CRM

MANAGING CUSTOMER EXPERIENCE

Lecture Series 08

KHALID BIN MUHAMMAD

Institute of Business Management
 Customer Experience
Customer experience is the cognitive and affective outcome
of the customer’s exposure to, or interaction with, a
company’s people, processes, technologies, products,
services and other outputs.

Customer experience consists of both cognitive

impressions (beliefs, thoughts) and affective
impressions (feelings, attitudes) about a range of issues
including value and quality, which in turn influence the
customer’s future buying and word-of-mouth intentions
 Continued..
CRM technology firms and consultancies now

recognize that CX is significantly influenced by

customer interactions with companies’ people (e.g.

sales reps), processes (e.g. issue resolution) and

technologies (e.g. call centre).

Special attributes that characterize services

Intangible-dominant.

Inseparable.

Heterogeneous.

Perishable
 Intangible-dominant

Services cannot be seen, tasted or sensed in other ways

before consumption. A customer buying an office-

cleaning service cannot see the service outcome before
it has been performed Services are high in experience
and credence attributes but low on search attributes.

Search attributes are attributes that can be checked

out in advance of a purchase
 Inseparable

Unlike goods that can be manufactured in one time

and location and consumed at a later time in another
location, services are produced at the same time and

place they are consumed. Your dentist produces

service at the same time you consume it. This means
that service customers are involved in and sometimes
co-produce the service
 Heterogeneous
Unlike goods that can be robotically reproduced to
exact specifications and tolerances, services cannot.
This is particularly true of services produced by
people, because people do not always behave as
scripted or trained. A band can perform brilliantly
one weekend but ‘die’ the next
Bank are atomising the operations.
 Perishable
Services, unlike goods, cannot be held in inventory for
sale at a later time. A hotel room that is unoccupied
on Monday night cannot be added to the inventory
for

Tuesday night.
 
 Customer experience concepts
 There are a number of core concepts that are
associated with customer experience management.
These include

Touchpoints,

Moments of truth

Customer engagement.
 Touchpoints
Touchpoints are found wherever your customer comes
into virtual or concrete contact with your company’s
products, services, communications, places, people,
processes or technologies. Touch points include
websites, Facebook and other social media, service
centres,warehouses, call and contact centres, events,
exhibitions, trade shows, seminars, webinars, direct
mail, email, advertising, sales calls and retail stores.
The variety and number of customer touchpoints
varies across industry and between companies, but
with the advent of social media they are increasing.
 Touchpoints of National Australian Bank

Branch,
Email
NAB website
Social media
ATM,
Financial planner
 Internet
Banking,
Personal banker
Mobile mortgage specialist
Customer contact centre
 Touch Points of Hospital Treatment

During admission,

In the ward,

 In the theatre,

After surgery

During discharge
 Moment of Truth

MOT as any occasion the customer interacts with, or is

exposed to, any organizational output that leads to the
formation of an impression of the organization.

Moments of truth occur during customer interactions at

touch points. These are the moments when customers
form evaluative judgements, positive or negative, about
their experience
 Moment of Truth
For example,

when a customer calls a contact centre and interacts

with an IVR (interactive voice response) robot,

Receives a visit from an account executive

Enters a branch office,

.
 Moment of Truth Example

If a service technician turns up late for an appointment,

this negative moment of truth might taint the entire
experience, even though the service job was well

performed. Customers generally have expectations of

what should happen during moments of truth, and if
those expectations are underperformed, dissatisfaction
will result.
 Engagement

Engaged consumers tend to have a higher intensity of

participation in and connection to a brand or
organization. They feel a strong sense of identification,
based on their experiences of the firm’s offerings,
activities and reputation. Engaged customers are more
committed to the brand or firm than customers who
are just satisfied
 Four dimensions of customer engagement

• Cognitive

• Emotional

• Behavioural

• Social
 Four I’s of Engagement

Involvement is indicated when a customer presents at a

touchpoint.
 Interaction focuses on what the customer does at the
touchpoint.
Intimacy is the emotional sentiment of the customer
towards touchpoint experiences.
Influence focuses on the advocacy behaviours of the
customer
 Challenges of Customer Experience
The challenges to delivery of consistent customer experience is
variance between channels. What the customer experiences from
interaction with people, process and technology at a retail point-
of-sale may differ significantly from the experience at the same
company’s website

Companies generally try to configure all the company channels, for

example stores, social media and catalogues, to deliver a consistent
customer experience.

