3. 3
contents
experiences
foreword
intro
Customer experience: a framework
for the marketing of the future
Elena Alfaro
Partner - EMO Insights
brand and communication
Customer experience from the perspective
of the brand and communication
Javier Velilla
Managing Partner - COMUNIZA
management systems
The role of IT systems in managing
customer experience
Hugo Brunetta
CEO - Nexting
measurement
How to measure customer experience
Carlos Molina
Innovation Vice President - IZO
6
9
12
20
29
38
4. 4
employee
The role of employees in customer experience
Beatriz Navarro
Marketing Director - Starbucks
retail
Customer experience from the retail standpoint
Lluís Martínez-Ribes
Professor of Retail and Marketing Innovation
ESADE Business School
contact center
Customer experience from
the contact center standpoint
José Ignacio Ruiz
Head of Marketing – Orange
on line
Customer experience from the online standpoint
Enrique Burgos
Chief Marketing Officer - QDQ Media
multichannel marketing
Customer experience in multichannel integration
Fernando Rivero
Marketing Director Partner - Tatum
b2b
Customer experience in B2B markets
Santiago Solanas
CEO - Sage España
49
56
67
75
83
93
contents
5. 5
innovation
Innovation in creating and managing experiences
Jaime Castelló
Principal and Professor of MBA
ESADE Business School
key ideas
The key ideas of customer experience
Jaime Valverde
Social Media Strategist - Territorio Creativo
Borja Muñoz
Partner and Day Trader - Factor K
acknowledgements
authors
103
112
119
120
contents
6. 6
Txema – Madrid
“The best experience I have ever had was with [satellite TV broadcaster]
Digital Plus - when I canceled my subscription, odd though it may sound. I wasn’t
expecting it, but when I called and they were busy, it was they who returned the
call, even though they knew I wanted to cancel my subscription. This was seven
years ago, and I still haven’t forgotten.”
Daniel – Barcelona
“I went into the Nike store on Paseo de Gracia in Barcelona. I had a
clear picture in mind: I wanted to buy my wife a pair of sneakers. A friendly
shop assistant came forward to help, and told me: ‘If you like, we can create
a personalized pair of sneakers just for you.’ She guided me to the Nike ID
department. We sat in front of a computer, and created the sneakers step by step,
specifying all the features I wanted to include. The finished sneaker would be ready
in four weeks. I came out of the store with the impression that I had bought a better
gift than I had expected to get, and that, even if just for a short time, Nike was
working for me. Thank you!”
Noelia – Madrid
“I can hardly remember what my life was like before my iPhone. With my
iPhone, I get a sense of not missing anything, and I become anxious when the
experiences
7. 7
battery dies. And when I look at other smartphones I think, okay,
but it’s not an iPhone.”
Carlos – San Sebastián
“I’m from Valencia, but for a while now I’ve been living in San Sebastian
for work reasons. Whatsapp on my cell phone makes me feel at home, because I am
constantly in touch with my closest friends and my family. Whatsapp has meant
that, even though I am far from home, I feel a lot closer to my loved ones.”
José Fermín – Madrid
“I have had a really good experience every time I have interacted with
American Express. Once, while traveling, I had my wallet stolen, with all my
cards inside. I called Amex and told them about it. The person taking the call
interrupted me to say: ‘Before we go on, José, are you all right? Is there anything
you need?’ I explained I was fine, and all I needed to do was cancel my card. He
complied, and then offered to handle any paperwork I might need to do: Sending
a photocopy of my identity card, bureaucratic formalities, help with reporting the
facts to the police, and so forth. Finally, they offered to send me cash at the hotel
where I was staying, and promised to send me my new card in a few hours’ time
so that I could pay for my stay and my return fare. I was impressed. Getting my
card stolen turned out to be a treat!”
David – Sevilla
“I spend the week looking forward to Saturday so I can drive my Ducati
Monster. That moment is priceless.”
experiences
8. 8
Ana María – Barcelona
“I am touched by the look of joy on my son’s face when he walks into
an Imaginarium toyshop through their special child-sized doorway.”
Iván – Madrid
“Why do I support Atlético de Madrid? It isn’t easy to explain. It comes from
the heart, that’s all - whether it makes me weep or jump with joy.”
Alexa – Barcelona
“Every week I have my gossip moment with Cuore magazine. It’s like a
ritual… Every Wednesday - when the magazine comes out - I go out to buy my
copy. In the evening when I get home, I lounge on the sofa and… Time to gossip!
I enjoy everything in it and what it teaches me. It’s my moment! And I’m not shy
to acknowledge that I love gossip!”
Tamara – Madrid
“It’s like being a little girl again, it reminds you of the feeling that fairytales
are true. Magic really is out there. Disney.”
experiences
10. 10
ZERO / FOREWORD
#CEMbook
Customer Experience
Many businesses are facing hard times. Customer profiles and the context in
which businesses operate are changing swiftly.This situation is thrown into relief by
the current economic downturn and the ongoing crisis of societal values.
Today, most companies operate in mature, hypercompetitive markets. Their
goods and services are virtually indistinguishable, and they compete chiefly on
price. Customers are more demanding, better informed, and look for personalized
products. We are facing a paradigm shift.Today’s customer is no longer concerned
merely to satisfy her basic needs.She wants to take her purchasing and consumption
process to a higher level: she wants emotions and experiences. This is the context
for this e-book.
You are probably aware of most if not all the following brands: Starbucks,
Harley‑Davidson, Desigual, Apple, Disney, Imaginarium, Nespresso. These are
some of the businesses that have succeeded in the present climate by creating and
managing their customers’ experience to leverage their strategy. Although they are
all different, they have one thing in common: they meet their customers’ needs not
just rationally, but emotionally.
There is an abundance of literature on customer experience, also known as
“experience marketing.”However, this e-book offers you a different perspective and
a different format.
This book is the outcome of a partnership.It brings together and pools the store
of experience and know-how of thirteen marketing experts. The authors include
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ZERO / FOREWORD
#CEMbook
Customer Experience
CEOs, directors and account managers working in a wide range of industries
and businesses; and they all share their expertise at leading business schools and
universities. Each author is a specialist who contributes his or her own distinctive
approach to customer experience to provide a stimulating multidimensional
perspective.
This e-book is open to everybody, and you are invited to contribute. You can
send us your feedback in the form of comments and suggestions. Please share this
e-book with others using the available links to various social networks.
This e-book is provided free, and is a nonprofit venture. The authors and other
contributors are driven by a passion for a new paradigm of marketing. Our reward
is to see this book emerge as something real, and to support the excellent work
being done by Fundación Vicente Ferrer.1
Finally, we hope you enjoy reading this book, and that it will suggest questions
for you and your business to think about. I would like to finish with the famous
words of B.Joseph Pine II and James H.Gilmore,“Welcome to the experience economy.”
1 All contributors to this project work on a non-profit basis. Any earnings arising from this e-book will be handed over to Fundación Vicente Ferrer in full.
12. one / introCustomer experience: a framework
for the marketing of the future
Elena Alfaro
13. 13
ONE / INTRO Customer Experience
#CEMbook
“Customer experience,” “experiential marketing,” “emotional marketing.” This
is a discipline that has spawned a confusing welter of concepts and terms. I have
gone on company visits and talked to professionals in the field of marketing,
quality, innovation, and research, and new niches like “customer insights,”“business
intelligence” and even “customer experience.” And my sense of a prevailing haze in
this area has only grown.
One thing is clear, though: quality alone is no longer enough for success. In an
increasingly complex and fast-moving environment, it is vital to understand that
perceptions set off feelings and emotions within organizations, and those feelings
directly impact end results.We need to bear in mind that customers and employees
are people: their motives and opinions blend the conscious and the unconscious,
and it is this hybrid that drives the dynamic of loyalty, referrals, repeat business,
and even impassioned advocacy of a preferred brand or company.vSo organizations
are now taking an interest in “experience” and what it means in terms of how they
should manage their business.But nobody can agree on what “customer experience”
really means. And what about within a specific organization? It gets trickier when
the term is used to mean different things at different times.
If we regard the concept as related to “use”or “practice,”then “experience”refers
to the points of contact between a customer and a business (the Internet, social
networks, physical stores, employees, the customer service center, and so on). We
can assume that the more a customer uses a product or service, the more experience
he or she is building up with that product, with the brand, and, ultimately, with
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the supplier (manufacturer and distributor). However, if we regard the “experience”
concept as related to the terms “habit” or “custom,” then its meaning mingles
with what has been a source of law for centuries: custom is a source of people’s
expectations. And if we view it as related to “life,” then we are linking the term to
emotion, and so complicating the message.
The literature is rich in suggestions as to what emotion can mean. It can be
defined as a state of affect that forms part of our experience; as a subjective reaction
to the environment accompanied by physiological changes that are themselves
influenced by earlier experience. Emotion helps our body adapt to its surroundings,
instantaneously or on a more lasting basis. Experience, then, triggers our emotions
and exerts an influence over them.
Even a customer’s rational response to a company or brand is hard to measure;
the issue is even more complicated when decisions are powerfully influenced by
emotion - and this is the case of the customer’s “experience.”Analysis must further
contend with the difficulty of the myriad concepts that have evolved in connection
with “experience.”
