Customer experience
Encyclopedia
Customer experience is the sum of all experiences a customer has with a supplier of goods or services, over the duration of their relationship with that supplier. From awareness, discovery, attraction, interaction, purchase, use, cultivation and advocacy. It can also be used to mean an individual experience over one transaction; the distinction is usually clear in context.
have increasingly recognized the importance of managing the customer's experience.
Customers receive some kind of experience, ranging from positive to negative, during the course of buying goods and services. Brad Daniels (Business Development Manager) says that “an experience is defined as the sum total of conscious and unconscious events. As such, a supplier cannot avoid creating an experience every time it interacts with a customer” (2011). Furthermore, it has been shown that a customer’s perception of an organisation is built as a result of their interaction across multiple-channels, not through one channel, and that a positive customer experience can result in increased share of wallet and repeat business.
A company's ability to deliver an experience that sets it apart in the eyes of its customers serves to increase their spend with the company and, optimally, inspire loyalty to its brand
. "Loyalty," says Jessica Debor, "is now driven primarily by a company's interaction
with its customers and how well it delivers on their wants and needs." (2008)
To create a superior customer experience requires understanding the customer's point of view, say Don Peppers and Martha Rogers, Ph.D in Rules to Break and Laws to Follow. "What's it really like to be your customer? What is the day-in, day-out 'customer experience' your company is delivering? How does it feel to wait on hold on the phone? To open a package and not be certain how to follow the poorly translated instructions? To stand in line, be charged a fee, wait for a service call that was promised two hours ago, come back to an online shopping cart that's no longer there an hour later? Or what's it like to be remembered? To receive helpful suggestions? To get everything exactly as it was promised? To be confident that the answers you get are the best ones for you?" (Peppers and Rogers 2008)
In short, customer experience meaning a customer journey which makes the customer feel happy, satisfy, justify, with a sense of being respected, served and cared, according to his/her expectation or standard, start from first contact and through the whole relationship.
no longer sustainable and customers demanding more, companies – and communication service providers (wireline, wireless
, broadband
cable
, satellite
) in particular – are focusing on delivering superior customer experiences. A 2009 study of over 860 corporate executives revealed that companies that have increased their investment in customer experience management over the past three years report higher customer referral rates and customer satisfaction (Strativity Group, 2009).
This finding is also supported by research completed by software company Chordiant
in 2008 into the customer experience management performance of large organisations across Europe. The research surveyed 450 large organisations to create a maturity model and the results showed that over ¾ of the organisations surveyed achieved level 3 (of 5) or less for CEM performance (5 being best possible result). The results also showed that performance in four key business areas (market share, retention, profitability, and customer satisfaction) was directly related to CEM performance.
The customer experience has emerged as the single most important aspect in achieving success for companies across all industries (Peppers and Rogers 2005).
For example, Starbucks spent less than $10MM on advertising from 1987 to 1998 yet added over 2,000 new stores to accommodate growing sales. Starbucks
popularity is based on the experience that drove its customers to highly recommend their store to friends and family.
Where CRM is enterprise-focused and designed to manage customers for maximum efficiency, CEM is a strategy that focuses the operations and processes of a business around the needs of the individual customer. Companies are focusing on the importance of the experience and, as Jeananne Rae notes, realizing that “building great consumer experiences is a complex enterprise, involving strategy
, integration of technology
, orchestrating business models, brand management and CEO commitment
.” (2006)
According to Bernd Schmitt, "the term 'Customer Experience Management' represents the discipline, methodology and/or process used to comprehensively manage a customer's cross-channel exposure, interaction and transaction with a company, product, brand or service." Customer experience solutions provide strategies, process models, and information technology to design, manage and optimize the end-to-end customer experience process.
Experience-based providers also integrate both internal and external innovations to create end-to-end customer experiences. They evaluate their business models as well as business support systems and operational support systems (BSS/OSS) from the customer’s point of view to achieve the level of customer-centricity necessary to improve customer loyalty, churn and revenue
(Lopez, 2007).
Gartner http://www.gartner.com
Microsoft http://www.microsoft.com
Amdocs http://www.amdocs.com
Forrester http://www.forrester.com -->
Growing recognition
Analysts and commentators who write about customer experience (CX) and customer relationship managementCustomer relationship management
Customer relationship management is a widely implemented strategy for managing a company’s interactions with customers, clients and sales prospects. It involves using technology to organize, automate, and synchronize business processes—principally sales activities, but also those for marketing,...
have increasingly recognized the importance of managing the customer's experience.
