Designing Your Customer Engagement Strategy by Laura Patterson * [42]

How would your customers categorize their experience with your firm? A Forrester Research study that shared the findings from interviews with more than 4,600 U.S. consumers about their interactions with 133 companies across a variety of industries revealed that ONLY 13 firms received “excellent” ratings, while 45 were rated either “poor” or “very poor.” Clearly the results suggest improving customer experience and customer engagement will drive better business results.

Defining Customer Experience

Forrester categorizes the customer experience as the sum of three elements: meeting needs, being easy to work with, and providing customer enjoyment. The more complex your internal processes and the more interconnected technologies you have, the greater the opportunity to negatively impact the experience. Companies who are too internally focused, struggle the most with improving customer experience. To affect customer experience and engage customers you need to be a customer-centric organization. Customer-centric organizations evaluate processes, technologies, personnel, and decisions in terms of the impact on their customers and recognize that customer experience and engagement can be a valuable differentiator in the market.

How do your touch points impact your customer’s experience?

Earn High Marks

Companies who achieve high marks for customer experience generally have invested in cross-channel alignment, established customer-centric metrics, and have a customer-centric culture. These organizations recognized that a positive experience is the responsibility of everyone in the organization. The organizations objectives, strategies and metrics are aligned in order to facilitate the customer experience.

Customer-centric companies have mapped all the customer touch points and are committed to improving touch point effectiveness. Studies suggest that few companies are good at mapping their customer touch points. Mapping customer experience across all touch points has a tangible impact on the ability to engage with customers. Companies who have mapped the customer touch point process feel this approach has positively affected the success of their customer engagement strategy. Mapping customer touch points is something any company can initiate.  Improve your touch point effectiveness with our Touch Point Effectiveness Workshop.

Four Key Elements to Delivering the Ideal Customer Experience

When it comes to metrics, customer-centric companies monitor customer metrics such as engagement, loyalty, retention, growth, and on-boarding for new customers.  Research suggests that the ideal experience fulfills four key elements:

1. Convenience: An enterprise needs to deliver on ease of contact, short wait times, through any channel the customer prefers
2. Competence: Humans or self-service tools need to have fingertip access to all necessary information and be consistent across all channels
3. Personalization: Companies and their web sites must recognize and remember the customer, and use existing information about them appropriately
4. Proactivity: A company must proactively reach out whether by phone, text message, or other channels. The topics range from a simple follow-up to informing the consumer about relevant products and services (while still respecting the need for permission and being mindful of customer preferences).

While improving customer experience and engagement won’t cure all the problems your company is facing, it is a pivotal opportunity. Customers are becoming increasingly intolerant of poor customer service. Customer engagement is seen as being about creating relationships which result in value both for customers and for organizations. Research by E-Consulting and Cscape found that a customer engagement strategy increases long-term customer value and the value delivered to customers.

Develop Your Strategy

After you take a look at your current capabilities and map your customer touch points, you can begin to develop a strategy that will enable you to create the ideal experience and improve engagement with customers. To deliver an ideal customer experience, it is important to have a well thought out customer experience and engagement strategy. To be successful the strategy will need to address customer interaction in all its forms (web, phone, etc.), personnel skills, infrastructure to support customer-centric processes and data collection, business process, and customer-service and engagement data.

* Laura Patterson is a marketing practitioner, consultant, writer, and speaker. Contact her at  laurap@visionedgemarketing.com. Also, check out Laura's other articles [22 & 38] on the Customer Value in the Now Economy blog.

Global Customer Satisfaction and Experience Management [25] *

Customer satisfaction (CS) is a key performance measure for global marketers. Recently, there has been a shift to applying newer digital metrics. Others contend that customer delight may be a more relevant construct than customer satisfaction. How has customer satisfaction measurement changed in the past few years? Does it differ by country and industry sector?

