What the heck is Customer Experience Management! A value-based approach


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Having worked in Customer Experience for many years, one of the things that most strikes me is the level of confusion that surrounds the term; I mean what does ‘Customer Experience’ mean anyway? As one of my colleagues put it, there are a lot of people talking a lot of bla..bla…bla. The danger of this is, of course, that without a clear definition, Customer Experience risks going the way of many business trends by becoming defined by what sells most software, as we saw in Beyond Philosophy’s recent Global Customer Experience Management Survey 2011.

I feel this is a significant risk, but to be honest another cause of the ‘bla..bla..bla..’ lies in the very ambiguity of the word Experience itself. For instance, does it mean ‘Wow!’ that was an Experience (let’s call this the entertainment dimension; I use the term loosely to demonstrate wows and emotional pulls – emotional experience being the key differentiator for Beyond Philosophy here) or does it mean Experience as in ‘everything that I experience’ about you (let’s call this the process dimension or the Theory of Everything! As another eminent CE authority called it).

It seems to me that the two are in conflict for almost without exception, firms seem to emphasise the latter – it’s about everything we do – while at the same time emphasising in their examples of great Experience the former: as in look at the Wow Experience of Disney, Lush and so forth.

For me what I think would be truly helpful is to look at Customer Experience not as a separate ‘process’ and a separate ‘entertainment’ thing but as one concept bound by a simple but quite revolutionary approach. That we can differentiate and create value from ‘our experience’ ‘outwith’ the goals customers traditionally seek from buying from you in the first place. In other words, for a retailer price and product are, yes, part of the Experience world but Experience value-creation in its truest sense is found in the process of shopping; a process that can impact and uplift my experience by being ‘a good and more emotionally engaging process experience’ or be an additional reason in itself to shop by being ‘a good and entertaining process experience that clearly has a stronger emotional hit’. Consider the following:

  1. Traditional Marketing value: I go to your store to buy a can of beer because the price and products you offer are the most competitive. This represents a classic marketing offer. My goal of going to your store is focused on achievement of my core need, to buy that beer.
  2. Process Experience value: I go to your store to buy a can of beer because the car parking is great; the staff are friendly, oh! and I get that beer. That is an experience offering. My goal of going to your store is still focused on achievement of my core need, but in my buying decision your good performance on process makes me feel and think you are the best to buy from.
  3. Full Experience value: I go to your store to buy a can of beer because it’s in a fantastic shopping mall with marbled halls, the car parking is great, the staff are friendly, oh! and I get that beer. This is a full experience offering, maximising the emotion inherent in how you can entertain me or Wow! me. My goal in this example now becomes twofold and in some ways reversed, firstly I want to experience your entertaining and emotionally engaging process – it does more than just uplift my traditional marketing goal as it is a goal in itself – and I want my traditional core goal (buying that beer, which is at that point a pretty commoditised offering).

The emphasis on creating differential value through ‘process’ because that ‘process’ creates its own goal state the consumer would pay money to Experience seems therefore to be key. Likewise, there is an assumption that the core Marketing offer is under commoditisation pressure and you no longer get sufficient margins from price competition or new product/ service offerings are easy to copy.

Now, if we look at our process and our entertainment dimensions together (see below) we can see how a firm can generate Experience value. Crucially this will depend on where they stand in their market (i.e., their starting point) and whether they wish to focus on uplifting through better process their traditional marketing offers (customer goals) or they wish to take a more radical approach, building in additional Experience – as in ‘entertaining/ emotional wow! – related offers (customer goals).

Customer Experience Management: a value-based view

So from the above box:

Marketing goal related value

  • Low Process, Low Entertainment: a utility may seek differentiation by taking the dissatisfiers out of the process.
  • High Process, Low Entertainment: a Telecom may seek differentiation by making the process smooth and easy (as well as taking out the dissatisfiers).

Experience goal related value

  • Low Process, High Entertainment: a Pizza restaurant may seek differentiation by adding cost of entry through themeing the restaurant (but not caring too much about Pizza quality). This cost barrier to entry use of Experience can also be seen in brand advertising. This is a particularly interesting use of Experience, and more common than realized. It does reduce market competition but is ‘copiable’ as Entertainment added value is undermined by a denuded core product offering.
  • High Process, High Entertainment: a Construction company may seek differentiation by adding wows! to the process of doing business (e.g., great sandwiches, concierge service on site) as well as delivering a smooth and easy experience with low dissatisfiers.

Management Implications

  1. Be clear about Customer Experience Management, this is not about ‘just’ a rehash of traditional marketing.
  2. Think about which value-box you are and your competitors are in.
  3. Consider how you will differentiate yourself in the market.
  4. Use relevant research (both analytical and creative) techniques in your approach i.e., for instance, do you understand the dissatisfiers; what could create a more satisfying process; where the emotional levers are to create an entertaining experience; how you could innovate and what new ‘goal-states’ might work? See last blog on managing your Creative Equity.
  5. Think about your organization; is it ready for the change?

Republished with author's permission from original post.

Steven Walden
Steven Walden is Director of Customer Experience at leading CX firm TeleTech Consulting (which includes Peppers and Rogers, iKnowtion and RogenSi). Steven is instrumental in efforts to develop the CX practice promoting thought leadership and CX community engagement and IP development. Prior to TeleTech he was Director of CX at Ericsson, developing their Experience Management Centre and also Head of Research specialising in emotion and journey mapping agency side.


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