Customers receive some kind of experience, ranging from positive to negative, during the course of buying goods and services. Brad Daniels (Business Development Manager) says that “an experience is defined as the sum total of conscious and unconscious events. As such, a supplier cannot avoid creating an experience every time it interacts with a customer” (2011). Furthermore, it has been shown that a customer’s perception of an organisation is built as a result of their interaction across multiple-channels, not through one channel, and that a positive customer experience can result in increased share of wallet and repeat business.
A company's ability to deliver an experience that sets it apart in the eyes of its customers serves to increase their spend with the company and, optimally, inspire loyalty to its brand
Brand
The American Marketing Association defines a brand as a "Name, term, design, symbol, or any other feature that identifies one seller's good or service as distinct from those of other sellers."...
. "Loyalty," says Jessica Debor, "is now driven primarily by a company's interaction
Interaction
Interaction is a kind of action that occurs as two or more objects have an effect upon one another. The idea of a two-way effect is essential in the concept of interaction, as opposed to a one-way causal effect...
with its customers and how well it delivers on their wants and needs." (2008)
To create a superior customer experience requires understanding the customer's point of view, say Don Peppers and Martha Rogers, Ph.D in Rules to Break and Laws to Follow. "What's it really like to be your customer? What is the day-in, day-out 'customer experience' your company is delivering? How does it feel to wait on hold on the phone? To open a package and not be certain how to follow the poorly translated instructions? To stand in line, be charged a fee, wait for a service call that was promised two hours ago, come back to an online shopping cart that's no longer there an hour later? Or what's it like to be remembered? To receive helpful suggestions? To get everything exactly as it was promised? To be confident that the answers you get are the best ones for you?" (Peppers and Rogers 2008)
In short, customer experience meaning a customer journey which makes the customer feel happy, satisfy, justify, with a sense of being respected, served and cared, according to his/her expectation or standard, start from first contact and through the whole relationship.
Emerging Business Requirement
With products becoming commoditized, price differentiationDifferentiation (economics)
Differentiation is a concept used in business strategy and describes one of the three ways to establish competitive advantage.Differentiation advantage occurs when a firm delivers greater services for a non-unlimited higher price than its competitors...
no longer sustainable and customers demanding more, companies – and communication service providers (wireline, wireless
Wireless
Wireless telecommunications is the transfer of information between two or more points that are not physically connected. Distances can be short, such as a few meters for television remote control, or as far as thousands or even millions of kilometers for deep-space radio communications...
, broadband
Broadband
The term broadband refers to a telecommunications signal or device of greater bandwidth, in some sense, than another standard or usual signal or device . Different criteria for "broad" have been applied in different contexts and at different times...
cable
Cable
A cable is two or more wires running side by side and bonded, twisted or braided together to form a single assembly. In mechanics cables, otherwise known as wire ropes, are used for lifting, hauling and towing or conveying force through tension. In electrical engineering cables are used to carry...
, satellite
Satellite
In the context of spaceflight, a satellite is an object which has been placed into orbit by human endeavour. Such objects are sometimes called artificial satellites to distinguish them from natural satellites such as the Moon....
) in particular – are focusing on delivering superior customer experiences. A 2009 study of over 860 corporate executives revealed that companies that have increased their investment in customer experience management over the past three years report higher customer referral rates and customer satisfaction (Strativity Group, 2009).
This finding is also supported by research completed by software company Chordiant
Chordiant
Chordiant was an American company. It offered enterprise software to help other companies improve the customer experience of their customers. Primarily their software is internet based / Java EE solutions, though some products run on Microsoft .NET Framework technologies...
in 2008 into the customer experience management performance of large organisations across Europe. The research surveyed 450 large organisations to create a maturity model and the results showed that over ¾ of the organisations surveyed achieved level 3 (of 5) or less for CEM performance (5 being best possible result). The results also showed that performance in four key business areas (market share, retention, profitability, and customer satisfaction) was directly related to CEM performance.
The customer experience has emerged as the single most important aspect in achieving success for companies across all industries (Peppers and Rogers 2005).
For example, Starbucks spent less than $10MM on advertising from 1987 to 1998 yet added over 2,000 new stores to accommodate growing sales. Starbucks
Starbucks
Starbucks Corporation is an international coffee and coffeehouse chain based in Seattle, Washington. Starbucks is the largest coffeehouse company in the world, with 17,009 stores in 55 countries, including over 11,000 in the United States, over 1,000 in Canada, over 700 in the United Kingdom, and...
popularity is based on the experience that drove its customers to highly recommend their store to friends and family.
