Sunday, 2 June 2013

What's the Difference Between Customer Experience Management and Experiential Marketing?

Many people equate Customer Experience Management with Experiential Marketing.
However, in recent years, "experiential marketing" has become perceptually aligned with "marketing execution." This is because it largely focuses on developing highly visible, stimulating, interactive, and sensory-engaging environments in which products and services are showcased.
Accordingly, experiential marketing is an important component of CEM, but it isn't the whole enchilada.
The environments that experiential marketers focus on are diverse. You'll often find a large emphasis on shaping the walk-in experience of brick-and-mortar environments. This is done with the goal of creating more positive, intuitive, memorable, engaging, and pleasing environments which better engage, entertain, and support customers.

In my last post, I wrote about experiential marketing and wrote about examples on how it can be used to leverage brands credentials and forge better relationships with your customer groups.  More broadly though, it is important to look at value of using customer feedback in your organisation… we’ve all done surveys

Experiential Marketing

So what is experiential marketing? In a nutshell, experiential marketing is all about creating branded experiences for your customers… for example, Google recently released their Virtual Art Gallery projectwhich is an extremely powerful form of experiential marketing due to its interactivity, emotional appeal and from an organisational perspective, it shows the power that Google have to deliver high quality and complex projects to the community.

Customer Experience Management

So what does Customer Experience Management bring to the party??  Well, after talking with Bruce Temkin, he explained that the discipline of customer experience management is all about…
“Increasing loyalty by exceeding customers’ needs and expectations”
Bruce Temkin – Customer Experience Transformist & Managing Partner of the Temkin Group
For an organisation, this is easier said than done but there are some pro-active steps that organisations can take to map a customer’s journey throughout an organisation to help management teams use the path of the customer to optimise the supporting processes that in turn create enjoyable experience for the customer increasing satisfaction levels.
For example, British Airways and Virgin Atlantic both operate in the same market spaces and compete for the same customers but the way they approach servicing their customers is completely different.
The main differentiator between them both is the experiential factor.  The Virgin group is renowned for creating highly effective customer experiences but to help stage these experiences requires a large amount of human resource and creativity to think “how do we create a great experience for this customer segment” and “what channels shall we use to resonate with customers” and “will this extend customer loyalty and referral sales?”

Customer Experience Mapping

Mapping your customer journey is great way to understand how your customers interact with your organisation but more to the point, if you decide to segment your customers by tier, you can gain the insight on how individual customer segments like to interact with your organisation and focus your resources on higher yielding customer touch points creating value for both the organisation and customer… a win-win situation scenario.
Professor of Marketing Leonard Berry from Mays Business School explains that there are several experiential factors to look at when analysing a customer journey.  He says that when a customer interacts with an organisation
Experiential CueDefinitionExample
Tangible CuesFunctional product/serviceTangible cues refer to the actual product or service that you buy and whether or not it meets your expectations…
Intangible Cues (Mechanics)Emotional connection to organisationThis cue is felt when you admire the aesthetic quality of a product or for services, the feeling of stepping into a spacious, well lit office.
Intangible Cues (Humanics)An organisations human touchThis cue is felt when you interact with somebody who represents the organisation… was the representative polite?
To read a previous post I wrote that goes a little deeper in the Customer Experience Mapping.. please click here.

Voice of the Customer Programs

Voice of the Customer (VoC) programs allow an organisation to truly understand what the customer values and acts as a great tool for organisations to deploy to share valuable knowledge about the customer throughout the organisation in order for departments to achieve their goals..
To go more in depth, John Hauser from MIT Sloan Management School defines VoC as ..
“a hierarchical set of “customer needs” where each need (or set of needs) has an assigned priority which indicates its importance to the customer”
By prioritising the importance of the customers’ needs in this way allows an organisation to audit its processes and programmes and focus on higher yielding processes which customers love and value.
Voc programs can be used in a wide array of settings.  They can be used in the New Product Development stage, gauging brand perceptions or develop change management programs to help address organisation issues which can sometimes be out dated or mis-aligned to market perceptions.
For Example, a VoC program allows an organisation prioritise customer needs into actionable and tactical actions that management teams and departments can help achieve by focusing the right resources to achieve them.
Taking a sports leisure club as a case study, they could identify that the customer values the gym due to
  1. A strong brand association,
  2. An enhanced sense of community,
  3. Friendly and well educated staff and
  4. Cleanly and hygienic facilities.
More importantly though, a VoC program can allow an organisation to understand why their clients leave and collect feedback across multiple touch points to understand which customer touch point are effective at communicating and satisfying the customer needs and which ones are falling short when it comes to doing well at moments of truth.
With this understanding, an organisation can optimise its people, processes and technology to extend the customer lifecycle, meet the needs of their customers better to contribute to retaining more customers in the long term.

So how can experiential marketing and customer experience management work together…

By placing the programmes I have outlined in my last two posts into a hierarchy, it is easy to see that there is a benefit of having both programs running at the same time.

The Role of Customer Experience Management

A companywide initiative that focuses around the customers opinions, behaviours and needs and loops that feedback back into the organisation via analysis of an organisations customer touch points and data collection techniques…

-          Voice of the Customer Programmes

This collects feedback from the customer and places right into the centre of the organisation… however, if the organisations culture and processes does not support a customer centric focus, then the information will lead less than satisfactory results.
An organisation has to truly break out of thinking in siloes and distribute knowledge about the customer throughout the company as inevitably; every single person is accountable and has a helping hand in delivering a service/product to the end client regardless of it is directly or indirectly.

-          Customer Experience Mapping

Mapping the customers journey allows the organisation to measure the number of touch points an organisation uses to interact with their customers and can span several communication channels and address several customer tiers…
Some touch points may yield higher satisfaction rates than others and some may be failing to meet customer expectations but by applying a Customer Experience Map, you gain the insight into your organisation as your customer sees it and measure the effectiveness of each touch point.

The Role of Experiential Marketing

Experiential Marketing focuses on creating engaging customer experiences for the customer in order to leverage a brand credentials to influence a customers buying decisions and actions in order to increase the amount of leads in the marketing pipeline and potential sales an representative can close.  More importantly though, it can act as a great retention mechanism and touch point where your organisation can take the opportunity to get to know the customer at more intimate level.
By using customer experience management as a cultural and organisational philosophy, your organisation can analyse your customer buying needs and preferences and use this insight into achieving the goals and objectives that individual departments play in servicing the customer.
From a experiential marketing perspective, the marketing department can use the insight gained from VoC departments to shape and prioritise which touch points the customer group will most likely enjoy the most and deliver an experience that is in line with how the customer likes to interact, their lifestyle and understand the underlying drivers and trends that may shift in the future.

The end result?

If your organisation has a customer centric culture and internal and external perceptions of the performance of the product/service are aligned, the organisation will in the long term, achieve higher retention rate and produce a higher level of satisfied customers…
So what does this mean for your organisation?
Satisfied customers form the foundation of any successful business as a satisfied customers leads to repeat purchase, cross-sell opportunities, higher brand loyalty and the saturation of positive word of mouth.
After conducting  20,000 customer surveys across 40 countries, Coldwell 2001 identified that a highly satisfied customer…
  • Contributes 2.6 times as much revenue to a company as a somewhat satisfied customer.
  • Contributes 17 times as much revenue as a somewhat dissatisfied customer
  • A Totally Dissatisfied Customer decreases revenues at a rate equal to 1.8 times what a totally satisfied customer contributes to a business
What do you think? How does your organisation use customer experiences and experiential marketing to better serve your customers’ needs and influence positive buying behaviour?

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