Digital Customer Management Summary PDF

**Summary: Digital Customer Management** Part Nils Hafner **Session 1** Ein Bild, das Text, Screenshot, Schrift enthält. Automatisch generierte Beschreibung **Customer Management -- a strategic approach** Customer relationship management (CRM) is a strategic positioning. A bank should have the...

**Summary: Digital Customer Management** Part Nils Hafner **Session 1** Ein Bild, das Text, Screenshot, Schrift enthält. Automatisch generierte Beschreibung **Customer Management -- a strategic approach** Customer relationship management (CRM) is a strategic positioning. A bank should have the best relationship to their customers and differentiate herself to other banks. a strategy is: - plan to reach a longterm goal (3-5 years) - setting the limits / outline - define what we don't want to do / never do - behaviors to reach certain targets in customer management the longterm relation is important - you need to have a sustainable strategy **Competitive strategy** Banks products are not unique! They are very exchangeable. Therefore the differentiation from other banks can be made by having a relationship with the customers. Porter: differentiation can only be made when a bank has a clear positioning: - address relevant needs or problems of the customers: money transaction, investments, getting loans, payment solutions) - know the target group: different banks have different target groups (Raiffeisen in countryside, private banks for wealthy customers, cantonal banks for everyone in the canton,...) - offer a customized offering: in the eye of customers most banks do not have a customized offer. Positioning is very important! And you need to be able to fulfill your promise. Ex. Of a bad positioning: shows all different asset classes - sorted from the worst to the best possibilities They asked the customers if they recognize a pattern - but there is no pattern. With this explanation they wanted to motivate the customer to give them the money. But the banks weren't able to fulfill this promise **Task oriented approach**  find profitable customers: - look at existing clients -\> try to establish them - focus on profitable clients. Most wealthy clients don't need to be the most profitable ones - get to new customer by establishing a digital solution steps to approach new customers: 1. look at the existing data bank 2. analyze existing customers look at their attributes (how do they life, what do they do,...) 3. find new customers that are very similar to your existing ones Positioning of retail banks Ein Bild, das Text, Screenshot, Diagramm enthält. Automatisch generierte Beschreibung The total income per client is higher, when banks invest in CRM.  Research by Reichheld and Sasser (1990) have shown that it is cheaper for firms to sell products to existing customers than sell them to new customers. The research question was "is customer loyalty worth an investment?" The answer differs from different industries. For financial services (banks, insurance companies,...) it's extremely important to have the customers loyalty. Ein Bild, das Text, Screenshot, Reihe, Diagramm enthält. Automatisch generierte Beschreibung revenue growth: costs to serve a loyal customer get cheaper. Because we learn from the customer and over time, we know what he wants and what he doesn't want. Cost also gets cheaper for the customer! By recommendations the bank gets a trust bonus from the customer. That is very valuable especially in financial sector - because people don't like to speak about their finances.  Ein Bild, das Text, Screenshot, Schrift, Dokument enthält. Automatisch generierte Beschreibung **Payne Model of Customer Management**  Marketing & CRM Ein Bild, das Text, Diagramm, Reihe, Schrift enthält. Automatisch generierte Beschreibung **Branding as an input factor for customer management in Banking** - Branding strategy (positioning, industry characteristics) The most valuable brand of the world has a good branding. The value of the branding is valued by the goodwill in the pricing process (M&A). Ex.: American Express is involved in a lot of loyalty programs. That's how they get a lot of data from their customers -- which are very valuable.  **What is a brand?** Most common definition: a brand is a promise delivered - A unique promise - A guideline for employee behavior - A differentiated client and employee experience (the experience made has to stay in mind and heart of the customer) The best approach to stay in mind of (potential) customers is to use an oversimplified message. Easiest way to stay in mind: Be No. 1! Be the best in the market **CRM -- leading banks excel in customer data management** Factors for successful acquiring and loyalizing bank customers Ein Bild, das Text, Screenshot, Schrift, Website enthält. Automatisch generierte Beschreibung Banks should focus on: - Understanding the clients (develop an integrated customer comprehension) - Having a good approach on client communication to nurturing an attractive brand - Selecting right customer touchpoints to secure ease and a good service (designing customer experiences all over the decision-making chain) - Design successful campaigns and events. Use an introduction of structured advisory processes in banking (advisory is the basis for the customer relationship in banking). - Use omnichannel servicing (branch, ATM, call center, mobile and e-banking, social media). Use new electronic media (multinational and online banks). 