Many marketers believe that customer satisfaction is the one customer value metric that matters the most.  A large research study (70,000 customers, 1,068 managers, and 97 countries) revealed that managerial perceptions of CS is not aligned with customer perceptions. Managers overstated CS and loyalty rates and underestimated the impact of customer complaints on future loyalty (Hult, et al., 2016).  The University of Michigan’s American Customer Satisfaction Index (ACSI) has found a strong correlation between CS and firm’s financial performance. Customer satisfaction analysis can predict and improve financial outcomes such as sales growth, gross margin, operating cash flow, market share, and shareholder return (Mittal & Frennea, 2010). 

Customer Satisfaction and Experience Management Applications

HappyOrNot is a Finnish company and innovator in customer satisfaction research. Their experience shows that if product/service assessment is made easy, people will readily provide feedback without the need for consumer incentives. Their core research tool is a terminal with four large buttons -- dark green/smiley (very happy), light green/less smiley (happy), light red/frowny (unhappy) and dark red (very unhappy) – accompanied with a sign asking customers to rate today’s experience by pushing one of the buttons. This simple premise has been used effectively by their global clients. This includes: a European gas station chain which measured managers’ overall performance; a Swedish sofa retailer for understanding why sales varied greatly throughout the day; medical facilities that evaluated doctors’ care and treatment; and the San Francisco 49ers football team to monitor the NFL game-day fan experience. In the latter application, more than 20,000 responses were recorded during the first game of the season via 60 devices – this was equivalent to the total feedback the team received for the entire previous season. The HappyOrNot devices track responses instantaneously to provide data-based, real-time feedback to organizations (Owens, 2018).      

The Temkin Experience Ratings (headed by Bruce Temkin, formerly of Forrester) ranks 331 companies in 20 industries based on feedback from 10,000 U.S. consumers. Three dimensions of customer experience are evaluated -- success, effort, and emotion. For example, in 2017, the wireless industry tied for 16^th place with a 65.5% customer experience rating which is up 7.5% from 2011. While AT&T matched the industry average (66%), they did increase their customer experience rating an impressive 10% from 2016 showing a strong commitment to improving customer service. (Their overall rank in the study was number 224). The top wireless carrier was US Cellular at 71%, ranked number 137, overall (Temkin Group, 2017).            

Customer Experience Impacts Business Performance

While under-performing firms may survive in the short term, they will not last long-term unless they change their ways and become truly value creating for customers. Two global billion-dollar companies clearly illustrate this point. A transaction-based company learned that customers with the best experiences spend 140% more than those with the poorest experiences. The second firm was subscription-based; they found that customers with the best experiences had a 74% likelihood of renewing for another year versus 43% of those with the worst experiences. Furthermore, those with the highest customer experience scores were likely to remain members for six more years (Demere, 2017).

METHODOLOGY

The “State of Marketing – Fifth Edition” provides insights and trends on customer satisfaction and related metrics from 4,100 marketing leaders in 17 countries in 13 business sectors (Salesforce Research, 2018). This report identifies the top 13 marketing metrics used by global companies and contrasts high- performing from under-performing organizations. Four metrics – revenue growth (74%), sales effectiveness (64%), web traffic analytics (61%), and customer satisfaction (60%) were used by 60% or more of the respondents. Nine other popular metrics – customer retention, customer acquisition rates, qualified leads, digital engagement, social analytics, customer referrals, customer acquisition cost, mobile analytics, and customer lifetime value – were used by 43-59% of the global marketing organizations.

Research Questions

RQ1. The usage of customer satisfaction as a marketing metric varies by country

RQ2. The usage of customer satisfaction as a marketing metric varies by business sector

RQ3. High-performing organizations are more likely to track customer satisfaction than low- performing organizations.

RQ4. The use of customer satisfaction as a performance measure has declined as global organizations are prioritizing new marketing metrics.

RESULTS AND DISCUSSION                                                                                                           

The following findings are based on the “State of Marketing” report. Customer satisfaction was rated as a top 5 marketing metric in 11 countries - Australia, Belgium, Canada, France, Ireland, Mexico, Netherlands, New Zealand, Singapore, The Nordics, and the United Kingdom. Surprisingly, it was not ranked as a top 5 metric in 6 major countries - Brazil, Germany, Hong Kong, India, Japan, and the United States (see Table 1). Hence, RQ1 was supported.

