Chapter 13

Question 1

Explain the development of customer experience as a perspective

Answer 1

1. Agrarian economies
   Revolved around growing and producing. E.g. corn
2. Industrial economies
   Manufacturing products. E.g. cars
3. Service economies
   Delivering services. E.g. banks
4. Experience economies
   Co-creating individual experiences. E.g. brewing your own beer

Question 2

State and explain the various stages in the customer journey

Answer 2

• Pre-stage: Previous experience
  For those with previous experience, an important factor for determining whether to interact with the organisation again is if their expectations were met. These expectations are compared against the actual service they receive, and thus, effect their satisfaction with it.
• Stage 1: Pre-purchase stage
  Anything that takes place prior to purchase of the product. It includes awareness and learning about the product. Information search occurs, internal and external sources. They become aware of the product attributes and benefits, and evaluate it against alternatives.
• Stage 2: Purchase stage
  Customers will have decided on the product to be purchased, but they’ll still need to decide on when and how the purchase will take place. There are periods in a year where customers are more interested in a product. The customer would also choose between buying online or offline. The organisation would need to optimise their touchpoint accordingly. Online; the org would try to ensure the process is easy to follow, while being secure enough to provide reassurance. Offline; the organisation would focus on the servicescape and retail environment.
• Stage 3: Post-purchase stage
  The customer will use and evaluate the product, as well as the experience, to determine whether their expectations have been met. This effects decisions to engage with the organisation in future, and future relationship.

Question 3

What are the types of touchpoints?

Answer 3

• Brand touchpoints
  Are developed by the brand to reflect brand values, as they are under the control of the organisation. All marketing communication, marketing mix, loyalty programmes, brand communities.
• Partner touchpoints
  Are touchpoints developed together with partners, such as retailers, distributors, and communication channel partners
• Customer-owned touchpoints
  Are touchpoints that are part of the customer experience but out of the organisation’s control. For example, customers decide which aspects are important about a service, or how the product can be used.
• Social touchpoints
  Come about when people influence each other during the shopping process. Customers rely on reviews they read online, social media, and opinions of peers.

Question 4

How does having customers with a high level of engagement benefit organisations?

Answer 4

• Increased customer lifetime value (CLTV)
  Customers who are highly engaged with an organisation contribute 23% more revenue than the average customer.
• Customer referral value
  Highly engaged customers share their experience of the organisation, thus introduce the organisation to others. This could be encouraged through a reward-based referral programme.
• Customer influence value
  Highly engaged customers are more likely to communicate with others, influencing their behaviour. Word-of-mouth and word-of-mouse.
• Customer knowledge value
  Highly engaged customers provide feedback on touchpoints and other issues, allowing the organisation to improve.

Question 5

What are the dimensions that make up customer engagement?

Answer 5

• Cognitive engagement
  Is the mental processes that the customer exercises, which means that the customer pays attention to the product or starts thinking about the product. Previous experiences included.
• Emotional engagement
  Refers to the emotions a customer feels towards an organisation and its offerings. This enthusiasm reflects in how they interact with others about the product.
• Behaviour engagement
  Is reflected in the participation and actions the customer exhibits. Following the organisation on social media, providing feedback about a product, liking a brand message, etc.
• Social engagement
  This includes social interactions. For example, comment sections are a way to engage between customers socially.

Question 6

How can an organisation increase customer engagement?

Answer 6

• Excellent customer service
  Customer service is what the organisation provides to customers to support them, with the aim of making sure that the customer is satisfied. Most customer service happens after purchase with regards to problems with order or product failure.
• Loyalty programmes as strategic tools
  Some loyalty programmes can be linked to a specific product category (like health & beauty), and others are more general

Question 7

What does the term ‘employee engagement’ mean and what are the two parts of employee engagement?

Answer 7

The term ‘employee engagement’ refers to the employee’s passion and connection with their employer.
Two parts:
- Engagement with the organisation as a place to work
The employee evaluates the organisation as a fair place to work, they are treated fairly, and confident in their leadership.
- Engagement with the direct manager
The extent to which employees get performance feedback from managers, have positive relationships in their team, and feel appreciated by their manager.