Lecture notes
Managing the Customer experience
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- Oxford Brookes University
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Managing the Customer experienceCX - “the totality of a customer’s individual interactions with a brand, over time.”
- “an interaction between an organisation and a customer as perceived through a
customer’s conscious and subconscious mind. It is a blend of an organisation’s
rational performance, the senses stimulated, and emotions evoked, and is intuitively
measured against the customer’s expectations across all moments of contact’.
- CX focuses on experiential values
Customer relationship Management (CRM)
- “Customer Relationship Management (CRM) can refer either to the
activities/processes a company must engage in to manage individual relationships
with its customers … or to the suite of software, data, and analytical tools required
to carry out those activities and processes more cost efficiently”
- CX takes a more strategic/holistic view of how customer’s experience an
organisation, directly and indirectly, and is often described as taking an outside-in
view (rather than inside-out)
Outside-in thinking
- “Most of our customers trade in their old cars. It’s a great opportunity for us to look
at the old car and identify clues about the customers to enable us to deliver a great
customer experience. For example, we check what radio stations they are tuned
into. So when we hand over the new vehicle it is pre-tuned to the stations that the
customer
had in their last car.”
Experiential values
- “[Having been to Disney World (Florida) a number of times] we decided to take the
kids to Chessington World of Adventures. At the end of the day, I turned to my son
Ben and asked him if he had enjoyed himself. He said, ‘it was okay, Dad, but I guess
when you have been to all of the theme parks we have, in comparison it wasn’t very
good. You have spoilt us!’ ”
- anecdote in Shaw & Ivens (2005, p. 56)
CX is a combination of strategic processes
Strategy development process
Value creation process
Multi-channel integration process
Performance assessment process
Information management process
,The role of technology
- Although many believe CX is a synonym for software, customer experiences involves
analytical as well as operational processes
- Technological advancements in interactivity, such as the Internet, mobile
technologies, and social media, have driven the growth capacity of CX, but such
technology is a means of managing customer experiences, not the end in itself
- The experience that retains customers is the understanding of their needs and
values - less to do with technology and a lot more to do with how you engage with
them
Technology Revolution – increases the enterprises’ ability to connect with customers one-
to-one
Customer Revolution – increases the customers’ expectations to be treated as an individual
Is taking a customer – centric view important?
Keep Gro
Get
w
• • Retain profitable
Upsell
• Acquire • Cross-sell
customers
profitable • • Win back profitable
Generate referrals
customers customers
• Reduce costs
• Eliminate unprofitable
customers
The customer-centric view focuses on ‘share of customer’
Market Share’ Focus
• Products and brands as source of company value
, • Sells one product at a time at a time to as many customers as possible
• Differentiates products from competitors
• Sells to customers
• Finds a constant stream of new customers
• Makes sure each product is profitable, even at expense of customer confidence
• Uses mass media to build brand and announce products
Share of Customer’ Focus
• Customers by definition only source of revenue
• Sells as many products as possible to one customer at a time
• Differentiates customers from each other
• Collaborates with customers
• Finds a constant stream of new business from established customers
• Makes sure each customer is profitable, even if loses money on occasional product
or transaction
• Uses interactive communication to determine needs and communicate individually
A 1-1 learning relationship - is where the customer teaches an organisation about their
preferences and the organisation then tailors its response to those preferences … such that
it becomes more worthwhile for the customer to remain loyal than to switch to another
organisation for any reason.
Benefits of 1-1 learning relationships …
• Customer loyalty
• The customer learns more about his or her preferences
• The organisation learns more about its own strengths and weaknesses
Customer retention drives increased profits
Reichheld and Sasser (1990) found that a customer’s profitability increased with length of
retention, based on four factors:
1. Increased purchases
2. Reduced operating costs
3. Referrals to other customers
4. Price premium (conversely, new customers usually pay lower introductory
prices)
Being customer centric pays but…
requires a unified view of the customer across the five principal business functions:
1. Financial
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