What the heck is Customer Experience Management! A value-based approach

by Colin Shaw on June 25, 2012

Having worked in Customer Experience for many years, one of the things that most strikes me is the level of confusion that surrounds the term; I mean what does ‘Customer Experience’ mean anyway? As one of my colleagues put it, there are a lot of people talking a lot of bla..bla…bla. The danger of this is, of course, that without a clear definition, Customer Experience risks going the way of many business trends by becoming defined by what sells most software, as we saw in Beyond Philosophy’s recent Global Customer Experience Management Survey 2011.

I feel this is a significant risk, but to be honest another cause of the ‘bla..bla..bla..’ lies in the very ambiguity of the word Experience itself. For instance, does it mean ‘Wow!’ that was an Experience (let’s call this the entertainment dimension; I use the term loosely to demonstrate wows and emotional pulls – emotional experience being the key differentiator for Beyond Philosophy here) or does it mean Experience as in ‘everything that I experience’ about you (let’s call this the process dimension or the Theory of Everything! As another eminent CE authority called it).

It seems to me that the two are in conflict for almost without exception, firms seem to emphasise the latter – it’s about everything we do – while at the same time emphasising in their examples of great Experience the former: as in look at the Wow Experience of Disney, Lush and so forth.

For me what I think would be truly helpful is to look at Customer Experience not as a separate ‘process’ and a separate ‘entertainment’ thing but as one concept bound by a simple but quite revolutionary approach. That we can differentiate and create value from ‘our experience’ ‘outwith’ the goals customers traditionally seek from buying from you in the first place. In other words, for a retailer price and product are, yes, part of the Experience world but Experience value-creation in its truest sense is found in the process of shopping; a process that can impact and uplift my experience by being ‘a good and more emotionally engaging process experience’ or be an additional reason in itself to shop by being ‘a good and entertaining process experience that clearly has a stronger emotional hit’. Consider the following:

  1. Traditional Marketing value: I go to your store to buy a can of beer because the price and products you offer are the most competitive. This represents a classic marketing offer. My goal of going to your store is focused on achievement of my core need, to buy that beer.
  2. Process Experience value: I go to your store to buy a can of beer because the car parking is great; the staff are friendly, oh! and I get that beer. That is an experience offering. My goal of going to your store is still focused on achievement of my core need, but in my buying decision your good performance on process makes me feel and think you are the best to buy from.
  3. Full Experience value: I go to your store to buy a can of beer because it’s in a fantastic shopping mall with marbled halls, the car parking is great, the staff are friendly, oh! and I get that beer. This is a full experience offering, maximising the emotion inherent in how you can entertain me or Wow! me. My goal in this example now becomes twofold and in some ways reversed, firstly I want to experience your entertaining and emotionally engaging process – it does more than just uplift my traditional marketing goal as it is a goal in itself – and I want my traditional core goal (buying that beer, which is at that point a pretty commoditised offering).

The emphasis on creating differential value through ‘process’ because that ‘process’ creates its own goal state the consumer would pay money to Experience seems therefore to be key. Likewise, there is an assumption that the core Marketing offer is under commoditisation pressure and you no longer get sufficient margins from price competition or new product/ service offerings are easy to copy.

Now, if we look at our process and our entertainment dimensions together (see below) we can see how a firm can generate Experience value. Crucially this will depend on where they stand in their market (i.e., their starting point) and whether they wish to focus on uplifting through better process their traditional marketing offers (customer goals) or they wish to take a more radical approach, building in additional Experience – as in ‘entertaining/ emotional wow! – related offers (customer goals).

Customer Experience Management: a value-based view
So from the above box:

Marketing goal related value

  • Low Process, Low Entertainment: a utility may seek differentiation by taking the dissatisfiers out of the process.
  • High Process, Low Entertainment: a Telecom may seek differentiation by making the process smooth and easy (as well as taking out the dissatisfiers).

Experience goal related value

  • Low Process, High Entertainment: a Pizza restaurant may seek differentiation by adding cost of entry through themeing the restaurant (but not caring too much about Pizza quality). This cost barrier to entry use of Experience can also be seen in brand advertising. This is a particularly interesting use of Experience, and more common than realized. It does reduce market competition but is ‘copiable’ as Entertainment added value is undermined by a denuded core product offering.
  • High Process, High Entertainment: a Construction company may seek differentiation by adding wows! to the process of doing business (e.g., great sandwiches, concierge service on site) as well as delivering a smooth and easy experience with low dissatisfiers.