5 pillars of excelling at CRM: - Listening to customers (structured and unstructured data) - Communicating in easy language with customers - Building a customer-centric culture (annual CX day) - CX Governance (monthly CX-committee, meeting with senior management) - Excellence in customer data management Having the data is very useful! Typical challenges with data management:  Generative AI is a fast growing trend also in Swiss financial services. Ein Bild, das Text, Screenshot, Schrift, Design enthält. Automatisch generierte Beschreibung Swiss banks are quite slow in innovations. Weaknesses in digital sales limit opportunities for growth.  Ex.: Deutsche Bank created a new Customer Management organization because of new digital challenges Ein Bild, das Text, Screenshot, Reihe, Diagramm enthält. Automatisch generierte Beschreibung  **Notes from reading** *Buttle, Francis; Maklan, Stan (2015): Customer Relationship* *Management -- Concepts and Technologies, 3. edition, Routledge, pp. 3-* *23.* Ein Bild, das Text, Schrift, weiß enthält. Automatisch generierte Beschreibung  **Strategic CRM** - Is very customer-centric - they want to deliver better value to their customers than the competitors - resources are allocated where they enhance customer value (reward systems for employees based on customers satisfaction, collect customer information,...) - Customer-centricity competes with other business logics: - Product oriented (believe that customers choose products with best quality,... Ex. Apple) - Production oriented (want to offer the customers the best value for money, time and effort. Operating costs need to be low. Ex. WalMart) - Sales-oriented (believe that customers buy because the invest in advertising, PR and sales promotion. Often produce low-cost products they have to promote heavily. **Operational CRM** - Automates customer-facing business processes - Software applications for marketing and selling - Marketing automation (MA) means that technology is applied for marketing processes (ex. Fashion brand with different channels (stores, online,...) need technology-aided coordination across the channels) - Event based, customer-initiated, contextual event are different trigger points that can be used by a firm - Applications of CRM - Real-time marketing (ex. Constantly refreshing the recommendations based on customers google search) - Sales force automation (SFA) is adopted for business-to-business environments. Is used to improve and standardize the selling process. - Service automation uses technology for customer service operations (ex. Call centre, field-service, web or face-to-face,...) ex. Interactive voice responses (IVR) for first contact resolution. If the problem could not be solved, a person can be added. Also used to answer complaints on social media. - is capturing, processing and reporting customer related data to enhance the customers and the companies value. - This could be sales data, financial data, loyalty scheme,... and includes external data like demographics,... - Analytical CRM is key to know the customers and apply a good operational CRM. **Misunderstandings about CRM:** - CRM is only a database for marketing - CRM is a marketing process - CRM is an IT issue - CRM is about loyalty schemes - CRM can be implemented by any company **CRM constituencies** - Many companies, mostly big companies, have implemented CRM. - CRM influences customers and partners and their satisfaction and loyalty - Vendors of CRM systems - CRM cloud, so that customers interact with the data using web browsers - Social media has big communities with a lot of valuable data - CRM Hardware for technological foundations - Consultants to help companies implement CRM **Commercial contexts of CRM** CRM is used in a lot of different customer management problems. Ex. of a bank: - Use CRM for its analytical capability to manage customer defection (churn) rates by data mining techniques - to enhance cross-sell performance or which customers are not prospects for cross-selling offers - how to communicate best CRM is also used in the not-profit context (ex. charity, NGO,...) -\> "third sector". Educations and government sector uses CRM very actively. **CRM Models** - IDIC model: identify, differentiate, interact and customize to build a closer one-to-one relationship the customer - CRM value chain: consists of 5 primary stages to support conditions and leading towards the end goal of customer profitably - Panye and Frow's 5-process model: shows 5 core processes in CRM -\> strategy development, value creation, multi-channel integration, performance assessment and information management (analytical CRM). - Gartner competency model shows 8 areas for CRM to be successful. **Session 2** Ein Bild, das Text, Schrift, Screenshot, Algebra enthält. Automatisch generierte Beschreibung Separate the two views! Read the questions carefully in the exam - Value customer receives (value proposition, value assessment) - Value