A Harvard Business Review Article by Christoper Meyer and Andre Schwager, Article Review By Akhmad Rahadian Hutomo
Organizations, especially who gives service and have B2B customer are usually already implement CRM. But Meyer and Schawager think it not enough to ensure customer satisfaction. They propose a customer experience approach to answer this.
Meyer-Schwager starting their paper on pointing out about problems on customer experience in Telco and mortgage application industries. On some industries, customer experience still have low quality that resulting in low customer satisfaction.
Organizations may already realised that customer experience is important, yet they still havent give special treatment on it. This lack of tratment might cause loss of focus on customer experience, since every business function focusing on they own core function. Nowadays, when concern on customer experience is still low, the competitions are not following with the same pace. Faster competitors resulting in more choices faced by customer. Inability to implement customer experience will resulting in inability to measure customer satisfaction.
Basically customer experience process is a simple baseline process where there is closed loop process in business functions that focused on giving good experience with the vision, support, and concern from senior management.
What Customer Experience is
Meyer and Schwager stated that:
“Customer Experience is the internal and subjective response customers have to any direct or indirect contact with a company.”
Direct contact occurs in purchase, use and sevice where usually requested by the customer, where indirect contact mostly unplanned contacts that could give customer an impression of a company. Usage of Apple vs Microsoft OS (Windows) gives a good example on how a customer experience differ.
Like BMW did, succesfull customer experience done by embedding fundamental value proposition in offerrings’every feature. Fedex also gives a nice example in showing that service quailty and wider scope are important for good customer experience.
Later on the sub-part, the writer explain that in B2B companies, customer experience are as crucial as in Business-to-customer. B2B companies helps its business customer serve their customers by solving their business problem. B2B experience occurs in relationship between suppliers and purchasing department, as well as in sales-marketing with distributors.
Data about customer experience are found anc can be collected in “touch point”, which then aggregates into “customer corridor”. Not all touch point should get equal concern, there are important touchpoint and unimportant one. Yet, at each touchpoint, the gap between customer expectations and experience shows the customer satisfaction.
Customer expectation are basically composed of previous experience with the product/ company, plus expectations that are settled by the market. Good design needed to ensure expectation are met to make a good experience.
Why The Neglect?
Basically there are three main reasons why managers who already aware of the customer experience, yet still not having priority in it:
- Already too much investment in CRM, so the managers think that the system are already met all the need to take care of customers.
- No harmony with real customer needs. CRM and CEM may already set, but without harmony with customer expectation, it can be considered unsuccessfull
- Fear of the real information. Managers may fear of having too many considerations and choice by knowing the real information of customer.
All Hands on Board
Like some company did, there are some benefits to assign customer experience to a single group, but yet, to achieve succesfull implementation, customer experience need to include all function that included in design, delivery and creation of value. Palm’s Treo and Intuit’s may gives good example on it.
Obtaining the right information
The writers divide information on customer experience on three patterns:
Basically occuring in large number transaction by individual customers or historical data which giving persistent flow of information to the company.
It is explained by some example like customer awareness of alternative, new features wanted by customer etc. Present pattern must be done periodically in near timing to ensure company gets the big picture on the current condition. It is collected through surveys and interviews.
It is often obtained by interpreting above patterns, present and past patterns.
By best pracices, it is shown that the deeper the relationship with customer, the more often needs to collect data. To collect data there are things to be considered, such as to choose low cost and easy data collection (like through email), to ensure that the data collection (like surveys) not annoys customer, and survey also have some limitations.
Acting on Experience Information
To better understand this part, the writers are giving explaination through HiTouch which faced problems that their highest spending customer are shifting to competitor even though the satisfaction report shows green result.
It turns out that the way of measuring satisfaction is the one of the key problem. The employees think that customer experience is sales marketing’s problem. Then after hiring consultant and holding ap pilot survey, the company realised that the result is different from what they always get. It shows the legacy measurement are no more effective.
Then, using the matrix tools like shown on the left, HiTouch divide it into 4 quadrants:
- Model Customer, Good summary scores, good revenue
- Growth Customer, Good summary scores, low-yet-potential revenue. To be cross-selling and up-selling
- At-risk Customer, Low summary scores, yet giving high revenue. Demands more serious intervention from decision maker
- Dangling Customer, Low summary score and low revenue, to be rescued or abandoned.
The Employee Experience
The final explanation of the paper is how important is employee to ensure good customer experience. Employee basically learns from their leaders, so top-down approach is suitable to transfer the points on customer experience. How Siebel shifting from 6 version to 7 version could be good example. However, business function have to ensure good customer experience:
- Marketing, to captures what customer wants, segment it, and tailors communication
- Service operations, ensuring the people and experience on touch points are good.
- Product development, making customer-driven / customer-based design to ensure the expectations are met
- IT, ensure the CRM and CEM doing their job well
- HR, to ensure employee, more importantly the frontline are able to transfer the CEM strategy
- Account teams, ensuring the right survey to give betterinsight on accounts
What i already know about Customer Relationship Management are turns out not all the things that i need to know to understand how a company retains its customer,a nd this paper gives me a great insights on the concept of Customer Experience. Furthermore, I got the idea that the failure of organizations in retaining the satisfaction of their customer may the result of not understanding touch points, and how to measure customer satisfaction.
Based on an Harvard Business Review article titled “Understanding Customer Experience” by Christoper Meyer and Andre Schwager on February 2007. Article review by Akhmad Rahadian Hutomo for Business Intelligence assignment, Information System, Faculty of Computer Science, Universitas Indonesia on November 2011.