Customer experience (CX) is the product of an interaction between an organization and a customer over the duration of their relationship. This interaction includes a customer's attraction, awareness, discovery, cultivation, advocacy and purchase and use of a service. It is measured by the individual's experience during all points of contact against the individual's expectations.
Analysts and commentators have increasingly recognized the importance of managing the customer's experience.
Forbes says that customer experience is the "cumulative impact of multiple touchpoints" over the course of a customer's interaction with an organization. Some companies are known to segment the customer experience into interactions through the web and social media, while others define human interaction such as over-the-phone customer service or face-to-face retail service as the customer experience.
According to Fast Company, the six disciplines for great customer experience are strategy, customer understanding, design, measurement, governance and culture. A company's ability to deliver an experience that sets it apart in the eyes of its customers will increase the amount of consumer spending with the company and inspire loyalty to its brand. According to Jessica Sebor, "loyalty is now driven primarily by a company's interaction with its customers and how well it delivers on their wants and needs."
Wharton's Professor of Marketing Barbara E. Kahn has established an evolutional approach to customer experience as the third of four stages of any company in terms of its customer centricity maturity. These progressive phases are: 1) Product Orientation: Companies just manufacture goods and offer them the best way possible. 2) Market Orientation: Some consideration on customer needs and segmentation arises, developing different marketing-mix bundles for each one. 3) Customer Experience: Adding to the other two factors some recognition of the importance of providing an emotionally positive experience to customers. 4) Authenticity: This is the top maturity stage of companies. Products and service emerge from real soul of brand and connect naturally and on long term sustainable basis with clients and other stakeholders.
The customer experience has emerged as the single most important aspect in achieving success for companies in all industries. With products becoming commoditized, price differentiation no longer sustainable, and customer demand, companies – particularly communications service providers (landline, wireless, broadband, cable, satellite, etc.) – are focusing on delivering superior customer experiences.
Along with developing various integration and automation tools to organize customer information better, companies are implementing principles to improve customer perception and satisfaction, as well as customer commitment. One method some companies use is through diversity in hiring and staffing, which attracts a diverse and loyal customer base. Companies are also working to differentiate their brand from competitors, which increases sales effectiveness and reduces customer attrition. Studies show that both customer satisfaction and employee satisfaction jointly affect firm success,. A 2009 study on 860 corporate executives found that companies with increased investment in customer experience management over the past three years reported higher customer referral rates and customer satisfaction.
Customer experience management
Customer experience management (CEM or CXM) is the process that companies use to oversee and track all interactions with a customer during the duration of their relationship. This involves the strategy of building around the needs of individual customers. According to Jeananne Rae, companies are realizing that "building great consumer experiences is a complex enterprise, involving strategy, integration of technology, orchestrating business models, brand management and CEO commitment."
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." Harvard Business Review blogger Adam Richardson says that a company must define and understand all dimensions of the customer experience in order to have long-term success.[need quotation to verify]
Although 80% of businesses state that they offer a "great customer experience," according to author James Allen, this contrasts with the 8% of customers expressing satisfaction with their experience. Allen asserts that for companies to meet the demands of providing an exceptional customer experience, they must be able to execute the "Three Ds":
- designing the correct incentive for the correctly identified consumer, offered in an enticing environment
- delivery: a company's ability to focus the entire team across various functions to deliver the proposed experience
- development ultimately determines a company's success, with an emphasis on developing consistency in execution
Customer experience management has been recognized as the future of the customer service and sales industry. Companies are using this approach to anticipate customer needs and adopt the mindset of the customer.
Digital Customer Journey
In the classical marketing model, marketing was deemed to a funnel: at the beginning of the process (in the "awareness" stage) there were many branches competing for the attention of the customer, and this number got reduced through the different purchasing stages.
Marketing was an action of "pushing" the brand through few touch points (for example through TV ads).
In the digital era, there are many more touch points: digital media channels (Facebook, Twitter, YouTube, etc) and other Internet platforms, such as forums, blogs, etc.
