Customer experience (CX) refers to the cognitive, emotional, sensory, and behavioral responses of a customer during all stages of interaction with a product or service, including pre-purchase, consumption, and post-purchase.
Different dimensions of customer experience include senses, emotions, feelings, perceptions, cognitive evaluations, involvement, memories, as well as spiritual components, and behavioral intentions. The pre-consumption anticipation experience can be described as the amount of pleasure or displeasure received from savoring future events, while the remembered experience is related to a recollection of memories about previous events and experiences of a product or service.
Definitions According to Forrester Research, the foundational elements of a remarkable customer experience consist of six key disciplines, beginning with strategy, customer understanding, design, measurement, governance and culture. A company's ability to deliver an experience that sets it apart in the eyes of its customers will increase the amount of consumer spending with the company and inspire loyalty to its brand. According to Jessica Sebor, "Loyalty is now driven primarily by a company's interaction with its customers and how well it delivers on their wants and needs".
Barbara E. Kahn, Wharton's Professor of Marketing,University of Pennsylvania, Barbara E. Kahn, accessed 23 June 2023 has established an evolutional approach to customer experience as the third of four stages of any company in terms of its customer centricity maturity. These progressive phases are: Product orientation: Companies manufacture goods and offer them in the best way possible. Market orientation: Some consideration of customer needs and segmentation arises, developing different marketing mix bundles for each one. Customer experience: Adding to the other two factors some recognition of the importance of providing an emotionally positive experience to customers. Authenticity: This is the most mature stage for companies. Products and services emerge from the real soul of the brand and connect naturally with clients and other stakeholders, for a long-term.
Customer experience involves every point of contact a business has with a customer, as well as interactions with its products or services. It has emerged as a vital strategy for retail businesses facing competition. According to Holbrook & Hirschman studies (1982) customer experience can be defined as a whole event that a customer comes into contact with when interacting with a certain business. This experience often affects the emotions of the customer. The whole experience occurs when the interaction takes place through the stimulation of goods and services consumed.
In 1994 Steve Haeckel and Lou Carbone further refined the original concept and collaborated on a seminal early article on experience management, titled "Engineering Customer Experiences", where they defined experience as "the 'take-away' impression formed by people's encounters with products, services and businesses — a perception produced when humans consolidate sensory information." They argued that the new approach must focus on total experience as the key customer value proposition.Schmitt, Bernd (2011). Experience Marketing: Concepts, Frameworks and Consumer Insights (PDF). Columbia Business School. p. 87.
The type of experience seen through a marketing perspective is put forward by Pine & Gilmore which they state that an experience can be unique which may mean different individuals will not have the same level of experience that may not be memorable to the person, therefore, it won't be remembered over a period of time. Certain types of experiences may involve different aspects of the individual person such as emotional, physical, intellectual or even spiritual.
Customer experience is the stimulation a company creates for the senses of the consumers, this means that the companies and that particular brand can control the stimuli that they have given to the consumer's senses which the companies can then control the consumers' reaction resulting from the stimulation process, giving more acquisition of the customer experience as expected by company.
Kotler et al. 2013, (p. 283) say that customer experience is about, "Adding value for customers buying products and services through customer participation and connection, by managing all aspects of the encounter". The encounter includes touchpoints. Businesses can create and modify touchpoints so that they are suited to their consumers which change/enhance the customers' experience. Creating an experience for the customer can lead to greater brand loyalty and brand recognition in the form of logos, colour, smell, touch, taste, etc.Kotler, P., Burton, S., Deans, K., Brown, L., & Armstrong, G. (2013). Marketing (9th ed.). NSW, Australia: Pearson Australia.Oxford. (2016). touchpoint – definition of touchpoint in English from the Oxford dictionary. Retrieved from http://www.oxforddictionaries.com/definition/english/touchpoint Bailey, P. (2015). marketing to the senses: multi-sensory strategy to align the brand touchpoints. Retrieved 29 March 2016, from http://www.warc.com
However, customer experience management, and in particular design for experiences, is not only relevant for the private sector but also increasingly important in the public sector, especially in the age of digitalization where public service users cocreate value by integrating resources from multiple sources.Trischler, J., & Westman Trischler, J. (2022). Design for experience–a public service design approach in the age of digitalization. Public Management Review, 24(8), 1251–1270. In this context, organizations need to not only understand their service users but also the network of actors and how public services fit into the wider value constellation and people's activities.
