6 IMPORTANT REASONS WHY YOU NEED TO INVEST ON CUSTOMER EXPERIENCE

Companies have spent a lot of money to improve customer experience online. Millions have been invested into focus group and researches for the sake of improving the experience they wish to provide. But why such effort? Why customer experience is so important? Here’s 6 important reasons why:

  • Leads to new means of competition
  • Co-creation adds value
  • Affects customer satisfaction
  • Influences expectations
  • Brand Love
  • Leads to brand loyalty

Leads to new means of competition

Meyer and Schwager (2007) have pointed out the importance of delivering high standards of customer experience in their paper. They explained that customer experience can become another platform for organisation to be competitive.

Aside from providing good quality of customer care, customer experience also surrounds advertising, packaging, product and service features, ease of use, and reliability which are crucial to ensure the high competitiveness of a company (Meyer and Schwager, 2007).

By continuously improving customer experience, companies start to innovate new ways to get customers approval on the great service provided. They become competitive.

Co-Creation Adds Value

Prahalad and Ramaswamy (2004) have also stressed the importance of customer experience for a company and pointed out that high-quality interactions can lead customers to co-create the experiences vital to unlock new sources to gain the competitive ‘edge’.

The concept of co-creation (Appendix I) is explained by Prahalad and Ramaswamy (2004) in stressing that in order to co-create unique customer experience, there needs to be ‘joint-creation’ of value by both the company and the customers (Prahalad and Ramaswamy, 2004; Bhawani and Jauhari, 2013).

For instance, having dialogues discussing about the company’s offerings or simply for friendly discussions can help enable to achieve the ‘joint-creation’ of value (Prahalad and Ramaswamy, 2004).

The writers further added the importance of social media (i.e. Facebook) can be used as tools to elevate customer experience to a different level to co-create value.

Affects customer satisfaction

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Liljander and Strandvik (1997) discussed in their paper that customer satisfaction is contributed by delivering unique customer experience.

Customer satisfaction is mainly driven by emotion experienced by the customers during transaction. Koelemeijer et. al. further explained that emotion is divided into ‘reactive’ and ‘goal-directed’ (cited in Liljander and Strandvik, 1997). For instance, emotion led by ‘goal-directed’ on a consumer can be seen in entertainment venues such as the amusement parks whereas ‘reactive’ emotion is mainly affected by the experience consumers received which can be much seen in retail stores (Liljander and Strandvik, 1997).

Liljander and Strandvik (1997) paper has concluded that customer experience, in the context of ‘emotion’, is capable of affecting customer satisfaction and their loyalties (Espejel, Fandos and Flavián, 2008). This is especially useful whenever customer service is able to resolve problems which leads to satisfaction.

Influences expectations

Johnson and Mathews (1997) have agreed the importance of delivering unique customer experience and its effects on customers’ expectations. They have also indicated that customers’ evaluation is much affected by the service quality received, influenced by their earlier expectations (Johnson and Mathews, 1997). These expectations are based on several different concepts of how consumers assess the service quality received.

Furthermore, Johnson and Mathews (1997) have identified two concepts which are known as expectancy based and performance based. The expectancy based is mainly based on Parasuraman model (Appendix II) which summarises the combined view of consumer-customer relationship. According to the model (Appendix II), past experience, service delivery and communicating with external customers are a part of delivering customer experience which influence the expectation of customers.

Despite of criticisms on the Parasuraman model, it is already proven that expectations are developed among range of products in different service providers as indicated by Lewis and Outram paper (cited in Johnson and Mathews, 1997).

Brand love

Another importance of customer experience is its ability to influence customers to support the brand (Long-Tolbert and Gammoh, 2012). Long-Tolbert and Gammoh (2012) explained that customers are willing to develop strong and deep bond with the company affected by the good and unique customer experience. According to the paper, this term is called as ‘brand love’.

A great example would be the recent involvement of companies such as Tom’s Shoes being active in the social media and blogs as means of developing that ‘strong and deep’ bond with consumers (Tom’s, 2013). These online involvement is the kind of ‘customer experience’ which is capable of leading customers to develop the ‘brand-love’ and ultimately supporting the company or brand.

Leads to Customer Loyalty

Customer experience indirectly influences customer loyalty as well. A paper by Kandampully and Hu (2007) on the hotel brand loyalty also found that the image of hotel is important to attract and keep loyal customers. They further argued that image is closely linked with customer satisfaction and customer ‘preference’ (loyalty) (Kandampully and Hu, 2007; Kandampully and Suhartanto, 2000). Having reputable image is another form of unique customer experience which is capable of influencing customer loyalty. For instance, reputable hotels such as the Hilton Hotels which have built its image in providing great customer experience for decades enabling it to have the capacity to attract and maintain loyal customers.

My Final Two Cent

Achieving high rate of customer experience is crucial as it leads to further customer retention – thus increasing company’s revenue. What do you guys think? If you feel I’ve missed some important details to the subject, please leave a comment so we can discuss further on this.

References

Meyer and Schwager, 2007;
Kandampully and Hu, 2007;
Kandampully and Suhartanto, 2000;
Long-Tolbert and Gammoh, 2012.

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Author: fauzanmokhtar

A mechanical engineer with MBA in Procurement and Business Strategies. I've sold my company's import/export license to a regional distributor in Asia and been investing actively in the stock and cryptocurrencies markets.

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