promoters argue that designing great customer experiences delivers loyalty and improved retention as a natural consequence of happy customers – as this quote from the 1994 Harvard Business Review explains: “Profi t and growth are stimulated primarily by customer loyalty. Loyalty is a direct result of customer satisfaction. Satisfaction is largely infl uenced by the value of services provided to customers.” (Alan Dick and Kunal Basu). In their seminal book, The Experience
Economy, authors Joseph Pine and James Gilmore maintain that competing on product and service alone is no longer enough, as greater effi ciencies and economies of scale are leading to widespread commoditisation of service, with little opportunity for profi table differentiation. For example, if a budget club differentiates itself primarily on price, what happens when the next budget club opens down the road? Research has also shown that only 50
per cent of customer experience derives from the physical performance of an organisation – facilities and price, for example (Colin Shaw and John Ivens, for their 2002 book Building Great Customer Experiences). While it’s true that customers will always want ‘better and cheaper’, it’s not the full story: Jones and Sasser pointed out in their 1995 Harvard Business Review paper that rationally satisfi ed customers can defect just the same as dissatisfi ed customers.
november/december 2011 © cybertrek 2011
In their book, Pine and Gilmore
explain how a typical service business will charge for the activities it performs, while an experience business charges for the good feelings customers get when engaging with it. They also go on to outline a fi nal stage based on customers paying for the level of ‘transformation’ benefi ts provided by the service. Personal trainers take note.
LEARNING FROM APPLE
Many businesses, large and small, have been quick to understand and adopt CEM; its adoption has proved particularly beneficial for traditional experienced-based businesses such as hotels and attractions. However, there have also been stunning successes among more unlikely businesses, with Apple being the most notable example. To witness the power of experience design, walk into any Apple Store and look around. Here are a few highlights: DÉCOR – Ron Johnson, the man
behind the Apple Store design, described the physical layout of the store as “inviting, approachable, warm, interactive and intelligent”. The clever use of natural materials such as stone, wood, glass and stainless steel bring to mind a hip boutique hotel – indeed, much of the initial research was based on looking at what the best hotels and
‘hip’ museums do in their public areas. ATMOSPHERE – The Apple Store was one of the first chains to have fully
Lessons to learn: Apple Stores are a stunning success story in customer experience management
connected computers on display. Customers could come in and check their email and browse the internet for as long as they liked. This was an inspired move, as it let customers interact with Apple’s hardware and software and created that all-important buzz that draws in even more people. In fact, the stores often resemble more of a cool hangout than a retail unit. STAFF – You may be surprised to
learn that Apple retail employees aren’t paid commission at all. This is to ensure that their focus is on promoting the
‘Apple experience’ rather than high- pressure sales tactics. All store staff are avid Apple fans and have an almost tribal affi nity with the brand, showing great pride in their Apple lanyard and T-shirt. In addition, while most retailers are reducing their staffi ng to an absolute minimum, Apple is intent on investing even greater resources in front-line staff: it believes good facilities will only get you so far, with people the key. BUYING NOT SELLING – The
Apple Store may not look much like a typical shop – a distinct absence of POS terminals (cash registers), for example – but don’t be deceived: the process for extracting money from customers has been honed to a fi ne art. Rather than
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