1. Customer Experience Management
Prof. Dr. Haluk Köksal
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2. Learning Objectives
Discuss the progression of economic value and experience economy
Develop an understanding of customer experience
Evaluate the influence of customer experience on company objectives
Assess the customer experience management framework
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3. Progression of Economic Value
The term experience economy was first used in an article by Pine II and Gilmore  (1998) describing the experience economy as the next economy following the agrarian economy, the industrial economy and the most recent service economy.
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4. Progression of Economic Value
Companies observed that differentiating themselves in terms of innovative products, low prices and better services was no longer enough.
Consumer experience was introduced as a new form of economic offering to provide a competitive advantage for companies.
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5. Definition of Customer Experience
Holbrook and Hirschman (1980) introduced the experiential perspective to consumer behaviour and marketing.
This represents a shift away from a cognitive perspective towards a more holistic perspective that considers both rational and emotional aspects of consumer behaviour.
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6. Definition of Customer Experience
An experience occurs when a company intentionally uses services as the stage and goods as props, to engage individual customers in a way that creates a memorable event (Pine & Gilmore, 1999).
Customer experience is a multidimensional concept focusing on a customer’s cognitive, emotional, behavioural, sensorial, and social responses to a company’s offering during the customer’s entire purchase journey (Lemon &Verhoef, 2016).
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7. Drivers of Customer Experience
From company perspective:
Change in customer demand
Dynamic competition
Agility in business models
Increase in the bargaining power of customers
Blurred boundaries in services
From customer perspective:
Globalization
Increased customer awareness
Need for customized services
Existence of diverse alternatives
Increased purchasing power
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8. Characteristics of Customer Experience
Strongly emotional: Emotional experience is the heart of the customer experience.
Subjective in nature: Constructing an experience depends on the each customer’s competencies, knowledge and skills.
Engaging: Engaging all customer senses on a personal level.
Customer-centred: Deliberately designed by the provider and focusing around the customer and performing physical and social interactions.
Inherently unique and extraordinary: It should be innovative and stand out from the ordinary.
Memorable and remembered: Successful commercial experiences always leave memories in the mind of customers.
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9. Dimensions of Customer Experience
The five dimensions of a customer’s experience are: • Sensorial: aims to involve customers through the five senses: sight, hearing, touch, smell, and taste. The sensorial dimension creates the perfect environment to give the customer a memorable experience (i.e. Illy Caffe' campaign). • Affect: aims to stimulate any sort of emotions at any intensity. Most of the time these emotions flow while using the product or even before (i.e. Louis Vuitton campaign , different travel experiences). • Cognition: aims to arouse customers' creativity and imagination towards the product (Apple campaign – think different). • Action: involves the physical aspect, behaviours and lifestyles of the customer in relation to the product (i.e. Nike campaign – be active). • Relation: connects the customer with other people and cultures. The relation incorporates all other experience forms.
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10. Stages in Customer Experience
A main assumption is that the customer experience is a part of a
customer’s ongoing life, not in terms of a single episode. Customer
experience can be divided into four major stages:
• The pre-purchase experience: It involves searching for, planning, day-dreaming about, foreseeing or imagining the experience.
The purchase experience: It derives from choice, payment, packaging, the encounter with the service and the environment.
The core consumption experience: It includes the sensation, the satiety, the satisfaction/dissatisfaction, the irritation/flow, the transformation.
The remembered or nostalgia experience: It activates photographs to re-live a past experience, which is based on accounts of stories and discussions with friends about the past, and which moves towards the classification of memories.
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11. Outcomes
Customer experiences are expected to lead to several outcomes The most notable are:
Customer satisfaction
Customer loyalty
Customer word of mouth behaviour (Mbama &Ezepue, 2018; Lemon &Verhoef, 2016; Homburg, Jozic & Kuehnl, 2015).
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12. PODCAST: WHY THE CX MATTERS. HTTP://WWW. MCKINSEY
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13. Customer Experience Management
“It is the cultural mindsets toward customer experiences, strategic directions for designing customer experiences, and firm capabilities for continually renewing customer experiences with the goals of achieving and sustaining long-term customer loyalty” (Homburg et al., 2016).
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14. The Customer Experience Management Framework
Design and Implementation Process
Managerial Process
Customer Experience Understanding
1.1 Define the segment
1.2 Define customer needs and requirements of the journey
1. Customer Experience Strategy
Customer Experience Design
2.1 Define the macro journey
2.2 Define the micro journeys or steps including; customer perspective, enterprise perspective and support requirements
2.3 Define the moments of truth
2.4 Map the positive experience, versus negative experience outcomes or service failures as well as the detection mechanisms
2. Leadership
3. Customer Experience Culture
Customer Experience Measurement
3.1 Define internal (process) measurements
3.2 Define external (customer) measurements
3.3 Implement escalation mechanisms
Customer Experience
Improvement
4.1 Identify gaps in experience design versus current organisational capability
4.2 Differentiate between new enterprise actions, or existing actions and prioritise improvement initiatives
4.3 Establish working groups
4. Customer Experience Ready- Organizational Design
5. Customer Experience Ready- Systems, Processes and Technology 1 2 3 4
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15. Moments of truth
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16. Summary In this class, we have covered:
Progression of economic value and experience economy
Definition of customer experience
Drivers, characteristics and dimensions of customer experience
Stages in customer experience
Outcomes of customer experience
Customer experience management framework
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17. References
Bolton, R. N., Gustafsson, A., McColl-Kennedy, J. R., Sirianni, N. J. & Tse, D. K. (2014). Small details that make big differences: A radical approach to consumption experience as a firm's differentiating strategy. Journal of Service Management, 25(2):
Homburg, C., Jozić, D. & Kuehnl, C. (2017). Customer experience management: toward implementing an evolving marketing concept. Journal of the Academy of Marketing Science, 45(3):
Kranzbuhler, A-M., Kleijnen, M. H. P., Morgan, R. E. & Teerling, M. (2017). The multilevel nature of customer experience research: An integrative review and research agenda. International Journal of Management Review, 20(2):1-24.
Lemon, K. N. &Verhoef, P. C. (2016). Understanding customer experience throughout the customer journey. Journal of Marketing, 80(6):
Mbama, C. I. & Ezepue, P. O. (2018). Digital banking customer experience and bank financial performance. International Journal of Bank Marketing, 36 (2):
Schmitt, B. H. (2003). Customer Experience Management. John Wiley & Sons Inc., New Jersey.
Voorhees, C. M., Fombelle, P. W., Gregoire, Y., Bone, S., Gustafsson, A., Sousa, R. & Walkowiak, T. (2017). Service encounters, experiences and the customer journey:
Defining the field and a call to expand our lens. Journal of Business Research, 79(C):
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18. Thank you
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19. Application Topic: Customer Experience Management
Course: 1st Year, Consumer Behaviour Session 6/10 Class size: 30 students

20. Session Plan Introduction Activity 1 Activity 2 Summary
Lesson overview
Background
Definition
Theory
Examples
With your group members choose a retail shopping example and discuss good and bad customer experiences you have faced.
How did you feel?
What would be the consequences of those good or bad experiences for the company?
Each group will present their answers to the rest of the class.
Case study: “Tesco’s bid to become a consumer-centric business”
This will be solved by the lecturer with the class members’ participation.
Key points
Further exploration
15 minutes
30 minutes
Remembering previous topics and understanding the new concept
Questioning, critical thinking, teamwork, written and oral presentation skills
Questioning, critical thinking, problem solving and decision making skills

21. Moment of Truth
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