The various meanings of the term directly impact the ways in which
organizations perceive and manage the fact of experience, and the ways in
which the associated research is structured. In fact, it is common to come across
companies that think customer experience management comes down to narrowing
the customer’s expectation gap with the various channels with which he or she
interacts. An increasingly widespread job title is that of the “customer experience
manager,” designating the person in charge of a call center taking telephone calls
from customers.
Interestingly, even the research industry is unable to agree on how best to
analyze customer experience. Companies spring up promising to deliver “customer
experience”services,but when you look at the detail of what they do you realize they
are merely repackaging other philosophies, such as “total quality management,” to
embrace the latest buzzword, “experience.” Maybe their market positioning takes a
deliberately ambiguous approach.
In terms of the history of market research institutions, until recently, when a
business wanted an answer to a specific problem (e.g., to ascertain perceptions of
the asking price for a given product),it would enlist the assistance of a conventional
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ONE / INTRO Customer Experience
#CEMbook
research institution or company to obtain data which would enhance its decision-
making. A research institute would provide a range of menus comprising fairly
standardized blueprints, and would try to shepherd the client toward these patterns
to address almost any given query. Typical forms of research included quantitative
survey data or information elicited from the client business itself, research based on
observing customers in purchasing environments, group-based qualitative inquiries
(better known as “focus groups”), and in-depth personal interviews.
To date, decision-making was based on research of this kind. We are all
used to hearing and reading statements such as “80% of customers are highly
satisfied,” “customers are unhappy with the product price,” “there is a problem
with complaints,” and so forth. Little thought has been given to the methodology
underlying the reported data,the way in which companies took credit for the results
or deployed other strategies. But a more accurate awareness of what the figures
mean, and a laser-like search for where improvement was needed, prompted us to
take our analysis a step further and look for metrics that would reflect real changes
in stakeholders’ behavior.
For example, we discovered that the distribution of satisfaction surveys was
biased toward positive views. Customers who still remained as customers were
the people who were returning scores at the higher end of the scale. In addition,
the fact that customers gave a low score to a particular feature did not mean
that it required improvement - for one thing, the price was one aspect which
from the customers’ standpoint always stood to be improved. In the search of
metrics intended to monitor customer experience, there was another fad which
ultimately proved uninformative. The net promoter score (NPS) was heralded as
the indicator to end all indicators. However, it had almost nothing to say about
the future.
Bearing in mind that in recent years brain science has achieved greater forward
strides than in the whole of the previous century, we are strongly placed to gain a
more accurate picture of how we humans function. Research and development of
innovative solutions are now being undertaken wider afield. Discoveries relating
to the role of emotion in decision-making have led to improved solutions that
combine conventional techniques with medical technology and neuro-marketing
(attention meters, galvanometers, etc.) and even newer methods, such as
quantitative approaches to qualitative research (linguistic and semantic analysis of
Internet commentary, conversations between customers and call center operators,
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etc.), predictive inferences (use of statistical models that pinpoint the perceptual
features shaping certain behaviors), and so forth.
The rise of experiential strategy also involves the emergence of new professional
profiles in a research capacity, from the fields of psychology, trend-spotting
(“coolhunters”), industry experts and mirror markets (having analogous features),
stakeholders and interest groups (customers,suppliers,etc.).The innovation process
should be driven by those professionals whose input is needed to resolve the issue
in question. For example, some time ago I was involved in creating an experience-
based differential concept for a natural park. The only commodity in view was
brute nature. The aim was to create wealth in the vicinity and attract visitors
with a higher purchasing power. The concept development process thus enlisted:
a professional whose background was in the luxury goods industry (an expert
in selling expensive items), an environment professional, a trend-spotter, a local
infrastructure professional,information office employees,visitors,and more.All the
people involved first experienced the park so that they would be able to discuss it
in the first person.The concept underpinning this multidisciplinary involvement is
itself in vogue: co-creation.
Given this setup, the future of research and consultancy companies is to engage
in actively listening to the customer: not to offer the standard recipes of the day
referencing size,capabilities and volume of human resources.Yes,that’s right - what
I mean is that presentations for consultancy firms typically include phrases such as
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#CEMbook
“we are the world leader in product X,”“we have more than Y employees, and Z computer
assisted telephone interview workstations, etc.” It is less often heard that they actively
listen to the customer, study the customer’s need in-depth and come up with a
research solution specifically targeting the problem to be solved. What is more,
customers are increasingly short of time to review the information, and want the
supplier to play a more active role in resolving the issue.
“Don’t believe the recipes” is my message regarding the creation of approaches
to understanding stakeholders and, therefore, the people around us. The reality is
that we are facing a time of aggressive competition which is leading to price wars in
many industries.The speed of the changes we are witnessing and global uncertainty
are catalyzed by the Internet, a world information exchange network. In the face of
these changes, businesses are seeking new solutions, and the research industry has
had to adapt, even if offering the same recipes in a different guise.
Thinking through the problem that a given customer needs to solve, and so
arriving at an answer, requires an understanding of strategy, psychology, statistics,
mathematics, advertising and more. Experiential research has recently been
associated with neuro-marketing. However, when addressing an experiential
research project, we should think about which techniques and profiles are best
suited to arriving at the intended target. Not every research target is best addressed
by neuronal marketing, nor can any study population be processed with magnetic
resonance imaging to produce brain maps.
Research is evolving just like any other form of science: it is driven this way
and that by new discoveries and the new reality, which embraces new channels
and available technologies. We can neither dismiss the use of long-established
techniques, nor stop evolving and rethinking the new reality that surrounds us.
Research institutes must adapt to the new reality and come up with solutions that
suitably provide the information required by today’s organizations.
Due value must be placed on the line of work that has achieved the most
significant progress in history: research. If the aim is to transform the industry
and evolve in step with global and specific circumstances so as to arrive at new
solutions, then an appropriate valuation must be made in terms of price. This is a
reality we see every day.The capabilities and skills of two businesses, though widely
different, are purportedly compared to one another simply because the goals they
pursue are described by similar phrasing - “information for decision-making.”And
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we sometimes refuse to acknowledge and pay the fair value of advice that can save
us millions of euros.The immediate consequence of this is a lowering of the caliber
of professionals in the industry, and hence a shortfall in the quality of information
that would otherwise provide us with an edge.It is urgent for businesses to undergo
change in this respect to prevent an outflow of talent and thus of capability from
our organizations.
Customer experience management is a strategic proposal to deal with situations
where the goods or services on offer have become commodities. It sometimes
emerges in the form of detecting and managing experiences at all points of contact
with the consumer, and sometimes appears in the guise of approaching the sale in
terms of helping the customer. Either way, the goal is to set yourself apart from the
competition.
It is not easy to find professionals whose experiences ranges over disciplines
as diverse as strategy, consumer research, operational marketing, psychology,
technology solutions, quality, development of metrics and statistical modeling, and
so forth: all these subjects form part of the all-embracing discipline of research.The
clear outcome of this is that in consultancy only a few boutique companies have a
long track record in the field, which need not be highlighted by an internationally
known brand. We should not be afraid of innovation. A few years ago I was struck
by the following story. In the 1980s, General Motors selected suppliers precisely on
the basis that GM was their first-ever customer. Sometimes we ask for too many
prior references for a product or service which is in itself new.
Finally, I leave you with the following thought: “Only one percent of customers
think that companies focus on emotional needs.” This was the conclusion of a
study conducted in the UK. In my view, this finding has a corollary: “there is a big
opportunity out there to gain an edge by the emotional management of customers’
needs,” because the data shows that this is hardly being worked on at all. I would
urge you to try. Don’t be afraid of being first!
20. 20
TWO / BRANDS AND COMMUNICATION Customer Experience
#CEMbook#CEMbook
A brand isn’t what it says about itself,but what its target market says about it.In
short: brands aren’t defined as much by the perception they have of themselves but,
and this is the key, by the combination of the individual opinions and experiences
of its target markets connected to the perspectives of third-parties such as the mass
media, opinion-leaders and social networks.
Unfortunately, for years customer experience has been handled in a disjointed
way, with brand communication separated from customer service (amongst other
divisions), as if what the brand promised and the experience of the consumer and
use were two different realities. One of the consequences of this situation is that
marketing departments have tended to focus on just one of the variables making
up the 4 Ps in their brand strategies: promotion. Brand communication has been
limited to one-way mass advertising, leaving out other crucial factors such as
product, place and price.
This is a reductionist approach that leads to one outcome: on many occasions
we have disconnected self-expression of the brand from user experience. Marty
Neumeier uses the first pages of the book The Brand Gap (Peachpit Press, 2006) to
highlight a number of the sector’s conceptions: a brand is not a logo,an identity or a
product. Nor are other signs of the brand identifiable, expressive and easily recalled
like the terms associated to the brand (for instance, Nokia’s Connecting people or
Nike’s Just do it) or personal charisma (in the case of the late Steve Jobs for Apple,
for instance), although achieving an aligned organization to offer a user experience
requires both elements. We perceive this role, for example, in people like Howard
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#CEMbook#CEMbook
Schultz, Jeff Bezos and Richard Branson, who act as brand guardians so that the
user experience is the right one.
