Customer experience: The next major evolution

Customer experience: The next major evolution

Rhenald Kasali Contributor Jakarta

Is there any company that makes you feel very special? Are there any beautiful memories of the last time you purchased a product or service? Are you loyal to any brand? How often do you recommend a brand, be it of a product or service, to anyone else? These are some of the questions that prompted the emergence of "experience" as one of the hottest words in marketing strategy for more than a decade.

"Experiential marketing" was a mantra introduced to the marketing world in the mid-1990s. This new concept was based on the premise that customers were seeking more than functional values -- price and quality -- as they started to demand the fulfillment of emotional values.

Consumers were using all their senses and started to feel, think and take action accordingly in their relationship with companies through their products and services. So, using this experiential marketing concept means that companies have to provide an experience -- utmost and lasting satisfaction, in a simple phrase -- that is holistic as it blends every element: sensory, emotional, conceptual, participatory and relational.

By using experiential marketing a number of companies have indeed gained success. Starbucks with its "Third place" concept has changed the perception of drinking coffee not only in America, but in numerous countries. Disney World and its associated companies have for years been loved by children worldwide.

Harley Davidson makes men dream of owning their products. In the airline business, Singapore Airlines, Virgin Atlantic and Southwest Airlines, and Amazon.com for online shopping, are success stories of experiential marketing. These successes have given many other companies no option but to follow suit. However, not a few of the followers failed in the implementation. Their huge investments in this strategy, to their great disappointment, increased neither their profits nor customer loyalty.

The companies who failed forgot that each company serves customers with uniquely different characteristics. So the success of one company in the same line of business does not automatically mean that similar success can be achieved by just copying the other company's strategies. Imitating a successful company's strategy becomes even more difficult when the types of businesses are worlds apart. Therefore, experiential marketing that works for an airline cannot be copied in its raw form by, say, a telecommunications company or a bank.

Another reason for failure is that companies design customer experience from their own point of view, rather than what customers really expect, both from the physical or concrete features and the ensuing emotional impact. Hence, the creation of the second mantra, customer experience, which is, in fact, a natural and more effective evolutionary step of experiential marketing.

Customer experience is often defined as a blend of a company's physical performance and the emotions evoked in a customer, intuitively measured against the customer's expectations across all moments of contact.

Some basic differences exist between customer experience and experiential marketing. Customer experience is more "outside in", while experiential marketing is still in the "inside out" stage. Clearly, "outside in" means being able to identify consumers' expectations in a holistic way, both physical and emotional aspects, so that the company can provide them the ultimate experience at every moment of contact. In short, it has its roots in customers' wishes and entails the fulfillment of the relevant wish.

Until now, a number of companies still mistakenly think that moments of contact for customer experience only take place in the conventional channels, such as shops, dealers, service points and so forth. These locations, albeit necessary, are costly and not all customers use them all the time. Take the payment point of a telecommunications company, for instance. Today, many payments are made through ATMs or e-banking, at least in major cities. Physical payment points with their costly offices and staff are useful in smaller towns or in some isolated areas. Given this situation, telecommunications companies are well advised to improve the payment points in smaller towns and remote areas and keep such heavy investment offices to a minimum, while, simultaneously, enhancing the virtual points of contact -- ATMs, e-banking and phone banking -- for a more elevated customer experience.

In the more holistic customer experience concept, evoking customers' emotions to the fullest and regular monitoring is required. Indofood, for example, has launched a wide range of variants on its fast-selling packaged noodles, Indomie, to satisfy the taste buds of the entire nation. Different spices and flavors are produced to specifically cater to each region. Bank Mandiri, with its Mandiri Prioritas product concept, is offering customers a specially coordinated art and shopping tour to some of the country's famed tourist resorts. At first, this may seem a simple idea, but to the bank's priority customers the trip to handicraft centers in serene villages has proven to be a memorable experience.

Paraphrasing what Shaun Smith and Joe Wheeler wrote in their book Managing the Customer Experience, the essential core of experiencing the brand lies primarily in managing a brand well and changing desired values into promises that are implemented for the customers' lasting and memorable satisfaction. The product itself is then only an "artifact" of the truth of a promise. Generally speaking, only companies with established brands in a mature market adopt this strategical concept. Take Coca-Cola, for example, which offers its customers experience refreshment.

With today's fierce competition, customer experience is acknowledged as the natural evolution of experiential marketing and, undoubtedly, one extremely effective tool for any company's success beyond simple survival. It boils down to really serving the customer to the utmost. The decades old adage the "Customer is king" is no mere slogan anymore. (The writer is a senior lecturer at the University of Indonesia's Schools of Economics)