Customer satisfaction was rated as a top 5 marketing metric in 9 business sectors – communications, financial services, healthcare, hospitality, life sciences, manufacturing, media, transportation, and travel. It was not ranked as a top 5 metric in automotive, professional services, retail and consumer services, and various business sectors (see Table 2). Hence, RQ2 was supported.

High-performing organizations were 1.4 times more likely to track customer satisfaction than under-performing organizations (RQ3 was supported). The use of customer satisfaction has declined as global organizations are prioritizing new marketing metrics. Overall, CS has slipped from the number 1 marketing metric in 2016 to the number 4 marketing metric in 2018 by global companies (RQ4 was supported).

CONCLUSIONS AND IMPLICATIONS FOR THEORY AND PRACTICE

Undoubtedly, customer satisfaction is a key metric for global marketing. New digital metrics (e.g., customer acquisition and retention, mobile analytics, social engagement, and web traffic) have grown in importance in recent years. As a result, CS now shares the marketing dashboard with other insightful performance measures. Nonetheless, the effective use of customer satisfaction tracking is a strong differentiator for how high performing companies outpace their rivals.  Since customer satisfaction usage varies by country and business sector, specialized multi-country, multi-market studies represent a useful stream of inquiry. Marketing scholars may emulate the research approach used by John L. Graham and his team as they studied international sales negotiations in many countries for more than two decades (e.g., Campbell, Graham, Jolbert, and Meissner, 1988).

In addition, customer delight is related to customer satisfaction and has received much attention in the marketing literature. Barnes & Krallman (2019) advocate that customer delight is a distinct marketing construct – i.e., “an emotional state where customer expectations are exceeded.” Others believe that customer delight is an extreme form of customer satisfaction (i.e., highly satisfied) or a customer-centric business philosophy (marketing strategy). It is recommended that this variable be incorporated into future studies.

Art Weinstein, Ph.D., is a Professor of Marketing at Nova Southeastern University. His research interests are customer value, market segmentation and entrepreneurial marketing strategies. He may be reached at art@nova.edu 

* This material was presented at the Academy of Marketing Science, Annual Conference (virtual), December 14, 2020. 

Key References

Barnes, D.C. and Krallman, A. (2019), “Customer Delight: A Review and Agenda for Research,” Journal of Marketing Theory and Practice, 27 (2), 174-195.

Campbell, N.C.G., Graham, J.L, Jolbert, A. and Meissner, H.G. (1988), “Marketing Negotiations in France, Germany, the United Kingdom, and the United States,” Journal of Marketing, 52 (2), 49-62.

Demere, N.E. (2017), There’s a Correlation between CX and Revenue – and Here’s the Data to Back it Up”, Medium.com (January 25).

Hult, T., et al. (2016), “Do Managers Know What Their Customers Think and Why?” Journal of the Academy of Marketing Science, 45 (1), 1-18.

Mittal,V. and Frennea, C. (2010), Customer Satisfaction: A Strategic Review and Guidelines for Managers, Cambridge, MA: Marketing Science Institute, msi.org/.

Owens, D. (2018), Customer Satisfaction at the Push of a Button,” New Yorker (February 5).

Salesforce Research (2018), State of Marketing – Insights and Trends from over 4,100 Marketing Leaders Worldwide, Fifth Edition.

Temkin Group (2017), Temkin Ranking, Temkin Group Q1 2017 Consumer Benchmark Study, temkingroup.com/.