Designing customer experience There are many elements in the shopping experience associated with a customer's experience. Customer service, a brand's ethical ideals and the shopping environment are examples of factors that affect a customer's experience. Understanding and effectively developing a positive customer experience has become a staple within businesses and brands to combat growing competition. Many consumers are well informed, they are able to easily compare two similar products or services together. Therefore, consumers are looking for experiences that can fulfil their intentions. A brand that can provide this gains a competitive advantage over its competition. A 2015 study found that developing a positive behavioural culture created a greater competitive advantage in the long term. It looked at the customer experience at resort hotels and discovered that providing the best hotel service was not sufficient. To optimise a customer's experience, management must also consider the peace of mind and relaxation, recognition and escapism, involvement, and hedonics. The overall customer experience must be considered. When the experience is non-routine, even prior expectations may be reconstructed as memories of the experience after some time has elapsed since the actual experience.
The development of a positive customer experience is important as it increases the chances of a customer to make continued purchases and develops brand loyalty. Brand loyalty can turn customers into advocates, resulting in a long-term relationship between both parties. This promotes word-of-mouth and turns the customer into a touchpoint for the brand. Potential customers can develop opinions through another's experiences. Males and females both respond differently to brands and therefore, will experience the same brand differently. Males respond effectively to relational, behavioural and cognitive experiences whereas females respond greater to behavioural, cognitive and effective experiences in relation to branded apps. If female consumers are the target market, an app advert focused on the emotion of the product will provide an effective customer experience.
Today, retail stores tend to exist in shopping areas such as malls or shopping districts. Very few operate in areas alone. Customer experience is not limited to the purchase alone. It includes all activities that may influence a customer's experience with a brand. Therefore, a shopping centre's reputation that a store is located in will affect a brand's customer experience. At the same time, it is important to provide a seamless integrated experience that goes beyond individual transactions and enhances overall brand perception. This is an example of the shopping environment affecting a customer's experience. A 2013 study found that a consumer's opinion of a town centre can affect the opinion of the retail stores operating within both negatively and positively. They shared an example of a town centre's management team developing synergy between the surrounding location and the retail stores. A location bound with historical richness could provide an opportunity for the town centre and local businesses to connect at a deeper level with their customers. They suggested that town centre management and retail outlets should work cooperatively to develop an effective customer experience. This will result in all stores benefiting from customer retention and loyalty.
Another effective way to develop a positive customer experience is by actively engaging a customer with an activity. Human and physical components of an experience are very important. Customers are able to recall active, hands-on experiences much more effectively and accurately than passive activities. This is because customers in these moments are per definition the 'experts of use'.Trischler, J., Pervan, S. J., Kelly, S. J., & Scott, D. R. (2018). The value of codesign: The effect of customer involvement in service design teams. Journal of Service Research, 21(1), 75–100. Participants within a study were able to recount previous luxury driving experiences due to its high involvement. However, this can also have a negative effect on the customer's experience. Just as active, hands-on experiences can greatly develop value creation, they can also greatly facilitate value destruction. This is related to a customer's satisfaction with their experience. By understanding what causes satisfaction or dissatisfaction with a customer's experience, management can appropriately implement changes within their approach. A study on the customer experience in budget hotels revealed interesting results. Customer satisfaction was largely influenced by tangible and sensory dimensions. This included cleanliness, shower comfort, and room temperature, just to name a few. As budget hotels are cheap, customers expected the basic elements to be satisfactory and the luxury elements to be non-existent. If these dimensions did not reach an appropriate standard, satisfaction would decline, resulting in a negative experience.
History The concept of customer experience has roots in marketing and consumer behavior research. In 1994, Lewis Carbone and Stephen Haeckel published "Engineering Customer Experiences" in Marketing Management, coining the term and defining experience as "the 'take-away' impression formed by people's encounters with products, services and businesses."
In 1998, B. Joseph Pine II and James H. Gilmore published "Welcome to the Experience Economy" in the Harvard Business Review, arguing that businesses must orchestrate memorable events for customers and that the experience itself becomes the product. Their 1999 book The Experience Economy became a foundational text in the field.