organization receives (acquisition economics, retention economics) **Customer management in banking -- seen from different perspectives** - The target group needs to be defined - For the customer an equilibrium is key - Pricing need so be fair and should be used to regulate a fair relationship - The value for the value is important, because if there is no value, a customer would go to another bank  - We need customers data to create value for customers - Banks have a lot of data of their customers. That should be used wisely. - Satisfaction of the customer is one part - knowing the expectation of the customers is very valuable -- why do customers leave,... **Value for the customer -- what the client gets from the bank** - bank services don't really differentiate. Therefore, the relationship is more important Theory: Ein Bild, das Text, Screenshot, Schrift, Reihe enthält. Automatisch generierte Beschreibung - When a customer decides on their own and for example invests directly through a tool, there is no co-creation. When a personal touchpoint is included, there is co-creation. There are also customers, that don't want co-creation. With Trust it's the same. Customers should not be concerned or thinking about their bank constantly. They need to have trust in their bank to relax. - Total costs of ownership mean all costs included (ex. Costs of a car and costs to use the car like insurance, fuel,...). In banking there are service costs, transaction costs, cost for currency exchange,... - Conflicts, energy and time spent for banking services should be as easy as possible. Is very important for a good customer experience. Today it's underestimated in banks. - Risk of losing the money is important -- how safe is my money? It's very difficult to measure the benefits and the efforts! This should be seen as a Checklist. **Definition of customer value**  **Means-End analysis** The bank can only influence the green part. The blue, yellow and red part are working in the customer's head.  Banks can find out which products the customers like and adapt them to what customers want. Ein Bild, das Text, Screenshot, Schrift, Grafikdesign enthält. Automatisch generierte Beschreibung People were asked about the experienced attributes of their experience in the bank. The emotion of a functional benefit is important. Ex. a long row at the shelter is inconvenient. We need to wait and loose time (functional). I get angry (emotional). It's important because I want to be the master of my time and not lose it because of my bank. The values, relationships are based on should be part of the branding. - Always ask the three questions Example of the means-end chain in retail banking  **Definition of the central concepts in Means-End analysis** Ein Bild, das Text, Schrift, Dokument, Screenshot enthält. Automatisch generierte Beschreibung Ex. ecolytiq Is a service provider for banks. They are helping banks to serve the customer's needs. **Characteristics of customer value und challenges for customer relationship management**  Customers do not remember average experiences. Extremely bad or good experiences are important. Therefore, when other banks implement services, other banks should do it too, because for customers something can be missed if they don't. This can also change over a lifetime. Especially risks are very related to the current life-situation. **Overview of the methods** Ein Bild, das Text, Screenshot, Schrift, Reihe enthält. Automatisch generierte Beschreibung - Observation is the main used method (how are they using our products, how much money do they have,...) - With interviews we can ask our customers. Ex. with established questionnaires is used very often by banks. But they don't provide a lot of value. Banks should go away form this old-fashioned questionnaires. Banks should be able to proceed open questions and not only the standardized questions. AI can be very useful for that. - They should go to event-oriented methodologies. **Event-oriented technique** - Asking for good or bad experiences. Because people can't remember average experiences. - Asking open questions! To understand the customers' needs Ex.:  Sequential event technique -\> customer journey - Along the interaction or relationship process Ex.:  Ex. Credit Suisse They combined quantitive with qualitative questions Ein Bild, das Text, Dokument, Quittung enthält. Automatisch generierte Beschreibung When a lot of people are asked a lot of questions it's very difficult to form a branding out of this. Then you need to segment them. Ideally small samples (15-17 / 50) should be asked in qualitative research to get reasonable results. It's not the question of representation. -\> sequarated sample **Customer view of decisions -\> customer journey** A customer has a lot of decisions along his journey.  