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The Four Stages of the Customer Experience
By Tom Sweeny, ServiceXRG

The Customer Experience

The way we interact with customers directly affects the way they perceive us. When we are responsive, attentive, willing and able to provide the information or assistance they need, we increase the likelihood of providing a positive experience. When we are difficult to do business with, unable or unwilling to satisfy customers’ needs, indifferent, inept or rude, chances are the customer will have a bad experience.

A satisfying customer experience is critical if we want to positively influence the way customers behave. Anything less — even if it’s just a neutral experience — is not sufficient to compel the behaviors we want. Customers that have a positive experience are three times more likely than customers with a neutral or negative experience to buy a product from the company that delivered the experience; four times more likely to recommend a company or renew an existing relationship (e.g., a service contract); and five times more likely to state that they are satisfied with the outcome of the interaction.While companies generally agree that a good experience is something to strive for and a bad experience is something to avoid, they find it’s not always easy to provide the experience customers need or expect. The first step to creating a positive customer experience is to understand the critical elements that shape the experience. It is also imperative to recognize the phenomenal impact the web has on shaping customer experiences and the new challenges introduced as we move more customer interactions on-line.

Elements of a Successful Experience

Whether it’s delivered on-line, by phone or in person, the customer experience should be governed by the same basic principle: Customers have an objective in mind and want to achieve it quickly and efficiently. Their goal may beto purchase a new product or get help with something they already own. Regardless of the objective, there are four basic elements that define the experience customers have in driving towards their desired outcome. These elements are: Exploration, Formulation, Validation and Action.

Exploration is the first step in the customer experience. At this stage the customer is looking for the tools, resources and information that will help them chart a course to their final objective. In many cases, the customer does not know what the end result will be and have only a general idea where to start their journey.

For example, when a customer is researching a product to purchase they may know that they want an MP3 player, but may not know which make or model is right for them. They may not know the price range of such products or where to buy one. Their experience begins by exploring the possible options, including available products, features, price, etc.

This exploration phase also applies to services. Customers may know that they have a problem, but may have no idea what the underlying cause is or how to get it resolved. They begin their experience by searching for information to help them isolate and resolve the issue.

Formulation

Initial discovery of possible options can often complicate a service or shopping experience. A process that began with a simple objective — to purchase an MP3 player — has blossomed into a ‘situation’: customers find they can choose from dozens of manufacturers, all with models offering different features and price points. As the customer experience continues, the effort focuses on the formulation of a desired outcome. In product research and e-commerce scenarios, the customer begins to make decisions about what product features and price are of most interest.

Validation

The quality of a customer experience depends on more than whether the customer chose the right product to buy or figured out which solution would solve a problem. A complete customer experience requires that the course of action selected by the customer – deciding to buy a specific make and model of MP3 player – is validated by objective evidence. Validation may come in the form of professional reviews, magazine articles, comments from peers, and other trusted sources.

Action

The final stage of the customer experience is the action a customer takes to achieve their desired outcome. This action may take the form of a product purchase or the satisfactory resolution of a service issue.

The Journey vs. Outcome

While the four elements described above describe the stages of customer experience, the experience itself is best defined as the way in which these stages unfold as the customer journeys toward the desired outcome. To be successful, a customer experience must have a satisfactory outcome. Moreover, the path to this outcome must be perceived to be productive, efficient, and even enjoyable.

Figure 1: The Journey to a Positive Customer Experience

Many factors affect the customer experience. While no two customers are alike, every customer experience shares basic characteristics that help to assure that the flow of the experience is positive and the elements of the experience are fulfilled. Basic stages of the experience include:

  • A Starting Point – Customers need to know how to begin their journey. Where should they start, what should they do first, and what information do they need to proceed?
  • A Road Map – As customers navigate their way from exploration to action they need to know how to take each subsequent step in the process. Instructions, guides, and live assistance can all be used to keep the customer on the track to their desired outcome.
  • A Destination – Every experience has a desired outcome. At the beginning of the journey the customer may be unsure of the outcome, but they at least have a direction in which to head. As the journey towards the destination progresses, a positive experience will help to refine the characteristics of the final goal (e.g., select a product to buy or receive an answer to a service issue).

The goal is to create a situation where customers feel that the journey to their desired outcome is easy and relevant to their needs. If a company can’t meet customers’ needs and provide a reasonably acceptable experience, then they will likely choose an alternative path to their destination.

Conclusion

Companies have a lot at stake when they move interactions to the web. Once on-line, their customers are just one Google search away from a variety of alternative sources of information and resources to help them satisfy their needs. Brand awareness and affinity can be undermined in an instant. Creating a positive customer experience has never been more important. It’s also never been more challenging.

The battle for mindshare and marketshare has shifted to the virtual world and customers are in control. Companies that wish to maintain the mindshare of their customers and to rise above the noise of alternative sources of information must be prepared to deliver an experience aligned with customer needs. Providing a superior on-line shopping and service experience can no longer be viewed as an optional add-on or simply as an opportunity to reduce costs over brick and mortar channels, but as a necessity for creating and sustaining customer loyalty and achieving market differentiation.

About the Study

The information presented within this article is from a larger study to examine how the web is changing the way businesses engage with customers and the impact on-line interactions have on shaping customer perceptions of companies. The study, conducted by ServiceXRG and sponsored by InQuira, examines both shopping and service experiences. The study was designed to gain insights from both the consumption and supply sides of the on-line experience and includes responses from 503 customers and 311 companies.

The consumption-side of this study explores how individuals search for the information to support on-line service, product research and shopping activities. The supply-side explores the investments, tools, and resources companies provide to encourage web use, drive successful on-line transactions, and deliver a positive customer experience. For more information contact Tom Sweeny (tsweeny@servicexrg.com).

About ServiceXRG
ServiceXRG specializes in helping companies develop and execute service and support strategies that strengthen customer relationships and optimize financial performance from service operations. ServiceXRG’s research provides a balanced perspective of the IT services industry with views from users, service professionals and suppliers. ServiceXRG combines years of real-world service industry expertise with a unique ability to collect, analyze and present high-quality industry data. ServiceXRG provides management consulting, custom benchmarking, competitive analysis and customer satisfaction assessment, and publishes a series of reports on industry trends and best practices. For more information, visit www.servicexrg.com.