Management Implications

  1. Be clear about Customer Experience Management, this is not about ‘just’ a rehash of traditional marketing.
  2. Think about which value-box you are and your competitors are in.
  3. Consider how you will differentiate yourself in the market.
  4. Use relevant research (both analytical and creative) techniques in your approach i.e., for instance, do you understand the dissatisfiers; what could create a more satisfying process; where the emotional levers are to create an entertaining experience; how you could innovate and what new ‘goal-states’ might work? See last blog on managing your Creative Equity.
  5. Think about your organization; is it ready for the change?

A Few Key Questions

Q1) What does outwith mean?

A) My apologies I am betraying some Scottish roots.
Outwith means: outside of something; not within something
It’s usually this ‘not within’ or ‘not part of’, that we are stressing when we use this expression. I wouldn’t say that this is a dialect word, being used rather in educated language, also known as Standard Scottish English. It is most often used in Scotland in quality newspapers, on serious programmes on TV etc.

To re-express the comment:

‘For me what I think would be truly helpful is to look at Customer Experience not as a separate ‘process’ and a separate ‘entertainment’ thing but as one concept bound by a simple but quite revolutionary approach. That we can differentiate and create value from ‘our experience’ outside the goals customers traditionally seek from buying from you in the first place. Let me explain:

  • For a customer of a retail store getting the right product at the right price would be a traditional goal (let’s call this the Traditional Marketing value).
  • The extra value of Experience would be found however in the very process of shopping (let’s call this Experience value); a process that can either (a) impact and uplift my experience by being ‘a good and more emotionally engaging process experience’ or (b) be an additional reason in of itself to go shopping at your store by being ‘a good and entertaining process experience that has a stronger emotional hit’.

Q2) “What about Amazon? ‘This is in the top 20 in the US for customer experience. You could say the shopping experience is excellent – but I would argue its all process and about Amazon getting out of the way and simplifying the process. This description works for Harrods but not for Amazon – yet both are excellent.

  • My answer to question 2 is that, yes I agree. Amazon for me is an exemplar of Customer Experience within process. From a goal state view, I want my books, I get my books, it’s an excellent experience without being entertaining – although parts no doubt are. I do not see being in a ‘High Process, Low Entertainment’ region as being ‘not Customer Experience’ orientated, the emphasis is still on process. But, with reasonable competition (probably not now) the Amazon.com type monopoly could breakdown as others come up the curve; then is the time to move into the Top Box of High Process, High Entertainment . So, it depends where your starting point is.

Q3) “I like the model and the contrasts but I think the customer can reward you for being 90% entertainment and 10% process or the other way round – it certainly needs some form of combination to pull it off. But his paper sort of implies 50:50 in some way to me. “

  • My answer to question 3 is again to agree. You can and companies do create value and cost barriers to entry by being 90% entertainment and 10% process and the other way round. The key point here is what is differentiating in your market today? Where should you move to, to be differentiating? I would think 50:50 is not the right thing to say for the ‘High Process, High Entertainment’ box. Here it’s more like maxed out best process capability and differentiate in the consumers mind through being Entertaining i.e., they want to buy from you because of the Entertainment goal state first. So really the reward is much more about Entertainment. The process reward is there but is not differentiating from a ‘High Process, Low Entertainment’ value company.

Q4) Why do companies focus on the process view rather than the Entertainment view?

  • Well I would agree that this is a function of ease of measurement, level of comfort – it’s easier to break fix than think of value adds, it provides for repeatable, predictable and less volatile solutions. But also for many companies getting process right is enough of a challenge!
  • Of course ‘being entertaining and creating Wows’ is also a challenge to creative thinking and the analytical mindset of many organizations.

Q5) I’m a believer that the problem is usually about being caught in the middle – Lidl and Waitrose both trash Tesco and Sainsbury’s for CSAT scores but for polar different reasons. Expectations low, price low, value high vs Expectations high, price high, value high. The initial Wow at IKEA is look at the price of that cupboard it’s amazing, the delivery and pickup a nightmare

  • Being clear about the differential value proposition and delivering to that is key. So for ‘caught in the middle companies’ they may well be focusing on different aspects of process and entertainment, but they are not executing these well.
Steven Walden is VP Consulting and Thought-Leadership for Beyond Philosophy. Steven has 17 years Strategy Consultancy experience directing and designing strategies for major B2C & B2B firms. At Beyond Philosophy, the Global Customer Experience Consultancy, he is a Thought Leader and Innovator, directing engagements to assist leading firms to transform through Customer Experience. A world-leader in emotional experience his skills lie in innovation, thought-leadership, strategy consultancy and Qual/ Quant research. He is a regular speaker at conferences, blog writer, CE Trainer and international author.
Colin ShawWhat the heck is Customer Experience Management! A value-based approach