Until 2008 banks were only focusing on the orange part. Then research has shown that there are a lot of customer contacts before a contract is signed. With the new way of collecting data (ex. online) there are a lot of information available even before a potential customer gets a client. - Is the bank able to fulfill my needs? -\> competence - Do I want to be with that bank? -\> are they nice enough Only when this two question are yes, a relationship is built. Almost every bank can fulfill the customers needs. A customer can get out of the process in every single step. **Value for the bank** To parts a bank, need to think of: - How can banks increase costumers' loyalty and the revenue? - How can costs decrease? - Normally costs reductions leads to smaller revenues - To avoid that a customer equity approach needs to be applied. - Profitability can be achieved by applying the cost management approaches in customer management **Main challenges in customers equity** Ein Bild, das Text, Screenshot, Schrift, Zahl enthält. Automatisch generierte Beschreibung - In retail banking a consultant should focus on the household because that's more important for the customer. But in the analysis of the customer the single customer is only viewed. Same applies for corporate relationships.\ The challenge for banks is to aggregate the dates in a useful way. - A dynamic prospective (present values) is important. Because otherwise you only analyze the status and not the future. - Deciding what we are analyzing can also be a challenge. Which components are included? Monetary information is not easy to get. Ex. how much does it cost, when a client complains? Also, a lot of non-monetary aspects are not known. Ex. how long will a customer stay with this bank? **Methods of customer value analysis**  **\ ** **ABC Analysis** - Focus on the revenue - Pareto-Princip -\> A-customers 20% made 80% of revenues, B-customers 15%,... Ein Bild, das Text, Diagramm, Reihe, Screenshot enthält. Automatisch generierte Beschreibung **Customer contribution costing**  - Gross profit is what we earn with a customer - Net profit more interesting, because all costs are deducted Bad Ex. They found out, they only have 20-30% of profitable customers. The biggest part of 40-60% are break-even customers. They established accounting strategies per customer segment. Ein Bild, das Text, Screenshot, Diagramm, Reihe enthält. Automatisch generierte Beschreibung This is not a good example because: - They don't' know about the needs of the segments / customers! - They should focus on the future. They don't know what the customers will do in the future. Ex. they don't know if the profit generators are going to leave. - They need to know more indicators ex. about potential defecation to establish a strategy. **\ ** **Net present value models** In customer lifetime value  Apply the formula don't know it by heart! Ein Bild, das Text, Screenshot, Schrift, Reihe enthält. Automatisch generierte Beschreibung Ex.  Problems by calculating customer lifetime value: - We need a lot of assumptions: - bout the revenue - costs - discount factor - also, about the time of the revenues and costs. Are we sure certain revenues will come in the first year? - Result is a very theoretical / pseudo correct value! But it's still better than having no information at all. We can still put customers in classes (ex. valuable, non-valuable,...) **RFM Analysis** Can be used for customers that have savings. Otherwise, it cannot really be used for banks. **Customer lifetime value analysis and predicted churn** Apply the formula don't know it by heart! Ein Bild, das Text, Screenshot, Schrift enthält. Automatisch generierte Beschreibung Ex.  - Is also a theoretical result. - But can be used to show the effect of defection in profitability **Scoring model!** Ex. Ein Bild, das Text, Screenshot, Zahl, Schrift enthält. Automatisch generierte Beschreibung - Values come from the sales person **\ ** **Group work**  Having a clear sales strategy reduces preparation time and makes the process mor efficient. Strategies and CLV are helpful- Ein Bild, das Text, Screenshot, Schrift, Diagramm enthält. Automatisch generierte Beschreibung **Support for leadership**  A Tool can also be built in Excel. It doesn't need to be super complicated. Ein Bild, das Text, Screenshot, Zahl, Schrift enthält. Automatisch generierte Beschreibung - Average is fixed at 100 -\> everything under 100 is bad, everything above is good (above the average) - Teamleader with low grade (under 100) should take action - Start to analyze the portfolio with the least successful relationship manager. There is potential in his portfolio that must be used. Setting up meetings with customers that have potential. - Check if the relationship managers have the capacity to work on every customer to realize the potential The marketing campaigns also needs to be steered. They should be focused on the needs of actual customers. (ex. inform customers about tax savings through 3a, when they haven't payed in until December)  Olivier baum - **Notes from reading** *Zeithaml, Valerie A; Rust, Roland T; Lemon, Katharine N. (2001): The customer pyramid: Creating and serving profitable customers, California Management Review; Vol. 43, No. 4, pp. 118-142.