A Glossary of Terms for Customers and Service

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This Glossary of Terms was helpfully crafted by Arti Gupta.

Customer Advocacy

Customer advocacy is a specialized form of customer service in which companies focus on what is best for the customer. It is a change in a company’s culture that is supported by customer-focused customer service and marketing techniques.

Customer Analytics

Customer analytics is a process by which data from customer behavior is used to help make key business decisions via market segmentation and predictive analytics. Data is collected from various touch-points a customer has with the organization and then analysed to give insights about consumer behavior. In today’s connected world where customer has immense power, it is extremely important for organization to use analytics to get closer to the customer.

Customer Attrition Rate

It is the number of customers lost divided by the number at the start of the period and is typically expressed as a percentage (%) of all customers and on a monthly or annual basis. So for the customer attrition rate you would divide the number of customer lost by the total number of customers at the start of the period.Customer Attrition rate is also the compliment of Customer Retention rate. If a company has a 20% attrition rate it will have an 80% retention rate.It is an important variable to track in your business as it indicates how many new sales you have to make just to keep up with your losses.Sometimes it can be difficult to determine when a customer has left, especially in a retail environment but there are ways around this problem.

Customer Centric Organization



As the name suggests, Customer-centric organizations are ones, which have succeeded in keeping the customer at the center of their organization. They spend energy and effort on satisfying internal and external customers by first identifying customer needs, then establishing policies, procedures, and management and reward systems to support excellence in service delivery.They have moved beyond lip service and have re-oriented their operations, their decision making around the customer. This has resulted in increased customer satisfaction, higher advocacy along with higher profits.

Customer Charter

It is a document that sets the standards for a company regarding customer service. It is also known as a code of practice, which improves access to an organization’s service and promotes quality. A customer charter also helps employees too by clearly setting out services their organization provides.

Customer Engagement

Customer engagement is the engagement of customers with one another, with a company or a brand. The initiative for engagement can be either consumer- or company-led and the medium of engagement can be on or offline. Customer engagement can help organizations to understand their customers, their needs, and increase advocacy.

Customer Expectations

The perceptions that customers have when they contact an organization or service provider about the kind and level and quality of products and services they should receive. These expectations are a factor of customers’ own previous experience with the organization or the experience of their friends.

Customer Experience

Customers’ perception of their experience at various touch-points across their lifecycle with an organization. Please note that it is the “perception” of Customers and hence, is based on their experience of the product/service.There are 3 levels of Customer experience

Functional – Do you have what customers wants?
Accessible – How easy it is for customers to do business with you?
Emotional – How do customers feel while doing business with you?

Customer Experience Management

The process of strategically managing a customer’s entire experience with a product or a company” :Schmitt, 2003
The process of strategically managing a customer’s entire experience with a product or a company to meet business goals”: Genroe, 2005

Customer Experience Strategy

It is the strategy to achieve the desired level of Customer Experience. As per a survey, only 20% companies have a well defines Customer Experience Strategy. A detailed CE Strategy makes sure that every employee has same understanding of desired Customer Experience. It acts as a guiding like when managers face business decisions on day-to-day basis.

Customer Feedback

Customers’ opinion about the product/service of an organization. It can be collected using surveys, or proactively listening to what customers are talking on social media.

Customer Insight

An understanding of Customers’ behavior, an insight into why customers like/dislike a brand, why they prefer one brand over others, what influences their decisions, their pain points and their sweet spots. Organizations get customer insights by studying the behavior of their current customers as well as market research.

Customer Journey Mapping

It is the depiction of a customer’s journey with an organization. A customer journey map should include all touch-points that customers have with the organization. It helps in giving a holistic view of customers’ lifecycle and ensures that organizations deliver good Customer Experience to move forward in a Customer’s consideration set.

Customer Lifecycle

Customer life cycle is a term used to describe the progression of steps a customer goes through when considering, purchasing, using, and maintaining loyalty to a product or service.

Customer Lifetime Value

Customer lifetime value is a prediction of the net profit attributed to the entire future relationship with a customer.Customer lifetime value is an important concept as it encourages firms to shift their focus from quarterly profits to the long-term health of their customer relationships. Customer lifetime value is an important number because it represents an upper limit on spending to acquire new customers.

