of the customers will be willing to pay more if they have a pleasant customer experience. Also, 32% of the customers would abandon the brand after a negative interaction.
Yes, the stakes are that high!
So how do you go on to deliver a great customer experience every time you encounter a new customer?
For starters, you need to properly understand what customer experience management is and whether or not your customers are having their expectations fulfilled.
But you need not fret. Because we will take you through who, what, when, where, and how of perfect CXM so you can deliver the best possible experience to your customers. Let’s get to it!
What is Customer Experience Management?
In simple terms, customer experience management or CEM definition can basically be stated as a system that businesses use to track, oversee and respond to all the customer interactions. The primary aim of this system is to help companies exceed the expectations of their customers to increase loyalty, advocacy, and overall customer satisfaction.
The definition of customer experience management also outlines that customer goes through several touchpoints in their customer journey, which includes:
- Hearing about your company
- Making the first purchase
- Getting assistance from the company and many more.
This is where the customer experience management system comes into play.
It is responsible for overseeing all the touchpoints in the customer journey (no matter how big or small) and ensuring maximum satisfaction by offering the best possible service.
Shep Hyken, renowned customer service, and experience speaker has also emphasized the importance of CX management and gave the conventional CEM definition a whole new meaning. According to him:
“The best advertising you can have is a loyal customer spreading the word about how incredible your business is.”
It is quite a statement because it directly indicates that customer experience is not confined within your purchase point walls. Instead, it is closely tied to marketing and promotional functions as well by having a direct impact on them.
In fact, there are three main components of customer experience that businesses can exploit to deliver better services:
- Success– It determines if the interaction between the business and the customer was successful, as perceived by the customer.
- Effort– It determines the amount of effort the customer had to put in towards the interaction and how easy it was overall to interact with the business.
- Emotion– It determines the emotional outcome of the interaction and how the customer felt after interacting with the business. Emotion can range anywhere from ‘upset’ to ‘delighted’.
These three components will ultimately determine the customer’s overall perception, loyalty, and likeness towards your brand.
However, a lot of companies are still in the dark and don’t understand the importance of practicing effective customer management experience.
But before we jump into the importance of CXM, let’s get a more detailed view of what a customer experience journey is.
What is the Customer Experience Journey?
As we discussed above, customers go through multiple touchpoints as a part of the experience journey with your brand. To accurately find out how a customer experiences your brand, it is essential to understand their interaction at every touchpoint
There are at least four touchpoints in the customer experience journey that include:
- Research– This is where customers discover your company, either on the web or in-person via advertising or from third parties, including friends, colleagues, consultants, etc.
- Comparison– This is where customers find out more about your brand by looking at your competitors and finding out your functions, capabilities, offerings, attributes and how you can fulfill their needs.
- Purchase– This is the part where customers decide about making a purchase and also where customer retention and loyalty building begins.
- Support– In the final phase, the customer support teams come into action, and they put in their best efforts to ensure that every customer grievance is resolved promptly and effortlessly.
By capturing each step of the customer journey, you will get an accurate representation of customers’ wants and needs, which will enable you to create superior products and eventually elevate the customer experience.
This is where customer journey maps will prove important as you can easily visualize the specific progressions of your customer’s journey through maps and uncover critical obstacles and opportunities in the touchpoints.
Related Read- To get a more detailed view of customer journey mapping, take a look at The Ultimate Guide to Customer Journey Map Guide (With Examples & Templates)
Why Customer Experience Management is Important
Business leaders know that it costs as much as five times to attract a new customer than to retain an old one. But the strategies that run behind these actions to offer a positive customer experience are often unknown.
However, when followed with precision, CEM marketing can offer a ton of tangible benefits to your business. Let’s explore a few of them below:
1. Higher customer lifetime value
Customer lifetime value represents the amount of money a customer will spend on the business throughout their lifetime. When brands are able to identify this number, they know how much to invest in retaining customers.
Companies often roll out rewards and loyalty programs and even personally get in touch with the customers as a part of this investment to boost customer experience.
Offering a better customer experience perpetuates strong customer loyalty towards the brand, and customers become a lot more likely to keep on spending in return for an unmatchable experience with the brand.
Also, it goes without saying- the more the customer spends with your business, the higher the profits are.