* **The customer pyramids** - Different groups of customers vary widely in their behavior, desires and responsiveness to marketing. - Firms should know that they do not need to serve all customers equally well. They should focus on the ones that are or have potential to become profitable. - It can be critical for firms to understand the needs of customers at different levels of profitability. **Necessary conditions for customer tiers** - Different and identifiable profiles - Customers in different tiers view service quality differently - Different factors drive incidence and volume of new business across tiers - Profitability impact of improving service quality varies greatly in different customer tiers - The results of customers of different tiers should never be combined because it can lead to false results. - It is suggested to distinguish more than just the 80/20 tiers. Differentiation in 4 tiers: - Platinum: most profitable customers - Gold: less profitable than platinum but still loyal customers. Are more price sensitive - Iron: are not worth special treatments - Lead: customers that costs money to hold them The customer pyramid needs to be adapted to the industries and categories. It is useful to implement a customer pyramid when: - Service resources incl. employee time are limited (most important reason) - Customers want different services or service levels - Customers are willing to pay for different levels of service - Customers define value in different ways - Customers can be separated from each other - Service differentials can lead to upgrading customers to another level - Customers can be accessed either as a group or individually **\ ** **Customer alchemy** Is the art to turn less profitable customers into more profitable customers. - Turning gold into platinum: - Become a full-service provider - Provide outsourcing - Increase brand impact by line extensions - Create structural bonds - Offer service guarantees - Turning iron into gold - Reduce the customers nonmonetary costs of doing business - Add meaningful brand names - Become a customer expert through technology - Become a customer expert by leveraging intermediaries - Develop frequency programs - Create strong service recovery programs - Getting the lead out -\> allocating less effort in customers that are less valuable - Raise prices to lead customers (ex. charging fees for services) - Reduce costs -\> find ways to serve leads more efficiently **\ ** **Session 3**  - Integration of omnichannel - Data repository because its always a data driven relationship **What is customer experience Management?** **The customer journey** Until 2010: Ein Bild, das Text, Diagramm, Schrift, Screenshot enthält. Automatisch generierte Beschreibung - Banks were just thinking about existing customers. - Marketing was seen as an outside necessity but wasn't used as an integrated process. Today: - Customer centricity is the most important factor - No avoid mistakes (operational excellence) is also very important. Because most mistakes will be noticed by the customers. Ein Bild, das Text, Schrift, Klebezettel, Screenshot enthält. Automatisch generierte Beschreibung Today the customer journey begins even before he is a customer. Because of the data we know a lot of him. Starting with the need. This is also important for B2C customer in banking. **Brand promise** The brand promise is important to get customers. But to have the customers a good customer experience you need to fulfill the brand promise.  **Definition of "customer experience"** - Involving the customer - Memorable - Emotional - Perception of direct and indirect company contacts from customers point of view. Ein Bild, das Text, Screenshot, Schrift, Dokument enthält. Automatisch generierte Beschreibung - All contact points are very important! Want to touch each other and can do so. - The customer doesn't care about the organization. They just see the bank as a whole.  - The journey also includes interaction with other companies or people. As well as customer behavior (ex. waiting) - Journeys are not internal processes or marketing funnels. It must be in the customers perspective! Emotions are very important to design a good customer experience. Ex. from "Beyond Philosophy" settled up for Baloise Most important: not to stress customers! Because they will get unsatisfied and never come back. Difference between banking an insurance: insurance you sell once and then you don't need it until you will need the insurance. Banking we use every day -- therefore the emotions after the sales are very very important. Banks are viewed as problem-solvers in the head of customers. Therefore, they need to fulfill this expectation to provide a good customer experience. **Interaction of CEM and CRM** - temporal delamination of experience - Role of IT - Primary customer value - Contact point considered - Focused benefits - Relation between service / product and the customers living environment Having a customer charter helps to manage the customers relationship. Ex. RBS:  These promises are very difficult to fulfill or very expensive! They failed with these big promises. They should have started with rather small promises, they would be able to fulfill. **Understanding the decision making of customers** Ein Bild, das Text, Kreis, Screenshot, Logo enthält. Automatisch generierte BeschreibungIt was important to know for Tui f.e. to know, when customers decide to book a holiday. There is no specific point when they decide. The evaluation after the experience is also important. In this case it's just about the experience, but also of the reactions of collogues f.e. when showing photos of the holiday. **\ ** **Touchpoints** - It's the smallest and most precise contact between the bank and the customers - Touchpoints are all points of contact. - Online (social media, websites,...)  - The canal (channel) does not really create a touchpoint. - The touchpoint is more dynamic and fun - In the beginning of a customer journey customers often use a non-controllable touchpoint like google. Before they go onto the website of the bank. Ein Bild, das Text, Schrift, Diagramm, Screenshot enthält. Automatisch generierte Beschreibung - What do the touchpoint serve for the customer? - For banks its always important to know what the competition is doing. Most banks are strategically "smart movers". When something knew is in the market, banks are just moving when the other banks are moving. Exam question: Show the 4 dimensions and elaborate the service offering. Drawing! **Personas** Personas are important to assign touchpoints and work with them. Personas should represent the target group. For that we use clustering. concerns are very important to avoid mistakes and create a bad customer journey Typical personas: Ein Bild, das Menschliches Gesicht, Mann, Text, Kleidung enthält. Automatisch generierte Beschreibung Methodology to design a persona: Ein Bild, das Text, Screenshot, Schrift enthält. Automatisch generierte Beschreibung - Data is very important to know which personas are necessary (f.ex. middle aged persons often need pension fund investment -- so we can create a middle-aged persona with their need and touchpoints). Personas are used for: - Product development (with AI today it's very easy to design different products adapted to the personas) - Process design - Communication design - Campaign management - Addressing customer contact - Channel management - Employe training - To make well founded decisions always in the interest of the customers **Groupwork -- customer journey** In Retail banking 1. Need: a. Mortgage to build a house 2. Find options b. Online research c. Personal recommendations d. Regional aspects e. Personal options to feel comfortable 3. Decisions or shortlist f. Compare offerings 4. Approach g. fix an advisory meeting h. contact can be online or personal 5. Advisory Meeting i. In a branch or online 6. Conclusion of contract j. Personal or via E-Mail depends on the persona 7. Use of bank services k. Not too much contact during the mortage -- when expiry gets closer 8. Get support l. Good contact services ideally with the advisor 9. Recommendation m. When having a good customer experience to family and friends Advises Hafner: - Always look from the perspective of the customer! Don't mix it up - Don't mix up Touchpoint with steps of the process - We don't need to have a touchpoint in every step Ein Bild, das Text, Diagramm, Screenshot, Schrift enthält. Automatisch generierte Beschreibung **What to do to design a customer journey** Banking often is too complex for the customers. They have concerns about banks. From that we can derive needs. They are a lot of levels to understand the customers and their needs. Checklist:  The process needs to be reliable for the customer. A complicate process is not good for customers Ex. Virgin Money They answer customers comments very quickly and can avoid bad reputations. Ein Bild, das Text, Screenshot, Schrift enthält. Automatisch generierte Beschreibung - They talk to their customers to show them, they take them seriously. - That lent to a significant reduction of negative customer comments. - They developed an easy and simple score to measure the satisfaction of the customers in terms of effectives, ease and emotion. - A new governance structure sets a cross-functional CX improvement forum (CXIF) - To help employees to fulfill the vision they have a "decision making guide" **Steering Customer Experiences** **Key figures in CRM**  - Business related KPIs are important, because we want to increase sales. But this KPIs mostly we have only later in the journey. - So, we need to ask the customers to have KPIs in advance - Process related KPI is what a bank do in real life - The attitude related KPIs is what the customers sees (from the process related) **Net promoter Score (NPS)** Ein Bild, das Text, Screenshot, Schrift, Design enthält. Automatisch generierte Beschreibung - Core idea is, to only having 2 question to measure customer's experience. - They answers are classified in three scores - Be aware, that this is customer research! We only ask customers. It's not a market research! - It's not anonym. We know the scores given by the customers. - It reflects the relationship between a bank and the customer. Not the experience of the customer. - We just ask the detractors or promotors the reason for their scoring. We don't ask the passives, because they can't give us a useful answer, because they had a neutral experience and cannot remember it. - NPS = %promotes - %detractors Promoters stay longer with a bank. They own 20% more products than the detractors and referral 2 times more. NPS is often misused. It should be used for learning  The bank learns, what are they doing good (Strengths) and what not so (Weaknesses). **Second option to Measuring customers satisfaction** Ein Bild, das Text, Screenshot, Schrift, Diagramm enthält. Automatisch generierte Beschreibung Here you can also measure the experience (f.ex. the experience at an advisory meeting) The bank is always a problem solver. The customer never wants to talk to the bank with no reason/problem. Ideally banks should exceed the customers expectation.  