When Amazon’s CEO Jeff Bezos says that the company mission places
the customer at the heart of the company, this is an affirmation that requires a
certain kind of behavior. In addition, it decisively affects all of an organization’s
departments,which often suffer from a fragmented perspective.In the case of brand
management,effort has often focused more on conveying and controlling messages,
rather than exerting effort on the quality and consistency of contact points.Luckily,
this segmented outlook is changing.
A logo is just one of the many signs that a brand uses to express itself. It is
a crucial element, but so too should the consumer’s first-hand experience. Both
are distinguishing features as well as being hard for the competition or new
competitors to imitate. Let’s take an example: there is a bar or restaurant for every
461 inhabitants in Spain. What’s on offer may seem the same: a sign over the door,
a bar, cutlery, tables, chairs, food and drink… From this perspective it would be
incredibly difficult to make a choice: they all seem to be the same. Yet we know
that other factors are at play. The expression of brand (distinction, personality and
a whole raft of psychological associations) combines with the user experience (in
the form of recall, repetition or loyalty).The combination of both of these elements
positions one bar over another bar in such a fiercely competitive ecosystem as our
city streets.
After all,this isn’t just a bar in the abstract.The brand concept forcefully emerges,
generating a new reality in terms of communication and culture with its messages
and attributes.The brand acts as a semiotic mechanism which triggers associations
to values and ideas. It affords information, differentiation and seduction targeted at
the act of buying or recommendation. This value can be pared down to the lowest
common denominator of associations shared by a group of users. In this way a
brand is the result of distilling associations which add value and shape a space of
reference in which to position the product, service or idea in the market as a whole.
The user’s experiences shouldn’t be any other reality except the materialization
of brand positioning, but this time on specific actions based on consumption and
use. Some years ago Stelios Haji-Ioannou, CEO of easyGroup and founder of
easyJet, had a big influence on this. But, unfortunately, it isn’t often that way.
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Concept, context and experience
A brand generates a complex semiotic construction. It bases itself on a
combination of elements such as expectations, experiences, needs, wants and
hopes. In this process the perception of value (concept), its position in the market
(context) and consumption and use (experience) are essential to create and manage
a powerful brand.
It is clearly becoming increasingly complicated to achieve a competitive
advantage due to the appearance of new companies, goods and services, but also
due to a change in some of the rules of the game. Today markets are controlled by
hypercompetition: generally speaking, key variables such as price, distribution or
availability are no longer differentiated from one company to another.The position
of market leaders is continually in jeopardy: looking back at the last fifty years we
see that company loyalty is at an all-time low, digitalization leads to disruptive
processes, and new competitors and innovators enter the market all the time. One
upshot of this phenomenon is that the quality of goods and services isn’t enough to
guarantee an organization’s competitiveness or even survival. Quality is taken as a
given.The enterprises that survive in this market are probably those that are able to
enhance the value delivered to customers without continuously pushing up costs or
finding another way of making a profit.
The brand should draw together a kind of enhanced experience which combines
and unites different experiences of use, consumption, socialization, personalization,
transmedia…to equip itself with a brand promise with added value,that is different
and memorable. This strategy is being rolled out by Caja Navarra with its ‘Cancha’
branch offices. This concept goes beyond conventional offices by providing spaces
with enhanced experiences to meet the public’s needs and which, besides, yields an
average profitability that is higher than the bank’s other offices. As Michael Porter
said, a brand is, “the principal defense against price competition.”This is why more
sophisticated elements push through: intangible elements.
Customers don’t just acquire goods and services, in reality target markets are
drawn to a particular brand because they share certain values, ideas and mindsets,
and because they tie in with an experience. Few products are more undifferentiated
and generic than coffee, yet Howard Shultz created a corporate story that was
powerful enough to roll out the Starbucks brand across the world. The promise of
value is based on an unmistakable concept, context and experience: the third place
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between home and work.This promise represents a commitment to consumers,who
need to align themselves to the mission in the form of a long-term guarantee. In
this way the brand becomes the perfect agent to hold a long-lasting and profitable
relationship with its target market.
The brand acts as a compass for the points of contact of user experience: it takes
on a competitive discourse to extract and afford optimum value of all points of contact
and to all the various channels to connect intelligently and effectively in a solid and
long-lasting way. Its function is to generate a long-lasting impression associated to a
particular mindset with a goal: establish meanings for the product, good, service or
idea and sell them.These meanings clearly generate preferences or loyalties amongst
customers or stakeholders in the form of purchasing,preference or choice.In short,we
are social and complex beings. We live in dense spaces in meanings and connections
with intricate semiotic ecosystems in which brands are related to personal journeys,
past experiences, ways of understanding reality and, above all, expectations.
The brand as a guide to points of contact
The brand establishes a promise and acts to make sure the experience of
consumers is satisfied. For years Philips operated under the slogan Let’s make things
better, now Sense & Simplicity. Both formulations are excellent brand expressions
affording a powerful meaning on a sensible and simple technology that extends to
the products and to the corporate brand.
Extending the brand to user experience means that the corporate story needs to
seamlessly permeate the group of employees,processes and organization.The brand
becomes stronger the more the promise on which it is based is fulfilled, that is, the
more it acts as a compass of all points of contact. For instance, the Imaginarium
chain proposes the following concept: spaces shared by parents and children. This
brand promise is linked to a very specific view of the world and type of consumer.
Yet it is also genuinely expressed in the interior design of the establishments and
in the product range, and it is relevant for its brand territory as it helps decision-
making in a sensitive environment such as the family setting.The context in which
Imaginarium operates is unique and free from competition.
Retrieving the terminology of W. Chan Kim and Renée Mauborgne, authors
of the best seller Blue Ocean Strategy (Harvard Business Press, 2005), a blue ocean
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is compared to a red one (where brands compete for a bigger portion of a limited
demand in water teeming with competitors, with falling profits and fierce and
bloody behavior). Blue oceans, say W. Chan Kim and Renée Mauborgne, involve
a new way of understanding positioning: they are unique market spaces where
the competition becomes irrelevant due to its capacity to reinvent the category.
The authors use the examples of Southwest Airlines, Cirque du Soleil and eBay,
that propose a brand promise (concept and context) with an aligned, obvious and
motivated user experience.
Brand management should go beyond the act of selling existing stock to starting
before the product or service is designed and continue afterwards in the form of
customer service, loyalty and communication. Today’s major brands no longer just
advertise thanks to their huge budgets, but they establish relational actions that
generate 360º experiences before and after the transactions.
It is becoming increasingly common for the brand concept to be rolled out
throughout the company’s entire value chain, from products and services to
behavior, attitude, communication and thinking of the organization. Branding
from the perspective of user experience takes this approach farther as it means
consumers require the guarantee that they will have experiences that are satisfactory,
meaningful and memorable with the brand values in each interaction they have, in
a coherent and consistent way every time.
Experience as the basis of the brand
The brand acts naturally in this context: it should be the semiotic container for
weaving associations and connections in the brain, highlighting certain meanings
and practical elements that combine rational, emotional and meaningful factors.
The car industry is highly representative of these kinds of connections: Volvo is
safety, BMW is the pleasure of driving, Ferrari is Italian sportsmanship and Toyota
is innovation. These are connections that often last regardless of user experience
and which circulate in the form of social, cultural and symbolic stories.
These stories,rather than identifying a particular reference,become the reference
itself. We are continuously detecting brands that go beyond the descriptive nature
of the product or service: these brands become the basis of a relationship with
consumers.The challenge is to not forget that user experience should be a firm basis
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linking a brand’s value promise, providing that it aspires to survive thanks to each
person’s personal experience.
The process of “positioning” - a term coined in 1972 by Al Ries and Jack Trout
- comprises three phases: analyze the offer, ascertain what the consumer values
and determine the distinguishing features in a competitive environment. In other
words, positioning defines the process that describes what a brand offers its target
markets and how. Over time the term has evolved, but its essence remains: it means
to occupy a space in the mind of the target markets by way of an idea or concept
that is relevant, easy to explain and which is not an intangible or legal property
belonging to a competitor.
Positioning is nothing more than devising an idea and making it grow with a
powerful meaning that is clear and easily distinguishable. Organizations need to
know and interact with their customers to find out their needs and expectations,
which are of a changing nature. This means keeping an eye on the market and
constantly gathering data to find out where the brand can give value and that this
value is perceived. One of the brands which has best understood this process is
the Malaysian financial entity RHB Bank, which gives small elements of value to
users while they are waiting (laying on staff who serve coffee, tea and soft drinks)
or depending on the weather (handing out anoraks on rainy days). Even the bank’s
call centre sets itself apart thanks to its capacity to process requests simply and at
all times on a one-to-one basis. The key of this entity is that it comprises many
elements that customers genuinely value in terms of their experiences with the
banking sector.
