Customer Experience Management
Table of contents
Customer Experience Management.................................................................1
Introduction...................................................................................................4
Other lecture notes......................................................................................................... 4
Understanding Customer Experience Throughout the Customer Journey (Lemon &
Verhoef, 2016)................................................................................................................ 5
Moving the customer experience field forward: introducing the touchpoints, context,
qualities (TCQ) nomenclature (De Keyser et al., 2020)...................................................8
Customer Experience Management: toward implementing an evolving marketing
concept (Homburg et al., 2017)....................................................................................11
Guestlecture “Essent”..................................................................................14
How to measure the customer experience management?...............................14
Other lecture notes....................................................................................................... 14
Customer Experience: Conceptualization, measurement, and application in
omnichannel environments (Gahler et al., 2023)..........................................................15
The one number you need to grow (Reichheld, 2003)..................................................17
How to improve your company’s Net Promotor Score (Teixeira & Mendes, 2019).........19
Net Promotor 3.0 (Reichheld, 2021)..............................................................................20
How to manage touchpoints in the customer journey?...................................21
Other lecture notes....................................................................................................... 21
Attributing conversions in a multichannel online marketing environment: An empirical
model and a field experiment (Li & Kannan, 2014).......................................................25
Linear thinking in a Nonlinear world (De Langhe et al., 2017)......................................27
A step-by-step guide to smart business experiments (Anderson & Simester, 2011).....28
Outsourcing the pain, keeping the pleasure: effects of outsourced touchpoints in the
customer journey (Kranzbühler et al., 2019).................................................................28
Loyalty formation for different customer journey segments (Herhausen et al., 2019). .30
Guestlecture “Creating Social Value”............................................................33
How to manage failures in the customer journey?..........................................35
Other lecture notes....................................................................................................... 35
The service recovery journey: conceptualization, integration and directions for future
research (Van Vaerenbergh et al, 2019).......................................................................37
Complaint de-escalation strategies on social media (Herhausen et al., 2023)..............39
1
, Detecting, preventing, and mitigating online firestorms in brand communities
(Herhausen et al., 2019)............................................................................................... 41
How to best capture value from customers?..................................................42
Other lecture notes....................................................................................................... 42
How should consumers’ willingness to pay be measured? An empirical comparison of
state-of-the-art approaches (Miller et al., 2011)...........................................................43
Do satisfied customers really pay more? A study of the relationship between customer
satisfaction and willingness to pay (Homburg et al., 2005)...........................................45
Expand your pricing paradigm (Rafi, 2023)..................................................................46
Guestlecture “Implementing CX management”..............................................47
How to use AI and ML in the customer experience?........................................51
Other lecture notes....................................................................................................... 51
Artificial intelligence in service (Huang & Rust, 2018)..................................................54
Algorithms need managers, too (Luca et al., 2016)......................................................56
Why AI that teaches itself to achieve a goal is the next big thing (Hume & Taylor, 2021)
..................................................................................................................................... 57
Create winning customer experience with generative AI (Siggelkow & Terwiesch, 2023)
..................................................................................................................................... 57
How to manage experiences in a connected world?........................................58
Other lecture notes....................................................................................................... 58
How smart, connected products are transforming competition (Porter et al., 2014 &
2015)............................................................................................................................ 58
Capturing value in the internet of things (Wortmann et al., 2020)................................60
The age of continuous connection (Sigglkow & Terwiesch, 2019).................................61
Case assignment..........................................................................................61
The magic that makes customer experiences stick (Thomke, 2019)............................61
Introduction...................................................................................................3
Other lecture notes......................................................................................................... 3
Understanding Customer Experience Throughout the Customer Journey (Lemon &
Verhoef, 2016)................................................................................................................ 3
Moving the customer experience field forward: introducing the touchpoints, context,
qualities (TCQ) nomenclature (De Keyser et al., 2020)...................................................7
Customer Experience Management: toward implementing an evolving marketing
concept (Homburg et al., 2017)......................................................................................9