Save the customer's time! When customers call, their problem should be solved. So that they don't need to go to the branch. **Ex. Interdiscount Use of Customer Effort Score (CES)** Ein Bild, das Text, Screenshot, Schrift, Design enthält. Automatisch generierte Beschreibung **Process key figures**  **Notes from reading** *Lemon, Katherine N; Verhoef, Peter C: Understanding Customer Experience Throughout the Customer Journey, in: Journal of marketing: AMA/MSI Special Issue, Vo, 80, November 2016, S. 69-96* - Because customers nowadays interact with a lot of different touchpoints in multiple channels and media, it's difficult to understand customers experience along the customer journey. This creates a more complex customer journey. - Big firms have created specific roles to improve the customer experience -\> customer experience officers, customer experience vice presidents, customer manager responsible,... - Customer-to-customer interaction through social media are creating significant challenges and opportunities for firms. **Customer experience defined** - There are different definitions of a customer experience. The most important is, that it's not about just buying a product but having a good experience when doing so. - Customer experience is a multidimensional construct that involves cognitive, emotional, behavioral, sensorial, spiritual and social components. During the entire purchase journey. **Roots of customer experience in Marketing** - Customer buying behavior process models: were the starting point in the 1960s. (ex. AIDA-Model). This is still the basis of CE. - Customer satisfaction and loyalty: Starting in the 1970s the concept of customer satisfaction became popular (Ex. Net-Promoter-Score) - Service Quality: in the 1980s the importance of marketing service offerings. This is different than marketing goods (ex. SERVQUAL model). - Relationship marketing: importance to build a strong relationship with customers in 1990s. - Customer relationship management: started in the 2000s. Focus on the optimization of customers profitability by building a relationship. - Customer centricity and customer focus: CRM can be criticized to not necessarily deliver a value to the customer. In the 2000s the concept of customer centricity came up which has the approach to do marketing to deliver value. To provide value for individual customers several tools have been implemented (ex. personas) - Customer engagement: is very important today especially because of digital and social media. Ein Bild, das Text, Quittung enthält. Automatisch generierte Beschreibung **Stages is the customer experience** 1. Prepurchase: customers experience before the purchase -\> need, recognitions, search and consideration. 2. Purchase: all customers interaction during the purchase -\> choice, ordering, payment. 3. Postpurchase: is very important, because it can last until the end of the customers life. The product itself is a very important touchpoint. -\> usage, consumption, postpurchase engagement, service requests. **Touchpoint in the customer journey** - Brand-owned: advertising, website, loyalty programs, service, price,... - Partner-owned: marketing agencies, multichannel distribution partners, communications channel partner, multivendor loyalty program partners,... - Customer-owned: choice of payment method, explanation videos,... - Social/external/independent touchpoints: other customers, peer influences, independent information sources, environment,... they can also be partner-owned websites f.ex. **Dynamics and external influence** - Prior experiences influence current satisfaction, which in turn influences future usage. - Customer decisions become routinized, and they can develop a strong relationship with the brands - Competitors actions also influence the customer experience. **\ ** **Customer journey analysis** - Service blueprinting: a customer-focused approach for service innovation und service improvements. It can provide a starting point for customer journey mapping. - Multichannel perspective: They differ in benefits and costs. Channel choices affect each other. - Mobile: the mobile channel is increasingly getting important. There is still a discussion, if mobile and tablets are a separate channel then desktop devices. They can give the customer a shopping experience at the same time they can look up for better offers. **Customers experience measurement** - There are just newly studies to measure the overall costumer experience. Current research is very fragmented. - Often customer feedback are askes but not the customer experience - There is not yet agreement on robust measurement approaches. - When analyzing customer journey, multiple touchpoints need to be considered. This is very difficult. The touchpoint with the most significant influence should be evaluated.