Customer Service Outsourcing Vs Customer Experience (CX) Outsourcing: Key Differences And Similarities

Customer experience is a buzzword on top of most marketers and business leaders' list, but is often confused with customer service and vice-versa.

An ideal outsourcing partner should not just be able to differentiate between the two, but rise above reactive customer service to provide an experience to customers that they can emotionally relate to. Malhir, based in Thane, Mumbai, aims to do just that.

Customer experience is the overall experience of a customer with a company or brand, across all touchpoints over the entire customer life cycle. Customer service on the other hand, is an important component of delivering great customer experience and is usually focused on resolving customer problems or addressing queries before, during and especially after their purchase to minimize churn.

In this article, we conduct a thorough comparison between the two customer-centric functions.

What Is Customer Service Outsourcing?

Whether you are outsourcing customer service to Mumbai or Manila, the underlying principles of keeping a customer satisfied and brand loyal does not change. Customer Service is the support or assistance provided by a company to its customers before, during or after a purchase. It involves interactions such as:

  • Pre-purchase customer service:  Sharing product/ service related information, answering customer queries on pricing, utility, guarantee etc.
  • Customer service during the purchase process: Helping customers choose the right product or service and assisting them with regards to billing, refund, replacement, packaging or delivery.
  • Post-sales customer service: Answering product-related questions after a purchase such as helping them use it in the best way possible, resolving any issues or complaints and keeping customers updated on delivery, service or issue-resolution process.

What Is Customer Experience Outsourcing?

Customer experience (CX) is the overall experience of a customer with a company based on all interactions and engagements across various digital and offline touch points, before, during or after a purchase. It is the resulting experience of all customer interactions - digital and physical - starting from brand discovery, website browsing experience, mobile app interface, marketing activities, purchase, product use, maintenance and post sales experience. Here's what it includes:

  • Pre purchase: Proactive information or assistance from the company across all customer touchpoints of interaction, whether online or offline. This includes in-store experience, social media engagement, website experience, advertisements and promotions, content quality and relevance to this specific stage of the buyer's journey (pre-purchase) etc.
  • During purchase: This includes the overall in-store or online experience while making the purchase, including finding the right product, billing, check-out, packaging and delivery experience.
  • Product use experience: This includes quality of product as promised and expected, ease of installation and usage, user-interface etc. The attributes of product use experience are more granular and complex for digital products like smartphones, computer software and mobile apps.
  • Post purchase support: This constitutes product quality, usage, maintenance and support. It's about how good is the product itself, in comparison to its competition and how well does the company support in its service, repair, maintenance or how comfortable is the replacement, refund or upgrade process, if any.

Good customer experience is an outcome of meeting and exceeding customer expectations across all stages of the buyer's journey. It is the single most important determinant of business success in the current 'experience economy'. In a 2017 Gartner 'Customer Experience in Marketing' Survey, marketers responsible for customer experience (CX) had agreed that in two years' time, 81% expect to be competing mostly or completely on the basis of CX. And here we are, in 2019, with customer experience defining the rules of the game!

Similarities between Customer Service Outsourcing and Customer Experience Outsourcing

In a venn diagram, customer service will occupy a significant area within the larger circle of customer experience. This means, there is a common ground. Here's how the two are similar.

Shared purpose: Since customer service is a piece of the larger customer experience ecosystem, both aim to support the customer in their buying journey and beyond, with the goal of conversion, retention and loyalty. Customer service aims to help customers with their questions, queries or concerns before, during and after the purchase, and is essentially focused on problem solving.  Customer experience proactively covers the entire customer lifecycle - which includes all aspects of their experience, and is focused on engagement. Still, the ultimate goal of both is to ensure customer satisfaction. Both customer service and customer experience aim for customer acquisition,  retention and optimal lifetime value.

Shared approach: With common ambitions and purposes to ensure customer satisfaction, both customer service and experience depend on a company-wide customer-centric culture for their success.

Key Differences Between Customer Service Outsourcing And Customer Experience Outsourcing

  • Ownership

    CX is usually the mandate of the CEO or CMO, and as a concept it extends beyond any one function of the organization - it has to be owned by all functions and not just customer facing staff.  Customer service is usually a specific function, managed by the customer service head, who is accountable to ensure all customer issues and problems are resolved as per the pre-defined benchmarks. The function is usually outsourced.

