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Chapter 1
The What, Why and How of Customer Experience
Sapna Popli and Bikramjit Rishi
Abstract
The opening chapter takes the reader through three aspects of customer experience management (CEM) – the what of customer experience (CX), the why of CX and the how of CEM. The authors have collected, synthesised and presented information from research as well as practice in this chapter. It helps the readers build a perspective on CX, sieving through various notions, philosophies and terms that have come to mean CX. The chapter also establishes the need for understanding CEM and executing it using the framework presented in the ‘how’ section of the chapter. The chapter concludes with a short overview of each of the following chapters.
Keywords: Customer experience; customer experience management; integrated; frictionless; culture; leadership
Experiences are all around us,
we are experiencing something in
each breath we take
1. Introduction
Every organisation gives some kind of experience to its customers – that experience might be great, good, bad or ugly…but experience it will be. Every time we interact with a website, shop online, shop offline, walk into a café, use an equipment we bought, use a software at work, use technology to connect and collaborate, each of these times we experience the product, the brand, the service and the organisation itself. Each experience has an emotion, a feeling attached to it, maybe subtle but is very much there. What we remember as we think of buying again or recommending the brand is based on the perception of these emotionally cued interactions with the organisation.
Movie going has always been an experience, not just because of the movie, but all of it, the planning, the ticketing, the popcorns, the feel of the movie hall, the other patrons, the theatre and all that it brings. For the same movie, some will come back and think of it as an exceptional movie experience, yet for others it may not have been so. Not because of the movie, but maybe because of waiting time outside the movie hall, not getting your popcorns on time or the strange smell of the place or a random argument over the cab charge en route. Buying or waiting for the car to be delivered as promised by your dealer may be a neutral experience, and interacting with your bank call centre may have been very pleasant or painful, it's an experience nevertheless. You do not have to be in the opera hall for an experience; a well-managed, effortless buying journey in the time of need with an organisation is also a superlative experience. The question is, can organisations manage these experiences…the many emotions…? Is it doable? What does it take to get it right?
Customer experience management (CEM) over the last decade has become not only an important discussion subject in corporate corridors and branding conversations but is also being seen as the only source of sustained competitive advantage in the coming years. While academic research and consulting both are starting to arrive at an agreed understanding of CEM, the field continues to evolve. One of the most accepted academic arguments on customer experience (CX) is presented by Lemon and Verhoef (2016), ‘customer experience is a multidimensional construct focusing on a customer's cognitive, emotional, behavioural, sensorial, and social responses to a firm's offerings during the customer's entire purchase journey’. And CEM/CXM as proposed by consultants and academics alike is what organisations do to manage CX, such that it brings back customers and enhances customer loyalty and recommendation, thereby leading to growth and revenues. Gartner (2016) defines CEM as ‘the practice of designing and reacting to customer interactions to meet or exceed customer expectations and, thus, increase customer satisfaction, loyalty and advocacy’.
While many reports and articles have documented the heightened interest and attention on CX across organisations, there is also ample reporting about the difference in perceptions of the kind of CX senior leadership believes their organisations deliver and what consumers say they receive. There are also dismissive notions about the return on investment (ROI) in CX. The truth about CEM remains, that unless the CEM intent is perfectly aligned within the organisation structure, processes, people, practice and all employees have a complete understanding of the customer's journey with their brands, the challenges will remain. Many organisations have set up fairly new CX department/function and are struggling to get it right and specially in terms of making the business case for CEM.
To top all this, the pandemic caused by the novel corona virus (COVID-19) has brought a fundamental shift in the ways customers think, decide and buy. Their expectations and priorities have shifted from the ‘shopping experience’ to a ‘safe experience’ and from an in-store experience to an ‘online experience’. A recent article by Diebner, Silliman, Ungerman, and Vancauwenberghe (2020) rightly points out that
‘…in times of crisis, a customer's interaction with a company can trigger an immediate and lingering effect on his or her sense of trust and loyalty…a primary barometer of their customer experience will be how the businesses they frequent and depend upon deliver experiences and service that meets their new needs with empathy, care and concern’.
In this context, this first chapter tries to clarify three key questions about CX and CEM/CXM – the what, why and how of CX and CEM.
(1) What is CX? What is the genesis of CX? What is CEM?
(2) Why is it important? Why are leaders betting on CX? What does it offer to organisations?
(3) How do we manage CX? How does an organisation embed CEM in its philosophy, design and way of doing things?
