tts

GIULIANO NOCI, Politecnico di Milano, Italy

2007 Elsevier Ltd. All rights reserved. experiences that originate from those contact points.

doi:10.1016/j.emj.2007.08.005

European Management Journal Vol. 25, No. 5, pp. 395410, 2007 2007 Elsevier Ltd. All rights reserved.

0263-2373 $32.00Nowadays the experience factor plays an increas-ingly important role in determining the success ofa companys offering. The literature on CustomerExperience is growing fast and the debate amongscholars and practitioners is fervent. While manystudies explore such theme from a theoretical view-point, tools aimed at supporting marketing manag-ers in devising the right stimuli to support anexcellent Customer Experience are still scarce. Inthis perspective, this study sheds some light onthe concept of Customer Experience, and on howthe right environment and setting for the desiredCustomer Experience should be created in such away as to contribute to the value creation for cus-tomers and the company itself. Drawing from theresults of a survey submitted to several groups ofcustomers, this paper attempts to understand thespecific role of different experiential features inthe success achieved by some well-known prod-ucts. Following the empirical investigation, thiswork also suggests an interpretative model to sup-port the marketing manager in generating theproper stimuli to activate the various componentsof the Customer Experience.

Keywords: Experimential marketing, Customerexperience, Customer behaviour

Introduction

Nowadays competing in a global market has becomeincreasingly difficult and only the creation of long-lasting competitive advantages seems to offer an ave-nue for survival. But where should a company startlooking to develop a competitive advantage? Manyscholars advocate that one of the main routes toreach it is by means of a much stronger focus onthe customer (Douglas and Craig, 2000; Farinet andPloncher, 2002; Kotler and Keller, 2006; Peppersand Rogers, 2000).

In the last years, and particularly in the process ofdevising a companys strategy, this growing attentionon the customer resulted in an increased focus onCRM philosophies. More recently, as the number ofcontact points between a company and its customersincreased, such attention to the customer revealed thefundamental importance of monitoring the manyCHIARA GENTILE, Politecnico di Milano, Italy

NICOLA SPILLER, Politecnico di Milano, ItalyHow to SusCustomer ExAn OverviewExperience Cthat Co-creaWith the CuEuropean Management Journal Vol. 25, No. 5, pp. 395410, October 2007tomerain theperience:ofomponentse Value395

ing to Pine and Gilmores perspective) experiences,but rather they provide artifacts and contexts that

HOW TO SUSTAIN THE CUSTOMER EXPERIENCEIn this perspective, the central idea is to expand thetransaction-based notion of Customer Relationshipto the continuous concept of Customer Experience.Consequently, it becomes necessary to consideraspects that refer to the emotional and irrational sideof customer behavior (Holbrook and Hirschman,1982) and which, more than the only rational ones,account for the whole experience coming from theset of interactions between a company and its cus-tomers. Such experience plays a fundamental rolein determining the customers preferences, whichthen influence their purchase decisions. In fact,whilst the classical economic theory regards the con-sumer as a logical thinker whose purchasing deci-sions are based on rational problem solving, therecent developments on the literature on economicsand marketing, and particularly the new stream ofthe Experiential Marketing, advocates for the exploi-tation of intangible elements linked to the emotionalvalue perceived by customers.

In addition, a similar position can be found in themanagerial field; in fact, 85% of senior business man-agers believe that differentiating solely on the tradi-tional elements, such as price, product and quality,is no longer a sustainable competitive advantageand even more senior managers hold the CustomerExperience as the next competitive battleground(Shaw and Ivens, 2005).

Despite such vibrant enthusiasm, however, the real-ity is very different, and far from being close to eitherwhat the literature advocates or what many compa-nies claim in their statement of intent.

In addition, the scientific literature on this topicshows the limitations and inadequacies that are typ-ical of those research fields which are still far fromtheir maturity, particularly as it lacks both in termsof a precise terminology and of structured and stan-dardized approaches that can support the adoptionof the above mentioned practices.

Given these considerations, the aim of this paper is tocontribute towards the formalization and theimprovement of the existing models and approacheson the matter. In particular, the present study con-tributes to the scientific debate in terms of a furtherrationalization of the approaches and theories so fardeveloped and in attempting to provide an answerto certain open issues. Specifically, in this work it isprovided:

v a conceptual definition of Customer Experi-ence based on the most relevant scholarly andmanagerial contributions;

v an analysis of the specific role played by theexperiential features in a sample of innovativeproducts with respect to the outcomes of theirintroduction to the market;v an interpretative model aimed to support a com-pany in the process of devising contexts and arti-

396 Euroare conducive of experiences and which can be prop-erly employed by consumers to co-create their own,unique, experiences (Caru` and Cova, 2003; Caru`facts that are conducive of a (Customer)Experience, and which can then be used by con-sumers to co-produce their own experience.

State-of-the-art Literature on ExperientialMarketing

The concept of Customer Experience was firstly con-ceived in the mid-1980s when, along with the main-stream literature in consumer behavior that deemedcustomers as rational decision makers, a new experi-ential approach offered an original view to consumerbehavior (Holbrook and Hirschman, 1982). Theimportance of various hitherto neglected variableswas re-considered: the role of emotions in behavior;the fact that consumers are feelers as well as thinkersand doers;. . .the roles of consumers, beyond the actof purchase, in product usage as well as brandchoice (Addis and Holbrook, 2001). Despite theseinitial sparks, the concept of Customer Experiencecame more relevantly to the fore in the 1990s withPine and Gilmores book on the Experience Economy(1999); the authors present the experiences as a neweconomic offering, which emerges as the next stepafter commodities, goods and services in what theycall the progression of economic value. Hence, in the fol-lowing years a flourishing of different contributionsfocused their attention on the Customer Experienceas a new lever to create value for both the companyand the customer (Addis and Holbrook, 2001;Caru` and Cova, 2003; Ferraresi and Schmitt, 2006;Forlizzi and Ford, 2000; LaSalle and Britton, 2003;Milligan and Smith, 2002; Ponsonby-Mccabe andBoyle, 2006; Prahalad and Ramaswamy, 2004; Sch-mitt, 1999; Schmitt, 2003; Shaw and Ivens, 2005;Smith and Wheeler, 2002). The starting point of theseapproaches is a renewed way to consider the well-known concept of consumption: it becomes a holisticexperience which involves a person as opposed to acustomer - as a whole at different levels and in everyinteraction between such person and a company, or acompanys offer (LaSalle and Britton, 2003). In thisperspective, the memorability of the staged events,as in Pine and Gilmores works, is no longer of pri-mary importance: what contributes to the creationof value is not so much selling memorable experi-ences but to enable the customer to live all themoments of the relationship with a company in anexcellent way, even beyond her expectations (LaSalleand Britton, 2003) or, according to the viewpoint ofPrahalad and Ramaswamy (2004), to co-create theirown unique experience with the company. In thisperspective, companies do not sell (or stage, accord-and Cova, 2007). Indeed, Schmitt (1999) states thatas a marketer you need to provide the right

