Institutul de Marketing

How to differentiate through

Customer Experience?

May 20th 2016

Why focus on Customer Experience? • 84% of organizations think that their market is comoditizing and 76%

think that this is affecting their profitability;

• When everything is equal, people buy on price; “ the emerging

experience economy”;

• 47% of companies think of them as product oriented;

• 60-70% average probability of selling to an existing customer; 5-20%,

probability of selling to a new prospect; On average, loyal customers

are worth up to 10 times as much as their first purchase;

• It takes 12 positive experiences to make up for one unresolved negative

experience;

• 78% of consumers have bailed on a transaction or not made an

intended purchase because of a poor service experience;

• Just 1% of customers feel that companies focus on their emotional

needs.

TOOL: Consumption Chain Analysis* Map the consumption chain and the entire

experience with a product!

Rita Mc Grath, Ian Mac Millan

Awareness of the need

Search. Selection

Order and Purchase.

Payment. Delivery. Financing

First experience

Repeated experiences with the product/service

Repeat purchase

• What?

• Where?

• Who?

• When?

• How?

+ CONTEXT

AWARENESS. How do people

become aware of your product?

Are consumers aware that you can satisfy their need? Are they even aware

of the need?

Oral B patenting the blue dye to tell the customers when the toothbrush

should be replaced. Only Oral B patented the process!

The Coffee Shop where you pay by the time spent ( PR )

Priceline.com, "Name-Your-Own-Price" (NYOP), reverse auctioning,

consumers set the price.

SEARCH. How do consumers find

your offering?

Differentiate by designing a new search and selection experience!

Google – the first different by focusing on user experience, search behavior,

search intent and moments of truth ( ZMOT- zero moment of truth)*

E.g..: Herbal Essences making search easier.

Provide guidance, useful content, educational material.

SELECTION. How do consumers

make their final selection? • Can you make the process more simple and less irritating?

• Minimize consumers information sources;

• Making it easier to evaluate options: De Beers’’s 4 C; Carmax, Auto

Nation;

• Personalization of the customer journey: Amazon;

• Transparent referrals, including decision criteria; JC Penney: using

haul video in their ad strategy; transparency; Disney , World Moms

Panel.

ORDER, PURCHASE. How do

consumer order and purchase your

product/service?

Making the process easier, more

pleasant or memorable :

offline ( waiting time in store,

complicated procedures) ,

online ( easy to fill in forms,

additional help, phone );

Amazon, the first to use and

patent one click order;

Creating ease if use and also

customer soft lock in: easy

reorder, extra benefits ( costs

control, invoice, time saved),

American Hospital Supply.

DELIVERY. What happens when your

product/service is delivered?

Design better experience

through innovations in the

value chain, partnerships.

PC Connection – “next day”

delivery – distribution

facilities and warehouses

located near Airborne

Express.

Ebay and Argos click and

collect.

Amazon lockers.

DELIVERY. What happens when your

product/service is delivered?

PAYMENT. FINANCING, RECEIPT.

• Quick or innovative

Payment solutions: RFID;

mobile payment;

• Promoting installments via

fixed amount;

• Progressive insurance:

giving clients quotes from

its competitor; mobile vans

to settle the claims.

INSTALATION. How is the product

installed?

E.g.: Chicco, the easiest infant seat to install;

STORAGE. TRANSPORTATION?

How is the product stored? Moved

around.

Often overlooked and cost effective

ways to differentiate;

BOC gases built gas plants near

clients' to overcome the problem of

storage and keeping competition

away;

Pills storage and dispensers offered

as a bonus.

USE. How is the product used?

What support might customers need when they use the

product? What might happen and how can we help? How

could brands reduce stress and anxiety related to product

use?

SERVICE. What help do consumers

need when using the product?

DISPOSAL. What happens when

your product is disposed of or no

longer used?

CE initiative should be strategic

Cost leader Self –service optimization that delivers

simple and efficient experiences

Differentiator ( offers consistently

innovative products and services)

Proactive guidance that educates

customers as they adopt breakthrough

products and services

Segmentor ( offers products and services

that fit a narrowly targeted market

segment)

Tailored intimacy that creates deep

connections with customers through

personalized interactions

Source: Forrester Research

CE strategy means delivering the brand promise and suitable to corporate

strategy and value chain. Support from the top is a must!

Differentiation trough Customer

Experience is only possible if…

1.Planning is indeed customer – centric and no other way

(fragmented, siloed), 7 Ps, not just 4 Ps or 1P (promotion);

delivered promise; values lived and shared through

culture;

2.Continuous focus on consumption chain, customer

journey, ‘moments of truths’ and’’ triggers’’ along the way

and brand management extends before the

design/production of goods/services and after (feedback,

loyalty);

3.Initiatives are strategic, not just tactic. Suport from the top.

Management buy in.

Further reading

• Customer Experience 3.0: High-Profit Strategies in the Age of Techno

Service, John A. Goodman, 2014

• The Customer Experience Edge, Reza Soudagar , Vinay Iyer , Volker

Hildebrand, 2012

• Discovering New Points of Differentiation, Harvard Business Review,

Ian MacMillan, Rita McGrath, 1997