2. Reduced customer churn
Businesses that focus on elevating the customer experience see higher customer lifetime value and do not experience churn even remotely as much as other brands.
You should always exploit the touchpoints and make an effort to reach out to the customers through phone calls, email updates, or appreciation events to make a permanent space in the customer’s subconscious. So that whenever the time comes to make a purchase, you are always the one influencing it.
3. Increased brand equity
Brand equity primarily refers to the value of the brand in the eyes of the customers.
Things like delivering on promises, offering superior products and services, and always being available for the customers increase the brand’s perceived value. On the other hand, under-delivery, disappointing interactions, time-lag, and inferior products reduce it.
A company with positive brand equity will have a lot of customers talking about it everywhere.
These customers are happy to post their reviews, share their experiences with their friends and family, and also spread positive word of mouth.
And as we know from Shep Hyken, the best form of advertising is positive word of mouth from happy customers.
Pro Tip: Having a proper live chat, help desk system, or even a self service knowledge base can go a long way in helping customers have a better experience.
4. Higher customer retention
When your brand experiences positive brand equity and reduced churn, higher customer retention automatically comes with it.
This is because positive brand equity makes way for high customer loyalty, which correlates to higher customer retention.
All you need to do is to be quick to resolve issues, reward loyalty, and stay in touch with your customers to strengthen the positive perception of your brand. Positive perception is the root of overall customer satisfaction and the key to higher customer retention.
Related Read: Best Customer Feedback Software
5. Better crisis management
Businesses these days are implementing effective customer management experience programs to deal with any future shortcomings or potential crises.
A company’s reputation hangs by a thread, and things as minor as failing to resolve a simple customer request or even a slight mistake from an employee can result in bad PR and negative word of mouth floating around.
When things are as uncertain, companies with effective CEM marketing programs can defend themselves when there’s massive public outrage and humiliation. These programs help company personnel interact directly with the customers and media and own up to their mistakes to build a new foundation of trust, eventually leading to positive experiences.
For instance- American fast-food giant McDonald’s faced a massive backlash when the news about a supplier intentionally selling expired meat to the chain broke out in China.
The shares of both McDonald’s and its competitor Yum Brands fell sharply, as outrage spread among people.
This is when company executives launched an investigation and detained five people in this scandal and also ended up cutting ties with the supplier. They even ensured that food safety and quality control would be improved to never let anything of this magnitude take place again.
6. Reduced cost of service and marketing
If you follow a customer-centric approach to marketing, you eliminate a lot of guesswork and intuition-based product offering and develop products that customers want.
When your CX teams anticipate customers’ needs in advance, they can easily determine what products they will want and the potential problems they can face.
This way, eliminating alternatives beforehand based on data will allow you to stay one step ahead of the customers, which will help reduce the service cost and help spread a positive word of mouth, which will lower the cost of marketing as well.
7. Better customer engagement
A successful customer experience management program will require you to take an omnichannel approach towards customer engagement.
CX teams can accurately determine where customers interact most frequently and position themselves on those platforms to drive engagement.
It can either be through social media, email, or phone, where companies can be proactive in reaching out to the customers and interacting with them on a regular basis to drive engagement.
Most often, this is done using social media polls, surveys, or other promotional activities that users can participate in for complimentary rewards such as discount coupons and gift cards.
Now that there is no doubt in your mind about the importance of effective customer experience management let’s find out how you can create a good customer experience.
How to Create a Good Customer Experience
There are quite a few ways of creating a good customer experience to improve overall customer satisfaction. Here are some of the most effective ones:
Step 1- Create a clear customer vision
It all starts with creating a clear customer-focused vision that you can effectively communicate with your organization. Here, you need to have a few guiding principles that will steer you in the way of delivering an impeccable customer experience.
For instance- 3M is a global organization with over 90,000 employees that produces innovative technology solutions has a set of few guiding principles that include:
- Acting with uncompromising honesty and integrity.
- Satisfying customers with innovative technology and superior quality.
- Providing investors with attractive returns through sustainable growth and many more.
Similarly, when principles like these are in place for your organization, they will drive the behavior of employees in the right direction, and every member will work keeping in mind the end goal and the right ways of achieving it.