pean Management Journal Vol. 25, No. 5, pp. 395410, October 2007

suming Experience (Caru` and Cova, 2007), in which

between a customer and a product, a company, or part of its orga-

(Anderson, 1995; Brakus, 2001; Fiske and Taylor,1991; Goleman, 1995; Schmitt and Simonson, 1997;

HOW TO SUSTAIN THE CUSTOMER EXPERIENCEthe authors identify a continuum of consumingexperiences ranging from experiences that aremainly constructed by the consumers, to experiencesthat are largely developed by companies (a kind ofapproach which is close to Pine and Gilmores view-point), passing through experiences that are co-cre-ated by consumers and companies (as per Prahaladand Ramaswamy). Accordingly, the role of the firmchanges in each stage of the continuum: from a com-pany pursuing almost a traditional product or ser-vice marketing approach to a company adopting aholistic and immersive experiential marketingapproach (thus providing immersive experiences,whereby a consumer dives into an experience thatis fully developed in details by a company), passingthrough a co-creation stage, in which a company pro-vide the consumer with the basic platform and rawmaterials that are then being used by the consumerto mold and obtain his/her own experience.

As the scientific contributions are rich and diverse, soare the different interpretations and conceptualiza-tions of the Customer Experience offered by eachauthor; nevertheless, despite the differences of per-spective and the various models proposed, one canidentify some common core characteristics of theCustomer Experience. First, it has a temporal dimen-sion which originates from the entire set of contactpoints (or moments of truth, Carlzon, 1987) betweenthe customer and the company, or the companysoffer (Addis and Holbrook, 2001; Caru` and Cova,2003; LaSalle and Britton, 2003), then it is strictly per-sonal and it involves and engages a customer at dif-ferent levels (rational, emotional, sensorial, physicaland also spiritual) so as to create a holistic Gestalt(Brakus, 2001; Schmitt, 1999).

While the overall picture offers plenty of potentiality,if we exclude some pioneers, only few companieshave adopted the perspective of the Customer Expe-rience, whereas the many are still far from the levelof success that can potentially be obtained by lever-aging on the Customer Experience.

Two facts can then be regarded as main reasons forsuch slow adoption rate: one is the lack in the extantliterature of models, interpretation and conceptuali-zation offering a common terminology and a sharedmindset, the other is the lack of structured manage-rial approaches, which can only be overcome by adeeper comprehension of the role played by the Cus-tomer Experience.

Conceptual Framework

This paragraph outlines the reference framework ofenvironment and setting for the desired customerexperiences to emerge. More recently, a comprehen-sive contribution has been offered in the book Con-the research. In the first part we elaborate, drawing

European Management Journal Vol. 25, No. 5, pp. 395410, October 2007Tavassoli, 1998) distinguish three basic systems sensation, cognition and affect eachwith its own struc-tures, principles and mutual interactions. In addition,when considering a person per se, these studies takeinto account the set of ones actions, the system ofvalues and beliefs (from which lifestyles and behaviorsare derived) and relationships.

Furthermore, the multidimensionality of experiencesis also widely recognized in the medical literature.For instance, many neurophysiologic studies supportnization, which provoke a reaction (LaSalle and Britton, 2003;Shaw and Ivens, 2005). This experience is strictly personaland implies the customers involvement at different levels(rational, emotional, sensorial physical and spiritual) (LaSalleand Britton, 2003; Schmitt, 1999). Its evaluation depends onthe comparison between a customers expectations and thestimuli coming from the interaction with the company and itsoffering in correspondence of the different moments of contactor touch-points (LaSalle and Britton, 2003; Shaw and Ivens,2005).

This definition serves as a basis for a deeper con-ceptualization of Customer Experience, which isexplained in the following paragraph.

The Multidimensionality of the CustomerExperience

While still complyingwith the fundamental rule that agood experience must holistically and consistentlyinvolve a person at different levels, and following pre-vious conceptualization, we base our analysis on thepsychological concept of modularity of mind (Pinker,1997). Various psychological and behavioral studiesfrom the debate in literature, a definition of Cus-tomer Experience which underlies the subsequentanalysis; the second part delves into the concept ofCustomer Experience and introduces its elementarydimensions: the experiential components.

In the third part we describe a general frameworkwhereby the inter-relations between the concepts ofCustomer Experience and value exchanged are out-lined, as well as the relationships between such con-cepts, the customer and the company.

A Definition of Customer Experience

For our purpose, we consider a definition of Cus-tomer Experience which takes into account the mostrelevant scientific contributions; specifically, wedefine the concept of Customer Experience as an evo-lution of the concept of relationship between thecompany and the customer.

The Customer Experience originates from a set of interactionsthe widely accepted notion that pain is a multidi-mensional experience including sensory, cognitive

397

HOW TO SUSTAIN THE CUSTOMER EXPERIENCEand emotional components (i.e. Fulbright et al., 2001);this is consistently supported by findings fromhuman brain imaging studies showing that multiplecortical regions are activated during the presentationof painful stimuli (Coghill et al., 1994; Derbyshire andJones, 1998; Jones et al., 1991; Paulson et al., 1998; Tal-bot et al., 1991).

