What is Customer Experience?

Every time one reads about service excellence and superior customer experience the oft-cited examples include Starbucks, Google, Virgin Airlines, Lexus and Ritz-Carlton. A recent search on Google for “customer experience” returned over 1.4 million results and a search for “customer experience management” returned over 890,000 results! Clearly there is a great deal of interest (and chatter) on this topic. From business writers to leading consultants and CEOs, all have anointed customer experience as the new competitive battle ground. As differentiation in product and service features diminish, the argument is that superior customer experience can separate winners from losers. But what the heck is customer experience? Many pundits have written on this subject. Here is my spin presented in a three-part series.

An experience is something that one undergoes or lives through and obtains direct firsthand knowledge. It involves not only accumulation of knowledge, but also feelings during and after the experience. To use academic language, an experience results in both cognitive and emotional outcomes. Think of the birth of a child or buying your first car or the loss of a loved one. These are experiences that leave a permanent impression.

Clearly, not every customer experience will result in memorable cognitive or emotional reaction. I often buy coffee at a nearby Tim Horton’s. I can’t remember anything about my last trip there a couple of days ago. It was a thoroughly routine experience that made no lasting impression, positive or negative, on me.

On the other hand, a recent flight on Air Canada left a positive impression… for a change. As we checked in, we were told that our connecting flight from Toronto was full. My disappointment lasted only a fleeting second as the agent told me that we were being put on direct flight to our final destination and that we have been upgraded. That was a pleasant surprise.

I’ve come to expect very little good news when I travel. From lost baggage to missed connections to unfriendly (service in the) skies, air travel providers have lowered the bar on service quality. Actually, a J.D. Power and Associates study reported that in 2005 the average satisfaction across all airlines in the US was 664 on a 1000-point scale, which translates to 66% or a “C” grade. Given the low expectations, even moderately good experiences tend to stand out these days.

To me an experience has to be strong enough to register on the customer’s radar – either as a positive or a negative experience. If the experience is right on target with your expectations, it is not going to evoke strong cognitive or emotional responses. When given a choice, consumers will turn away from experiences that produces negative cognitive or emotional responses.

A customer experience with a firm does not start with or end with the purchase. Customers come in contact with touch points such as sales reps or the Web site, often sources if pre-purchase information, before they make the purchase. And in many cases, even months or years after a purchase customers seek support or go back to upgrade. So customer experience is something that happens over the purchase cycle – from pre-purchase to post-purchase (see Figure).

CEM Touch Points

Moments of Truth and Touch Points

If not all experiences evoke memorable thoughts or feelings, then it makes sense to focus on experiences that do leave a mark on the consumer. It is only these memorable experiences that are likely to affect purchase intent and the consumer’s future engagement with the brand.

Jan Carlzon’s, the former CEO of SAS Airlines, described a ‘Moment of Truth’ as one where the consumer’s perceptions of the firm are influenced, positively or negatively. Let me try to define a touch point:

A touch point is a point where the customer directly or indirectly comes in contact with the organization’s people, processes or customer interfaces, which influences, positively or negatively, how the customer thinks and feels about the organization. The touch point may be directly under the control of the firm or it could be an indirect touch point controlled by partners.

It is readily apparent that there are numerous touch points when one considers a typical service setting such as travel, hotel, banking and telecom or even with products such as cars and computers. Not all touch points are critical. Some of them are really “moments of truth” and others are hardly noticed except when there is a failure.

The touch points that evoke these strong responses are the ones that are important to consumers. It makes sense to focus on these touch points (even attempt to “wow” the customer), while ensuring that all other touch points offer satisfactory experiences, thereby avoiding the possibility of small irritants building up over time.

The J.D. Power survey of airline satisfaction highlights the fact that on average it takes 7.2 minutes to receive their boarding pass via an electronic kiosk, compared to 14.2 minutes at the ticket counter and 9.4 minutes at curbside check-in. Clearly, the check-in is an important touch point, but if the extra 7 minutes of waiting for a human agent at the ticket counter does not matter to most consumers, does it make sense to invest more in reducing the wait time?

The point is businesses need to know what experiences adversely affect consumers and then create solutions that will take away the pain. Often firms stress things that are unimportant to consumers.

What Products Mean to Consumers

Customer experience is really the result of the customer viewing the product or service through his or her personal lens. There is a lot of symbolism infused into brands through advertising and portrayal on TV and movies. Consumers buy into this symbolism and mythology when they buy certain products. That is part of the experience they are seeking.

Products and increasingly services have come to define who we are. We surround ourselves with brands that represent our self-image. What we consumes defines our place in the society. Work by marketing academics such as Grant McCracken, Russ Belk and Elizabeth Hirschman, among others, has opened our eyes to the symbolism, mythology and cultural context embedded in the products we consume.

So, when we think of customer experience one has to keep in mind that consumers seek products that satisfy many symbolic needs. Consumers interpret their experience through this cultural and symbolic lens. Consuming Coke is a mundane activity in North America, but in the developing world it could be a way of expressing that one is modern and not traditional. Two consumers could interpret a similar experience very differently.

In closing, a deeper understanding of the anthropological and sociological foundations of consumption is necessary to fully appreciate what customer experience means. Experiences are nothing but our perception. Perception is coloured by one’s background and one’s culture (see Figure below)

Factors in Interpretation of Experiences

The study and management of customer experience cannot be reduced to gathering customer feedback at every touch point. Customer experience management has to do with understanding what customer value and why they value it and then delivering this value on a consistent basis. Consumers seek not just functional product benefits, but also emotional and symbolic ones. Uncovering the consumer’s psyche is key to designing great experiences.

Customer Experience vs. Customer Satisfaction

Before we go too far into this discussion of what constitutes customer experience and why we need to manage it, it is worth considering the difference between customer experience management and customer satisfaction measurement. Isn’t it enough to measure satisfaction? To me, the answer is no. Customer satisfaction measurement has traditionally focused on product performance or functional attributes. It is a measurement that occurs in the post-purchase stage. Whereas, customer experience is really an organizational philosophy, just as six sigma is. To deliver a consistent and superior experience across all touch points, requires a concerted organization-wide effort and the breaking of silos. Customer satisfaction is a useful metric, but it remains a metric that tells us what happened. If an organization embraces the customer experience concept, it then has to align various parts, train and reward employees to deliver optimal experiences at every touch point.

Take customer experience with air travel. Virgin Airlines promises a “stress-free, fun and entertaining flight experience.” That requires everyone from ticketing agents to baggage handlers, inflight crew and caterers working together to achieve a common goal. Customer experience management has the ability to transform the way an organization functions, making it completely customer-centric.

In Part 2 of this series, I will explore the fundamentals of creating and managing customer experiences.

(This post was previously posted on October 1, 2007).