Understanding Service as Experience


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Services are experiences. Managers should not focus only on service attributes ( functional benefits) to build a competitive advantage but to understand customers interactions as a sources of emotional responses that can create customer loyalty. It requires an understanding of the emotional process and an ability to emphatise with customers

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Understanding Service as Experience

  1. 1. Session 4: Service as an Experience
  2. 2. New Business Landscape 1. Intense competition 2. Customers have too many choices 3. Customers are relatively immune to marketing communications 4. Internet is the terrorist weapon 5. Only Very Satisfied customers are Loyal!
  3. 3. The Experience Economy
  4. 4. The Progression of Economic Value Differentiated Stage Experiences Value-added Differentiation Competitive Position Deliver Services Make Goods Relevant to Needs of Customers “as goods” Growing and feeding Undifferentiated Market Irrelevant to Pricing Premium
  5. 5. 1. Commodities Supply chain optimization 36 bahts per kg
  6. 6. 2. Goods Quality 1200 baths per kg
  7. 7. 4800 baths per kg 3. Services Consistency
  8. 8. 9800 baths per kg 4.Experiences Orchestration
  9. 9. Customer Experience is the NEW source of competitive advantag
  10. 10. Experiences are as distinct from services as services are from goods Tom Peters
  11. 11. Experiential Marketing Vs. Service Experience
  12. 12. Goods that are consumed! Short-single Sensory R&D +Factory Marketing + Engineers High control on Customer Experience
  13. 13. Goods that are used! Single-influenced by learning process Sensory + users experience R&D +Factory Marketing + engineers + designers High / medium
  14. 14. Services as Experience Many (blocks of experiences), last longer Sensory + users experience + social experience Not in a factory but in a branch, store, at home… Collaborative work (all business functions involved)
  15. 15. The customer experience champions?
  16. 16. Singapore Airlines
  17. 17. NetFlix https://signup.netflix.com/global
  18. 18. Dell and Microsoft are trying very hard…
  19. 19. The CUSTOMER EXPERIENCE Is how do customers perceive their INTERACTIONS with a COMPANY
  20. 20. Experience Key Drivers 1. 2. 3. 4. 5. Service Product Processes People Technology Environment Mkg Communications
  21. 21. The Marketing Mix is Dead
  22. 22. The Meaning of Experience An event or occurrence which leaves an impression on someone. Oxford Dictionary
  23. 23. Cannot Not have an Experience!
  24. 24. Framework to Understand Customer Experience Experience as a story Experience Narrative Cognition (Stop thinking about The experience is formalized in the user’s head) (require to think about what we are doing) Sub-consciousness (set of activities as routines) Source: J Forlizzi & S Ford 2000 Meaning Storytelling (Meanings are created by story telling. This is the subjective aspects of an experience Making a personal story)
  25. 25. What Experience (as a verb) means?
  26. 26. Creating WOW! Kensei
  27. 27. Having multiple Experiences during a customer journey
  28. 28. To talk about experience as a story
  29. 29. Experience is personal, felt only by the person who has the experience!
  30. 30. Why to focus on Experience? It’s the only source of emotions
  31. 31. Differences between advertising & services experience emotional responses (Cheedar cheese ads vs M Douglas Falling Down movie)
  32. 32. 70% of Customer Loyalty is Emotional! Bill Bernback. DDB Founder
  33. 33. Emotional bond are difficult to build and easy to break!
  34. 34. How emotions are evoked during service interaction
  35. 35. The Emotion Process 1. Emotions have an object...the experience 2. Emotions arise from highly positive or strongly negative appraisal 3. Emotions are associate with automatic physiological activity experienced as feelings. No feelings no emotions… 4. Emotions give rise to a tendency to action 5. Emotions express themselves in involuntary facial display and physiological expression like body posture
  36. 36. Emotion is always the result of an event that is relevant to the consumer
  37. 37. How customers evaluate an experience?
  38. 38. How customers evaluate a service experience Objectives Attributes Key actions Measurements Integrate pleasures that resonate Thinking about your recent interactions with this firm, how enjoyable were the interactions? Make it fun Enjoyable Make it intuitive. Quick & easy Listen & Act Easy to use (usability) Meets the needs (usability) Reduce customers efforts during interactions Deliver what customer needs How much effort do you personally have to put forth to handle your request Thinking about your recent interactions with this firm, how effective were they at meeting your needs?
  39. 39. Wireless Post-paid Service Providers in Thailand Correlation between C. Exp and attributes Correlation between C. Ex and C. Loyalty Useful Likelihood to recommend Easy Reluctance to switch Enjoyable Willingness to buy more
  40. 40. Pleasure Vs displeasure.
  41. 41. Pleasure
  42. 42. Pleasant Feelings Happiness Joy Love Surprise Relax Trust Pride Thrilled Ok
  43. 43. Sensory pleasures
  44. 44. Psycho-pleasures
  45. 45. The Flow. A Virtual Pleasure
  46. 46. Online Pleasures Challenge Frustration Flow Boredom Enjoyable
  47. 47. Intellectual & Ideo-pleasures
  48. 48. Socio-pleasures
  49. 49. The World’s First Airline Social Seating System Flight mood. Business talk. Easy Chat. Relax.Work
  50. 50. Displeasure
  51. 51. Unpleasant Feelings Anger Rage Disgust Contempt Fear Embarrassment Shame Disappointment Sadness Boredom
  52. 52. Pleasures tend to quickly fall off. Pains usually stick in our brain
  53. 53. A feeling of control or submissiveness
  54. 54. How does emotion affects customers? It depends of its intensity (relevance of the event) and customer control
  55. 55. Emotions influence brand image
  56. 56. Emotions strengthen or destroy customers relationships with a brand
  57. 57. Type of Customer Experiences Pains Negative Rejection Terrorists Neutral Routine Commodity Ready to leave Pleasures Positive WOW Promoters
  58. 58. Creating a Customer Experience Centric Culture  How could we listen to customers and deliver what they want ? What are touch points relevant for customers? Could we reduce customer efforts? Could we remove all pains? What pleasures to integrate into a company touch-points? What these touch-points should evoke for the brand?
  59. 59. Managers must understand how their decisions affect customer’ Emotions!
  60. 60. 5 Things to remember about Customer Experience? 1. An emotional response 2. Across multiple touch points 3. Are perceived distinctly by different individuals 4. A combination of routine, pains and pleasures…. 5. Drive customer retention and profitability more than satisfaction!
  61. 61. Thank You