Chapter 6

Customer Relationship
Management and
Customer Experience

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Chapter Objectives
 a definition of customer experience
The differences between goods, services and
experiences
Three key concepts in customer experience
management: touchpoint, moment of truth and
engagement.

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 a number of methods for better understanding
customer experience
 Experiential marketing strategies and its tools
 How customer experience is changed by CRM.
 Four features of CRM applications that have an
impact on customer experience.

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What is meant by customer
experience?
 an intrapersonal response to, or interpretation of,
an external stimulus.
 Customer experience is the cognitive and
affective outcome of the customer’s exposure to,
or interaction with, a company’s people,
processes, technologies, products, services and
other outputs.
 TCE- influences customers ’perceptions of value
and service quality.

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From service to experience
 Intangible–dominant- experience attributes & search
attributes.
 Inseparable: services are produced at the same time
and place that they are consumed. Customer
involvement.
 Perishable.
 Heterogeneous : can not be mechanically reproduced
to exact specifications- automation.

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The planned customer experience
 Planning customer experience- attempting to
influence the cognitive and affective responses.
 Stage performance: a concept used to describe
service companies interventions to direct
customer while receiving services.
 Customer experience may be the core product
(safari) or a differentiating value-add (Dell online
computer purchase experience).

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 Two perspectives of customer experience:
normative and positive.
 Positive customer experience describes
customer experience as it is. It is a value free
and objective description.
 Normative customer experience describes
customer experience as management or
customers believe it should be

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Customer experience concepts
 Touchpoints instances wherein customers have a
contact the company’s products, services,
communications, places, people, processes or
technologies.
 A moment of truth is incident wherein the
interaction occurs between the customer and the
service provider whereby customer forms a
lasting positive or negative impression.
 Engagement: emotional or rational connection to
a brand, experience or organization- confidence,
integrity, pride, and delight.
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How to understand customer
experience
 Methods for understanding customer experience:
mystery shopping, experience mapping, process
mapping, plotting the customer activity cycle,
performing ethnographies, and conducting
participant and non-participant observation.
 Mystery shopping: paid shoppers to report on
their customer experience with the company.
 Experience mapping: to understand, chart and
improve what happens at customer touchpoints
(e.g. interviews) - What is the experience like?
How can it be improved? – Identify & close Gaps
of encounters.
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 Process mapping: graphical representations of
business processes-improve customer
experience & improving back-office internal
process- weaknesses (e.g. service standard, fail
points).
 The customer activity cycle (CAC): depicting
how customers go through in making and
reviewing buying decisions- dividing process into
elements & collect information.
 Three main stages: deciding what to do, implementing
the decision, reviewing what was done. (cycles differ in
duration)
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 Ethnographic methods: can be used to gain a
better understanding of the socio-cultural context
of customer experience- participation in people’s
daily lives.
 Participant observation: let employees
participate in the customer experience at various
touchpoints.
 Non-participant observation: observe customer
interactions at customer touchpoints.

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 Experiential marketing strategies and
tactics
 What sort of outcomes do our customers want to
experience?
 What is the current customer experience?
 What tools and strategies are available to close
any gap between
 current and desired experience?
 How can we measure whether we have
succeeded?

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 Experience clues: communications, visual
identity, product presence, co-branding, spatial
environments, websites and electronic media,
and people.
 Communications- company-generated &
customer-generated.
 Visual identity is communicated through brand
names, logos and livery.
 Product presence: product design, packaging,
and display.

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Co-branding: includes a number of activities
such as event marketing, sponsorship, alliances,
partnerships, product placement ..etc.
 Spatial environments: areas such as retail
stores, office spaces, lobbies, car parks, gardens
and public spaces.
 Websites and electronic media.
 People.

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Customer experience and the role of
CRM
 Strategic CRM: there will be a dedicated focus
on meeting the requirements of defined customer
groups.
 Operational CRM: automation will have positive
effects by fulfilling customers needs more
accurately, communications will be more relevant
and timely, and service will be more responsive
and reliable.
 More cost-effective manner (interactive voice
response (IVR) of call centers)

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 Analytical CRM is the intelligent mining of
customer-related data for marketing purposes-
analyze behavior & predict propensities to buy,
thus offers timely and relevant communications &
offers.

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Features of CRM software applications
 CRM software applications affect customer
experience and company’s image.
 Usability, performance, flexibility and
scalability are key features of CRM applications
that affect customers and channel partners
experience.

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 Usability: experienced as highly responsive by
the customer.
 Flexibility: determines how many alternatives are
available to the user at any given time; these
alternatives are often implemented through
hyperlinks, buttons or screen tabs (search &
filtering options).
 High performance: (speed and accuracy)-
network, database, server, application.
 Scalability: the extent to which the CRM system
is expandable and works accurately in high load
times.
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