Let’s take a specific example: in the professional trucking market, dozens of
trucks compete, each with a particular engine size and load capacity, with differing
prices and production processes, etc. It’s not easy to choose between them. Let’s
imagine a user who is in the middle of the buying process.They might consult their
fellow truckers, surf the Internet or buy one of the specialist journals published
on this subject. They might also visit a few truck dealers before making their final
choice. In other words, they will have spent a significant amount of time before
parting with a single euro. This whole process could be a great deal quicker if the
user connects with a brand, as they will approach it with a ready supply of data,
identification and differentiation.The outcome of this process is a clear decrease in
the time and effort spent on the search, evaluation, choice and consumption of a
product or service. Paccar, the heavy-duty truck manufacturer, is aware of this type
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of process and provides a memorable user experience to drivers who own their own
trucks.They are usually people who have a special relationship with the truck: they
pay for it themselves, it can set them apart from the crowd, they live in it, and they
want to customize it to some extent.
To meet this expectation Paccar produces custom-made seats, cabins, exteriors
and numerous features that create identity and are a source of pride.In addition it has
set up a roadside assistance network across the United States to easily sort out any
technical problems so drivers don’t lose working hours and pay. This brand yields a
benefit thanks to the lower effort required for these buyers and of the lower presence
of the price as a discriminatory element. In this way the manufacturer achieves a
higher profit for each unit sold. In exchange their customers get a whole lot more
than just a heavy-duty truck: they are buying a concept that they connect with and
that determines their preference; that’s why they are willing to pay a little more.
In this case, brand promise slots perfectly into place with positioning and user
experience. The price factor falls into second place during the decision-making
process, but it does so for two reasons: in this case the Paccar brand acts as a
complex warehouse of information that brings together attributes, benefits, values,
uses, consumption levels, user profiles... and this semiotic container is validated by
user experience.
Separating the brand from user experience leads to proposals that do not
meet customer expectations, often because of broken promises or even due to
contradictory relationships that leave the consumer feeling confused and frustrated.
Honestly, no brand strategy is capable of responding to a repeatedly deficient user
experience based on a poor product or service.
In short, powerful brands ought to manage their customers’ experience from
an all-encompassing standpoint structured around five areas: formulate a brand
benefit in the shape of an idea-effort; roll out a 360º experiential platform;
generate a brand capable of taking this idea on board and expressing it; build
a network of interactions with customers; and, lastly, continuously innovate to
ensure the correlation between brand and experience in a competitive and ever-
changing environment.
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References
Chan Kim, W. and Mauborgne, Renée, 2005. Blue Ocean Strategy. Harvard Business Press.
Chevalier, Michel and Mazzalovo, Gérald, 2005. Pro Logo. Por qué las marcas son buenas para usted.
Barcelona, Belacqua de ediciones y publicaciones.
Neumeier, Marty, 2006. The Brand Gap: How to Bridge the Distance Between Business Strategy and
Design. Peachpit Press.
Ollé, Ramón and Riu, David, 2009. El nuevo Brand Management: cómo plantar marcas para hacer
crecer negocio. Barcelona, Gestión 2000.
Pine, B.J. and Gilmore, J.H., 1999.The Experience Economy. Boston: Harvard Business Press.
Ries, Al and Trout, Jack. Positioning: The battle for your mind, Warner Books - McGraw-Hill Inc.,
New York, 1981.
Velilla,Javier,2010.Branding: tendencias y retos en la comunicación de marca.Barcelona,Editorial UOC.
28. threeThe role of IT systems in managing
customer experience
Hugo Brunetta
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The term CRM program is used indistinctly and erroneously to refer to the
strategy and the software that allows us to manage the experience and relationships
with the customer. And it has been said so many times that CRM isn’t a software
application that we seem to have gone to the other extreme and believe we can
just do without the technological tool. Just so it’s clear, whenever we refer to a
CRM program in this chapter, we are talking about the information technology,
namely the software application. Otherwise we will use the terms CRM strategy or
philosophy or customer relationship management.
We consider CRM to be a business strategy , therefore, with the ultimate
purpose of learning about customers in terms of what they have “told us” to give
them what they want, how they want, so that they don’t even consider going to
a competitor, or as Tom Siebel once said, “We’d got used to telling the customer how
to do business with us and now there’s nothing for it except to do business however the
customer wants.”
Having made the distinction and going back to the issue of whether or not it
is a software application, the answer is a categorical: “of course not, and of course I
can’t dispense with one if I want to roll out a successful strategy,which the customer
perceives at the end of the day with higher quality in the service and based on a
truly memorable experiential sensation.”
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But, more specifically, we ask ourselves what role the CRM system plays in a
customer relationship management strategy and the answer has a number of angles,
some of which we will try to expand on throughout this chapter.
To begin with, to understand that when companies aren’t wholly owned by a
parent entity, we can’t believe that information on customers can be shared without
using a CRM software application, which processes the information from a single
database; regardless of how well we get on with the members of the organization
or if we are people who understand the value of sharing information, it’s not really
a question of attitude, but a business issue. As customers we quickly realize when
an organization is being run as a cluster of airtight compartments, as, amongst
other things, they ask us the same questions every time we ring and we speak to
a different employee from the one before. Sharing information affords numerous
advantages for the customer and the company and just to mention a few of the
most significant, let’s take a look at both perspectives:
From a customer perspective:
• When the customer communicates with the company, it doesn’t
matter who the employee happens to be: The conservation continues
from where it left off the last time and of course maintains the
necessary coherence beyond the origin or cause of the contact.
• The customer feels appreciated and perceives that he or she acts
according to his or her needs, requirements, tastes and preferences.
• Receive personalized messages, not just individualized ones. The
belief that starting a communication by mentioning the customer’s
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name is “personalization”is completely wrong. Customers want to be
contacted about issues that interest them, not which the company
thinks they should be interested in.
• Receive better service in terms of what the customer considers “good”
and the intelligence applied to customers enables us to understand
that is “good” for each individual.
• In short, it is a customer who looks for total satisfaction in terms of
our service and beyond our basic product.
From a company perspective:
• Increase revenue coming from existing customers through cross-
selling channels: buy A, but not B.
• Develop customers: we want them to buy our products only and not
use up their budgets on our competitors.
• Pinpoint opportunities for underlying business.
• Improve customer service, optimizing the available resources. Doing
things better doesn’t always mean spending more money or time.
• Precise segmentations to invest the necessary and appropriate effort
in each customer.
• Decrease the customer drop-out rate.
• Raise barriers to competition.
In short, CRM as total integration between systems and strategies contributes
to the company’s overall profitability, as no matter what activity you are engaged in,
it is highly likely that you spend too much on getting customers and too little on
keeping them.
And what’s the best CRM system or software?
This is probably the question most often repeated at the end of each seminar.
And the answer is as simple as it is complex. There are many very good ones, but
in your company it won’t make any difference and the challenge is to find which
system suits each company. Let’s take a look at some of the features we should be
considering when it comes to choosing the best option for our company:
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User-friendly: The system shouldn’t disrupt our day-to-day work too much.
We have seen in some cases that one reason for a failed implementation of CRM
technology, and with it of course a failed strategy, is the simple fact that the software
just isn’t user-friendly enough. Let’s not forget that in many cases, we are implanting
a very strong cultural change and if we don’t do it in a simple way at least from a visual
point of view, we are just making things more complicated than they need to be.
By user-friendly we also mean that we need simplicity in the procedure, in the
loading of data, in the general operation. Remember that at first there is a lot of
opposition from people whose working methods will change and if we give them
the excuse, even unintentionally, that it is tedious and complicated, we can kiss
goodbye to the whole project.
Easy to implement: As far as possible, of course. We’re not suggesting that just
by running a file our CRM software will be up and running in a few hours,working
as if it was just a simple spreadsheet. Here we mainly mean that it shouldn’t be so
complicated to implement that it takes years, otherwise our interest wanes before
the program is even in operation. A good alternative is to organize it in stages so
that users get to learn as the process advances, rather than one day after months
we are told, “the CRM is up and running, start using it tomorrow please and forget
everything you did before.”
Easily assimilated: Unless the company is new, there’ll be a wide variety of
systems in existence. The ERP, logistics systems, of human resources management,
spreadsheets on each pc in the company and who knows how many other systems
we’ll find that are related to the customer in one way or other. The CRM system
should interact with the company’s formal systems in place, that is why it should
be easily assimilated with them. The decision should also be taken regarding what
to do with the information that goes through informal channels, such as those files
that everyone in the company creates and in which information is stored that is
essential for the organization as a whole.We should probably move this data to the
integrated systems, and tell people to stop using files which start out as temporary
and end up as final, albeit for a given individual only.
Personalizable: The software must fit the business, not the other way around.
Every process surrounding the interaction between the business and its customers
must of course be scrutinized. But this review need not mean that we are invariably
doing everything wrong; it just means we can sometimes improve.
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One of these vital properties must be that the system should be promptly
synchronizable. Customer data update constantly, and our knowledge of the
customer is accordingly changing all the time. Ideally, updating should be in real
time.The technology now available on the market makes this readily doable.
Flexible and scalable: However much we might plan - and we should plan -
we’ll always have to make changes along the way,because reality is never a perfect fit
with how we imagined it would be. We therefore need to be sure that our software
is not so rigid that, once we start moving, any deviation from our plan becomes a
real problem.
In addition, our software must be scalable: this means that a system - whatever
it may be - can be made larger without any loss in service quality.The scalability of
a system requires that it be carefully thought through from the outset.