Therefore, drawing from this literature, and follow-ing the stream of other scientific works (Brakus,2001; Fornerino et al., 2006; Schmitt, 1999, 2003), weconceptualize the Customer Experience as a multidi-mensional structure composed by elementary com-ponents. Nevertheless, one must keep in mind that,as indeed the study proved, customers hardly everrecognize such kind of structure. In contrast, weexpect that customers perceive each experience as acomplex but unitary feeling, each component beinghardly distinguishable from the others.

As above mentioned, our conceptualization of theelementary components of the Customer Experiencehas some elements in common with the model pro-posed by Schmitt (1999) and with the results ofFornerino et al. (2006). Moving from the basic ideaof engagement at different levels Schmitt (1999)proposes a modular conceptualization of the conceptof Customer Experience. Specifically, Schmitt identi-fies five Strategic Experiential Modules: sensory experi-ences (sense); affective experiences (feel); creativecognitive experiences (think); physical experiences,behaviors and lifestyle (act); and social-identity expe-riences that result from relating to a reference groupor culture (relate). Fornerino et al. (2006) analyze thecase of an immersive consumption experience andidentify five distinct dimensions: sensorial-percep-tual, affective and physical-behavioral (components)and social and cognitive (facets).

Hence, drawing from the extant literature, the (expe-riential) components we have assumed as dimen-sions of the Customer Experience are:

v Sensorial Component: a component of the Cus-tomer Experience whose stimulation affects thesenses; an offering, whose aim is to provide goodsensorial experiences, can address sight, hearing,touch, taste and smell so as to arouse aestheticalpleasure, excitement, satisfaction, sense of beauty(good examples are Jamba Juice bars or Lushstores).

v Emotional Component: a component of the Cus-tomer Experience which involves ones affectivesystem through the generation of moods, feel-ings, emotions; an offering can generate emo-tional experience in order to create an affectiverelation with the company, its brand or products(good examples of brands which claim a strongemotional link with their customers are Barillaand Kinder Surprise).v Cognitive Component: a component of the Cus-tomer Experience connected with thinking or

398 Euroconscious mental processes; an offering mayengage customers in using their creativity orin situations of problem solving; furthermore acompany can lead consumer to revise the usualidea of a product or some common mentalassumptions (as happened with the Barbie, thefirst doll with the image of a young woman).

v Pragmatic Component: a component of the Cus-tomer Experience coming from the practical actof doing something; in this sense the pragmaticcomponent includes, but is not exhausted by,the concept of usability (the Apple iMac offersan optimal example of what it means to designan extraordinary practical experience for usersbased on usability standards). In fact it does notonly refer to the use of the product in the post-purchase stage, but it extends to all the productlife-cycle stages (see for an example KitchenAidand Whirpools initiative called Insperience).

v Lifestyle Component: a component of the Cus-tomer Experience that comes from the affirma-tion of the system of values and the beliefs ofthe person often through the adoption of a life-style and behaviors. Frequently an offering mayprovide such experience because the productitself and its consumption/use become meansof adhesion to certain values the company andthe brand embody and the customers share (asin the consumption of no logo products).

v Relational Component: a component of the Cus-tomer Experience that involves the person and,beyond, his/her social context, his/her relation-ship with other people or also with his/her idealself. An offering can leverage on such componentby means of a product which encourages theuse/consumption together with other people(i.e. Disneyland parks) or which is the core of acommon passion that may eventually lead tothe creation of a community or still a tribe of fans(i.e. Ducati); finally the product (as haute coutureapparel) can be also a means of affirmation of asocial identity, inducing a sense of belonging orof distinction from a social group; in this casethe link with the lifestyle component is veryrelevant.

While mainly drawing from the results of the abovementioned works, the dimensions of the CustomerExperience we propose bear some differences. First,taking into consideration Schmitts act module, wedistinguish the physical aspects from the valuesand join the physical part with the sensorial dimen-sion. Such approach is also consistent with recentneurophysiologic studies, whereby the physical andsensitive aspects are considered as a unitary dimen-sion. Secondly, we add a new dimension, namelythe pragmatic component, which we drew from theextant literature on the user experience (Arhippai-nem, 2004; Battarbee and Koskinen, 2005; Forlizzi

and Ford, 2000) and which takes into account theaspects related to the human-objects interaction.

pean Management Journal Vol. 25, No. 5, pp. 395410, October 2007

The General Framework

Drawing from the extant theories on value creationand co-creation we propose a conceptual frameworkwhere the concepts of Customer Experience andexchanged value are encapsulated and their mutual-relations and the inter-relations with the main entities(the company and the consumer) are outlined.

As before introduced, the Customer Experience origi-nates from a set of interactions between a customerand a product, a company or part of its organizationand the value that the consumer and the companygain is created through that set of interactions (Addisand Holbrook, 2001). Additionally, following Addisand Holbrook (2001) we make a distinction betweentwo kinds of consumer value: utilitarian value (or func-

study was carried on. For such reason, the analyzeddata were partially qualitative.

they have a considerable impact in determining theCustomer Experience (see Figure 3).

HOW TO SUSTAIN THE CUSTOMER EXPERIENCEtional value) and hedonic value (or experiential value).

Such distinction draws from the subject-object inter-action as described by Holbrook (1999) whereby thetype of value depends on the relative weight of theobjective (or functional) features of the product overthe subjective responses of the consumer (see Hol-brook, 1999), which, turn, are elicited by specificaspects of the offer, which we refer to as experien-tial features. Equally, on the basis on the relativeweight of the hedonic value over the utilitarianvalue, products can be classified into three groups:hedonic products, utilitarian products, and balanced prod-ucts, for which a balance between the two types ofvalue is present (see Figure 1).

On the other hand, on the side of the company, thevalue generated from the set of interactions betweenthe customer and the company (even when mediatedby the companys offering) has a potential impactboth on the traditional performance measures (i.e.market share, sales, profitability) and on a set ofintangible assets of the company (brand equity andcustomer equity).

