Customer experience

I. Major trends and evolution

A.Digital transformation
1. Technological
In 2021 :
7.93 billions humans  57% lives in urban area = they have access to more information.
5.00 Billion are Internet users  4.65 billions use social media

In 2022 :
Population : +1%
Internet user : +4,1%
Social media user : +7,5%  not only supported by the increase of internet user, but also thanks to
pandemic

Internet users :
Online shopping weekly : 58%

2. Demographic
3. Socio-economic
Digital natives : person born in the 90s and exposed to digital technologies at a very early stage of life,
even before their teenage years ≠ Digital immigrants : the opposite

The sharing economy : partly due to the decreasing faith in the business world. Supposed to be more eco-
friendly behavior. ex : Blablacar  share car + environmental sustainable

B.Consumer empowerment
1. Competency
Companies can create competitive advantage through the transformation of consumer skills into
innovation
Ex : Starbucks : competition of the best cup by consumers.

2. Recreation
Ability of consumers to use the actual brand or company product and/or service to create new items
Ex : utiliser le sac de fruit comme un sac fashion

3. Consciousness
Consumers are now more aware of :
- Prices, persuasion strategies, brands, symbols and logos
- Their rights (consciousness of prejudicial contractual terms, biased offline and online business
practices, warranty rights)
- How to complain and what are the different strategies to attain brand in case of service failure.

4. Resistance
The ability of today’s consumer to resist marketplace solicitations and pressure from salesperson and
advertising
C. Key role of emotions
Emotional branding : the commitment of consumers in a profound, long term, intimately emotional
connection with the brand that is beyond the advantage based on satisfaction

II. What is customer experience

A.Origins of the “experience concept”
CX respond to 2 challenges :
- Changing behavior of customers
- Beyond functional benefit  Emotional expectations and symbolic needs

3 approaches :
 Philosophical approach : an X is an event induced by a stimulus. Therefore, an X is not self-
produced : it is the result of a link between an individual and his/her environment. It produces
knowledge and know-how.
Batat (2019) highlights 3 forms of X in philosophy :
o Immediate X : considered as a misleading because it can give a distort perception of reality.
The immediate X doesn’t necessary produce knowledge because of this source of errors.
o Experimentation : test hypotheses  necessary for validation of hypotheses in a given field.
o Lived experience : “it results from the sum of our theorical knowledge, the accumulation of
experience, and the conversion of knowledge accumulated into practice”, Batat.

 Anthropological approach : the definition of X refers more to the cultural aspects and especially
symbols and meanings. For Batat, a culture is a symbolic system within an environment.

 Sociological approach
 III. From “experience” to “customer experience”
Lemon & Verhoef : “Customer experience is a multidimensional construct focusing on a customer’s
cognitive, emotional, behavioral, sensorial, and social responses to a firm’s offerings during the customer’s
entire purchase journey”

Caru & Cova : the customer is a “personal experience – often emotionally charged – based on the
interaction with stimuli such as products or services made available by the consumption system … A
subjective episode in the construction/transformation of the individual, with however an emphasis on the
emotional and sensitive dimension to the detriment of the cognitive dimension.”

IV. A framework for conceptualizing customer

experience
A.The customer journey
1. Overview of the Customer Journey

 Prepurchase stage : all direct and indirect customer interactions with the brand before the
purchase. It starts with the “need/goal/impulse recognition to consideration of satisfying that
need/goal/impulse with a purchase” including the search stage. (Lemon & Verhoef)
 Purchase stage : all customers interactions with the brand during the purchase. It includes
behaviors such as choice, ordering, and payment. It is considered as the most “temporally
compressed” of the 3 stages.
 Postpurchase stage : it includes the use/consumption of the product/service, and service requests.
It is a important phase where the customer will evaluate his/her shopping experience. Based on this
evaluation, he/she will engage or not with the brand, become loyal or nor, use negative or positive
WOM.

2. Types of touchpoints
 Brand-owned touchpoints : They include all brand-owned media (e.g., advertising, websites, loyalty
programs) and any brand-controlled elements of the marketing mix (e.g., attributes of product,
packaging, service, price, sales force).
 Partner-owned touchpoints : These touchpoints are jointly designed, controlled and managed by the
firm and its partner(s). The partners could be multivendor partners (e.g., Amazon) and multichannel
distributors partners (e.g. Galeries Lafayette).
 Customer-owned touchpoints : The company, its partners or others do not influence or control these
actions. These actions may include customers reflecting on their needs and desires and the
transformation of a company product into a use not intended by the firm.
 Social/external touchpoints : These touchpoints are all external people that may influence the
customer experience. It may concern the advices of customers (e.g. Comments on TripAdvisor) or peer
influences, independent information sources (ex post de Kylie Jenner), etc. Sometimes influencers may
be independent and sometimes they are in line with firm expectations.

3. McKinsey purchasing funnel

B.The construction of personas

1. What is a persona ?
A persona is « a semi-fictional representation of your ideal customer based on market research and real
data about your existing customers”

2. Why using personas ?

Buyer Personas allow companies :
- To have a clear idea of their different customers through characters (to make alive their segments)
- Easily adapt, personalize, communicate with each segment (e.g. messages)
- Mapping the different customer journeys by segments

V. Experiential marketing mix

A.Experiential Marketing Mix : 4Ps  7Ps  7Es
4Ps 7Ps 7Es
- Product - Product - Experiential branding
- Price - Price - Exchange
- Place - Place - Extension
- Promotion - Promotion - Emphasis
- People - Emic/etic process
- Process - Emotional touchpoints
- Physical evidence - Empathy capital
 B.Experiential branding
Stage a memorable and personal performance that appeals to the sensations of your guest. A brand that
lives this mantra : Disney.