Step 2- Understand who your customers are
The next step of following up with your principles is to bring to light the different types of customers who interact with your brand.
If you truly want to predict your customers’ needs, you have to understand who they are and how they behave.
The most effective way of doing this is by segmenting your customers and creating buyer personas. Try giving those personas a name for better classification. For instance, John is 35 years old, likes innovative technologies, is quite active on social media, and will not need much support in troubleshooting.
Creating personas is the best way to understand who your customers are and a crucial step in being truly customer-centric.
Related Read- To learn more about building buyer personas from scratch, have a look at How to Build Customer Personas: The Complete Guide
Step 3- Create an emotional connection with your customers
You’ve probably heard about the phrase- “It’s not what you say, it’s how you say it”.
The best customer experiences are created when members of your organization form an emotional connection with the customers.
Even the Journal of Consumer Research data states that more than 50% of the experience is based on emotions. Also, emotionally connected businesses outperform competitors by 85% in sales growth.
This is why an emotional connection with the customers cannot be overlooked and is an opportunity that you should always capitalize on.
Step 4- Capture feedback in real-time
How to know if you are delivering a WOW customer experience?
By asking the customers themselves right then and there.
Circulating online surveys is the best way to do that. Tools like Qualaroo specialize in such formats as you can use Qualaroo to deliver contextual surveys to customers using 6+ channels in the form of completely unobtrusive popups.
You can also use Qualaroo to target specific customer segments, which is one of the most important yet unsaid pointers, as it will allow you to gather accurate and relevant data.
Watch: How to Create a User Research Survey
Step 5- Act upon the feedback and deliver on experience
The final step is to take the feedback constructively and act upon it by making necessary changes. Most organizations have a very uncertain schedule for collecting feedback and addressing problems.
However, collecting feedback on a regular basis and making regular changes to your offering will allow you to build trust in your customers and always stay up to speed with the rapidly changing trends.
Related Read- Learn how customer feedback is used to deliver excellent customer service from Using Feedback to Fuel a Better Customer Experience
Creating a good customer experience does have a ton of benefits, but it is certainly not easy by chance. There are several challenges as well that CX teams and organizations face in general. Let’s take a look at them:
Challenges of Customer Experience Management
Customer experience doesn’t just include customer satisfaction; it refers to the whole ecosystem of the customer journey. An ecosystem that is tricky to create for the CX teams as they interact with marketing, sales, and every other department that customers might encounter.
Let’s look at some of the most notable customer experience management challenges:
1. Data accessibility
The truth of the matter is that most companies do not have access to the data they need to offer a better customer experience. Even if they do, rarely is any company able to organize and make use of that unstructured data.
You simply cannot improve something if you don’t know what’s wrong in the first place.
Lack of data is one of the most limiting things that CX teams face when it comes to innovating with customer experience. Likewise, you won’t even know if you are getting better without access to the data.
In fact, 57% of the CX leaders report being unsure of how to measure customer experience to know if their CX strategies are getting or not.
Pro Tip: Conducting a ton of research is the key, no matter what role you play in your organization. Both primary and secondary research will uncover insights and open new doors to your CX strategies.
Also, when using online data collection tools, make sure to integrate them with other tools to widen your domain and also have a seamless experience in collecting and storing your data safely.
2. Little investment
80% of the companies today aspire to be a leader in customer experience, but only 1 in 5 companies today are delivering on that promise.
Oftentimes, the reason can be the difficulty in building momentum behind CX strategies that require a lot more effort than usual to get a significant ROI.
But mostly, it is difficult to raise investments for customer experience due to the prevailing lack of awareness and sponsorships that stop companies from innovating and deploying their CX strategies.
Pro Tip: Data is something that everyone understands. Collect all the relevant data about customer experience and prepare a compelling story about why customer experience is necessary.
You can use qualitative metrics to put things into perspective and deliver a more impactful message to the administration. Designating responsibilities is another important thing that you will have to do.
Almost 35% of the people are unsure about delegating or taking responsibilities, which means you will have to do it for them.
New technology that includes AI, chatbots, customer sentiment, and marketing automation has taken over to boost customer experience. However, data suggests that only 19% of the companies have tried such tools in the past five years.
You need to think outside the box if you want to stand out from the crowd.