The general framework is represented in Figure 2.Figure 1 Hedonic, Utilitarian and Balanced Products(Adapted from Addis and Holbrook, 2001)

European Management Journal Vol. 25, No. 5, pp. 395410, October 2007Investigation Methodology

The research has been carried out in two phases. Inthe first part, the experiential features of the offeringproposed by the company have been analyzed bymeans of secondary sources and direct interviews:this phase was meant to understand the marketingstrategy used by the company and the aspects ofthe Customer Experience on which the companyfocused in its strategy. In the second part, a marketresearch has been performed to assess how custom-ers perceive and evaluate the different componentsof the Customer Experience and to assess which ofthe six components were perceived as the most rele-vant for each of the products analyzed. In particular,following Calder and Malthouse, 2006 a survey, bothexplorative and descriptive in nature, was carriedout by means of a structured questionnaire with mul-tiple choice, rating scale and agreement scale ques-tions based on a 1-4 Likert scale. The choice of thequestionnaire as investigation means has been takenSampling of the Cases

Cases were selected to achieve an appreciable degreeof heterogeneity in terms of Customer Experienceconveyed to the market. Specifically, two variables,namely:

v type of knowledge embedded (tacit vs. coded, as perPolanyi, 1983);

v durability (non durable, medium range, long range)

were considered for the selection process sinceResearch Methodology

This study takes into consideration the role of theCustomer Experience in determining the outcomesof the introduction of some well-known and remark-ably successful products; to simplify the choice of thecases to be analyzed, we select our sample of casesamong those that are considered, both in the existingliterature and in the common opinion, as successfuland are characterized by widely-known brands witha very strong image. Furthermore, we specificallyconsider products that are not characterized by astrong superiority in technological aspects (whichmainly convey functional value) so as to betterisolate and outline the role played by experientialfeatures.

As the research project aims at suggesting an inter-pretative model of the above described phenomena,and due to the novelty of the matters, an explorativeboth on the basis of some precedents (as the already

399

eri

sorialtionalnitimastytion

Value perception

CH

_U_E

HOW TO SUSTAIN THE CUSTOMER EXPERIENCEExp

Company

SenEmoCogPragLife

Rela

Value proposition

Value realization

Company value (Ferraresi and Schmitt, 2006)

_ Sales, Market share..._ Brand equity_ Customer equity

Figure 2 General Framework

iPod

Playstation

Harley-Davidson

Smart

Gatorade

PringlesCoded

Type of knowledge embeddedmentioned work by Calder and Malthouse, 2006) andon the ground of the fact that data collected throughquestionnaires permit the use of specific statisticalanalyses, which can be applied to explore the inter-nal structure of the Customer Experience, as it hasbeen conceptualized in our study.

The questionnaire has been submitted to a non-statis-tical sample of almost 200 units (for each analyzedproduct, totaling 2368 units) chosen among individu-als, between 16 and 55 years, who usually buy/usethe considered product (for further information onthe sample, please refer to the sample descriptionin Appendix 1). We outline that the choice ofemploying a non-statistical sample implies someproblems on results generalizability; this issue, how-ever, can be considered as being not too relevant dueto the explorative nature of the research. The pro-posed interpretative model, in fact, can be subse-quently validated and tested on the basis of amultiple case study analysis.

The administered questionnaire (a sample of whichcan be found in Appendix 2) had been pre-testedon a small sample of consumers, hence the final ver-sion is made up of three parts: the first is aimed atcollecting demographical information (age, gender,

most relevant. The questionnaire was administeredto the sample both in paper and electronic format

Non durable

Ikea

Swarovski

Nike

Swatch

Haute Couture Brand Bars

McDonalds

Durable(Medium range)

Durable(Long range)

Tacit

Durability

Figure 3 Sample of Selected Cases

400 Euro(on the WWW).

Data Analysis

The framework for the analysis of the data is basedon the conceptualization of the Customer Experienceas a multidimensional concept. The first analysis wascarried out on the collected data to assess the relativeweight of the utilitarian value when compared to theeducation, etc.) about the respondents; the secondinvestigates the motivations on the basis of the pur-chase by analyzing the role of the experiential fea-tures; the last section is aimed at comparing theevaluation of the different components in order tounderstand which one the customers consider as

veticleal

ConsumerValue expectation

onsumer Value (Holbrook 1999; Addis and olbrook 2001)

tilitarian valuedonistic valueencehedonic value.

In a second phase each component of the CustomerExperience has been analyzed to investigate howcustomers evaluated it and how much relevant itwas when compared with the others. This part ofthe analysis was aimed at defining the interpretativemodel (see paragraph 6).

A factor analysis was carried out to explore the inter-nal structure of the dataset, additionally, furtherqualitative analyses and a cluster analysis (for somespecific cases in which it seemed relevant to identifythe existence of differences in customer behavior andevaluations) were conducted.

Results of the Survey

As mentioned in the previous paragraph the analysisof the data obtained by the survey was aimed atreaching two main results:

pean Management Journal Vol. 25, No. 5, pp. 395410, October 2007

v the comprehension of the relative weights of theexperiential features over the functional ones inthe perception of value (for each of the twelveproduct analyzed);

v the definition of the contribution of each experi-ential component to the overall evaluation ofthe offer.

Utilitarian vs. Hedonic Value

The first analyses were oriented at determining therelevance of the whole hedonic value as comparedto the utilitarian one. Figure 4 presents the resultsand demonstrates that overall the experiential fea-tures are perceived by customers almost as much rel-evant as the functional ones, indeed 7 products out of12 have been classified as balanced and 2 productshave been reported to be hedonic: Harley David-son and Smart. Such observations should however

nent is associated to certain group of customers,which represent only a fraction of the entire market(i.e. the relational component tied with collectingpractices). Consequently, the average score reportedby such component is substantially lowered by thelarge part of the sample which is definitely not inter-ested in this kind of component of the CustomerExperience. As expected, a cluster analysis confirmedthis line of reasoning isolating two clusters of cus-tomers, one remarkably affected by the relationalcomponent, the other substantially indifferent.