2. What Is Customer Experience?
Let us begin the conversation about CX from the word ‘experience’. In ordinary language, experience is used in two broad contexts, one that refers to ‘knowledge accumulated over time’ and the other that refers to ‘ongoing perceptions and feelings and direct observation’. Most English dictionary references of the word ‘experience’ include both these common understandings. Collins English Dictionary (2014) included the following entries for the word experience.
experience
n
1. direct personal participation or observation; actual knowledge or contact.
2. a particular incident, feeling, etc, that a person has undergone.
3. accumulated knowledge, esp of practical matters.
4.
a. the totality of characteristics, both past and present, that make up the particular quality of a person, place, or people
b. the impact made on an individual by the culture of a people, nation, etc.
5. (Philosophy) philosophy
a. the content of a perception regarded as independent of whether the apparent object actually exists.
b. the faculty by which a person acquires knowledge of contingent facts about the world, as contrasted with reason
c. the totality of a person's perceptions, feelings, and memories
vb (tr)
6. to participate in or undergo
7. to be emotionally or aesthetically moved by; feel: to experience beauty.
[C14: from Latin experientia, from experīrī to prove; related to Latin perīculum peril]
It is this ‘totality of a person's perceptions, feelings and memories’ that comes closest to the way the experience is interpreted for understanding and evaluating CX. In one of the early books on ‘experience marketing’, Schmitt (2011, p. 60) referred to ‘experiences in the here and now – perceptions, feelings and thoughts that consumers have when they encounter products and brands in the marketplace and engage in consumption activities – as well as the memory of such experiences’.
The theoretical roots of CX can be traced back to the late 60s/early 70s in the consumer decision-making models. The most influential one's being those of Howard and Sheth (1969); attention–interest–desire–action (AIDA) model and its adaptations (Lavidge & Steiner, 1961); business buying process Webster and Wind (1972) and the model of industrial buying behaviour (Sheth, 1973). They focussed on the process of the purchase journey and the factors that influence customers while making a buying decision. These models continue to influence marketers while they explore the realms of CX. These models provided the foundation to view CX holistically, as a process that consumers go through; today these are commonly referred to as the ‘customer decision journey’ or ‘customer purchase journey’ (Lemon & Verhoef, 2016) or just ‘customer journey’.
Other theories and works that have influenced the current conceptualisation and practice of ‘CX’ include the following:
- The stimulus-organism-response model (Mehrabian & Dan Russel, 1974). The authors articulated customer response to an organisation in terms of ‘approach’ or ‘avoidance’ and it being shaped by the interaction between the stimulus (organisational or environmental) and organism (consumers – emotional state). ‘Interaction’ and ‘response’ continue to be critical elements of CX.
- The works of Holbrook & Hirschman, 1982 and Woodward & Holbrook, 2013 helped marketers going beyond the information processing approach to include the subjective elements of the ‘consumption experience’. The authors may have been the first ones to bring in the experiential aspects of consumption including the symbolic meaning, subconscious processes and nonverbal cues. The information processing and stimulus-response perspectives till then focussed on product attributes and functionality. The discussed the full range of possible consumer emotions (e.g., love, hate, fear, joy, boredom, anxiety, pride, anger, lust and guilt) that influence buying decisions) (Schmitt, 2011).
- Service-dominant logic (S-D logic) and value co-creation (Vargo & Lusch, 2004, 2008). The concept of ‘value’ has dominated economic thought from centuries. Traditionally, value creation is thought of as a series of activities performed by the firm to create value and then distribute it in the market through exchange of goods and money (today referred to as the goods-dominant logic). The S-D logic view does not segregate the roles of producers and consumers in value creation, meaning that value is always co-created, jointly and reciprocally, in interactions among providers and beneficiaries through the integration of resources and application of competences. S-D logic is a mindset for a unified understanding of the purpose and nature of organisations, markets and society. The foundational principles of S-D logic state, ‘The customer is always a co-creator of value, value creation is interactional and that value is always uniquely and determined by the beneficiary’; Prahalad & Ramaswamy, 2004 discussed that value in the emergent economy will centre on personalised co-creation of experiences and that customer value will be derived from purposeful and meaningful personalised interaction between customer and organisation.
The emergence of ‘experience economy’ as coined and popularised by Pine, Pine, and Gilmore (1999) is also an important underpinning to the world of CX. The...