Customer Experience Management
The goal of customer experience management (CEM) is to move customers from satisfied to loyal and then from loyal to advocate. Traditionally, managing the customer relationship has been the domain of Customer Relationship Management (CRM). However, CRM strategies and solutions are designed to focus on product, price and enterprise process, with minimal or no focus on customer need and desire. The result is a sharp mismatch between the organisation’s approach to customer expectations and what customers actually want, resulting in the failure of many CRM implementations.Where CRM is enterprise-focused and designed to manage customers for maximum efficiency, CEM is a strategy that focuses the operations and processes of a business around the needs of the individual customer. Companies are focusing on the importance of the experience and, as Jeananne Rae notes, realizing that “building great consumer experiences is a complex enterprise, involving strategy
Strategy
Strategy, a word of military origin, refers to a plan of action designed to achieve a particular goal. In military usage strategy is distinct from tactics, which are concerned with the conduct of an engagement, while strategy is concerned with how different engagements are linked...
, integration of technology
Technology
Technology is the making, usage, and knowledge of tools, machines, techniques, crafts, systems or methods of organization in order to solve a problem or perform a specific function. It can also refer to the collection of such tools, machinery, and procedures. The word technology comes ;...
, orchestrating business models, brand management and CEO commitment
Commitment
Commitment may refer to:*Promise, or personal commitment*Contract, a legally binding exchange of promises*Brand commitment*Involuntary commitment, the use of legal means or forms to commit a person to a mental hospital, insane asylum or psychiatric ward...
.” (2006)
According to Bernd Schmitt, "the term 'Customer Experience Management' represents the discipline, methodology and/or process used to comprehensively manage a customer's cross-channel exposure, interaction and transaction with a company, product, brand or service." Customer experience solutions provide strategies, process models, and information technology to design, manage and optimize the end-to-end customer experience process.
CEM systems
One of the key features of successful CEM implementations is their ability to manage multi-channel interactions. Customer experience solutions address the cross-channel (contact center, Internet, self service, mobile devices, brick and mortar stores), cross-touchpoint (phone, chat, email, Web, in-person), and cross-lifecycle (ordering, fulfillment, billing, support, etc.) nature of the customer experience process. By contrast, CRM solutions tend to offer point solutions for specific customer-facing functions such as, but not limited to, sales force automation, customer analytics, and campaign management.Experience-based providers also integrate both internal and external innovations to create end-to-end customer experiences. They evaluate their business models as well as business support systems and operational support systems (BSS/OSS) from the customer’s point of view to achieve the level of customer-centricity necessary to improve customer loyalty, churn and revenue
Revenue
In business, revenue is income that a company receives from its normal business activities, usually from the sale of goods and services to customers. In many countries, such as the United Kingdom, revenue is referred to as turnover....
(Lopez, 2007).
See also
- Customer serviceCustomer serviceCustomer service is the provision of service to customers before, during and after a purchase.According to Turban et al. , “Customer service is a series of activities designed to enhance the level of customer satisfaction – that is, the feeling that a product or service has met the customer...
- Service designService designService design is the activity of planning and organizing people, infrastructure, communication and material components of a service in order to improve its quality and the interaction between service provider and customers....
- Employee experience managementEmployee experience managementAlong with the notion of Experience Economy, Employee experience is defined as what employee received during their interaction with careers’ elements Along with the notion of Experience Economy, Employee experience is defined as what employee received during their interaction with careers’ elements...
- Experience designExperience designExperience design is the practice of designing products, processes, services, events, and environments with a focus placed on the quality of the user experience and culturally relevant solutions, with less emphasis placed on increasing and improving functionality of the design...
- Customer experience transformationCustomer experience transformationCustomer experience transformation is a strategy that uses business process management to enhance customer service experience from any customer touchpoint....
- User experienceUser experienceUser experience is the way a person feels about using a product, system or service. User experience highlights the experiential, affective, meaningful and valuable aspects of human-computer interaction and product ownership, but it also includes a person’s perceptions of the practical aspects such...
(experience with products and services) - The International Customer Service InstituteThe International Customer Service InstituteThe International Customer Service Institute is an international organisation enabling the recognition and sharing of global best practice in customer service...
- Customer Advisory BoardCustomer Advisory BoardA Customer Advisory Board is a form of market research whereby a group of existing customers is convened on a regular basis to advise company management on industry trends, business priorities, and strategic direction...
- Customer communications managementCustomer communications managementCustomer Communications Management is a term highlighted by research companies such as Gartner Group, Forrester Research and Madison Advisors to define a convergent set of Information Technology solutions that together provide marketing communication professionals the ability to advance the way...
- Mystery ShoppingMystery shoppingMystery shopping or a mystery consumer is a tool used externally by market research companies or watchdog organizations or internally by companies themselves to measure quality of service or compliance to regulation, or to gather specific information about products and services...
Sources
Catapult http://www.videocatapult.comGartner http://www.gartner.com
Microsoft http://www.microsoft.com
Amdocs http://www.amdocs.com
Forrester http://www.forrester.com -->