Lemon, K.N. & P.C. Verhoef (2016). Understanding Customer Experience Throughout the Customer Journey. Journal of Marketing, 80: 69-96. PDF

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Download Lemon, K.N. & P.C. Verhoef (2016). Understanding Customer Experience Throughout the Customer Journey. Journal of Marketing, 80: 69-96. PDF

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Lemon, K.N. & P.C. Verhoef (2016). Understanding Customer Experience Throughout the Customer Journey. Journal of Marketing, 80: 69-96. Main point: Summarizes how brand image develops over time through many different touch points during the customer journey, indicating the importance of a wide perspective on brand management: Where do we ‘touch’ what customers in different stages of their journey, and how and when do me connect with them there? Customer experience defined  What people really desire are satisfying experiences  Every service exchange leads to a customer experience, regardless of its nature and form  Experiences are identified though a multidimensional view (cognitive, emotional, affective, social, behavioral, sensorial and physical responses)  Design, delivery and management of customer experience can be viewed from multiple perspectives: customers, firms or co-creation perspective.  Touch points are individual contacts between the firm and the customer and their collection across multiple phases of a customer’s decision process or journey builds up experience. Roots of customer experience in marketing Theory Main points Customer buying  Customer experience and decision making is a process behavior process models  Foundation to start thinking holistically about the customer (1960s-1970s) experience (i.e. AIDA model) Customer satisfaction  Assessing and evaluating perceptions and attitudes about an and loyalty (1970s) experience  Ability to measure and monitor customer reactions to firm offerings (mainly use of satisfaction as measure à delivered vs expected value)  Provide basis for measurement Service quality (1980s)  Focus on the context in which the experience arises  Focus on the journey mapping and measurement / assessment aspects of customer experience  Marketing services is different than marketing goods  SERVQUAL model Relationship marketing  Broadening the scope of customer responses in the customer (1990s) experience  Strengthening relationships with customers  Role of trust, commitment, B2B specific investments in relations, passion and intimacy  Expand previous theories as to include emotions and perceptions Customer relationship  Identify how specific elements of customer experience management (2000s) influence each other and their business outcome  Optimization of customer profitability! LT & strong relationship is no longer the ultimate objective  Customer equity framework Customer centricity and  Focusing on organizational challenges associated with customer focus (2000smanagement of customer experience

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Customer (2010s)

engagement

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Centers on delivering value to individual customers rather than target markets Align company’s products with the needs of most valuable customers to maximize LT financial value of those Buyer personas Just to be done perspective – examine circumstances that may lead to purchase Customer role in the experience is emphasized Distinguish attitudes and behaviors beyond purchase Motivational state leads customers to participate with firms, especially in the digital and social media revolution Empower customers

Customer experience and earlier theories 3 areas: 1) focus on process, behavior and value (provides a foundation, emphasize importance of different touch points); 2) focus on process outcomes (focus on outcomes and their measurements); 3) focus on customer-centricity (helpful in internal and external customer management for firms). Customer experience as a distinct construct  Customer experience is related to satisfaction and service quality. Satisfaction could be one of the components of customer experience (cognitive evaluation). Service quality may be an antecedent of customer experience.  Trust and commitment are also related to customer experience and may influence follow-up experiences. Commitment would be a consequence of customer experience. Trust could be a state variable about firm’s reliability, or a good experience could help build trust.  Customer experience is related to customer engagement – it constitutes touching points along customer journey and results in cognitive, emotional, behavioral, sensorial and social responses on the part of the customer. Customer experience and the customer journey Stages of the total customer experience: the customer journey Customer experience: customer’s journey with a firm over time during the purchase cycle across multiple touch points. Dynamic & iterative! From pre-purchase to postpurchase. Incorporates past experience and external factors. Pre-purchase: customer’s entire experience before. From need recognition to consideration of satisfying it with a purchase Purchase: all customer interactions with brand and its environment during the purchase event itself. Choice, ordering, payment. Extended to the digital environment. Post-purchase: following the actual purchase. Usage, consumption, engagement and service requests in relation to product/brand. “loyalty loop”: trigger that leads to customer loyalty (repurchase) or customer looking for alternatives. FIRMS should: 1) understand firm and customer perspectives in each stage; 2) identify elements or touch points through the journey; 3) identify trigger points that lead to continue/dis their purchase journey Types of touch points  Brand owned: designed and managed by the firm. under firm’s control

