'Designing the Customer's Experience' Builds Strong and Lasting Bonds

Published: March 01, 2006 in Knowledge@W.P. Carey

There are hotels that allow pets, and then there is the elegant Arizona Biltmore Resort and Spa in Phoenix, where guests receive a "pet amenity" package upon check-in that includes doggie treats and little plastic bags for -- well, you know. Biltmore guests don't have to haul seven-pound sacks of puppy chow or cat kibble on their trip, either, because the hotel offers a room-service pet menu. Meal choices range from grilled tenderloin with eggs and Japanese brown rice to grilled salmon. A bottle of mineral water and "appropriate petware" comes with each $11 entrée.

Sound crazy? Not to Aleda Roth, a professor of supply chain management at the W. P. Carey School of Business, whose research on what she calls "experience-centric service" captivated an audience of customer-service gurus at a recent conference sponsored by the Center for Services Leadership.

"I'm interested in how a company can actually design their customers' experience, and in doing so, make a huge difference in profitability," she explains. "What does your target market want? What sensations do you want to create?" Her premise: By continually focusing on and refining the shopping or service experience, companies build a dollar-producing bond with customers that goes beyond mere product satisfaction to actual anticipation. In this scenario, the business transaction evokes such pleasant feelings that customers look forward to repeating it.

The goal is to literally choreograph the customer's contact with the company, which may require walking through or rehearsing exactly what targeted customers experience while using a certain brand of soap, riding on Company B's escalator or dining out at the Cleveland location of a steakhouse chain. What are tactile sensations evoked -- does the soap smell subtly good, or overwhelmingly sweet? Does the escalator make too much noise? Does the steakhouse's ambient lighting make it hard to see your fellow diner's face clearly -- does the candle smoke unpleasantly, making your eyes water?

But the savviest businesses figure out how to stimulate more than tactile triggers, Roth stresses. They're going for emotional connections that weld customer loyalty in a way that guarantees repeat business. That's why the Biltmore, a ritzy resort where presidents and stars stay, stocks disposable litter boxes and kibble. Someone figured out that people with enough money to pay an average $250 a night are just as likely to adore their pet -- and want them along for the ride -- as the typical Ramada Inn guest. There are at least a dozen posh hotel/resorts in the metropolitan Phoenix area, but Biltmore marketing folks are betting that by taking extra-special care of your nonhuman traveling companions, you'll choose their venue rather than a competitor's next time you're in town.

Roth proposes that the same experience-centric approach that brings customers back again can also succeed in expanding their consumption, and ultimately, their satisfaction and the company's revenue. "Before, [customer] experiences were limited to a single visit, a short stay to buy goods or a service. A destination used to be somewhere people would go for a visit -- to see family or attend a wedding," she explains. The new goal: to extend the customer's stay and add layers of additional experience via specific themes and multiple activities.

Example: a historic mansion that digs up 1,500 tulip, iris and daffodil bulbs planted only one year earlier to make room for a refreshed maze walk the next; the coffee shop that offers Wi-Fi and pastries along with its $4 cups of coffee; the shopping mall with an indoor ski slope that offers free snowboarding lessons for kids; the grocery store that holds poetry readings and Saturday-night dances; the pet-food maker that sponsors camp-outs for dog owners and their four-legged companions. Making it work requires "a different mentality than before" but eventually reinforces the experience profit-cycle, Roth says. "Give customers a memorable visit with a vibrant environment and the result is anticipation and increased visits, more footfall, longer stay-time and increased orders."

And customers pleased with their experience don't just want to repeat it, they also tend to share stories with others, potentially boosting revenue further. That's another reason that providing experience-centric service is a growing priority even at the most mundane businesses, from grocery stores to gas stations, medical clinics to nail salons. Roth says the push is part of an overall shift in how companies operate. The new business model includes more emphasis on innovation, customer-pleasing employees and "failure and recovery" -- salvaging what can be saved from a disastrous customer experience.

Making all this tangible is a huge challenge, Roth continues, and involves "looking at marketing and operations differently. They're not separate. They go hand in hand, are different sides of the same coin." To this end, a large food manufacturer that sells to a high-volume company such as Wal-Mart might, for example, collaborate on designing a test store, a "grocery store of the future." There, based on market research pinpointing what makes targeted customers spend more, WalMart decision-makers can sample different shopping scenarios on the food manufacturer's dime. "This creates a big connection. There is a real understanding and knowledge of the customer's processes," she adds.

Planners who designed the new international terminal at the Dallas/Ft. Worth airport scored an experiential bulls-eye by including a Grand Hyatt Resort Hotel in Terminal D. During a recent business trip, Roth passed through the terminal and was amazed at the customer-pleasing design and delivery obvious at every turn. "There you are, at the airport, actually in it, and there's this phenomenal hotel with spas and conference rooms. It's so convenient. There are massive pieces of art throughout the terminal, like a museum, and when I checked in for my flight, employees helped me with my bags, similar to a personal valet service," she recalls. "You don't usually feel good at an airport, but this was different."

Although Roth is a seasoned researcher with more than 125 published academic articles and 38 research awards, her ideas also are rooted in the decade spent as a senior manager in the business world. Now she advises customer-service, marketing and operations executives to pursue a common goal of "getting customers' serotonin going." Bottom line, she says, companies "get more revenue by not only understanding the customer better, but also choreographing their operations to stage experiences that evoke intended customer emotions." At the Biltmore, that means delighting guests by offering homemade dog food at more than a dozen times the cost of a name-brand can of beef and rice.

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