The fragmentation of brand contacts in today’s omni-channel environment has fundamentally changed the way customers search for and eventually purchase products. As a result of this change, companies need to systematically manage the experiences along the customer journey in order to stay competitive, says Jan F. Klein from the Aalto University School of Business.
Jan F. Klein has conducted several research and consultancy projects on customer experience management and customer journey tracking in Europe, Asia and the USA. In these projects he has helped world-leading companies to effectively track customer experiences in the omni-channel environment, to implement organizational change for superior experience creation, and to increase sales by strategically managing experiences along the customer journey.
“A systematic customer experience management addresses customers’ growing demand for consistent and memorable experiences along the customer journey. This includes experiences companies can directly control, for example, brand contacts in its offline, online and mobile channels, but also experiences companies cannot directly control, such as customers’ contacts with retailers and peers. Strategically managing these brand contacts enables companies to provide a seamless experience across different channels and thus to increase brand and sales performance,” says Klein, describing the key objective of customer experience management.
In the following he gives an overview of how companies can leverage customer experience management to create value for both the customer and the company.
Acknowledging the Tremendous Room for Improvement
While customer experience management has become a strategic priority for many companies, the actual implementation of experience strategies still lags behind. In fact, research shows that there is a large discrepancy between companies’ beliefs that they provide a superior customer experience and customers’ poor evaluation of the actual experience.
“Naturally, companies are focused on the products and services they sell. Products and services, however, are becoming increasingly interchangeable due to a lack of functional differentiation. Customer experience management solves this problem by providing unique interactions between the customer and the brand which differentiate the brand from competitors. Thus, companies need to change the mindset from a focus on products and services, to a focus on customer experiences”, says Klein.
Starbucks provides a vivid example of this transition from selling products to providing experiences, best expressed by Starbucks’ philosophy: ‘We are not in the coffee business serving people, we are in the people business serving coffee.’
Addressing the Challenges in the Omni-Channel Environment
The increasing fragmentation of brand contacts, fueled by the digitalization and the growing empowerment of customers via social media, provides several challenges for the implementation of customer experience strategies in the omni-channel environment.
“Providing unique experiences, while assuring consistency across these different brand contacts is a crucial challenge for companies. Addressing this challenge requires a profound understanding of the number and variety of touchpoints between the customer and the brand.”
Companies usually need to consider 50 essential touchpoints. While the composition of these essential touchpoints varies from industry to industry, they commonly include touchpoints which are controlled by retailers, such as amazon.com, or by other customers, such as consumer reviews. Unveiling how these touchpoints influence the experience and developing strategies to improve the customers’ experience at these touchpoints is a key task of customer experience management.
Focusing on the Customer Journey, not on Single Touchpoints
Efforts to provide a superior experience at a single touchpoint might not be sufficient to strengthen the brand or increase sales.
“Optimizing individual touchpoints is necessary to achieve superior customer experiences, but it is not sufficient. Cumulative experiences within one channel, across multiple channels, and over time have to be considered when designing the experience along the customer journey.”
More specifically, expectations built via a single touchpoint, such as an advertising or social media campaign, have to be met along the customer journey. If a social media campaign increases customers’ expectations, such as German car manufacturer Opel’s campaign to boost its struggling brand, these expectations have to be met along the customer journey, for example by the website and dealership, in order to effectively stage the customer experience.
“A gap between customers’ expectations and their experiences at any point in the customer journey can hurt the brand and prevent customers from buying.”
Nike provides an excellent example of integrating the customer experience along the customer journey – including Nike stores, webpage, running apps and Nike communities – in a consistent manner that stages the experience of the “just do it” sports brand.
Utilizing New Consumer Analytics
Customer experience management does not rely on the commonly used CRM tools. While CRM builds on customer (sales) records with the company, managing experience along the customer journey requires exploring customers’ perception of the brand across many different touchpoints – offline, online and mobile touchpoints with the company and also with retailers and peers.
“New challenges require new consumer analytics. While focus groups still offer the opportunity to get valuable customer insights, more elaborate methods are needed to assess the experience along the entire customer journey. Experience tracking via smartphone, for example, offers a novel data collection method that integrates the multitude of touchpoints across channels and stakeholders in a single source data set.”
Experience tracking enables companies to calculate the return on investment on their experience strategy by quantifying the contribution of distinct touchpoints to the overall experience. In this way, new consumer insights not only help to close the gap between customers’ expectations towards the brand and their actual experience, but also directly support strategic budget allocations.
Dr. Jan F. Klein is Post-Doctoral Researcher at the Aalto University School of Business.
Jan F. Klein’s next Aalto Leaders' Insight blog article on customer journey management: Knowing Where You Lose… And Win.