Understanding your customers
Understanding your customers

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Understanding your customers

1.6 Customer experience management

An emerging school of thought says that contemporary marketing is best understood as creating and managing customer experiences. This perspective on marketing also puts customer behaviour centre stage, potentially covering every aspect of a customer’s interaction with a supplier.

Homburg et al. (2017) argue that customer experience management (CEM) is the most relevant way of pursuing long-term customer loyalty, and thus ensuring the long-term success of an organisation. CEM takes a very broad view of ‘satisfying customer requirements’ (CIM, 2015). It emphasises that a customer’s relationship with an organisation often begins well in advance of their purchase and use of a product or service and continues beyond the time they finish using it. The individual customer’s journey offers myriad ‘touchpoints’ along the way, positive or negative. The more positive an organisation can make the experience at each touchpoint, the more loyal the customer is likely to remain.

Think of your own journey in relation to a major purchase of a product or service. You may have spent a considerable amount of time interacting with advertising and publicity material, navigating websites, talking to advisors on the phone, filling in online forms, paying fees, and so on. Each of these were touchpoints with your selected brand, and each constituted an experience of some sort, good or otherwise. The touchpoints continue to proliferate as you embark on using the product or service and experience after-sales communications.

Homburg et al. (2017) propose that organisations that recognise which touchpoints matter most to their customers and can create ‘value constellations’ of compelling customer experiences, will outperform their competitors in the long term. This is a difficult thing to achieve. For example, what matters to customers may change over time. So, it’s important to monitor touchpoints and customers and manage them in line with such changes. This has only become possible at scale since customers moved online in large numbers. It is particularly relevant to services involving the web, such as smart-home management systems (where domestic appliances, heating and lighting are controlled in an intelligent way). But even organisations whose transactions take place in the physical world can benefit from understanding and enhancing important customer touchpoints.

Homburg et al. (2017) argue that to succeed with CEM an organisation needs three things:

  • Cultural mindset – in other words, a shared vision of the importance of touchpoints as opportunities to create positive customer experiences, and a co-operative outlook (given that many of these experiences will depend on collaboration within and even between firms).
  • Strategic direction – being consistent across customer experiences yet remaining sensitive to individual context.
  • Capabilities – the organisational capacity to implement CEM. For example, the skills and technology for designing, monitoring, prioritising and adapting touchpoints to optimise customer experience and promote long-term loyalty.

Activity 5 Customer experience management

Timing: Allow 40 minutes for this activity

Think about an organisation of which you are a customer. Which of its touchpoints are the most important to you? How well does the organisation manage the touchpoint in question? Use the table below to record scores for up to five touch points where 1 is low and 5 is high

Touchpoint table

Touchpoint description Importance to you (out of 5) Quality of experience (out of 5)
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Discussion

This is not meant to be a model answer, but you may get some extra insights by comparing it with your response to the activity. The chosen organisation is the local train operating company.

Touchpoint description

Importance to you (out of 5)

Quality of experience (out of 5)

Timetable leaflet

2

1

Smartphone app

4

2

Station platform

5

2

Ticket collector taking payment

5

4

Train ride

5

4

There are aspects of my customer experience where my local train operator could do better. I picked up a timetable for my usual service a month ago, but I find it hard to use because of its tiny print and (to me) confusing abbreviations.

I much prefer the convenience of the train operator’s app on my smartphone, but the app could be better designed. I need to click through several screens to get the information I need, and the layout is confusing.

Obviously, the train station platform itself is extremely important to me, but again the quality of the experience is disappointing, with limited seating. On a more positive note, the driver and ticket collectors on board are very important to me (as the people in charge of my safety). They offer an excellent customer experience in terms of friendliness and giving change if I have not got the right money. The train ride itself is also usually a good experience: punctual, with comfortable seats, storage for luggage, and an illuminated sign telling passengers what the next stop is.

The scores on my table suggest that the experience of being aboard the train is generally successfully managed – both important to me and of high quality. The printed timetable is not very important to me so I can tolerate the poor experience. However, it might be more of a problem for other customers, such as people who have learning difficulties or sight impairments, so it would be good to have this information available in alternative formats. The two areas of customer experience where the train operator needs to raise its game are its app and the station platform – both important to me, and both disappointing.

According to CEM, the train operator needs to develop a cultural mindset that sees the app and the platform as having a similar importance to me as the train ride itself in terms of my customer experience. It needs to see information provision and comfort while waiting for the train as a strategic part of its consistent service offering. This means being aware of the importance of apps and information, as well as comfortable conditions for waiting on the platform. These enhancements would require capabilities to take a more sophisticated approach to technology (which might require new skills to be developed within the company or outsourced), but most importantly they would require the company to monitor and prioritise these key touchpoints in order to prevent me from finding alternative means of transport.

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