What is Customer Experience? The Complete Journey That Defines Your Business

Customer Experience Definition - The complete journey from awareness to advocacy

Two companies sell the same product at the same price. One thrives while the other struggles. The difference? Customer experience. It's not just about your product anymore—it's about how customers feel at every touchpoint, from first awareness to long-term advocacy.

The Academic Foundation

Customer experience (CX) was formally defined by Bernd Schmitt in 1999 as "the internal and subjective response customers have to any direct or indirect contact with a company." This includes rational, emotional, sensory, physical, and spiritual responses.

According to Harvard Business School's Frances Frei, customer experience is "the sum of all interactions between a customer and a company, across all channels and touchpoints, throughout the entire customer lifecycle."

The concept evolved from customer service (reactive problem-solving) to customer satisfaction (meeting expectations) to customer experience (exceeding expectations at every interaction).

What This Means for Business

For business leaders, customer experience means orchestrating every touchpoint to create a seamless, valuable journey that builds emotional connections and drives long-term loyalty.

Think of customer experience as directing a movie where your customer is the hero. Every scene (touchpoint) must advance their story, create positive emotions, and move them toward their goals. A single poor scene can ruin the entire experience.

In practical terms, this means mapping every interaction—from website visits to support calls to product usage—and optimizing each one to reduce friction and increase value.

Essential Components

Customer experience consists of these essential elements:

• Touchpoint Management: Every interaction point including websites, apps, stores, customer service, social media, and product usage

• Journey Mapping: Understanding the complete path customers take from awareness to purchase to advocacy, identifying pain points and opportunities

• Emotional Design: Creating positive feelings through empathy, personalization, and exceeding expectations at crucial moments

• Omnichannel Integration: Ensuring consistent experience across all channels with seamless handoffs and unified customer data

• Feedback Systems: Continuous listening through surveys, reviews, analytics, and direct feedback to understand and improve experiences

The Experience Process

Customer experience management follows these steps:

  1. Journey Mapping: Document every touchpoint from customer awareness through purchase, onboarding, usage, and renewal, identifying moments of truth

  2. Experience Design: Create ideal experiences for each touchpoint, removing friction and adding value based on customer needs and emotions

  3. Implementation & Measurement: Deploy improvements across all channels while tracking key metrics like NPS, customer satisfaction, and effort scores

  4. Continuous Optimization: Use customer feedback and behavioral data to refine experiences, test new approaches, and adapt to changing expectations

This creates a cycle where customer feedback drives continuous improvement, leading to better experiences and stronger business results.

Four Levels of Experience Maturity

Organizations typically progress through these stages:

Level 1: Reactive Service Best for: Problem resolution Key feature: Responds to customer issues after they occur

Level 2: Proactive Support Best for: Issue prevention Key feature: Anticipates and prevents common problems

Level 3: Experience Design Best for: Holistic improvement Key feature: Designs optimal experiences across all touchpoints

Level 4: Experience Innovation Best for: Competitive advantage Key feature: Creates new types of value and emotional connections

Experience in Action

Here's how businesses actually deliver exceptional customer experiences:

Technology Example: Apple's customer experience includes intuitive product design, seamless setup, genius bar support, and integrated ecosystem, resulting in 92% customer satisfaction and premium pricing power.

E-commerce Example: Amazon's one-click ordering, predictive shipping, easy returns, and personalized recommendations create an experience that drives 96% customer retention and $469 billion in annual revenue.

Financial Services Example: USAA's military-focused experience includes specialized products, dedicated support, and digital tools tailored to military life, achieving 98% customer satisfaction and 95% retention rates.

Your Experience Strategy

Ready to transform your customer experience?

  1. Start with Digital Transformation to enable seamless digital experiences
  2. Explore Data Strategy for customer insights and personalization
  3. Learn about Business Intelligence for experience analytics
  4. Implement with our Customer Experience Playbook

Part of the [Business Terms Collection]. Last updated: 2025-01-18