Experiential Components

NIKE

H.C. BRAND BARS 2.48

2.28

2.93

3.07

Balanced

Utilitarian*

HOW TO SUSTAIN THE CUSTOMER EXPERIENCEPLAYSTATION

GATORADE

MCDONALDS

IKEA

SWAROVSKI 2.65

2.81

2.31

2.56

2.59

3.08

3.06

3.04

2.81

3.22

Balanced

Balanced

Utilitarian*

Balanced

Balancedbe tempered with the consideration that certain typesof experiences are particularly difficult to be investi-gated simply by means of a questionnaire. Those areexperiences which indeed are felt by a customer butoften at a sub-conscious level, thus a quick andsuperficial analysis, such as that performed whileresponding to a questionnaire, is likely to miss orunderestimate their real impact. Further, peopleoften show a tendency to undervalue the influenceof communication campaigns, advertising and othermarketing strategies on their purchase decisions;often an impulse purchase, mainly dictated by irra-tional motivations, is later re-interpreted in rationalterms and thus underestimated in the reported per-ceptions of a questionnaire.

As for the relational component, the analysis fromsecondary sources showed that such kind of compo-

SWATCH

HARLEY DAVIDSON

SMART

PRINGLES

IPOD

Hedonic Value Utilitarian Value Type of product

2.40

2.13

3.03

2.98

3.02

3.13

2.91

1.71

2.63

3.35

Utilitarian*

Balanced

Hedonic*

Hedonic*

BalancedFigure 4 Main Results of the Survey (a). *ANOVA:p-value < 0.05

European Management Journal Vol. 25, No. 5, pp. 395410, October 2007summarized in Figure 5 (scores have been calculatedas mean of the scores of the components of the Cus-tomer Experience).

Scores have been divided into three sets according totheir distance from the mean of the scale used (whichis 2.5); namely: scores much above the mean, scoresnear the mean or slightly above and scores belowthe mean.

Additionally, two considerations can be drawn fromFigure 5:

v the value associated with the sensorial compo-nent is substantially high (above the mean)across all the considered cases;

v the value associated with the relational compo-nent does not vary sensibly across productsand it is lower than expected, indeed no occur-rences have been reported to be much abovethe mean. This can be explained, as previouslymentioned, by the presence of two differentgroups of consumers within a given polled sam-ple, one of those being substantially indifferentto the specific experiential component.

Given such particularities, in defining the interpreta-tive model (proposed in the next paragraph) weThe second set of analyses was oriented at determin-ing the scores of each experiential component foreach product under analysis. The results have beenFigure 5 Main Results of the Survey (b)

401

factors that can be related to a single experiential

be framed so as to address the sensorial component.

Commitment/Involvement Matrix

The analysis of the scores reported in association tothe emotional, cognitive, pragmatic and lifestylecomponents suggested the definition of two variablesthat could account for the differences of relevancereported for the four components. Namely the twovariables are:

v Customer involvement, which is the level of impor-tance a customer attributes to an object, an actionor an activity and the enthusiasm and interestthey can generate (Dalli and Romani, 2000; Gold-smith and Emmert, 1991). Such variable isaffected by two factors: cost of the offering (bothin absolute terms and in relative terms whencompared with competitors) and impact on thecustomers self image. In this case, a higher cost

Figure 6 Typologies of Sensorial Component

HOW TO SUSTAIN THE CUSTOMER EXPERIENCESensorial Componentcomponent) and mixed components (that is, fac-tors whose variables belong to different experientialcomponents). Mixed components can be consideredas a cue for the hypothesized existence of interrela-tions between components, which in turn stand forcomplex experiences. Complex experiences thusemerge as specific case in which the componentsare so intimately intermingled that consumers areunable to draw any separation between them.

An example of the results of the factor analysis forthe iPod case is reported in appendix.

The Interpretative Model

The interpretative model consists of two parts. Firstof all, on the bases of the evidence reported in thediscussion of the results, other qualitative analyseswere carried out to infer further insight on the senso-rial component.

In the second part, first we analyze the relevance ofthe four components that reported the highest differ-ences in scores among the analyzed cases: emotional,cognitive, pragmatic and lifestyle. Then, the rela-tional component was analyzed separately: takinginto account the results of the cluster analysis, themodel defines different typologies of relational com-ponent proposing a link between them and the char-acteristics of the product analyzed. The output of thissecond part is the Commitment/Involvement Matrix.Complex Experiences

The main objective of the factor analysis was to studywhether the experiential components were actuallybeing perceived separately by customers or not. Suchinvestigation is important both from a theoreticalperspective and from a managerial perspective. The-oretically, as we hypothesized the existence of com-plex experiences whose modularity cannot bedecomposed (as perceived by customers), and mana-gerially since managers, while greatly benefitingfrom a simple and straight-forward tool (operatingon single and separated components) definitivelyought to take into account potentially complex inter-actions, should they be identified in the factoranalysis.

Indeed, the results of the factor analysis showed thateach case reported both pure components (that is,decided to analyze separately the sensorial and therelational component.As before mentioned, the sensorial component wasreported to score high across all the cases. Despite

402 Eurothis uniformity of results, an in-depth analysisrevealed that whenever a clear link between the corefunctionality of a product and a natural sense couldbe established (e.g. iPod/hearing, Pringles/taste,etc.) then that specific sensorial component was per-ceived as being the most relevant for the user. On theother hand, when a clear link could not be identified,the results showed that sight was the sense perceivedas most important.

Figure 6 reports when such a link could be estab-lished between core functionalities of a product andthe specific sensorial component.

Such observation poses some caveats from a manage-rial point of view, and specifically when conceivinghow and what specific features of the offering shouldSWATCH

HARLEY DAVIDSON

SMART

PRINGLES

IPOD

NIKE

H.C. BRAND BARS

PLAYSTATION

GATORADE

Score SensorialExperience

Link with core functionalities

3.48

MCDONALDS

IKEA

SWAROVSKI

2.65

3.53

2.70

3.62

3.63

3.31

2.67

2.53

2.90

3.21

3.63

Sight

Taste

Sight

Sight

Sight

Sight

Sight

Taste

Taste

Sight&Hearing

Sight

Hearing

No

Yes

No

No

No

Yes

Yes

Yes

Yes

Yes

No

Yesof the offering requires a greater willingness topay, which is more likely to be attained when

pean Management Journal Vol. 25, No. 5, pp. 395410, October 2007

the offer provides a significant emotional compo-nent. On the other hand, when a product has arelevant impact on ones image the sharing ofthe values embedded in the offer is fundamental(lifestyle component).

