NETTING IT OUT

What’s the goal of customer experience management? If you’re in charge of, or involved in, managing the customer experience for one or more groups of customers, here’s your mission as we see it: Your customer experience mission is to delight individual customers by designing ideal experiences for particular audiences, segments, or groups of customers—people who care about the same things and who have the same needs and desired outcomes. You want to optimize the quality of the experience you offer to each group of customers so that they perceive and appreciate the value of your brand. At the same time, you want to deliver the most appropriate level of service, based on the customer’s context, to please him or her, without overspending on the things that don’t matter to the customer. By understanding, anticipating and meeting customers’ needs, you increase customer loyalty while lowering your costs to serve.

In this report, we explain why customer experience matters. We offer our definition of customer experience management. We describe our approach to customer experience management. We invite you to compare our customer outcome-based and scenario-focused approach with what you are currently doing to manage, monitor, and improve the experience your customers have with your organization.

WHAT’S CUSTOMER EXPERIENCE AND WHY IS IT IMPORTANT TO MANAGE?

It’s the Way Customers Perceive Your Brand

Your customer experience is your brand. Your prospects and customers experience your brand every time they interact with your firm, its partners, and its products. If you want prospects and customers to perceive value from the products and services your organization delivers, you’ll want to be sure that they appreciate your brand(s). Whether yours is a for-profit company selling products and services to business and/or consumer customers, a government agency providing services to constituents, an educational organization providing services to students, or a not-for-profit organization delivering services to beneficiaries, you are in business to create and to deliver value to a group of customers. When those customers think of your organization, they’re thinking about your brand.

Some brands are so strong they’ve become icons—like Apple’s iPod, MIT, NTT Docomo, Samsung, BMW, the U.S. Marines, and the Harvard Business Review. Other brands are much weaker. Examples of weak brands might be your electric company, the brand of printer paper you use, the brand of matches you buy. Yet, even organizations with weak or invisible brands work hard to provide a differentiated experience—an experience that will help them build a stronger brand perception and higher perceived value in the eyes of their target customers.

Customers perceive value when they enjoy using, enhancing, sharing, and/or consuming products and services, when they feel that the benefits they’re deriving from those products are worth the cost and effort, when they enjoy interacting with your organization, and when your products and services meet or exceed their needs and expectations. In short, the experience that prospects and customers have in dealing with your organization, its people, your products, and with other customers is a large part of the perceived value your firm delivers.

Your ideal customer experience is the emotional connection and relationship you want your customers to have with your organization and its brand(s). (See Illustration 1).

Bad Customer Experience Damages Your Relationships with Customers

When prospects and customers are disappointed by your products or by any of the interactions they have in dealing with your organization directly or indirectly, they become disaffected. They won’t want to use your services or buy your products again. They’re likely to tell other people about their disappointment and disaffection.

Bad Customer Experience Tarnishes Your Brand Reputation

Even a single disaffected customer or constituent can do major damage to your organization’s reputation. We’ve all heard that each dissatisfied customer is likely to tell 10 other people. Even worse, a few disappointed constituents may post their feelings publicly on the Internet, broadcasting to a much larger audience. A disaffected customer may also speak to a reporter or to a stock analyst, creating even more negative buzz.

Once other prospects and customers begin to sense that they too may be disappointed, their expectations decline. They no longer expect a great experience. They begin to perceive more flaws and problems than they saw before. This is the beginning of a downward spiral in brand perception. Remember Arthur Andersen? Its brand was sullied by being connected to the Enron debacle. Other clients began to doubt the firm’s ability to perform unbiased audits and to deliver ethical advice. Unable to recover clients’ trust, Arthur Andersen was disbanded within a few months. Brands are built on trust. Customers need to trust that you’ll deliver on your brand promise. Once trust in your brand has been eroded, it takes time and hard work to reverse that downward spiral. Some companies never recover.

Managing Brand Experience Is Imperative

If you want customers to promote your organization and your products to their friends and colleagues, rather than detract from your reputation, you’ll need to pay close attention to managing and continuously improving the Quality of the Customer Experience (QCE)SM that your organization delivers.

WHAT’S INVOLVED IN CUSTOMER EXPERIENCE MANAGEMENT?

Align Your Customer Portfolio, Your Brand Portfolio and Your Customers’ Scenarios

One of the tricks involved in managing and improving the quality of the customer experience you deliver is to realize that there isn’t ONE customer experience. You’ll need different experiences for different customers in different contexts. (See Illustration 2).

In fact, there are three different categories of experiences you need to accommodate:

1. Different Experiences for Different Types of Customers. You may want to tailor experiences for each distinct group of prospects or customers—for each customer segment. For example, Ford Motor Company targets many different groups of customers—from college students to retirees—in several different socioeconomic classes, in many different geographic regions.

2. Different Experiences for Different Brands. You may have more than one brand. Ideally, you’ll be matching customers with brands, so that each type of customer will receive the brand experience that’s most appropriate for him or her. In the United States alone, Ford Motor Company sells eight different car brands, ranging from Ford pick-up trucks, to Taurus station wagons, to Jaguars, to Volvos. Each brand is carefully designed to appeal to a specific customer self image.