30 July 2011

Outcome, value and customer experience from LinkedIn

How are outcome, value and customer experience related?

Jim Lever
Customer Care Extraordinaire

The customer experience has everything to do with the perceived value of the goods or services encountered. The greatest product in the world may go unbought or underutilized if the customer had to purchase in spite of the customer experience. Most customers will not buy due to an unfortunate experience, and there is not a clearer harbinger of outcome than sale/no sale.

I'm confident that many if not all reading this have purchased a product in spite of a terrible customer service reaction. By terrible I mean that the purveyor was inattentive, rude, unavailable, unhelpful or any and all of the above. If the need for the product is instilled by need, advertising, or perceived desire we go ahead and buy the thing even though we may mutter "this is the last time I do business with these..." on the way out.

Mihai Lefter
Service expert

From a goods or service supplier it's like building a pyramid. At it's base you have the customer experience(based on awareness, discovery, purchase, use of the specific product/service), than you have the value(in my perception this means the sell price of the product including production costs) and on top is the outcome(net profit). all these are correlated as it is unlikely to have profit if the customer experience is terrible or the production costs are too high.

Lee Williams
Managing Director & Customer Champion at Text Your View

Value is determined through an experience or a series of experiences which are made up of the outcomes from processes.

Customers experience is made up from outcomes. However this experience is not limited to touchpoints with a specific company.

Outputs are tangible an normally measured by a business, however not all of them have an outcome for the customer. Outputs are always business measures, outcomes are customer measures. Outcomes are both tangible (functional) and also intangible (emotional) in terms of the customer experience. An emotion is not an output from a process but it is an outcome. This is one of the clear differences.

Value is generally delivered by both processes and people. However there are other elements of the value proposition as well, such as product innovation, brand, bundling, product associations (merchandising) etc. Aspects such as Physcial Evidence, i.e. the look and feel of your office building or shop impact the customers experience.

Bob Zabiyaka
Marketing Manager at BPMonline

If by value you mean Customer Lifetime Value, than the relation between CLV and CE is quite straightforward :) The great example is SaaS companies - if the company doesn't meet customer's expectation he/she leave this company ASAP.

Doug Morse
Customer Experience Strategy Executive

I am not sure what the real question might be that you are asking. There can be a lot of answers. For our clients,when we talk about Customer Experience we do talk about Value and outcomes that result from CE strategies. The value is a direct result of outcomes.If you can deliver successful outcomes to your customers it co-creates value. In "Service Dominate Logic" one of the founding principles states that a product"s value is only in the intended outcome. For example you sell someone an APP but if the APP does not do what the customer expected it to do, it has little value. To the extent that a product exceeds expected outcomes then the value to customer is increased and also creates a better Customer Experience.

Strategically speaking, our work shows how customer focused outcomes is (or should be) the driver for much of the CE work. It closely ties in VOC, use of VOC and expert knowledge that can provide outcomes that customers NEED that they may not know they want. Expert VOC programs understand what problems customers need solved and solving those creates value because the outcome exceeds the customer expectation. If you create successful customer outcomes, you build great customer relationships and loyaly. All of this will creat internal value (financial ) or brand value.

For brevity, this was just one example. Our CE strategy framework looks across 7 core business focus areas designed to deliver greater value by driving to improving customer outcomes. This CE framework is all about creating value for all players.

If your questions becomes more specific, I can certainly go into more detail. Hope this makes some sense. it is a complex topic.

Joseph Kamiru
Telecommunications Marketing at Safaricom

Customer experience is usually an end to end process through the various touch-points and associated channels across the entire customer lifecycle. So it is not a one off event at a specific touch point since each touch point is unique and contributes to the overall customer experience. The process on the other hand puts the customer on one end and the business supplier on the other in the value addition process…...what is referred to as the customer- supplier relationship. The outcome is the result…a win-win situation i.e…a satisfied customer and a profitable business.

Maz Iqbal
Customer Based Strategist

Customer hire products/services to get a job done. Put differently, they hire products and services to achieve specific outcomes. The classic example of this is that people buy drills to get an outcome: holes in various substances.

In the process of hiring and using products and services customers experience. There is the experience of search, of evaluation, of decision, of making your way to the store, of making your way around the store to find what you are looking for, asking for help, talking with store staff, paying, using the product and so forth. Each of these 'interactions' leaves a footprint if the experience is memorable (positive or negative). If it is not then these interactions fade into the background as they do not leave a strong enough trace. Collectively these interactions also constitute an experience. This is what is labelled as Customer Experience.

If you do it right then in helping the customer get her outcome and in co-creating positive memorable experience you have created value for the customer. And most customers will reciprocate by paying you an economic rent (the price), by buying from you again, by talking positively about you (leaving recommendations) and recommending you. That in turn creates value for you. First, from the customer herself and then from the stream of new customers that delivers to you.

Do this enough times and you build a reputation as a brand that customers can count on to get the job done and which leaves them feeling good about themselves and you. And you prosper - until you fall: that usually happens when there is a disruption and it does not matter how good you were in the buggy market because the market is now for cars!

Jorge Restrepo
CEO & Chief Analyst, EurekaFacts Research & Analysis

This could also be seen slightly differently. The customer experience (emotional) and outcomes will be processed rationally to arrive at perceived value and at least partially drive repurchase, price preference and w.o.m. Behavior. The order of these drivers and their direction will impact all relevant strategy and tactics.

Paul Ward
Partner at Avos Global Media

I think that the farther away a product or service veers from sheer utility (the drill example), the blurrier the distinction is between outcome and experience. For example, buying a luxury item can create "value" as much from the experience of buying and, say, wearing, as from the quality and utility of the item.

There is no question that the scorecard of rational and non-rational components of the customer's experience throughout their relationship with the company/product/service is the "value vector". Depending on the importance of different elements (weightings), you'd be able to develop strategies. So looking for clusters of customers whose weightings are similar can help you provide solutions at some scale. OTOH, for certain high-touch brands, or at moments of truth for the customer, an individual approach is most appropriate. The book Human Sigma covers these general principles nicely.

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