These assumptions can be compared with the datacollected to verify the existence of a relation betweencustomer involvement and the emotional and life-style components. Considering the means of thescore obtained for the two modules and contrastingthem with the 2.5 cut-off value (mean of the 1-4 Lik-ert scale) it was possible to divide the analyzed casesinto two groups: one set with scores higher than themean (marked in grey in Figure 7), and the other setwith scores lower than the mean (marked in white inFigure 7) and thus ascertain that actually the firstgroup includes cases characterized by higherinvolvement than the ones in the second group.

v Customer commitment, which is the effort in termsof resources the customer makes to use the prod-uct (adapted from Grandinetti and Paiola, 2003).Such variable is influenced by two factors: pur-

were used to explain the relevance of the four com-ponents; in the case of the relational component thesame two variables could be applied to describethree sub-typologies of the relational component.Accordingly, three kinds of relational componentcould be identified:

v absent or superficial: when a low-level customerinvolvement is present the relational componentstems from interpersonal relationships that aretemporally limited to the time spent while usingthe product (e.g. Playstation and Pringles);

v connected to collecting practices; when the rela-tional component is more intense than in the pre-vious case (due to the high level of customerinvolvement), but the low commitment levelindicates that the relational component is mainlygenerated by collecting practices stemmed fromthe ownership of the product (e.g. collectorsclubs for Swatch and Swarovski);

v profound: for the high-involvement/high-com-mitment products the relational component iseven more intense and is due to the existenceof communities of customers. In this case, inter-

HOW TO SUSTAIN THE CUSTOMER EXPERIENCEMCDONALDS

IKEA

SWAROVSKI

2.15

N.R.

2.65 2.90

N.R.

N.R. 1.08

2.78

0As before, we compared these hypotheses with thedata collected to search for the existence of a linkbetween customer commitment and the cognitiveand pragmatic components. Even in this case we con-sidered the means of the scores obtained for the two

SWATCH

HARLEY DAVIDSON

SMART

PRINGLES

IPOD

NIKE

H.C. BRAND BARS

PLAYSTATION

GATORADE

EmotionalComponent

LifestyleComponent

Emotional + Lifestyle Components (mean)

3.03 2.28 2.65

1.79

3.83

2.44

3.45

2.66

1.31

2.71

3.59

1.53

2.85

2.82

1.98

1.83

2.02

1.98

3.08

1.67

3.34

2.23

3.27

2.32

3.21

1.65

2.27chase/use frequency and level of complexity inusing the product. A higher level of the formermakes an easy and comfortable use/consump-tion (pragmatic component) desirable; a higherlevel of the latter requires a greater rationalengagement (cognitive component).Figure 7 Emotional and Lifestyle Components. ANOVA:p-value < 0.05

European Management Journal Vol. 25, No. 5, pp. 395410, October 2007modules and contrasted them with the 2.5 cut-offvalue (mean of the 1-4 Likert scale).

Hence, it was possible to divide the analyzed casesinto two groups (one group with scores higher thanthe mean, marked in grey in Figure 8, and the otherwith scores lower than the mean, marked in white inFigure 8) and verify that actually the first groupincludes cases characterized by higher commitmentthan the ones in the second group.

Customer Commitment and Customer Involvement

SWATCH

HARLEY DAVIDSON

SMART

PRINGLES

IPOD

NIKE

H.C. BRAND BARS

PLAYSTATION

GATORADE

CognitiveComponent

MCDONALDS

IKEA

SWAROVSKI

PragmaticComponent

Pragmatic + Cognitive Components

1.65 2.74 2.19

1.60

3.42

2.60

2.46

1.55

1.33

3.12

1.86

2.09

2.96

2.44

2.95

2.34

3.63

N.R.

N.R.

3.03

2.67

3.32

3.57

3.68

2.28

2.88

2.97

3.07

0.78

2.44

3.30

1.22

2.45

2.90

2.56

3.01

Figure 8 Cognitive and Pragmatic Components.ANOVA: p-value < 0.05personal relationships are built not exclusivelyon a common interest, but on shared lifestyles

403

and systems of values and are originated bothfrom the joint usage/consumption of the productand from its ownership (e.g. Harley Davidsonand Smart).

Absent or superficial

Profound (community)

Target Scope

Collecting

Source/occasion

Whole target market Usage of the product

Specific segment within the target market

Ownership and usage of the product

Ownership of the product

Specific segment within the target market

Figure 9 Relational Component: Target Scope andSources

HOW TO SUSTAIN THE CUSTOMER EXPERIENCEHarley-Davidson,Gatorade, Ikea, ighEach sub-typology of the relational component pre-sents specific characteristics depending on the scopeof the target for which the relational component isrelevant, and on the sources and the occasions inwhich the relational component is originated andtakes place (Figure 9).