1. The 4 realms of experience :

2. Types of experience :
- Entertainment : reading a book, watching television
- Educational : taking a guided tour of a museum, attending a lecture
- Esthetic : watching an opera, attending an exhibition
- Escapist : acting in a play, playing in an orchestra, skydiving

3. How to create great customer experiences :

- Theme the experience
- Mix in memorabilia
- Harmonize experience with positive cues / Eliminate negative cues
- Consistency
- Engage all five senses

4. Creating a consistent brand identity

- Focus on broad level brand values or benefits
- Multiple experiential elements and multiple businesses to complement each other towards the
same goal :
o Airbnb : from vacation rentals to other touristic experiences
o Uber : from transporting people to delivering food : Uber eats
o BlaBlaCar : from carpooling to intercity buses : BlaBlaBus

5. Overview of our senses :

- Vision : complex and well-developed ; Colors are often associated with brands and their meanings
vary by culture
- Smell : primitive and strong ; Induces physiological reactions (ex : hunger)
- Touch : endowment effect ; Modern user interfaces are centered around touch
 - Sound : affects moods and productivity ; Language inculcates socio-cultural characteristics in
individuals
- Taste : hard to exploit in design ; strongly affected by the other senses

6. Experience territory matrix

- Factors that influence consumer’s

perception of respect : attention and
valuing, understanding and responsibility

- Consumer-centricity : obsessively asking

how does this affect my consumer ?

C. Exchange
1. Exchange in marketing
What is the function of marketing ? Philip Kotler : Exploring, creating, delivering value to satisfy the needs
of a target market at a profit
 offering value to customers to capture value in return
 marketing is about value exchange

Price : the traditional mechanism for capturing value

2. Going beyond price

- Instead of setting a fixed price for all, le consumers realize or identify their idiosyncratic value of
the experience
- Principle of reciprocity : make people feel obliged to pay and/or to leave a good review
- A much higher rate of positive word of mouth for such tours
 3. A typology of co-creation processes

4. Limitations of the co-creation process

- Many industries are not compatible with the co-creation practices
- Consumers may end up creating products that only cater to a niche market
- Co-creation with consumer usually results in incremental innovations only :
o Lack of disruptive innovation
o Only caters to expressed needs, not latent needs
- Risk of theft of intellectual property, litigations regarding copyright, manipulation by competitors

5. To sum up
 D.Emotional touchpoints
1. Emotions and affect
Emotions: One of the strongest driver of consumer behavior. Most decisions are driven by intuition, not
reason “How-do-I-feel-about-it” heuristic: Affect as a source of information

Emotional touchpoints primarily focus on the emotional impact of the moments where customers interact
with different services and people.
Past experiences with a brand determine our future expectations about brand interactions
A well-known phenomenon in psychology: Affective (mis)-forcasting
- Our tendency to overestimate the effect of present decisions on our future emotional state
 Result: A single bad brand experience can lead to disproportionately high negative effect in future
- Similarly, good brand experiences compound to create strong brand goodwill for future.

2. Emotions classification

- Emotional valence : Positive, Negative, Neutral

- Emotional intensity: High, Low
- Ideal brand association: Intense-pleasant (then
follow the arrow)

E. Empathy capital
1. What is empathy ?
 2. McLaren’s empathy model

3. Components of emphatic customer experience

- Emotional–empathic experience
- Cognitive–empathic experience
- Motivational–empathic experience
Taken together, empathy converts an antagonistic relationship into an agreeable one!

VI. The future challenges and the ethical and societal

issues related to customer experience
A.Phygital customer experience
1. Definition of phygital
 2. From stores to omnichannel strategy

3. From physical to digital

- Mobile payment
- Click & collect and e-booking
- Range extension (article non available on site or out of order)
- Augmented reality to increase the physicla experience

4. From digital to physical

- Finalize the purchasing
- Return and exchange management
- Human contact and advice for complex or technical products/services (insurance, bank…)

B.Storyliving ; the future of customer experience

1. Definition of storyliving
- Brands telling a story in order to communicate
- Combines story and action through lived experiences in order to place the customer at the heart of
the story of the brand.
2. Seven steps of storyliving

3. 5 main strategies of storyliving

 C. Ethical and societal issues : what is morally right or
wrong ?
1. What makes things right or wrong ?
The philosophy of morality is not so much about which actions are right and which ones are wrong, as it is
about what makes actions right or wrong. The central question of moral philosophy is “where does
morality come from?”
- Culture : Some people probably believe that morality comes from culture, that whatever is
commonly accepted in their culture is right, and whatever is commonly forbidden is wrong.
- Religion : Some people believe that actions that are permitted by their religion are good, and those
that are forbidden by their religion are bad.
- Feelings : A lot of people think that morality comes from inside themselves. They could claim that
they have certain emotional reactions to actions, and those feelings determine what is right or
wrong.
- Pain and pleasure : This is a simple system for determining what is right or wrong = to consider only
the pain or pleasure that actions produce. Actions that produce pain are wrong, and actions that
produce pleasure are right.
- Interests : Everyone has interests—things they care about—and it would be reasonable for
someone to say that they should only have to be concerned with the things that they care about,
and that benefit them.
- Relationships : The most important thing to some people is their relationships with others and the
bonds of care between them. For them, good actions are ones that promote and sustain those
relationships, and bad actions are ones that damage them.
- Rationality : Someone could say that morality comes from rationality, so whatever is rational is
right, and whatever is irrational is wrong.
- Rights : People can consider that everyone has certain basic, natural rights, and upholding those
rights is good, while violating them is bad.
- Character : You might believe that what makes an action right or wrong has to do with the person
who does it. Maybe you believe that good people do good things, bad people do bad things, and it’s
the character of the person doing the action that makes it right or wrong.
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