This is something that innovative technologies have aimed at doing ever since they came into existence. And while you don’t need everything new, a little automation and personalization to shake up your customer’s expectations can go a long way.
Pro Tip: You can deploy a software tool like BigContacts, which is designed to seamlessly manage prospects and customer relationships. With it, you can easily
- capture more leads
- automate your marketing campaigns
- track all your contacts
- nurture more opportunities for the future
Overall, BigContacts is arguably the best alternative to extract data, contact information, and manage your resources all in one place to deliver a more seamless marketing experience to the customers.
Related Read: Checkout these Best Lead Generation Tools List to generate high-quality leads
4. Adapting to experience
Personalized experiences are known to make more sales along with encouraging customers to build and develop trust with the brand over time.
This is how loyal customers are built.
When customers feel that a brand is going out of its way to offer something that is unique to them, they feel more attached to the brand and are compelled to spend more.
However, 42% of the companies report being unable to adapt to experience and deliver experiences that are unique to every customer.
Pro Tip: Personalizing your services is not that hard. Doing something as little as adding your customer’s first name in every interaction will make a huge difference.
Loyalty programs are also quite popular, and you can be spontaneous with your offers to let your customers know that you appreciate their presence.
All-in-all, you should try to humanize the experience, which can be easily done by being available to your customers at all times and making frequent contact with them.
Related Read- If you want to learn how personalization can help boost actionable feedback, have a quick look at Need to boost your actionable feedback? Simple, personalize it!
Once you have overcome these challenges, you will be able to move to the next stage and talk strategies. So let’s do it.
Customer Experience Management Strategies and Techniques
As we discussed earlier, there are tons of benefits of improving customer experience, provided that you accurately follow tips.
Here are some of the most useful tips for you that also answer a commonly asked question – How do you implement customer experience management?
1. Empower your employees
Empowered employees and happy customers share a strong connection between them.
Give it a thought. A customer wants the service agent to provide a small discount. However, the agent is reluctant to make a move and does not want to do anything without the manager’s approval.
The result- customer, ends up leaving disappointed.
Therefore, as a manager, you should always try and find out what is stopping your employees from being decision-makers and delivering excellent customer experience. Conduct an online employee survey to uncover common pain points of the employee experience that hinder them from going the extra mile.
You should also keep your company culture in perspective.
Anything that needs changing for the better should be changed, and customer-centric culture should be built keeping in mind your customer experience management strategy.
2. Use technology to create a better experience
AI and machine learning can create a tailor-made customer experience, and that’s a fact. Functionalities like 24×7 chatbots and automatic language processing are readily available and will help you understand what customers mean in free-form messages.
Adding personalization to customer experience has become more scalable and affordable.
For instance– Domino’s deploys a chatbot on their Facebook messenger that allows their customers to order pizza from the messenger itself.
With AI being so prevalent, there is no doubt you can personalize your customer service with ease and get creative with your products.
3. Embrace an omnichannel mindset
The days of sitting in front of a desktop computer to connect with a brand are long gone. Now that more than 50% of the traffic is generated by mobile phones alone, multiple-device digital journeys are the new standard.
But maintaining customer journeys across different devices is not gonna cut it.
CX leaders today need to understand and adapt to tons of different online and offline platforms that customers use to connect to the brand.
Embracing omnichannel approaches can be the most important transition that you will ever make in your business, but it will certainly give you a more customer-centric approach by prioritizing customer experience.
4. Personalize everything
Customers long for personalized interactions. In fact, several pieces of research over the years have indicated how personalization can make customers more loyal and spend more.
When you personalize the customer experience to adapt based on your customer knowledge, you strengthen the bond between the brand and the customer and make the customer journey smooth.
There are several ways you can implement customization:
- Personalized good survey questions based on the data.
- Offer recommendations based on previous purchases.
- Follow-up personally with survey responses.
- Personalize based on location using geolocation technologies.
5. Use customer journey mapping
Customer journey maps are a visual representation of the entire customer interaction with the brand, which includes needs, perceptions processes, and much more.
You can easily understand all the problems and opportunities in your customer experience if you cross-reference your journey maps with the core metrics like churn rate, level of satisfaction, retention rate, and more.