Considering the two proposed variables, the roleplayed by the relational component and the resultsreported in Figure 7 and in Figure 8, a four-quadrantmatrix (Figure 10) can be drawn. Each quadrant con-tains offers with a specific combination of the Com-mitment/Involvement couple. Accordingly, eachquadrant identifies a specific configuration withrespect to the four components considered. Theproducts were then positioned within the quadrantsactivated components. Hence, resting on psychologi-cal and sociological interpretations about the genera-

Low

Swarovski,Swatch

E+LR: Collecting

iPod,Smart

E+L+C+PR: Profound (community)

McDonalds,H.C. Brand Bars,

Pringles,Nike

R: Absent or superficial

Playstation

C+PR: Absent or superficial

High

HLo

w

CUSTOMER INVOLVEMENT

CU

STO

MER

CO

MM

ITM

ENT

Labels:E = Emotional component L = Lifestyle component

C = Cognitive component P = Pragmatic component R = Relational component

Figure 10 Commitment/Involvement Matrix

404 Eurotion and elaboration of sensations, thoughts,emotions, behaviors and relationships and of theirinteractions and interrelations (Goleman, 1995), wecan hypothesize the existence complex experi-ences involving more than a single component.Indeed, we found that each of the products we ana-lyzed leverages on some experiential components;but at a deeper investigation, we noticed that thecomponents are not activated independently: some-times there are relevant overlapping areas and clearinterrelations, as reported by the factor analysis (pos-sibly an issue to be further investigated in futureaccording to the matching association between thereported scores and a given configuration of the setof four components. Furthermore, depending onthe combination of the Commitment/Involvementcouple, the relational component assumes one ofthe three sub-typologies earlier specified (alsoreported in Figure 10).

Finally, once each product has been positioned in thematrix, one can observe how the chosen variablessuitably characterize the four clusters obtained.

Conclusions and Future Developments

The above analyses show how important it is to payattention to the new arising tendencies in customersbehavior interpretation. The study proved that a rel-evant part of the value proposed to customers, andactually recognized by them, is linked to experientialfeatures; we found that, regardless of the context,customers want to live positive consumption experi-ences. Living a positive Customer Experience canpromote the creation of an emotional tie between afirms brand and its customers which in turn enhancecustomer loyalty. Yet this does not imply that cus-tomers neglect the importance of functionalities:sometimes as required standard, sometimes as fac-tors enabling an optimal experience. We notice thatthe functional value (or utilitarian value) obtainsalmost always (except in two cases) a score nearthe experiential (hedonic) one; in some cases even alittle higher. Therefore this part of the study basedon the analysis of best practices proves that it isimportant to deliver an adequate balance betweenutilitarian and hedonic value.

The results also show that these successful productsinvolve customers senses, emotions, thoughts, acts,values and relations in different ways: each productleverages on more than one component, the particu-lar combination depending on the characteristics ofthe product itself. Furthermore, we can infer that,by leveraging on more components, it is theoreticallypossible to intensify the whole hedonic value thanksto the existence of positive interferences among theresearches). From a managerial viewpoint, this

pean Management Journal Vol. 25, No. 5, pp. 395410, October 2007

by companies, the whole set of products, servicesand context should be addressed in a systematic

v which sort of relational component is to be acti-vated when dealing with different levels of cus-

Eventually, a further validation of the model is

HOW TO SUSTAIN THE CUSTOMER EXPERIENCEand consistent way (as it is for McDonalds andHaute-Couture Brand Bars cases).

4. Keep in mind that the different components of the Cus-tomer Experience depend on the characteristics of agiven product.proposition focused on the Customer Experience,companies should carefully regard at potential inter-actions between the components of the CustomerExperience on which their products leverage so asto fully exploit the effects above described.

Managerial Implications

Due to the lack of a rigorous phase of validation of thesuggested model, we need to precise that the resultsdo not allow a straight generalization. However, thatnotwithstanding, we can still draw some implicationsand suggestions aimed at supporting a manager indevising a value proposition, especially when thevalue delivered to the customer should ideally be dri-ven both by experiential features (hedonic/experien-tial value) and by functional characteristics(utilitarian/functional value), thus possibly increas-ing the odds of a good market response.

We sum up these indications into four guidelines:

1. Develop Experience-driven innovations; more thanTechnology push or Market driven innovations,the ones leveraging on experience have betterchances to get a positive market response as theyseem more likely and more capable of meetingnew customers needs;

2. Consider the functional features of the commercial offerin order to create a sustainable competitive advan-tage with respect to competitors. Because the util-itarian value is still one of the main drivers ofcustomers evaluation and perception of a newproduct, it ought to be paid full attention, particu-larly when those functionalities act as enablingfactors for great experiences.

3. Provide a venue for an integrated Customer Experienceaccording to the position in the ConsumingExperience continuum where the CustomerExperience is being provided. Specifically, whenexperiences are mainly created by consumers,the experiential features of the product or servicebeing offered should be systematically addressed(as it is for Pringles and Gatorade cases). In thecase of experiences that are co-developed by com-panies and consumers, companies should enablethe molding and forging of a consumers ownexperience by providing the experiential basicmaterials (as it is for Harley-Davidson case).Finally, for experiences that are mainly createdobservation suggests that when devising a valueSpecifically, at an operational level, the proposedinterpretative model can be used to identify:

European Management Journal Vol. 25, No. 5, pp. 395410, October 2007needed, for instance by means of multiple case stud-ies so as to achieve an analytical generalizability.

Acknowledgement

The authors would like to thank the anonymous ref-erees and the editor of this paper (Prof. H. Laroche)for the insightful comments and suggestions. Theauthors also gratefully acknowledge the support oftomer involvement and customer commitmentof a specific offer.

Next Developments

The main drawbacks of this study are connected tothe fact that complex experiences (that is, experiencesoriginating from the interaction of two or more com-ponents) were isolated in the factor analysis but notaccounted under the interpretative model.

Such interactions could be further explored by meansof a multi-way ANOVA so as to isolate both the maineffects of the pure components and account for theinteraction effects which originate the complexexperiences.

Moreover, while our study was not intended todevelop a general scale for measuring each experien-tial component, we recognize that such is an impor-tant area which deserves a specific investigation.

Another avenue for a further path of research wouldentail the exploration of whether certain types ofexperiences (such as very common experiences orexperiences which are particularly familiar to a cus-tomer) can still be accounted as a legitimate Cus-tomer Experience. In this respect it would beinteresting to account for a sort of updating mecha-nism whereby the expectations of a customer are sys-tematically updated as he or she lives a specificexperience.

A further advancement of the research would takeinto considerations the sets of experiences that canbe originated across each specific stage of the pur-chasing process (e.g. in-store experience), thusexploiting a much wider scope of experience thanthe one which can be offered by mere products.v which sensorial component should characterize anew offer (in the light of its core functionalities);

v which components of the Customer Experienceare consistent with the levels of CustomerInvolvement and Customer Commitment of theoffer;Fabrizio Rossi and Pablo Daini for their collaborationin survey data collection and preliminary analysis.