Guestlecture “Essent”..................................................................................11
How to measure the customer experience management?...............................12
2
, Other lecture notes....................................................................................................... 12
Customer Experience: Conceptualization, measurement, and application in
omnichannel environments (Gahler et al., 2023)..........................................................13
The one number you need to grow (Reichheld, 2003)..................................................14
How to improve your company’s Net Promotor Score (Teixeira & Mendes, 2019)........16
Net Promotor 3.0 (Reichheld, 2021).............................................................................17
How to manage touchpoints in the customer journey?...................................18
Other lecture notes....................................................................................................... 18
Attributing conversions in a multichannel online marketing environment: An empirical
model and a field experiment (Li & Kannan, 2014).......................................................22
Linear thinking in a Nonlinear world (De Langhe et al., 2017)......................................24
A step-by-step guide to smart business experiments (Anderson & Simester, 2011).....25
Outsourcing the pain, keeping the pleasure: effects of outsourced touchpoints in the
customer journey (Kranzbühler et al., 2019)................................................................25
Loyalty formation for different customer journey segments (Herhausen et al., 2019)..27
Guestlecture “Creating Social Value”............................................................29
How to manage failures in the customer journey?..........................................31
Other lecture notes....................................................................................................... 31
The service recovery journey: conceptualization, integration and directions for future
research (Van Vaerenbergh et al, 2019).......................................................................33
Complaint de-escalation strategies on social media (Herhausen et al., 2023)..............35
Detecting, preventing, and mitigating online firestorms in brand communities
(Herhausen et al., 2019)............................................................................................... 36
How to best capture value from customers?..................................................38
Other lecture notes....................................................................................................... 38
How should consumers’ willingness to pay be measured? An empirical comparison of
state-of-the-art approaches (Miller et al., 2011)...........................................................39
Do satisfied customers really pay more? A study of the relationship between customer
satisfaction and willingness to pay (Homburg et al., 2005)..........................................40
Expand your pricing paradigm (Rafi, 2023)..................................................................42
Guestlecture “Implementing CX management”..............................................42
How to use AI and ML in the customer experience?........................................46
Other lecture notes....................................................................................................... 46
Artificial intelligence in service (Huang & Rust, 2018)..................................................49
Algorithms need managers, too (Luca et al., 2016)......................................................51
Why AI that teaches itself to achieve a goal is the next big thing (Hume & Taylor, 2021)
..................................................................................................................................... 52
3
, Create winning customer experience with generative AI (Siggelkow & Terwiesch, 2023)
..................................................................................................................................... 52
How to manage experiences in a connected world?........................................53
Other lecture notes....................................................................................................... 53
How smart, connected products are transforming competition (Porter et al., 2014 &
2015)............................................................................................................................ 53
Capturing value in the internet of things (Wortmann et al., 2020)...............................54
The age of continuous connection (Sigglkow & Terwiesch, 2019).................................56
Case assignment..........................................................................................56
The magic that makes customer experiences stick (Thomke, 2019)............................56
Introduction
Other lecture notes
Ninety-three percent of business leaders today say that delivering a relevant and
reliable customer experience is critical to overall business performance (Harvard
Business Review, 2017) Customer experience: big promises, big opportunity.
What is customer experience management?
The customer as the essence of marketing. There is
only one valid definition of business purpose: to
create a customer. It is the customer who
determines what the business is (Peter Drucker,
1954). Concepts introduced into marketing.
What people really desire are not products but
satisfying experiences (Lawrence Abbott, 1955). Start using the product,
experience. Lot of things that influence the experience. Catalogues of the car,
people who sales the car, garage, brand influences what I see, partners who use
the company., influencers, what other customers do with the products. It is very
broad.
What is customer experience management?
Customer Experience: Customer experience is a multidimensional
construct focusing on a customer’s cognitive, emotional, behavioral,
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,sensorial, and social responses to a firm’s offerings during the customer’s entire
purchase journey. Customer experiences are formed through touchpoints which
are embedded in a broader context and marked by a set of qualities that result in
a value judgement by the customer.
Customer Experience Management: Customer experience management
refers to the cultural mindsets toward customer experiences, strategic directions
for designing customer experiences, and firm capabilities for continually
renewing customer experiences, with the goals of achieving and sustaining long-
term customer loyalty.