Partner owned: jointly designed, managed or controlled by the firm and one partner. E.g. marketing agencies. Sometimes blurred line between brand and partner owned.  Customer owned: firm has no control. Mostly post-purchase. Customers can be cocreators of value, independently or jointly with firms.  Social/external touch points: peers, other customers, social environments, third party info source (tripadvisor), social media à typology of touchpoints allows better understanding of leverage points for the firm 

Dynamics and external influences  Past influences current experience & satisfaction that in turn influences future usage.  External environments are drivers of customer experience and create needs  Macro level: state of the economy and crises (crises can have a strong, negative and enduring effect on the customer experience)  Competitors’ actions Understanding the customer view: customer journey analysis Firms focus on how customers interact with multiple touch points, moving from consideration, search, and purchase to post-purchase, consumption, and future engagement or repurchase. 3 key elements: 1) Service blueprinting: maps out entire service delivery from back office to front facing customer interactions. Internally oriented methodology building up on employee insights. Concern – not enough customer focus. Solid starting point but customer input is required 2) Multichannel management: use of multiple channels across multiple phases of the customer experience. Channels differ in benefits and costs and contingent on phases and customer preferences. Channel choices in the purchase funnel are affected by one another because of lock-in effects, channel inertia, and cross-channel synergies. 3) Mobile: more suitable for search but less for purchase. Interfere with other channels, create synergies. Offer new location-based, time-sensitive opportunities to create firm-initiated touch points. Influence customer journey greatly. Customer experience measurement Customer experience measurement  Make insights actionable for the firm  Ideally every touchpoint can be measures. Practically not always the case  It is hard to develop a single set of measures that captures customer experience across all industries and channels à typically single-item measures to measure specific aspects, do not capture the full experience and not predictors of future performance  SERVQUAL as good starting point  Customer satisfaction and NPS equally well in predicting firm performance and customer behavior, although predictive performance differs across contexts.  Use multiple rather than single metric Measuring effects of customer touch points

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Multiple and different touch points occur in different phases of the funnel. Touch points can be endogenous, leading to wrong conclusion and resource allocation. They have direct and indirect effects on purchase and customer behavior Customers use multiple touch points that affect one another Fundamental to identify critical touch points (moments of truth) that have the most influence on key customer outcomes.

Customer experience management àIt is the process of strategically managing a customers’ entire experience with a product or company Customer journey and touch point design  Optimize customer experience by designing interactions with touch points  Synergies (and non) between channels – online/offline channel integration  Specific touch points should contribute to customer experience in different stages  Seamless experience across channels through integration à stronger experience  Effect of individual touch points may depend on when it occurs in the overall customer journey Partner & network management  Role of partners and external influences  Customer experience ecosystem à the complex set of relationships among a company’s employees, partners and customers that determines the quality of all customer interactions  Customer oriented network – customer takes control and responsibility for all external activities related to the focal experience. Low control and high uncertainty for the firm  Service coordinator-based network – customer may outsource planning to event coordinator (travel agency). Focal firm still low control and high uncertainty.  Firm coordinated network – where the firm has a leading role. Low uncertainty and additional insights in customer experience, as well as greater control. Still may entail increase in costs and complexities  Take broader service delivery system into account  Choose the right governance modes for partner networks Internal firm perspective  Managing customer experience affects the firm  Firms should develop and master several mindsets and capabilities to successfully manage the customer experience  Specific systems (IT) can enhance the more emotional components of the customer experience. Loyalty programs are an example  Customer-centric focus within your firm  Multidisciplinary approach required, cooperation across multiple functions  Firms require specific capabilities to develop successful customer experience strategies...