Customer Loyalty

How often and how much a customer purchases from you over other providers?



Customer Relationship Management

CRM is an overall strategy to help organizations learn more about their customers and their behavior. As a result they can develop stronger, lasting relationships, which will benefit them as well as their customers. Customer Relationship Management (CRM) software solutions helps to manage these relationships, using a combination of people, processes and technology. It helps businesses attain and retain happy customers.

Customer Retention

Customer retention is the act of keeping customers.There are many studies that show that keeping customers longer is much less expensive than acquiring new customers with some suggesting that it is up to ten times less expensive to keep a customer than acquire a new one. Customer retention is focused on ways to keep customers longer.

Customer Satisfaction Score

The cus­tomer sat­is­fac­tion score, or CSAT as it’s often called, intends to mea­sure a customer’s sat­is­fac­tion with the ser­vice received.

Customer Satisfaction Survey

A survey conducted to measure the level of Customer satisfaction. It can be administered online, telephonic or face-to-face.

Delivering WOW

It is delivering an experience much beyond Customer’s expectations. One way to deliver WOW is to convert a “moment of anxiety” for a customer into “moment of happiness”. Delivering WOW needs huge empowerment and engagement of front-end employees.

Net Promoter Score

The Net Promoter Score, or NPS®, is based on the fundamental perspective that every company’s customers can be divided into three categories: Promoters, Passives, and Detractors.By asking one simple question — How likely is it that you would recommend [your company] to a friend or colleague? — you can track these groups and get a clear measure of your company’s performance through your customers’ eyes. Customers respond on a 0-to-10 point rating scale and are categorized as follows:

Promoters (score 9-10) are loyal enthusiasts who will keep buying and refer others, fueling growth.
Passives (score 7-8) are satisfied but unenthusiastic customers who are vulnerable to competitive offerings.
Detractors (score 0-6) are unhappy customers who can damage your brand and impede growth through negative word-of-mouth.

To calculate your company’s NPS, take the percentage of customers who are Promoters and subtract the percentage who are Detractors.

Online experience

Experience delivered by the organizations to customer using the online channel. It includes things like, uptime for a website, speed at which pages load, ease of navigation, website design, use of fonts, speed of online transactions etc.

Outside-In Thinking

This refers to looking at organizations’ processes and policies from a customer’s perspective. Delivering a superior Customer experience involves an outside-in approach to business.

Service Promise

It explicitly states the minimum level of service customers can expect while dealing with an organization. This helps in building brand and creating trust in customers.

Social Buying

It is a term used to explain the current buying behavior where people ask their friends/colleagues for recommendations before making a big purchase.At times Social buying is used interchangeably with Group buying though the two are different.

Social CRM

Customer retention is the act of keeping customers, customers.There are many studies that show that keeping customers longer is much less expensive the acquiring new customers.

Social Media Monitoring

Social media monitoring is monitoring the social media and proactively listening to what prospects/customers are saying about you and your competitors. Effective Social media monitoring helps organizations target and manage their relationships with more precision than at any point in history. Monitoring helps achieve multiple objectives:

Provide greater Customer Service due to deeper understanding of Customer behavior

Address dissatisfaction as soon as it arrives

Get insights into product innovation



Design targeted campaigns and measure campaign effectiveness

Touch-points

Any point where the customer touches the organization is called a Touch-point. Customers start having touch-points with organizations even before organizations realize. For example if I want to buy a new noise cancellation headset, I search the web. The brands churned by the search engine create a touch-point for those brands. I talk to my friends and they recommend me a few brands. Again there are touch-points with those brands. I visit a friend’s house and try his/her headset; I create a touch-point with that brand.To manage the experience, organizations need to map all the touch-points.

Touch-point experience

Experience delivered at any touch-point is called Touch-point experience. In a customer’s journey with an organization, there are touch-points, which can make or break an organization’s relationship with the customer. It is key for organizations to deliver a great experience on those touch-points.

What other customer and service related terms to you use? What do they mean to you?

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