With your strategies in place, the penultimate step will be to find an appropriate software tool that can implement your customer experience management strategy with maximum efficiency. Let’s have a look at the types of CX management tools.
Must Read: Customer Journey Mapping Tools
Types of CXM Software Tools
CXM platforms today offer different approaches to online customer experience management, and this is what sets them apart from each other. However, they share a common goal which is to improve the customer experience at large.
Here are the four main types of CXM tools:
1. A/B Testing
A/B testing, also known as split testing, is one of the most important testing tools that help businesses drive conversions through detailed insights. This is done by splitting the traffic between two different versions of a webpage to determine which one performs best and is liked more.
A/B testing effectively highlights what’s working and what elements on the website are disliked by the users, which can be changed post-testing.
Developers can also easily determine if a certain feature or design element is worth investing in from the responses that they get from users.
A/B testing also allows users to voice their opinions. They can let the developers know what information is missing from the website, which can be added to elevate the customer experience.
Related Read – 25 Best A/B Testing Tools For 2022
2. Content Management
Content management is a practice that will never go out of fashion.
It gives you insights into the kind of content your customers are willing to see across all the channels. You can continue delivering that type of content with consistency and a personalized experience.
Your efforts towards outbound communication tremendously impact customer experience. That’s why companies have approached customer experience from the domain of content management.
Content Management Systems are designed specifically to serve these functions as they specialize in creating, editing, and publishing content.
These tools also offer built-in SEO and powerful analytics to give you an accurate idea about the performance of your content on the web. You can even integrate them with CRM tools like BigContacts for a more seamless workflow.
3. Survey and Form Builder
Some of the best CXM solutions like Qualaroo are packed with robust survey and form-building capabilities that allow you to customize and schedule your surveys and send them to your target audience for actionable insights.
These tools also come with a powerful analytics dashboard that will give you an overview of the level of customer satisfaction that you work upon to elevate even further.
Watch: How to Create a Customer Satisfaction Survey
Case Study: Belron
One of the world’s biggest automotive windshield repair businesses, Belron, values its owners more than anything. The company says that collecting user feedback is the key to improving their client experience management strategies and overall business.
“Every customer that comes to us must have the best, easiest experience that they can possibly have. The only way that we can continually provide [the easiest possible] experience is by understanding and internalizing what previous customers have told us.” -Jamie Carter, Voice of the Customer Manager
Even though broken windshields are once-in-a-blue-moon scenarios, the customers are often quite frustrated when this happens. This is the reason why giving them a pleasant experience is a top priority for Belron executives.
It is done in several ways:
1. Analysis of open-ended responses with Qualaroo’s sentiment analysis engine.
Belron deploys Qualaroo for survey data collection and analysis of data. According to them, surveys are helpful, but open-ended responses hold richer insights.
“Using sentiment analysis with Qualaroo,” Carter said, “it took no time to view themes and patterns from customer responses. Fantastic!”
Qualaroo was extremely easy to implement for Belron, and the IBM Watson Sentiment Analysis integration just made things way simpler for them.
2. NPS data is valuable, but you have to dig deeper
Sentiment analysis was one thing, but Belron also does a remarkable job of maintaining their incredible NPS score of over 80 using Qualaroo.
However, such high scores do present some challenges as well. For instance, the recency effect is one of the problems that Belron faces. It tends to overshadow the previous problems by the most recent experience or achievement and falsely shapes the overall perception of the service.
This is where the company conducts surveys on a timely basis to store the data that is collected, which can be revisited again to fully understand the problems that may have been forgotten or overlooked previously.
“Qualaroo allows us to look at where the red flags are at the beginning and middle of the process, where we may get a lot of bounces. Surveying customers allows us to understand why they may be experiencing an issue, which in turn allows us to be more surgical in our approach to improve the process.” -Stephen Payne, Customer Journey Team Manager
3. Learning from those who leave
Belron aims to learn the most from people who came to their website and then left without availing any service. It is quite difficult to understand for the organization why someone would browse the windshields but end up not buying them.
To get to the bottom of such incidents, Belron uses Qualaroo’s Exit Intent Surveys to immediately poll them and uncover the key reasons as to why customers would leave without making a purchase.