Table 1.  Customer Satisfaction as a Marketing Metric – A Global Perspective *

Countries	Respondents/ Percent of Sample	Customer Satisfaction Rating   in Top 5 Metrics
Belgium	150 / 3.7 %	1st
Singapore	150 / 3.7 %	2nd
France, Mexico, Netherlands	800/ 19.5%	3rd
The Nordics, United Kingdom/ Ireland	450/ 11.0%	4th
Australia/New Zealand, Canada	600/ 14.6%	5th
Brazil, Germany, Hong Kong, India , Japan, United States	1,950/ 47.6%	Not ranked in top 5
17 countries	4,100/ 100%	Varies

*Adapted from State of Marketing 2018

Table 2. Customer Satisfaction as a Marketing Metric by Global Business Sector *

Business Sector	Respondents/ Percent of Sample	Customer Satisfaction Rating   in Top 5 Metrics
Healthcare, Life Sciences	320/   7.8 %	2nd
Financial Services, Hospitality, Transportation, Travel	838/ 20.4%	3rd
Communications, Media, Manufacturing	674/ 16.4%	5th
Automotive, Professional Services, Retail and Consumer Services, Other	2,268 /55.3%	Not ranked in top 5
Various Business Sectors	4,100/ 100%	Varies

*Adapted from State of Marketing 2018

 

Experiential Retailing - Can It Help Offline Stores? by John Gironda * [16]

                         Image source: Tim Nichols (2014) – “Experiential Marketing on The High Street” (ExactDrive™).

 

The growth of online shopping has led many traditional brick-and-mortar retailers to create and emphasize unique in-store shopping activities and experiences as a way to compete with online retailers. This is known as experiential retailing, and the idea behind this trend is that the one thing online retailers can’t offer is the in-store experience. Therefore, if offline stores can develop truly interesting, entertaining, and/or one-of-a-kind shopping activities/experiences, that would be one way to effectively compete.

There are a number of examples of companies engaging in experiential retailing. For instance, Bass Pro Shops Outdoor World superstores feature a number of attractions that make each store a unique destination, such as indoor waterfalls, gigantic aquariums, archery ranges, and ponds with fish native to the store’s area. In addition, the stores hold a number of demonstrations and workshops that teach customers a variety of skills related to outdoor activities, including camping, hiking, fishing, and water safety. Another outdoor recreation company, REI offers climbing walls at some of its stores, for patrons to try out and practice their rock climbing skills. In addition, Dick’s Sporting Goods offers a golf simulator for shoppers to try out any of their golf clubs on a number of virtual holes before purchasing them. On the simulator, the customer hits an actual golf ball and then a large projection screen shows the flight of the ball through the air, as well as where it lands. In addition to displaying this, the simulator also provides a number of useful metrics, such as ball distance, speed, launch angle, and spin, to further help customers decide if the club they’re using is the right one for them. 

Sporting goods and outdoor oriented stores aren’t the only ones engaging in experiential retailing. Many other brick-and-mortar retailers are starting to use technology to create a personalized shopping experience for customers. For example, many companies such as Target offer mobile apps that allow shoppers to see if an item is available at a particular store, and if so tell them the exact location of that item within that store. In addition, other retailers including Timberland, are beginning to employ the use of augmented reality systems in their offline stores, to allow customers to virtually try on clothing and accessories, as well as instantly mix and match various combinations of shirts, pants, shoes, etc. www.youtube.com/watch?v=5TZmQPdhpak.  Neiman Marcus has also developed the “Memory Mirror” shopping assistant, which allows shoppers trying on various items to view them on a large video screen from any angle, as well as instantly change an items color, or see the way different outfits look in side-by-side comparisons: www.youtube.com/watch?v=B97k394jetk. 

Since many of these retailers’ items can be purchased online, companies are hoping that by offering these extra experiences, it will encourage consumers to go and shop at their physical stores. Obviously online shopping is here to stay and will most likely continue to keep growing well into the future. However, experiential retailing does show promise in helping offline retailers to still have a relevant place in consumers’ shopping habits.

What do you think of experiential retailing? Do you think it’s a viable technique for allowing offline stores to better compete with online shopping? Are there any other examples of experiential retailing that you’ve recently seen in action? Please share your thoughts in the comments section below.

