Making a difference with customer experience management

Technological advancement has changed the marketing landscape almost beyond recognition. With mobile and social technologies, customers are always online and connected to a personalized universe of at-the-ready data and intelligence. No longer arethey satisfied with generic offerings; rather, they seek personalized and contextualized experiences from their interactions with any company, at any point in time, through any channel.

Raising the bar for marketing practice, these growing customer demands necessitate systematic management of the entire customer experience. Practitioners are increasingly looking toward customer experience management (CXM) as the key to success in today’s dynamic market environment. A recent survey by Gartner showed that 89% of companies expect to compete primarily on the basis of customer experience by 2017[1], an industry projected to be worth $13.18 billion by 2021[2]. Superior performance is presumed to result from the set-up of a collection of processes that manage all customer interactions across the company.

Despite this surge of attention, CXM is still a greenfield area, and only a few companies have reached a stage of customer experience maturity[3]. Yet, results show that leading-edge customer experience players outperform their industries, gain market share and succeed at building sustainable competitive advantages[4]. In what follows, we discuss some key best practices, building on a recent Marketing Science Institute (MSI) working paper[5].

Optimize journeys not touchpoints

Rather than focusing on specific touchpoints, companies should take account of the entire end-to-end journey their customers go through. This journey is shaped by a progression of touchpoints across multiple stages – pre-purchase, purchase, usage and post-usage. The goal should be to provide a “frictionless” flow across these stages and touchpoints. Not only can this journey orientation help to uncover inconsistencies between multiple stages and touchpoints, it also stimulates companies to look at their processes the way customers do.

Disney, for example, is taking great strides in this area. Its Magic Band technology and its online tool, MyMagicPlus, have enabled the company to take control of their customers’ journey. Customers can now fully pre-plan their visit, while the MagicBand can be used to check-in at the hotel, enter attractions, store fast-passes, pay for food, make gift purchases, etc. This provides Disney with a vast amount of real-time data on how their customers flow through the park and what they are doing. This data is then used to optimize the entire Disney experience. The result: happier customers and a more effective and efficient operation for Disney[6].

Use context to your advantage

Although the importance of context has been recognized in marketing, it is perhaps the most ignored ‘variable’ in the field. Why? The complexity of context makes it very hard to apprehend. Fortunately, new technologies show great promise in capturing and processing real-time contextual data that can be used as input for novel marketing actions. The rise of wearable devices, for example, offers ample opportunities to collect individual context data such as one’s daily activity rating (i.e., number of steps, calories, sleep hours, pulse rate) and health condition. Smartphones enable data collection on an individual (e.g., personal calender), social (e.g., social connections), and environmental (e.g., geolocalization) level. As a result, the delivery of ‘experiences in context’ is rapidly becoming the new mantra for many CXM-managers.

Red Roof Inn is a best example of how context can be used to differentiate the customer experience. The low-budget U.S. hotel chain recognized that 90,000 passengers face flight cancellations each day, with many in immediate need for lodging[7]. To address this issue, Red
Roof Inn developed a search advertising program that tracks cancellations in real-time and uses this information to buy prominent search placements to speak directly to stranded travelers, showing them the exact distance to the nearest Red Roof Inn. The company booked immediate success with a 375 percent increase in conversions, and a 60 percent increase in bookings[8]. Capitalizing on the failure of other (airline) companies, Red Roof Inn is able to enhance the customer experience.

Maesure customer experience in a multi-method way 

The large majority of customer experience measurement still focuses on customer satisfaction and Net Promotor Score (NPS). While these metrics are valuable, they do not give a complete
picture of what is going on. Rather, companies should gather customer insights using a mix of quantitative, qualitative and other methods. For sure, there will always be an important role for traditional tools like surveys, focus groups and in-depth interviews. However, we urge companies to look beyond. Novel approaches like social listening, (big) data analytics and
text/video/photo analytics might prove very valuable and generate new insights to strengthen customer experience. As machine learning algorithms keep on evolving, the usage of such intelligence will become more important. At the same time, we also see great promise for research methods coming from neuroscience. Global research firms like Nielsen, Ipsos and
Millward Brown are now using methods such as biometrics (e.g., eye tracking, galvanic skin response, and facial coding) and direct neural measures (e.g., EEG, fMRI) to better understand
customer experience. While these tools might not be fit for daily use, they could prove valuable at some stages – one could think of its usability for new product/service development.

As the marketing discipline continues to change at a rapid pace, companies will have to deal with this volatility. For sure, customer experience leaders have a competitive edge to make a positive difference.

[1] Gartner (2014), "Importance of Customer Experience Is on the Rise; Marketing Is on the Hook, " available at  https://www.gartner.com/doc/2853519?ref=ddisp

[2] MarketsandMarkets (2016), "Customer Experience Management Market by Touch Point (Company Website, Branch/Store, Web, Call Center), Vertical (IT Communication Service
Provider, BFSI, Healthcare, Manufacturing, Travel & hospitality), and Region - Global Forecast to 2021,” available at http://www.marketsandmarkets.com/Market-Reports/customer-experience-
mana... 

[3] Burns, M. (2012), Customer Experience Maturity Defined. Cambridge, MA: Forrester Research.

[4] HBR Analytic Services (2014), "Lessons from the Leading Edge of Customer Experience Management," available at https://www.sas.com/content/dam/SAS/en_us/doc/whitepaper2/hbr-
leading-ed....

[5] De Keyser, A., Lemon, K.N., Klaus, P., & Keiningham, T.L. (2015), “A Framework for Understanding and Managing the Customer Experience,” Marketing Science Institute Working
Paper Series 2015, Report No. 15-121.

[6] Lemon, K. N. and Verhoef, P. C. (2016), "Understanding Customer Experience and the Customer Journey," Journal of Marketing, 80 (6), 69-96.

[7] Gupta, S. (2015), "In Mobile Advertising, Timing Is Everything," available at https://hbr.org/2015/11/in-mobile-advertising-timing-is-everything.

[8] Mobile Marketing Association (2014), "Red Roof Inn Turns Flight Cancellations into Customers," available at http://www.mmaglobal.com/case-study-hub/case_studies/view/31739.

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