As a result, this process has become a journey:
- The number of brands does not decrease during the process of evaluating and purchasing a product.
- Brands not taken into account in the “awareness” stage may be added during the evaluation or even purchase stage
- Following the post-purchase stage, there is a return to the first step in the process, thus feeding the brand awareness.
- "Customer Experience Management: What it is and why it matters". SAS. Retrieved 7 May 2015.
- Thompson, Ed and Kolsky, Estaban (2004-12-27). "How to Approach Customer Experience Management". Gartner.com. Retrieved 2014-12-13.
- Zwilling, Mark (10 March 2014). "'Customer Experience' Is Today's Business Benchmark". Forbes. Retrieved 7 May 2015.
- Manning, Harley; Bodine, Kerry (28 August 2012). "The 6 Disciplines Behind Consistently Great Customer Experiences". Fast Company. Retrieved 7 May 2015.
- Sebor, Jessica (2008-02-20). "CRM Gets Serious". CRM Magazine. Retrieved 2008-05-13.
- van Doorn, Jenny and Lemon, Katherine N. and Mittal, Vikas and Pick, Doreen and Pirner, Peter and Verhoef, Peter C., Customer Engagement Behavior: Theoretical Foundations and Research Directions (August 11, 2010). Journal of Service Research 13(3), August, 253-266, (2010). Available at SSRN: http://ssrn.com/abstract=2340164
- Mittal, Vikas and Frennea, Carly, Customer Satisfaction: A Strategic Review and Guidelines for Managers (2010). MSI Fast Forward Series, Marketing Science Institute, Cambridge, MA, 2010. Available at SSRN: http://ssrn.com/abstract=2345469
- Keiningham, Timothy L. and Frennea, Carly and Aksoy, Lerzan and Alexander and Mittal, Vikas, A Five-Component Customer Commitment Model: Implications for Repurchase Intentions in Goods and Services Industries (2015). Journal of Service Research, 1-18, 2015 . Available at SSRN: http://ssrn.com/abstract=2593914
- Peppers, Don; Rogers, Martha (2005), Return on Customer, Doubleday, division of random House, Inc., ISBN 0-385-51030-6
- Shaun Smith and Joe Wheeler.; Shaun Smith, Joe Wheeler (2002), Managing the Customer Experience: Turning customers into advocates, Financial Times Press, ISBN 978-0-273-66195-5
- Richardson, A. (2010, 10 28). Understanding the customer experience. Retrieved from Harvard Business Review Blog Network: http://blogs.hbr.org/cs/2010/10/understanding_customer_experie.html
- Allen, James, R., Frederick F, H., & Barney. (2005, 11 07). The Three "D"'s of Customer Service. Retrieved from Harvard Business School: http://hbswk.hbs.edu/archive/5075.html
- "Customer Experience". Genesys. Retrieved 7 May 2015.
- Groening, Christopher and Mittal, Vikas and Zhang, Yan, Cross-Validation of Customer and Employee Signals and Firm Valuation (April 25, 2015). Journal of Marketing Research, Forthcoming. Available at SSRN: http://ssrn.com/abstract=2623204
- Evanschitzky, Heiner and Groening, Christopher and Mittal, Vikas and Wunderlich, Maren, How Employer and Employee Satisfaction Affect Customer Satisfaction: An Application to Franchise Services (December 17, 2011). Journal of Service Research, 14(2), May 2011, 136-148. Available at SSRN: http://ssrn.com/abstract=2339332
- Strativity Group (2009), 2009 Global Customer Experience Management Benchmark Study (PDF), Strativity Group, Inc.
- Rae, Jeananne (2006-11-27). "The Importance of Great Customer Experiences". Business Week. Retrieved 2012-01-05.
- Bernd H. Schmitt. (2003), Customer Experience Management: A Revolutionary Approach to Connecting with Your Customers, Wiley, ISBN 0-471-23774-4
- Dorman, Stuart. "The Future Is Customer Experience Management". Avaya. Retrieved 7 May 2015.
- David Court et al. (2009), The consumer decision journey, McKinsey&Company