CRM software: the moving parts
It is common to hear the words “we need CRM software,” but we never hear a
reference to a specific module. What does this mean? Simple: operational CRM,
collaborative CRM and analytical CRM. Until these three modules are operating
an integrated way, we cannot say that our strategy has been properly implemented,
nor can we realistically hope that our efforts are ready to be monetized.
Operational CRM supports the business processes of the sales and marketing
departments; collaborative CRM, however, integrates the various channels of
communication with customers, outside of sales and service representatives’
personal calls and visits. Communication can be implemented over a website, by
e-mail, IVR, or less conventional but increasingly used channels, such as Twitter.
Finally - though this module is frequently bypassed by companies - analytical
CRM is, simply put, the technology component that enables us to transform data
into knowledge. Specifically, it comprises analysis of a customer’s data for multiple
purposes, especially predictive analysis. Objectives can range from marketing
campaign design and implementation to special niches and campaigns for specific
customers, customer behavior analysis in aid of decision-making on goods and
services, and business rulemaking to guide actions in the face of specified events
and customers.
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The importance of system integration
We spend so much time talking about CRM that we end up imagining that
ERP (Enterprise Resource Planning - centralized information software that records
and integrates most business processes) is out of fashion or has been superseded.
This is far from the truth. Though widely different, CRM and ERP are strongly
complementary tools. It is vital to understand that both tools must be integrated
and work together like the two blades of a pair of scissors.
To put it differently, let’s imagine that our goal is to arrive at a business
destination called “total performance control,” which involves the company’s total
success in terms of shareholder value and total satisfaction for both internal and
external customers. To visualize this concept, we could say that our path takes us
along a “highway:”the first stretch of the highway is called ERP, the homestretch is
called CRM. Obviously, we need to go along the entire path, travel both stretches
of the road, in order to reach our goal.
Much of the data handled by our CRM technology must be supplied by
our ERP system. If not, we shall be doing little more than operating a powerful
contacts and activities diary. Picture a sales representative who obtains a full
history of communications with a customer via the CRM system. He is fully
aware of the latest issues - e.g., a late delivery - and how they were resolved.
He can see the customer’s weighting in terms of multiple variables. And the
activities management module tells him that today is a good day to visit this
customer. As he arrives, he greets the customer by his first name, asks after the
customer’s children by name, and mentions various details making for perfect
personalized treatment. So far, so good. The customer places an order, but asks
for a special cash payment discount. The sales rep is pleased to comply. But
since the ERP system is not integrated with the CRM technology, the sales
executive is unaware that the customer still owes three bills past due, one of
which carried a discount for payment in cash, which the customer obviously
failed to honor. You can probably imagine what ought to have happened when
the customer placed his order, and what the sales rep ought to have done,
and the implications of this in financial respects. Two days later, the sales
representative tells the customer that his order was (quite rightly) rejected. The
incident creates unnecessary handling costs and harms the relationship with
the customer, regardless of who was at fault.
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This is a simple example of how failure to integrate can hurt you,and it happens
all the time. Failure to integrate means that instead of having a 360° view of
the customer, we only get a patchwork of partial views, and make “partly right”
decisions, so to speak. Operating as a cluster of airtight compartments does no
good to customer relationships or to the health of business.
When the supplier of a given system tells you that ERP need not be integrated
with CRM, be wary. And if someone promises to resolve the integration issue with
an interface that is yet to be developed, make sure the interface really happens
before starting a project that might grind to a halt before reaching its destination.
Software is crucial, but companies must continue to enhance the design of
integrated strategies before they make the decision to purchase any given IT
technology.Tactics must not come before strategy; don’t put the cart before the horse.
Source of competitive edge
To conclude this chapter, my aim is to convey the insight that investing in
CRM - in terms both of strategic planning and implementation via the right
software - is the only source of competitive edge that is still left. It is here that you
will achieve a better knowledge of your customer and will start to offer him or her
better experiences with your business.
Remember that competing on price is easy, and not very smart. Nor is it a
strategy that is likely to see you through long term. If you lower your prices, so can
your competitors - straight away - and in the end it is a zero-sum game.
Competing on the basis of the benefits of a given product will not garner a
long-term edge, either. Even as you read this, somebody in China or elsewhere
is disassembling or reverse engineering the components of anything remotely
innovative, so that they can make the same thing: quicker, possibly better, and
certainly cheaper.
But the one thing nobody can plagiarize is the relationship you have built with
your customers and the experience you offer them. Your competitors can’t copy
what they can’t see. And what they can’t see is in your database - a smart repository
of relationships built painstakingly over time, brick by brick.
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In most organizations, CRM strategy now focuses on customer experience.
Measuring customer experience has thus become one of the biggest challenges that
businesses face. Let’s take an example:
“Somebody goes into a store. It is clean and tidy.The customer finds
what she wants and takes it to the checkout counter. The friendly
store clerk takes the customer’s money in payment for the goods.
Before the customer leaves, the clerk says ‘Have a nice day!’”
If we look at the buying process from the service standpoint, we can assume the
customer’s perception was positive. It went along without a hitch. If we called the
customer and asked her if she was satisfied with her purchase and with the service
dispensed by our employee, it is likely she would say yes; if we asked her to rate the
experience, she would give a high score.
But is this really what customer experience is about? Was her purchase
experience in our store something so special that the customer will remember
us by it? Crucially, will this experience influence her future buying behaviors and
decisions, thus impacting our business earnings? Probably not.
A customer experience measurement model must heed the basic indicators. But
if what we want to do is manage and use the data effectively and create memorable
experiences,we must deploy more advanced models that go beyond satisfaction and
make a real fit with business performance.
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Mapping all points of contact
Customer experience is an abstract concept.Measuring it requires breaking it down
into concrete,tangible elements.One such element is the Moment of Truth,or MOT.
Not all of a customer’s interactions with a business are important to him. So
it is not every interaction that gives a chance to really surprise him and create a
memorable experience.
An experience map - a concept that goes by a variety of names - is an account
of a given customer’s experience over the lifecycle of the relationship; this analysis
compares the customer’s expectations to his perceived experience. To build an
experience map, you must:
• Analyze the lifecycle of the relationship and map the main points
of contact.
• Design a survey capable of obtaining data on customer experience
at each point of contact. We need to ask the customer the following:
»» Importance: What are his expectations of the company at that
specific moment of the relationship?
»» Experience: How did the actual interaction with the company
turn out?
• Generate indicators for each point of contact. It is a good idea to use
a numeric scale and focus on the results clustering in the top and
bottom boxes.
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• Graphically draw the experience map, comparing results for
importance versus satisfaction.
Companies must focus their effort and investment on the basis of the lessons
drawn from the experience map.
• First, it is important that experience basics are fully covered. If there
is a point of contact where expectations are low but actual experience
falls short nonetheless, these issues need to be resolved first, so we
can deliver the basic experience the customer expects to get.
• However, more important even than working on points of contact
where the gap is greatest is to work on points of contact where the
customer’s expectations are highest.These are the Moments of Truth.
This is where it is feasible to impact the customer’s perception and
create an experience he will remember.
This same concept is also discussed under different terms - customer pathway,
customer journey and customer heartbeat - but is not always applied in the same
way. But, however one might go about this, it is always important that expectations
and experience can be compared at each point of contact of the life cycle.
Physical and emotional variables
Customer experience comprises various physical variables - time, cleanliness,
functionality, temperature, environment, etc. - and various emotional variables,
shaped by the character traits of the person involved and her way of perceiving and
processing the experience.
A variable such as waiting time is open to many different interpretations,
depending on the type of experience and on the specific person concerned. By
adding emotional variables to our experience assessment model we can better
understand how customers perceive and respond to interactions with the company;
this in turn enables us to design better experiences. Experience is not measurable
by focusing on conventional physical variables only.
The variables informing an assessment of a customer’s experience with a
company should not be viewed in isolation but with reference to a specified goal.
We should accordingly use two tools operating in tandem:
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Correlation analysis: Regression models enable us to compare two data series -
the experience indicator and the business target - so that we can identify the extent
to which they are correlated.
Impact matrices: Impact matrices graphically represent indicators by score and
correlation index.They enable us to visualize the variables of an experience and clearly
distinguish existing strengths from the most urgent opportunities for improvement.
Net Promoter Score: the definitive question?
One of the most fashionable metrics in the field of customer experience is the “net
promoter score,”or NPS.Valuable information is extracted by a single straightforward
question: “Would you recommend this company to a friend or relative?”
NPS partly reflects a customer’s emotional loyalty. In addition, it is highly
suitable for benchmarking because many companies use it as a standard. These
features, coupled with its sheer simplicity, make the NPS a favorite with company
boards and executive committees.
Most companies use a combination of several metrics - seven on average - to
measure and manage customer experience; NPS, however, is the metric picked for
presentation to management.
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The hidden challenge in the NPS lies in the post-measurement phase, however.
NPS is a general indicator of the company’s health, but it tells you nothing about
where and how to improve. In addition, some circles are very skeptical of the NPS,
and the scientific community says that there is no proven correlation between NPS
and business growth.
Customer Effort Score (CES) & Customer Advocacy (CA)
NPS has inspired conceptually similar approaches. One popular metric is
Customer Effort Score, which measures the effort a customer must make to do
business with a given company, in a bid to reduce that effort.
