The Rise of the Customer Experience Model

In my last post, I outlined the shortcomings of the marketing funnel when it comes to today’s marketplace. But given the limitations of existing models, how does one go about measuring marketing activities and the success of acquisition and retention strategies? Clearly we need a new model. New models can no longer afford to track activity within specific marketing channels, but must be centered around the customer, and based on the brand experience across all touch points.

This new type of Customer Experience Model encompasses three key stages of the customer lifecycle:

• Discovery: From discovering the need, to researching the category, brand and specific product or service, this step is critical to getting to the eventual purchase. This is the phase where traditional measurement methods still work, since marketing focuses on category and brand exposure through different channels.

• Purchase: Customer experience during this phase includes usability associated with the purchase process, product availability, pricing and delivery, etc.

• Advocacy: This consists of customer activity after purchase (i.e., lifetime value, referrals, recommendations, etc.), and is arguably the stage where the marketing funnel is the weakest. Marketing teams must include post-purchase experience as part of their strategy if they want to leverage word-of-mouth influence.

By using a model that takes into account the entire customer experience, you will be able to better allocate resources. Knowing the 80/20 rule (80 percent of your revenue or profit is likely coming from 20 percent of your customers), you will be able to concentrate your efforts on getting the most profitable customers.

One method for deploying such a model is to use scoring throughout the entire customer experience. For example a negative score can be assigned to each event that has a cost to your organization (campaign clicks during the Purchase stage and support calls or tickets during the Advocacy stage) and a positive score can be assigned for each conversion event (a purchase, referral, etc.). In this manner, a user who clicks on multiple campaigns without ever purchasing or adding items to cart will have a negative score and can ultimately be treated different than someone with a positive score.

This type of Customer Experience Model provides several benefits:

• Customer-Centricity – Most marketing today is channel-centric, with the customer as an attribute of the channel. By placing the customer at the center of all marketing, you’ll not only provide a better experience, but you’ll also get a better picture of the customer journey across channels. More importantly you’ll be able to better allocate budget across channels. Rather than looking at what channel works and what doesn’t, you can concentrate on what channel works for which customer or customer segments, yielding improved efficiency.

• Persona-Based Marketing – Another key advantage of this model is that it promotes the use of personas across the different stages of the customer journey. We will discuss personas in a later post, but this provides a more targeted messaging platform across all stages of the customer experience.

• Omni-Channel Customer View – Today’s customers no longer interact with a brand through a single channel. Customers may learn about a brand on social media, research the brand’s offerings on their tablets, and make the purchase on their desktop devices. A model that is centered on the customer will recognize this as one customer, rather than three separate and distinct visitors.

• Focus on High-Value Customers – By incorporating post-purchase behavior, you can shift your focus to high-value customers (i.e., customers with high lifetime value, high referrals, etc.). It’s that 80-20 rule. Organizations can direct their attention to the customers who generate the highest value to the organization, thereby maximizing profitability.

We live in the era of customer. Unfortunately, the traditional funnel, or linear, view of marketing will no longer suffice. Industry experts like Forrester and McKinsey & Company are starting to share this view and technology has finally caught up with the desire to provide an omni-channel experience. Shouldn’t our marketing be focused on the customer as well?