Part 1 of the two-part series “The Digital Customer Experience And The Customer Journey“
The customer journey and customer experience management, from a digital perspective, are important issues for enterprises. Traditionally, customer experience has centered on the accumulation of multiple contacts and interactions across the customer journey, rather than just a single experience. Now that much of the customer journey is digitized, differentiated management of a spectrum of digital experiences is needed, especially as customers demand more immediate and personalized experiences online.
Research reveals that the quality of digital customer experience management can impact corporate performance. Based on operating profit margins and grouped by the maturity of management systems, the average profit margin of leading companies – 8.2% – is much higher than that of more conservative firms (1.1%).1
The growing digitalization of the customer experience
From information search to transactional purchases and online channels, providing a consistent customer experience has important implications for businesses. Therefore, it is necessary to develop appropriate strategies based on a clear understanding of the customer journey and digital customer experience through online channels.
The customer experience is often defined as a series of internal and subjective customer experiences, whether in direct or indirect contact with the company. The experience, as studied by many researchers, include sensory, emotional, cognitive, pragmatic, lifestyle-focused, and relational components.2
The customer experience also contains responses that are cognitive, affective, social, and physical.3 More specifically, the customer experience has been influenced by factors such as social environment, service interface, store atmosphere, product assortments, price, other channels, brands, and past experiences.
More specifically, digital customer experience refers to the customer experience through a digital interface. As the characteristics of online and offline customers are different, finding and improving the digital customer experience and measuring performance should include traditional and offline factors.
Offline customers consider factors such as store atmosphere, location, wait time, and other customer behaviors that are difficult to control. When these factors are satisfactory, customers are more likely to evaluate the quality of customer experience generously. However, online customers tend to abandon their carts immediately when the website response speed is poor or the search function does not serve up the right offerings.
The digital customer experience can also be described by various components, such as the offline customer experience. This online shopping model consists of cognitive and affective experiences, which are linked to satisfaction and trust and influence customers’ intention to make future purchases online.4
What’s unique about the digital customer experience is its cognitive experiential state – the “flow” of the mental state that deepens so that competitors become invisible. This flow is determined by interactive speed, telepresence, level of challenge, and user skill. On the other hand, the state of the affective experience represents users’ feelings and moods created by perceived control, aesthetics, and perceived benefits.
According to a case study on Amazon’s online customer service experience, online customer experience consists of psychological factors such as trust, value for money, and context familiarity, as well as functional elements such as usability, communication, product presence including preview, interaction with websites, and social presence with other consumers. What matters is that all customer experience factors imply interactions with service providers or other customers.5
The impact on the overall customer journey
For a customer to purchase and use a product or service, it is essential to cover everything from awareness of customer needs to continuous engagement. Each of these touchpoints in the customer experience is what we call the customer journey.6
From a traditional marketing perspective, this journey was perceived as a linear funnel model. The customer selects a brand through the stages of awareness, familiarity, consideration, and purchase decision. However, simple linear models are no longer valid due to the development of digital channels and the enhanced intelligence of customers.
The critical parts of the customer’s purchase journey include the search to discover, consider, and evaluate offerings and execute a purchase. Information search directly impacts purchase behavior and affects the satisfaction of the purchase experience according to the utilization level of information. Additionally, the impact of using an online and offline channel can impact the overall experience. The channels are determined by the attributes and choices of each step, and the benefits can be maximized by switching the channels; for example, the showrooming, looking at products in offline stores, and buying them online.7
1. Klaus, P., “Towards practical relevance—Delivering superior firm performance through digital customer experience strategies”, Journal of Direct, Data and Digital Marketing Practice, Vol.15, No.4, 2014, pp. 306-316.
2. Gentile, C., Spiller, N., and Noci, G., “How to sustain the customer experience: An overview of experience components that co-create value with the customer”, European Management Journal, Vol.25, No.5, 2007, pp. 395-410.
3. Verhoef, P. C., Lemon, K. N., Parasuraman, A., Roggeveen, A., Tsiros, M., and Schlesinger, L. A., “Customer experience creation: Determinants, dynamics and management strategies”, Journal of Retailing, Vol.85, No.1, 2009, pp. 31-41.
4. Rose, S., Clark, M., Samouel, P., and Hair, N., “Online customer experience in e-retailing: an empirical model of antecedents and outcomes”, Journal of Retailing, Vol.88, No.2, 2012, pp. 308-322.
5. Klaus, P., “The case of Amazon. com: towards a conceptual framework of online customer service experience (OCSE) using the emerging consensus technique (ECT)”, Journal of Services Marketing, Vol.27, No.6, 2013, pp.443-457.
6. Lemon, K. N., and Verhoef, P. C., “Understanding customer experience throughout the customer journey”, Journal of Marketing, Vol.80, No.6, 2016, pp. 69-96.
7. Verhoef, P. C., Neslin, S. A., and Vroomen, B., “Multichannel customer management: Understanding the research-shopper phenomenon”, International Journal of Research in Marketing, Vol.24, No.2, 2007, pp.129-148
For more insight, download a free whitepaper from IDC about how to drive a great customer experience from the design of new products, through to their operation at a customer.