Customer experience can become stale over time, and stale

experiences are not engaging. It is therefore necessary to
constantly refresh the customer experience
 Features of CRM applications that improve customer experience
 
Usability
It refers to the ease with which a CRM application can be
navigated or used.
 Flexibility
An application’s flexibility determines how many
alternatives are available to the user at any given time.
 High performance
The performance of the CRM application should be high and
it will not slow down or become un responsive
Scalability
A system that is unable to scale will deliver inadequate
customer experience as user numbers grow
 HOW TO MANAGE CUSTOMER EXPERIENCE
Mystery shopping involves the recruitment of paid
 
shoppers to report on their customer experience. Usually
they report on their experiences of the company
sponsoring the research, but they might also compare
the sponsor’s performance with competitors
 HOW TO MANAGE CUSTOMER EXPERIENCE
Experience mapping is a process that strives to understand, chart and
 
improve what happens at customer touchpoints. Focus groups, face-
to-face interviews or telephone interviews are conducted with a
sample of customers who describe their experience at these
touchpoints. The focus is on two important questions.

What is the experience like?

How can it be improved?

The objective is to identify the gaps between actual experience and

desired experience. Then the company can begin to focus on
strategies to close the gaps. These strategies typically involve
improvements to people and processes. Outcomes might be better
training and reward schemes for people, or investment in IT to
support process improvements.
 HOW TO MANAGE CUSTOMER EXPERIENCE

Ethnographic methods can be used to gain a

 
better understanding of the socio-cultural
context of customer experience

Ethnography is a naturalistic form of

investigation that reveals customer experience as
it occurs in veryday life
 HOW TO MANAGE CUSTOMER EXPERIENCE

Participant observation.  Companies can develop

a better understanding of customer experience by

participating in the customer experience at
various touchpoints. Some companies require
their senior management to learn about customer
experience by providing front-line customer
service.
 HOW TO MANAGE CUSTOMER EXPERIENCE

Non-participant observation. Some

 
companies require their senior managers to
observe customer interactions at customer
touchpoints. This is particularly suitable
when the primary customer touchpoint is a
call centre or contact centre. Managers can
listen to customer calls to obtain a better
understanding of customer experience, but
not actually make or receive calls
 
 WHAT DISTINGUISHES CUSTOMER EXPERIENCE MANAGEMENT
FROM CUSTOMER RELATIONSHIP ANAGEMENT?
 CRM and CXM strategies may pursue the same objectives, including customer
retention, customer satisfaction and CLV. Increasingly, both CXM and CRM projects
measure customer effort or ‘pain’ as customers interact with business processes and
systems.  
 Both stress the integration of customer touchpoints, channels and communication to
provide coherence and identity. For large-scale organizations this often requires major
investment in IT infrastructure and business processes able to track individual
customers as they make their journey from prospect, to customer, through sales
service, into repeat purchase and advocate status.

 Both require customer-focused behaviours of customer-facing employees at all

touchpoints. CXM and CRM projects both consider how to motivate employees to
provide better customer experience, which in turn drives business performance

 Segmentation, targeting and creating segment-specific offers (experiences) is evident in

both CRM and CXM programmes. Not all customers want the same package of benefits
or experiences, not all customers buy and use goods and services identically, and not all
customers are equally adept at extracting value from their purchases.
 Four I’s of Engagement
The 4Is of customer engagement
Metric category Examples of measures
Involvement Unique site visitors, advertising impressions, website
page views, time spent per session, time spent per page,
in-store visits, newsletter subscriptions
Interaction First-time purchases, videos played, community
contributions, warranty registrations, loyalty card
registrations, requests for free samples, comments in
social media, click-throughs on banner ads, photos
uploaded
Intimacy Satisfaction scores, sentiment in blog and social media
posts, call centre feedback, focus group contributions

Influence Content forwarded, friends invited to join online

communities, word-ofmouth, creation of user-
generated content, invitations to join member get-
member programme, content embedded in blogs