Understanding Customer Experience Throughout the
Customer Journey (Lemon & Verhoef, 2016)
Lemon and Verhoef (2016) explore the complex nature of Customer Experience
(CX), which is created throughout the customer journey and spans multiple
dimensions. Their study offers an integrated framework for understanding CX, its
origins, measurement, and management. CX is defined as a multidimensional
construct that encompasses customers’ cognitive, emotional, behavioral,
sensorial, and social responses to a firm’s offerings during the entire purchase
journey. The authors argue that creating and capturing value through CX requires
aligning customer needs with a value-driven experience
strategy and ensuring consistency across various
touchpoints and stages. They emphasize that effective CX
management necessitates cross-functional integration and
collaboration with external partners to meet customer
expectations throughout the journey.
The Roots of Customer Experience in Marketing
Customer Experience (CX) builds on traditional marketing
concepts such as customer satisfaction, relationship
marketing, service quality, and customer engagement, but it goes beyond these
foundations by addressing a holistic range of customer responses across various
stages and touchpoints. The authors emphasize that CX is dynamic, with
customer expectations and experiences evolving rapidly due to technological
advancements and the increasing complexity of customer behavior. While the
customer journey itself is not a new concept, it has become more fragmented
and intricate due to omnichannel interactions. Episodes within the journey. some
positive, some negative. are interrelated, and cumulatively shape the overall
experience.
Customer Experience as a Distinct Construct
CX differs from traditional marketing constructs by being inherently
multidimensional and dynamic. It focuses on five dimensions of customer
response:
1. Cognitive: How customers process information and evaluate offerings.
2. Emotional: Feelings elicited during interactions.
3. Behavioral: Actions taken, such as purchasing or recommending.
4. Sensorial: Experiences involving physical senses, such as touch or sound.
5. Social: Peer influences and interactions within social networks.
These responses depend on the customer's role and expectations, which vary
significantly across different contexts, emphasizing the importance of
personalization. The authors highlight that CX is shaped by the entire customer
journey, from the initial contact through to post-purchase engagement. Firms
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, must consider each of these dimensions when designing CX strategies, as the
responses elicited will differ based on who is purchasing and their unique needs,
preferences, and expectations.
Slicing the Customer Journey
The customer journey is composed of three
interconnected stages, each influencing the overall
experience. These stages are not linear and often
overlap, creating a complex and dynamic interaction
between the customer and the brand.
1. Pre-purchase: This stage encompasses all interactions with the brand,
category, and environment before the actual purchase transaction. It
involves need recognition, information search, and evaluation of options. In
theory, this stage covers the entire customer experience before the
purchase. In practice, it starts when the customer first recognizes a need
and continues through to the consideration of satisfying that need with a
purchase. Key touchpoints during this stage include brand-owned media
(e.g., advertising, websites), partner-owned interactions (e.g., distribution
channels), customer-owned touchpoints (e.g., personal decision-making),
and social/external influences (e.g., peer reviews, third-party information).
2. Purchase: This phase involves all customer interactions with the brand
and its environment during the actual transaction. It focuses on the
immediate decision-making process, influenced by factors such as product
availability, convenience, service quality, and customer support.
Touchpoints during this stage include payment options, customer service
interactions, and potential barriers like choice overload. This stage is often
the primary focus of traditional mapping and experience measurements,
as it involves the actual act of purchasing.
3. Post-purchase: The post-purchase stage encompasses customer
interactions with the brand and its environment after the purchase,
including product usage, ongoing engagement, and post-purchase services
(e.g., support, service requests). This stage can extend from the moment
of purchase to the end of the customer’s life with the brand or product,
influencing future loyalty and satisfaction. The product itself becomes a
critical touchpoint in this phase, affecting repurchase intentions and
customer loyalty. Managing this stage is essential for long-
term satisfaction and the development of a lasting
relationship with the customer.
The customer journey is complex, with stages that overlap and
influence each other. To create a cohesive and satisfying customer
experience (CX), firms must effectively manage each stage,
ensuring that they address customers' evolving expectations
across all touchpoints.
Types of Touchpoints
Lemon and Verhoef categorize touchpoints into four types, each influencing the
customer experience (CX) based on the level of control exerted by the firm and
other actors:
1. Brand-Owned: These are customer interactions that are designed,
managed, and controlled by the firm. Brand-owned touchpoints include
media such as advertising, websites, and loyalty programs, as well as
brand-controlled elements of the marketing mix like product attributes,
packaging, services, and employees. These touchpoints are directly
managed by the brand to shape the customer’s experience.
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