John Gironda, Ph.D., is an Associate Professor of Marketing at Nova Southeastern University. His teaching and research interests include digital and social media marketing, consumer behavior, marketing strategy, advertising, personal selling, and sales management. He can be reached at: jgironda@nova.edu

A Customer Value Mindset in Asia’s Airlines Business by Michael Santonino * [8]

                      Photos by Michael D. Santonino III/Kim Pei Lu travel photography

Asian airports are transforming the airlines industry by creating value for customers in convenience, availability, and access with a multitude of services. The top airports in the world offer customers a travel experience with a “Disney-like” park feeling as airports display picturesque rainforest waterfalls, lush landscape, open glass designs, cultural artwork, sustainable operations, luxurious amenities, connectivity, and selection of dining and shopping preferences for passengers. Airports (and airlines) are creating value in the Now Economy with Speed, Service, Solutions, Selection, and Sociability (the 5-S model) in many Asian countries (i.e. Singapore, South Korea, Japan, and Hong Kong). 

The United States with its aging airport infrastructure has not been a passenger’s preferred choice in comparison to these Asian countries airports, as many of the service quality performance measures used by the various industry rating agencies exclude the aged US airports. The airlines have equally transformed their businesses with new aircraft, new cabin configurations, and extended ancillary services/fees (baggage, seat upgrades, fast-boarding, in-flight meals, WiFi, cancellation/changes, etc.).

Maximizing Value Attributes in Airport Layouts 

Suvarnabhumi Airport, in (Bangkok) Thailand, offers an excellent example of convenience, accessibility, cultural art, open-glass design, and luxurious amenities. It is strategically designed with seamless passenger movement flow to gates, multiple access points for shopping and tax refunds, and cultural art photo stop points, and is one of the most tourist-friendly airports in the world.

What a Jewel!

The Jewel located at Changi Airport in Singapore is creating value in the Now Economy with airport solutions and product selection for customers. The Jewel has an amazing sustainable architectural design with an integrated nature-themed entertainment park known as the Canopy and a retail mall complex. Value attributes of experience differentiations (product/services that tap into the five human senses) can be found throughout this airport complex with its customer interactive activities (walking trails, explorer slides, water mists, flower garden, and other family-centric fee paid services). 

The Jewel is strategically designed between terminals with seamless passenger movement flow to gates, shopping, dining, scenic photo taking areas, play-stations for kids, and interactive-themed park experiences for visitors, passengers, and local Singaporeans. Changi is ranked the number one airport in Asia and the world for its outstanding customer service. 

Changi Airport provides a mere glimpse of the future with technology and innovation as it relates to products (or services) in the pre-introduction stage of the product life cycle with artificial intelligence (AI), robots, virtual reality (VR), blockchain, and real-time data analytics. Expect fully autonomous aircraft or other global transportation vehicles as the technology evolves.

Creating Value with Technology for Better Passenger Experiences
Airports and airlines are incorporating technology to improve the overall passenger experiences. The use of virtual assistant holograms are being utilized by more airports to help arriving passengers make that transit to the next departure (or arrival hall) a better experience. Airlines are increasingly offering more extra room seating cabins for better comfort, as Air Asia Behad offers “hot seats” (with red headrest seats) for an upgraded fee. Tray tables and cabin bins are prime shelf-space designs for airlines (from the traditional supermarket shelf-space for products) as airlines expose passengers to new routes, tours, and other advertisements to its captive audience. Airlines are transforming cabins with newer aircraft designs that include the blue-red-yellow mood change lighting for improved cabin comfort. Airlines are upgrading the in-flight entertainment (IFE) systems to offer more TV channels, movies, games, and other IFE services for improved in-flight experiences throughout the entire journey.

The Now Economy is dominated by the services sector with an emphasis on creating exceptional customer experiences for the digitally-savvy customers. Sustainability, holistic perspectives, and personalized platforms are value attributes that digital-native customers are sensitive toward the future of airports and airline travel. The airline industry in Asia and worldwide is rapidly changing to build a competitive advantage through flexible production, innovative business models and strategies, hiring the best people, speed-to-market, and collaboration with the right business partners.  

 * Dr. Santonino is Associate Professor, College of Business, Embry-Riddle Aeronautical University Worldwide. Contact him at Michael.Santonino@erau.edu

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