CESisavaluableindicatorinallmattersrelatingtocustomerserviceinteractions.
Some research suggests that it is more closely correlated than conventional
satisfaction metrics and the NPS with customer decisions and behavior: repeat
purchases, increased spend or referral.
CES is based on the following question:“How much effort did your request take?”
The customer scores the question on a scale of 1 - negligible effort - to 5 - a big effort.
Another metric designed to assure correlation between experience indicators
and business performance is Customer Advocacy.
CA is also based on a single question: “Do you think your company does what’s
best for you, or only what’s best for its income statement?”
So there are several approaches that reach beyond the “satisfaction” concept and
attempt to build a metric that better explains customers’future behaviors and decisions.
Customer experience benchmarks
Rather than ad hoc models implemented by individual companies, it is
necessary to obtain comparative customer experience data, rankings and research
that evaluate all businesses under common criteria.
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There are two leading surveys on customer experience:
Forrester Customer Experience Index (CxPi): Conducted annually,
the survey evaluates customer experience with over 150 companies
in the United States. Forrester defines customer experience into the
three levels of the classic needs pyramid: basics, value creation, and,
finally, surprising the customer. Forrester publishes the results for
leading companies and comparative data for the various industries
considered by the survey.
IZO Best Customer Experience (BCX): This more recent survey
is the only one of its kind that focuses on companies operating in
Latin America, offering data and results specific to Latin American
customers and brands.The survey considers more than 130 companies
in main sectors, operating in Brazil, Chile, Colombia, Spain, Mexico
and Venezuela. The BCX index comprises three dimensions,
including experience with the brand, experience with the product,
and interactions with the company.
Relationship economics
You can’t measure customer experience without considering the financial angle.
Customer experience is a business strategy that ought to be results-oriented.
Historically, one of the mistakes made in customer management has been a
failure to link metrics to the business.One of the questions we hear most often from
company boards is “how much more are we going to earn if we raise our satisfaction score
by one point?” We must bear in mind that this is an entirely reasonable question.
The objective of an organization is to make money, and customer experience is a
strategy the result of which ought to be to maximize the benefit of the relationship
for the company.
If we have no robust answer to that question, it is unlikely that an organization
will make the investment decisions required to create the desired experience.
So customer management models and scorecards must be equipped with ways
of linking these metrics to business earnings.
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But how? Most companies do in fact have the tools to do this within their
grasp: we are simply not using them.CRM systems offer a rich store of information
about our customers that will stand us in good stead for achieving these outcomes.
The key questions we need to answer are:
• Premium price: Are consumers willing to pay more for a better
experience?
• Share of wallet: Do consumers enjoying a better experience spend
more with the company? Are we passing up business opportunities
with our existing customers by not aligning ourselves with their
needs and exceeding their expectations?
• Relationship duration: Do customers enjoying a better experience
churn less? How much longer will they continue to be our customers
if we deliver a better experience?
• Referral: Do customers refer our company to other people?
The results of the Best Customer Experience (IZO, Q4-2010) survey for
Latin America offer some answers to these questions. If we classify customers into
promoters (highly satisfied),indifferent (neutral) and detractors (highly dissatisfied),
we clearly see that creating experience powerfully enhances buying intention and
loyalty. However, it is important to note that these benefits are achieved only when
customer expectations are exceeded. The results show that simply removing the
causes of dissatisfaction is not enough to impact consumer behaviors and decisions.
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How can you measure these indicators for your company?
You can replicate these survey metrics in your own organization and obtain even
more accurate data by using the information available about your customers in your
company’s management and information systems.
To construct your business case and correlate customer indicators with business
performance you need to link customer experience metrics - using some of the
indicators discussed above - to real figures on expenditure, profit, customer
unsubscribes, etc. drawn from your customer database.
To do this, you can follow these steps:
• Classify customers into experience-driven categories: detractors,
neutrals, promoters.
• Extract the business indicators for these customers from the CRM
system and calculate them for each category: ARPU,average revenue,
average cost, churn, etc.
• Analyze how these indicators behave in each category and compare
behaviors across categories.
Your results will enable you to determine the business impact of turning
detractors into promoters, and thus justify the necessary investment.
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Some thoughts and guidelines
Measuring customer experience is one of the main challenges faced by
organizations today. This challenge is addressed by a range of indicators designed
to implement an evolution from the conventional concept of customer satisfaction
to a model that predicts impact on customer behaviors and decisions and thus on
company earnings.
There are various kinds of metric, each with its fans and skeptics. However,
three guidelines always apply when measuring and managing customer experience:
• Measure experience throughout the entire customer relationship
lifecycle.
• Use international benchmarks so you can compare yourself to others.
• Cross-refer experience metrics with customer business data.
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References
Dixon M., Freeman K. and Toman N., 2010. Stop Trying to Delight Your Customers. Harvard
Business Review.
Arussy, L., 2005. Passionate & Profitable: Why Customer Strategies Fail and 10 Steps to Do Them
Right! Hoboken, New Jersey. John Wiley & Sons, Inc.
Reichheld, F. 2006. The Ultimate Question: Driving Good Profits and True Growth. Boston,
Massachusetts. Harvard Business School Press.
Online references
Search Crm
Customer Think
The Marketing Spot
Blog Forrester 1
Blog Forrester 2
Izo Systems
Strativity
Experience Matters
Clientesfera
Aiarec
47. fiveThe role of employees
in customer experience
Beatriz Navarro
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How many companies regularly ask themselves “Are my employees happy to work
here?” The answer is, very few. Yet employee satisfaction automatically impacts the
way our customers’ experience is managed. Smiling, “good vibes,” “standing in the
customer’s shoes,”empathy… All this can make customer experience rate a 10 or a 1,
and our employees are 100% involved.And I can assure you that smiles can’t be faked.
How can we be sure that employees create an experiential moment every time
they speak to a customer, serve her a latte or show her a pair of pants? How can a
truly memorable customer experience be delivered?
The first line of approach is the company’s mission statement. The mission
statement must make itself felt in all actions taken by any department, and must
have a presence in every office and at every level.It needs to be alive! But how many
companies out there don’t even have a mission statement? And how many of those
that do have one haven’t updated it for years, or have never even read it?
At Starbucks, our mission statement is: To inspire and nurture the human
spirit: one person,one cup and one neighborhood at a time.These are the principles
guiding our day to day work.
And the mission statement covers several points, which, in order of importance
for the company, are:
• Our coffee
• Our partners: We call ourselves “partners” because what we do is
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not just our job - it is our passion. We accept diversity to create an
environment in which each of us can be him or herself. We always
treat each other respectfully and considerately. We are all responsible
for keeping this ideal alive. We all have the same job title and treat
one another equally, without regard to hierarchies. We are all equal,
and that makes us respect one another.
• Our customers: When we are fully committed to our customers, we
connect with them,we laugh together and we cheer up their day even
if just for an instant. Our work starts out from the commitment to
supply a perfectly made beverage; but it is a lot more than that. In
reality, our work is to nurture human relationships.
• Our stores
• Our community
• Our shareholders
So,ahead of our shareholders and in the second slot of our mission statement,
we have our employees. This is because we are a company that believes that “we
are not in the coffee business serving people; we are in the people business
serving coffee.”
These are the ways by which we enable our partners to create the Starbucks
Experience every day in each one of our stores:
• Giving them the freedom to manage their own business: Talk to
your customer; get to know her name and her drink; anticipate what
she wants, make her feel good, look after her, and enjoy working in
a team.
• Letting employees be themselves, be genuine: We are aware that
customer service is conveyed not just by words but also by attitude.
How to do it:
»» Enjoy your customer and invite him to come back.
»» Exceed expectations. Create details - both large and small - so
that your customer feels valued.
»» Anticipate his needs. Use empathy and remember your own
experiences as a customer.
• Letting them get involved: Make sure the values are reflected in
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everything the employee does, nurturing the spirit and energy of the
store. Be positive; set an example.
• Accepting feedback: We want to hear what they think. Their ideas,
views and concerns are always well received.
• Establishing recognition schemes: Always saying thank you.
»» MUG prizes
»» Bravo prizes
»» “Starbucks Spirit” Store Prize
»» Green apron cards: These are cards every employee has. We
give them to one another at any time just to express thanks for
something you liked about the other person - she helped you out,
you liked the way she worked, or you simply want to say “Thank
you for being there.”
It is vital to give your employees the tools to give and receive thanks for good work.
The five steps towards the perfect employee are:
• Hiring staff: Look past his CV to see his attitude, potential and
willingness to create customer experiences and put himself in the
customer’s place.How will he treat customers? Will he sell our goods
just because he needs to, or because he really feels the spirit?
• Train them every day to deliver experiences: Don’t just teach them
set phrases and scripted conversation.Employees need to understand
the crucial importance of their role for the company, and must be
free to find new ways to raise the value of the experience delivered
to the customer. Employees should always imagine themselves in the
customer’s place so that they can personalize the offering of goods
and generate experiences every day.
• Give incentives and rewards: The stimuli towards creating
experiences should include incentives and rewards. Incentives should
be more than merely financial. The reward should be sensitive to
social and cultural motivations and each employee’s lifestyle.