The exit-intent surveys helped Belron uncover that people who landed on the website were not looking for what they eventually found, which is why they ended up leaving.
Survey maker tools are what Belron highly appreciates, especially Qualaroo because collecting information with ease and getting tangible benefits is quite appreciable. Belron also says that “better answers are within easy reach” if you deploy the correct set of tools.
Improving your customer support operations is another great way of managing customer experience, and this is the forte for the help desk tools.
Help desk tools like BigContacts offer omnichannel support and act as a contact center for your organization by integrating all of your communication channels like email, phone, social media, live chat to collect and respond to customer complaints and grievances.
Help desk tools also have a self-help feature for customers to instantly provide answers to some of the common queries.
These self-help features normally include a knowledge base that acts as a repository for helpful articles and FAQs.
With 24×7 support and the ability to collect and analyze customer feedback, help desk tools are perfect for optimizing engagement to ensure that you do not miss an opportunity to interact and follow up with every customer.
Knowing the types of software is not everything, though. You should also know what you are looking for if you want to find a perfect solution for your business. Finally, let’s talk about what to look for in a client experience management tool.
What to Look for in Customer Experience Management Tools?
Your customer experience management software is responsible for storing all the customer information in one place.
But that’s just the beginning; there are several things that your CX management tool should ideally be capable of doing. It includes:
1. Survey engine
A good customer experience management software should always be able to collect customer feedback whenever possible.
This is usually done through a survey engine that presents customer surveys at different touchpoints to extract customer experience feedback.
A survey engine should also be flexible enough to send surveys through a number of different channels.
The customization ability is also necessary because some surveys need not be longer than a couple of questions to determine customer satisfaction.
2. CX Dashboard
Data collected through surveys is stored in the CXM tool, and it surfaces through the built-in dashboard on the home screen. It gives you an overview of everything that is happening.
Some of the more advanced tools even offer customizable and role-based dashboards, which are great for organizational teams as everyone needs different data to process. For instance- your design teams do not require feedback data about the after-sales service as it is redundant to them.
The customization ability allows you to only show the data to people that matter most to them.
3. Customer response management
Successful organizations don’t just collect and analyze data. Instead, they go even further and take time to respond to every customer.
This is called a closed-loop system, and it has proven to be quite effective in building stronger relationships with customers. It even prevents customer issues from escalating further by taking care of them in the early stage.
A customer experience platform should always be able to close the loop by responding to the customers because you can only do so much by just collecting feedback and not following up with it.
Having data is great, but analyzing and giving it meaning is even greater.
That’s why analytics is one of the most important features of customer experience management tools.
Most customer experience platforms today include some level of analytics because the data is almost useless if you can’t analyze it. Most organizations also deploy data scientists to analyze and make sense of the data collected.
A CX tool can ideally conduct quite a few types of analysis, including:
- Statistical analysis- Data relating one variable to another. For instance- Impact of long queues on NPS.
- Text analysis- Analysis of open-text responses to analyze sentiments.
- Key driver analysis- Identify key drivers of a specific metric like revenue or turnover to highlight focus areas.
Customer feedback is not the only data that your organization will have. You will also have tons of other data like website analytics, HR and finance data, CRM systems and much more.
The integration of customer experience management systems allows you to send your data to other tools that specialize in different domains for better visibility, impact on business and overall customer experience. For instance, you can integrate your survey tool with a CRM tool to transfer your customer information which you can use to send targeted ads to your respondents.
With CRM systems specifically, you can tie feedback to contact records and understand how the customer experience is impacting your bottom line.
Drive Retention With Effective Customer Experience Management
Customer experience does not improve until the organization makes it its top priority. But a good CXM program is equally worthwhile.
It leads to a consistent customer experience across channels and is valuable for both customers and the business.
Plus, managing customer experience with the right tool can help you make customers beyond satisfied and longing for more.
If you’re looking for a free CXM tool, Qualaroo should be your top choice. It holds the power to create higher customer lifetime value, reduce customer churn, and improve customer engagement — all with the help of contextual surveys delivered unobtrusively to the customers through popup Nudges.
With the ability to conduct NPS, CES, and CSAT surveys, Qualaroo is an ideal tool for every customer experience manager.
So start exploring today how it can help you to deliver the best customer experience possible.
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