  • Point of Activation

    Customer service begins only when a customer has discovered a brand and approaches it  - online or offline - for the purpose of purchase, clarification or issue resolution; and ends once resolved. In other words, customer service gets activated on demand and ends once the immediate purpose is complete through resolution of the issue / query. Infact, each segmented customer service interaction is part of the larger and unified customer experience touchpoints.

    On the other hand, customer experience is activated right from when a customer is still just a prospect and has just discovered the brand/company - through social media posts, an outdoor display, an online ad, a search engine ranking, webinar / seminar, the way staff interacts and engages, etc. CX remains active throughout the customer lifecycle with the organization. Infact, historic customer engagement data is often used to reactivate  prospects and customers that have become idle, because it is so rich in insight about the prospect or customer's preferences.

    Customer experience aims to provide all the relevant information and support to the customers across their entire journey, hence it begins much before customer service is required and continues to stay with the customer throughout their association with the brand.Owing to the nature and larger purpose of customer experience, it in fact, aims to reduce the frequency of customers having to reach out to customer service for issue resolution - by reducing issues by targeting overall CX excellence.

  • Reactive Vs proactive

    Although both customer service and customer experience aim for customer satisfaction, customer service is largely reactive -  it only comes into action after a customer approaches a brand for assistance during any stage of the decision making and buying process or post purchase, through online or offline modes of communication.

    Whereas, customer experience is proactive in its efforts in ensuring a seamless and satisfactory experience across all potential points of customer interaction.  It doesn't wait for a customer to raise a question or a request, instead, a CX team takes into account all potential customer expectations and requirements during the planning stage, and is based on customer journey maps with the goal to ensure that these expectations are met or better yet, exceeded, across all digital and physical touchpoints.

  • Transactional vs holistic

    Customer service is limited to one-off interactions, as and when a customer query or complaint arises or when a customer approaches a company for seeking information or making a purchase. Interactions between customer service and customers are mostly transactional in nature and take place in scattered instances across a customer's journey.

    On the other hand, customer experience takes a larger holistic approach to identify and meet customer expectations across all touchpoints - which includes the interactions, transactions and engagements. Customer experience ensures a positive perception each time a customer thinks of the company irrespective of the level in customer journey.

  • Measurement of effectiveness

    Owing to other differences, there's a clear distinction between how customer service and customer experience are measured. Customer service is mostly measured through a customer effort score (CES) survey - which asks a simple question like 'how easy was it for you to solve your problem with us, today' - or through a simple 5-point star rating, after every interaction with a CS executive.

    CS effectiveness measurement is always interaction-specific such that it is measured on a case-by-case basis to gauge how customers feel about your services at a specific stage in their journey.

    Customer experience, on the other hand, is measured through extensive surveys depicting overall customer experience, satisfaction or loyalty. It includes surveys such as the net promoter score (NPS), which depicts how likely a customer is to recommend the brand to someone or the customer satisfaction score (CSAT), which is indicative of how satisfied customers are with the customer service experience.

    Customer experience can also be assessed by keeping a constant close watch on social media comments, reactions or recommendations, website feedback or reviews, and product experience feedback, received either through a feedback survey or in a best case scenario,  received proactively from a customer himself.

  • Data and tech stack requirements

    Planning, measuring and delivering good customer service and experience today requires relevant customer data collection and analysis - the extensiveness of which is dependent on the company's digital maturity and tech stack.

    Customer service outsourcing may draw customer interaction data about customer queries or complaints and the company's response to them, from the customer relationship management (CRM) platform. A CRM software basically helps businesses record and maintain customer data to track customer interactions and improve customer relationships. Promoting interdepartmental collaboration, a CRM helps CS executives with all the relevant information and customer insights, allowing them to serve every individual customer seamlessly over their journey.

    Customer experience on the other hand requires data from across all channels of customer interaction, such as marketing (website analytics, social media analytics etc), sales (CRM), SaaS product experience (in-product analytics), packaging, finance and accounting and so on. It is based on the overall experience the brand delivers, not just in marketing or purchase driven interactions but in every possible touchpoint.

    Both - customer experience- and its sub-set, customer service, are crucial to driving customer engagement, delight, and retention. For CX to be a true differentiator and value proposition of a Brand, it has to get both- the overall experiential aspects, as well as the more specific, need-based service aspects, right.