• Measuring performance in relation to delivered experience:
Employees should always get feedback on their performance in
terms of experience management. What are their interactions with
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customers like? How do they help build customer relationships that
encourage repeat purchases?This aspect of performance is measurable
using tools like online questionnaires and mystery shoppers.
One of the main challenges being taken on by companies today is to find ways to
make employees’ jobs interesting, motivating and stimulating. If an employee thinks
her job is boring, she is less likely to deliver a good buying experience to customers.
The key here is that employees are the company’s first customers, its “internal
customers.” If employees themselves are not the company’s leading advocates, if
they do not feel proud of belonging to the company and would never recommend
its goods or services, then the company has a real problem on its hands.
That is why we need to find out what our employees want, what they are looking
for,and what their tastes,attitudes and interests are.Look at each employee as a whole
human being, and realize that he or she is the most important part of the company.
We need to involve our employees with our brand. Host workshops where
employees can discuss the brand and its features. If they can convey the values of
the brand, they will be able to satisfy their individual needs.
We also need to let them suggest alternative ways in which they can “live” the
brand, both throughout their working day and in their personal lives.
Companies are imprinted with either one of the two basic customer service
attitudes - a positive attitude or a negative attitude.Where a negative attitude takes
hold, the customer does not identify the individual employee as the cause of his
bad experience; he blames the entire organization. For example, if he has a bad
experience with a shop assistant in a given store, he thinks “the staff is terrible at
this store and I won’t be coming back.” This judgment directly and negatively links to
the brand and everyone working for it. This is why it is vital that a positive service
attitude is adopted by each and every one of a firm’s employees.
Other considerations relevant to creating customer experiences
• Outward appearance: As we all know, most people attach a
great deal of importance to personal appearance.
The appearance of a company’s employees - the way they dress, their
hairstyle, and so forth - therefore critically impacts customers and
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represent a person’s “first experience” of the company. It is the first
step in any interaction and often there is only one chance.
• Names:The name of the person helping us in a store is very important.
We all like to know who we’re talking to, call them by name and be
called by our own name in return. This makes the interaction closer
and more human.
• Environment: The environment is vital in creating an experience.
Environment has been a powerful force at Starbucks, which has
turned its coffeehouses into a “third place” between a person’s home
and work, an oasis where she can sit down for a quiet moment,
drink a coffee, and listen to good music in a perfect atmosphere.
Environment forms part of the company’s success in creating
customer experiences.
• Words: Tone of voice and words can create a sense of welcoming or,
rather, cool or hurt the relationship with a customer.
Just saying “Hi” with a smile, or even without a smile, critically
changes the customer’s experience.
Saying“have a nice day”as the customer leaves can cheer up his whole day.
Words are far more powerful than we think.Companies are not doing
enough to encourage employees to use words to generate experiences
in their customers.
What skills do we need to train our employees in to create experiences?
Skill 1. Diagnosing
Real care must be taken with what is widely known as non-verbal
behavior, because this is the first impression the customer gets. The
employee needs to be able to read between the lines to guess what the
customer needs, since every customer is different.
Skill 2. Listening
Listening is not the same as just hearing. How often have you felt
“not listened to,”when you were trying to explain a situation and felt
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that the person on the other side would just nod and come back with
a scripted response, ignoring what has actually happened.
Listening to tailor the solution to the customer’s need
Skill 3. Asking
Asking is the most straightforward way to get information from the
person in front of you. It is a means to display interest in and em-
pathy with the person you are speaking to. But you need to be careful
about how you frame your question and the wording you use.
Skill 4. Feeling
The ability to feel conveys empathy. Feeling means putting oneself
in the customer’s place; feeling what the other person feels about a
specific situation or issue so that we can provide the best solution.
Final thoughts
Creating an experience that nurtures customer loyalty is a magic blend of three
ingredients: products, stores and, especially, people.
At Starbucks, customers come to us for coffee, stay with us for the friendly
atmosphere and come back for our human connection. That is the experience that
the customer wants: every day, every time.
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Excuse me, what was it you were selling, again?
The implications of the buying experience in the retail setting
When you visit Bergen, a city in southwest Norway perched on the banks of a
stunning fjord,you can take the Floibanen funicular for a 6-minute trip from the city
to a mountaintop commanding spectacular views, as you can see from this webcam.
In 2008, Lillian, a former student of mine at ESADE, spent some time there
on a study exchange and spoke to the manager of the funicular company. She asked
him who his main competitor was.
“IKEA,” he replied. “We both offer the same thing: spending time with your family on
a Saturday or a weekday evening.”
What a notary would say
A wholly reliable witness - a notary, perhaps - would say that the funicular is
a type of train designed to climb up and down steep slopes, carrying passengers in
coaches.The notary would also say that IKEA is a retail chain that sells furniture at
prices below the industry average. So how can they be competitors?
While the notary’s observations are accurate, they don’t tell the whole story. He
merely reports what one can see on the surface, the tip of the iceberg.
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But the hallmark of an effective manager is her ability to perceive reality beyond
the obvious. So what is going on? What is the hidden part of the iceberg?
Looking further into the matter, we see that these two widely different
businesses nonetheless have two things in common: they sell direct to the public -
they are both retail businesses - and, what’s more, their target public is pursuing a
similar purpose in both cases.
It is this common denominator that makes them competitors. In the retail
world, it is not just what the business has and does that counts, but also what it is,
and what it makes you feel.
Funicular = furniture?
Selling the right to use public transport - a funicular - is not of course the same
thing as selling furniture.One thing constitutes a service,while the other represents
a sale of goods.
You would then assume that each business uses a different sort of marketing.
The so-called “marketing mix” would appear to be widely different for each of the
two businesses.So different,in fact,that the Norwegian Funicular Operator Society
might host its own training course, titled “Marketing the Funicular Business: Keys
to Success.” While the Norwegian Guild of Furniture Merchants could run a
course titled “The Future of Marketing for Furniture Stores.”
Either of these initiatives would make perfect sense.Too much sense,I would add.
If one looks underneath the tip of the iceberg to see the core of what’s going
on, you find that both businesses mainly target a family-oriented public. In both
cases,your target customer is unlikely to be a lone shopper or passenger.And people
typically visit these businesses during their time off.
The ostensible purpose of the visit is to view the landscape from the top of the
mountain - in the case of the funicular - and to buy furniture - in the case of IKEA.
But in both cases the visit itself is a major part of the “product.”The experience of
the visit is desirable for its own sake, there is “something in it” for the family. Put
differently, during the time that the family is there - on the funicular or in IKEA -
they have an interesting and attractive experience.
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Both businesses succeed not so much because they sell quality goods or services,
but because they make their customers’ whole day meaningful. For example:
• We all enjoy ourselves, adults and children together.
• We learn stuff. When we leave, we know things we did not when we
got there.
• And when we get home - Norway is a fairly rainy country - we’ll have
something to do with the children: put together a piece of furniture
or send a photo album to the grandparents.
And what about selling goods and services? The sales are an offshoot of the fact
that the customers achieve that particular meaning they are looking for, though
sometimes they would be unable to put it into words.The sale is just the consequence.
So it does not seem smart to emphasize the money aspect - “take three funicular
trips, pay for two.” Rather, the key is to stimulate customers’ imagination. A less
money-oriented approach may attract bigger takings.
Does the retail business have to provide a buying experience?
Not a week goes by without trade magazines or even - increasingly - the general
media asserting that stores must “deliver a buying experience”if they want to please
their customers.
This assertion is technically inaccurate,however.The buying experience is already
there! Whether the seller intends it or not,the customer always has an experience of
some sort: it might be fun, slow, boring, surprising, confusing, empathetic, crowded,
attentive, rude, high-pressure, and so on. So the operative word in that statement
ought really to be the adjective that describes the experience.
The buying experience perceived by the customer must reflect on the emotional
plane the meaning that the store desires to convey in its capacity as a brand.
The origin of the term
The “buying experience” concept dates back to 1973, when Philip Kotler noted
that “the atmosphere [of a store] is a marketing tool”and suggested that spaces and
environments be designed with a view to their triggering certain emotional effects
in the customer that influence the likelihood of his making a purchase.
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Almost a decade later, in 1982, Donovan and Rossiter adapted the earlier work
of the social psychologists Mehrabian and Russell, widely known as the Stimulus
Organism Response (SOR) paradigm, to the retail setting. Stimuli such as lighting,
colors or floor plan, to mention just three examples, elicit certain emotional
responses, which in turn guide certain behaviors.
Ten years on again, in 1992, Baker et al. undertook a more in-depth analysis of
the first part of the SOR model to create a far more comprehensive classification of
the specific features that could be managed. Factors were divided into three major
groups: environmental, social and design.
The environmental group of factors included invisible elements such as
temperature, lighting, music and smell. The design factor comprised visible
elements, which were divided in turn into functional features such as wide
corridors, for example, and aesthetic features, the suitability or otherwise of
which depends entirely on the target audience. As to social factors, the key
point was that they interact strongly with environmental factors, and any given
combination of environmental factors may lead to different outcomes depending
on the associated social factors.
