Customer experience – The impact beyond service provider
This Blog post was written by Majd AbedRabbo.
Let me begin by asking you a simple question: would you rather have bought a lower quality shirt from a lovely salesperson or a higher quality shirt from a rude one? Most of you would have probably chosen the former due to the positive experience you had.
While this example is oversimplified, it goes to show that historically product and service quality were integral for consumer decision making – presently more emphasis is on Customer Experience.
Remember the days where product and service quality were key determinants for consumers’ decision making? Those days seem like yesterday but in reality, they are even further away. According to research, Customer Experience (CX) will become the unique selling point for businesses by 2020, overcoming other service aspects such as quality.
The truth is, the most successful businesses in the retail sector have been investing heavily in this elusive concept. In the industry, the position ‘Chief Customer Experience Officer’ has been introduced to the board of executives, making CX the top priority for managers for the upcoming years.
Whilst the industry has been enjoying the fruits of spending money on this concept, academics have been debating the origin and dimensions of this concept. A wide body of research has attempted to define the construct and its determinants.
Meanwhile, others argue the holistic and latent nature of this construct. But, have you ever wondered how your experience within a place might affect the whole economy? Perhaps I can help you answer that. So, let’s dig in while keeping research philosophies aside to try and make sense of CX’s impact!
In a broad marketing sense, CX is the outcome of a consumer’s interaction with the service provider (easy stuff, yeah?). Example: The other day I visited a doctor for a blood test check-up. My interaction with the doctor was great, she was very knowledgeable, friendly, and made me feel comfortable when relaying my results. Assuming CX is that simple, this doctor deserved a 5 star Google review. But reality is far from that!
Before I explain why, let’s discuss the complex side of CX. A stream of literature argues that CX is the outcome of internal and subjective responses towards service exchange beyond cognitive and physical elements such as emotions, affective and social responses. In this case, CX is the totality of sub-experiences the consumer develops at each psychological level during their journey to goal-fulfilment (the complexity has gone up a gear, hasn’t it?).
Let’s go back to my example for a second. I only told you about my interaction with the doctor but not what happened before that. Well… as I drove towards the clinic, the roads were jammed, I lost my phone signal hence couldn’t access Google Maps for directions, and when I finally made it on time, I discovered that the appointments’ system was not working and they were now operating on a first-come, first serve basis!!!
Whilst the reception desk couldn’t care less about my frustration that my appointment was delayed by 30 minutes minimum, I was on the phone postponing my entire day’s scheduled meetings (you can imagine how uncomfortable that is). As a result of this disturbance, some meetings were cancelled, and some patients left the clinic frustrated at not seeing the doctor (now you understand why this review will only get 2 stars).
As we have developed some understanding of what constitutes CX, let’s question its real impact. At a micro-level, positive customer experience will yield a positive behaviour such as revisit, referral and even spending time and money, hence high returns for the business. The contrary is true for a negative CX.
However, the effect of this concept is not just at a micro-level but extends way beyond it. If we look at it positively, we can appreciate businesses’ efforts to improve our experience during our interactions with them (Starbucks is known for its superior CX, that’s why their stores are always so busy!).
The higher returns for businesses mean a stable economy, but what about those who are not working on this phenomenon? At a micro-level, the business will either underperform or close. However, at a macro-level, this could mean layoffs, reduced competition, vacant units, unsatisfied customers, reduction in market size and other consequences that will all lead to one thing: a negative impact on the ECONOMY.
Let’s go back to my doctor’s example – remember the other patients that left the clinic unsatisfied? They probably went to see another doctor. Whilst at a macro-level, the result of this negative experience led to cancellations of meetings, customer frustration, unrealized business revenue for both the clinic and the patient and loss of time. At a micro-level, it’s more than a lost customer for the clinic; this negative experience might have led to multiple outcomes as shown in figure 1.
Figure 1: Possible negative consequences of the negative CX encountered in a clinic
By analysing figure 1 carefully, we can comprehend the need to investigate this phenomenon and look for opportunities to use this concept for boosting the economy. It is important for academics and practitioners to dedicate enormous resources to understand and develop this concept further.
This concept sounds like the challenge of the era as advanced technologies are changing consumer behaviour, making them convenience and entertainment seekers. As customers now have more purchase power using the Omnichannel connected world, a positive customer experience is important to increase loyalty, satisfaction and spend.
Therefore, understanding the effect of this concept beyond micro-level is important as it will increase the awareness of businesses towards its impact on their performance, and the performance of the economy overall…