A great deal more could be said about these models, but I do not intend to set
out a theoretical or historical treatise. I simply wish to offer a sketch of where this
concept came from. Present models adopt the several variables mentioned so far,
but take the analysis much further, looking not only to the specific “moment”of the
purchase but linking that moment to the brand and the possibility of creating an
experience over time that involves an identification with the store/brand.
The upshot of the theory might be stated as the proposition that differentiation
must be sought by creating the buying experience that the brand/store requires.
Can a buying experience be managed?
A buying experience is analogous to “quality of life” while in the process of
buying.Like any other process that is open to being managed,it should be measured,
or measurement should be at least attempted,although most of the components are
intangibles.
In the field of marketing,“quality”is defined as the extent to which expectation
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is matched by the thing delivered. In some sense, it constitutes the management
of expectations.
One of the most widely used models in this respect is the “deficiency model”
developed on the basis of papers by Parusaraman, Zeithaml and Berry (1985,
1988). For the purposes of this chapter, however, I shall suggest a far simpler but
nonetheless highly effective model.
Applying the notion of quality to the buying experience, one would say that
quality is present if the customer’s perception of her visit to the store (experienced
reality) does not fall short of expectations (imagined reality). If the perception does
not at least match the customer’s expectations,she will feel disappointed; we should
then say the experience was low-quality.
These two aspects can be compared in matrix form.
The above table shows that the expected key factors are subdivided into two types:
• Key success factors, which in the field of marketing are those that
create the customer’s preference over a sustained period.These factors
tend to be emotional, non-concious and implicit.
• Key non-failure factors do not prompt the customer to form a
preference for the store but, if absent or perceived as poorly executed,
undermine the credibility required for continued presence in the
market. For example, if a convenience store keeps going out of stock,
or a restaurant serves tainted food,or a bank is regarded as unreliable,
customers disappear and the store closes down.But the fact that these
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factors are positives does not mean they are capable in themselves of
creating a preference for the store. They tend to relate to the proper
execution of the so-called “marketing mix.”
These two sets of factors must be distinguished with some care, because they
can differ widely in each specific industry and for each specific business. A key
success factor may over time become a key non-failure factor. The intrinsic quality
of a product may create a preference if competition is weak; but when competition
strengthens, quality is demoted to a key non-failure factor.
This analytical method must be put through its paces in terms of four
distinct vectors:
• A chronological view of the buying process. When a customer
goes shopping, the process takes her through various phases,
each with its own tempo and special features. The customer’s
expectations are not the same when parking her car on arrival as
when she is standing in line to pay at the checkout. Each phase
involves a different “mental frame” for the customer, and therefore
ought to be analyzed separately. What is more, it must be taken on
board that the process starts before the customer even enters the
store (e.g., when she plans her shopping trip, searches the Internet
for information, etc.) and ends a considerable time after she leaves
(e.g.,when she brings the packages home,organizes her refrigerator
or wardrobe, etc.). By analyzing the process step by distinct step, we
maximize the opportunities to innovate.For instance,KLM enables
its customers to buy duty-free goods online before boarding the
flight; purchases are delivered just before landing, thus saving the
customer from being inconvenienced.
• The pre- and post-store (the airplane is a store) steps also form
part of the buying experience; these steps are later remembered and
positively or negatively influence the customer’s next decision as to
where she will shop.
• The features of the product and what it may mean in the customer’s
life. Expectations are not the same when buying furniture as when
buying detergent.
• Customer segments the store aims to attract. It is key to understand
the expectations and perceptions of each segment (especially priority
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segments), because one and the same reality at a store can give rise to
widely different expectations and perceptions. Imagine, for instance,
a couple buying a cot for their future newborn child.There is clearly
a functional angle, but this does not gainsay other emotions those
customers may be having at that moment (“we shan’t get nervous if
the baby makes an early arrival”).
• The tone of the customer’s own moment, situation or context.
Our price sensitivity is not the same when we are on vacation as
in our regular life. Stores located in tourist areas have understood
this point well. The context vector and the segment vector
can often fuse into one, because one of the most interesting ways
of segmenting potential customers is on the basis of the context
variable. At a supermarket, for example, you could segment
customers into “I’m in a hurry,” “I’m on a splurge,” “I need to fill
my refrigerator today,” etc.
A buying experience can thus be analyzed on the basis of three vectors:
The score and the concert hall
The intended meaning of a given buying experience is analogous to a musical
score. It may have wonderful potential, but it sounds different in each different
concert hall. The store is the concert hall, and our perception of it can have a
considerable effect on the beauty or otherwise of the music.
A store can be credited with several roles that impact a customer’s perceived
buying experience.
• The store is a “buying machine,” a place where customers procure
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supplies.This means that a stockout - a shelf devoid of the goods the
customer was expecting to buy - has a serious adverse effect on the
buying experience.
• If the store succeeds in becoming a locus for the imagination i.e.,for
anticipating or visualizing a future desirable situation (e.g., “I’ll be a
hit at the party, they’ll be stunned when they see me in this dress”),
sales are easier to achieve. Imagination is a distinctively human trait;
we do not share it with other animals.If the store does not encourage
customers to imagine a future moment, the buying experience beco-
mes flat and functional. As a result, price sensitivity rises.
• The store can also be a place where you learn something new.When
he leaves,the customer has learned how cakes are made,the differen-
ces between various types of cotton, rising fashion trends, and so for-
th.This aspect is increasingly attractive, because it treats customers as
rounded human beings.
• The store can be a space for social interaction.The local supermarket
can be a meeting point where one sees and is seen by neighbors and
acquaintances. Encouraging the relational and social aspects softens
the commoditized perception and humanizes the store.The visit ex-
perience can be enriched in many different ways - making a notice-
board available to customers, running an in-store café or providing a
venue for talks and presentations.
• A store provides a wonderful medium for communicating with visi-
tors.In fact,it is an advertorial,several minutes long,where the messa-
ge is expressed by means of the five senses simultaneously. Hence the
subtle but vast persuasive power that a store can exert.This communi-
cative facet has its minimal expression in the form of info about each
product, and can be maximized to embrace theatrical performances.
• Communication ought also to be considered in the vector running
from the customer to the vendor. An essential element of the vi-
sit experience is to enable customers to express suggestions, views,
complaints and congratulations. Some stores reward their associates
for attracting and channeling customers’ comments. Others provide
a visitors’ books where customers’ written comments are visible to
subsequent customers. This practice creates transparency and genui-
neness, two values which are increasingly appreciated.
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The score and the conductor
To continue the analogy with music, it is not enough to have a skillfully
transcribed score of notes on a five-line staff.The music must be brought to life and
performed.This step depends on the instruments and the musicians, but especially
on the conductor, so that customers undergo a coherent and fascinating experience.
I believe that the buying experience will increasingly hinge on subtle, implicit,
intuitive and anthropologically feminine features. I believe we shall soon be
speaking of the “marketing of the implicit,” and this approach will find its fullest
expression in retail.
Those managers able to define the meaning with which they wish to imbue
certain moments of their customers’ lives will write the musical score of the
buying experience. And, moreover, they will probably be laying the foundations of
innovation in retail.
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References
Baker, J. Levy, M. and Grewal, D., 1992. An Experimental Approach to Making Retail Store Environ-
ment Decisions, Journal of Retailing. Vol 68, nº 4, p. 445-460.
Donovan, R.J; Rossiter, J.R., 1982. Store atmosphere: An environmental psychology approach. Journal
of Retailing. Vol 58. nº 1, p. 34-57.
Kotler, Philip, 1973. Atmospherics as a Marketing Tool. Journal of Marketing. Vol 49, nº 4, p. 48-64.
Parusaraman, A; Zeithaml, V.A; Berry, L.L., 1985. A conceptual Model of Service Quality and its im-
plications for future Research. Journal of Marketing. Vol 49. Autumn, p. 41-50.
Parusaraman, A; Zeithaml, V.A; Berry, L.L., 1988. A multiple-item scale for measuring consumer per-
ceptions of Service Quality. Journal of Retailing. Vol 64. Spring, p. 12-40.
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The contact center: more than a cost center
Call upon call, e-mails and letters, service level and customer care, missed calls,
repeat calls, claims, complaints, processes and systems, applications, dimensioning,
coding, prerecorded scripts, scorecards and templates, induction training and skills
upgrading, ring times, hold times, after-call times, notifications, audits, agents,
supervisors and coordinators.The terminology associated with the day-to-day work
of a contact center is virtually endless. But is this all a contact center is about?
This is the outlook that leads many companies to regard their contact center as
a cost center, rather than a profit center. But, although all these terms partake in the
definition of a contact center, in reality it is something more than this. A contact
center is a major channel for customer service and customer relationships. It is a
key source of information and a powerful lever to create and manage our customers’
experience. From this standpoint, we could even come to view our contact center
as a competitive advantage in its own right: an element giving us an edge over
our competitors. Yet we must first ask ourselves, is customer experience a suitable
strategic option for our business?
To answer this question we would do well to give thought to at least the
following two issues.
We must bear in mind that customer experience is a means, not an end in itself.
Customer experience is a strategic positioning that may enable us to stand out
from the crowd and, leveraging this edge, to earn higher profits. This point needs