405

Product Number ofquestionnaires

Sex Age

F (%) M (%) 1620 (%) 2130 (%) 3140 (%) 4055 (%)

Swatch 221 37 63 25 41 1 33Pringles 184 48 52 21 59 16 4Harley Davidson 219 6 94 0 28 54 18Smart 207 11 89 7 63 24 6iPod 187 6 94 20 57 16 7Nike 198 17 83 25 55 15 5H.C. Brands Bar 188 40 60 16 59 22 3Playstation 239 4 96 47 45 7 1Gatorade 191 24 76 33 48 14 6McDonalds 186 49 51 29 52 14 5Ikea 174 69 31 4 64 25 7Swarovski 174 81 19 4 50 33 13

Education level Region Employment Status

High schoolor less (%)

Degree ormore (%)

North(%)

Centre-South(%)

Homemaker +Unemployed +Retired (%)

Student(%)

Employed(%)

Swatch 51 49 77 23 3 41 56Pringles 46 54 82 18 3 55 41Harley Davidson 76 24 83 17 1 5 94Smart 83 17 61 39 0 24 76iPod 67 33 70 30 1 43 56Nike 70 30 67 33 3 55 42H.C. Brands Bar 62 38 98 3 0 34 66Playstation 89 11 50 50 4 59 37Gatorade 80 20 75 25 2 50 48McDonalds 73 27 59 41 5 44 51Ikea 58 42 77 23 3 29 68Swarovski 66 34 68 32 12 22 66

Demographic information

Age Less or equal to 20 3140 2130 More than 40Gender Male FemaleEducation High school or less Degree or more advancedEmployment Homemaker Employed Retired Student UnemployedCity/town of residence:________________________

Respondent-product interaction information

How often do you use your iPod? Often, once or more frequently a day Occasionally, some times a week Rarely, some times a month

Appendix 2. Questionnaire (iPod)

Appendix 1. Sample Description

HOW TO SUSTAIN THE CUSTOMER EXPERIENCE

406 European Management Journal Vol. 25, No. 5, pp. 395410, October 2007

Appendix 2 (continued)

Respondent-product interaction information

What is the main reason that you use your iPod? Listen to the music Record conversations Store any kind of files Other reasons (please specify): ____________Please tell us the main reasons why you chose an iPod over other mp3 players (please select at maximum 3answers) Quality/price ratio Performance (battery life, quick file transfer. . .) Aesthetical aspects Ease of use Distinctiveness with respect to other mp3 players Apple brand Opportunity of being part of a community Other reasons (please specify): ____________Please tell us which of the following statements about you and your iPod are true: I use it to record conversations I use it to transfer any kind of file I use speakers to listen to my music even without earphones I use extra functions of my iPod such as the diary, the alarm, the calendar, etc. I play with my iPods included gamesPlease tell us how much you agree / disagree with the following statement (1-4 Likert scale) It is easy and comfortable to use The interface is user-friendly File transfer to and from a PC is quick and easy It is comfortable to carry and to use even in motion (dancing, running, working out. . .)Please tell us how important each of the following statement is for you (1-4 Likert scale) Opportunity of being part of a community Opportunity of sharing and exchanging tunes with other iPod usersPlease tell us how important each of the following features of the iPod is for you (1-4 Likert scale) Design Essential and slick style Color and material Sound clearness Sound qualityWhen do you normally use your iPod? When I want to relax When I want to have fun When I am travelling Other occasions (please specify): _____________What kind of image about yourself do you think you are expressing when using your iPod? Young and active person A person different from the mass A person who loves having fun No specific image Other (please specify): _____________________Please tell us how important each of the following features of the iPod is for you (1-4 Likert scale) Quality/price ratio Performance (battery life, quick file transfer, etc.) Aesthetical aspect (form factor, design, color,. . .) Sound quality Distinctiveness with respect to other mp3 players Image of the iPod (young, innovative, dynamic, etc.) Extra functions (diary, games, calendar. . .) Apple brand Ease of use Opportunity of being part of a community Use during moments of fun and entertainment

HOW TO SUSTAIN THE CUSTOMER EXPERIENCE

European Management Journal Vol. 25, No. 5, pp. 395410, October 2007 407

)P3

HOW TO SUSTAIN THE CUSTOMER EXPERIENCEAppendix 3. Factor Analysis iPod (6 factors

Pure Components

Answers

FACTOR 1: SENSORIAL COMPONENTSound clearnessSound qualityFACTOR 2: PRAGMATIC COMPONENTThe interface is user friendlyIt is easy and comfortable to useFACTOR 3: RELATIONAL COMPONENTOpportunity of being a member of a community

Complex experiencesFACTOR 4:SENSORIAL/LIFESTYLE COMPONENTSDesignElegant and essential styleMaterial and colourEsthetical aspects (shape, colour, design. . .)Specificity and distinctiveness with respect to other MReferences

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408 EuroCoefficient Experiencetypology

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0.807 Pragmatic0.759 Pragmatic

0.880 Relational

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0.432 Pragmatic0.660 Cognitive

rs, 0.707 Cognitive

0.462 LifestyleCOMPONENTSnning, working out. . .) 0.468 Pragmaticrs 0.557 Relational

0.776 Emotional

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HOW TO SUSTAIN THE CUSTOMER EXPERIENCEEuropean Management Journal Vol. 25, No. 5, pp. 395410, October 2007 409

CHIARA GENTILE,Dept. of Management,Economics and Indus-trial Engineering, Poli-tecnico di Milano, P.zzaLeonardo da Vinci 32,20133 Milano, e-mail:chiara.gentile@polimi.it

Chiara Gentile is a Ph.D.Student in ManagementEngineering at Politecnicodi Milano. Her research

interests are in the field of Marketing, with a specialfocus on Customer Experience Marketing, CustomerEquity, Customer Lifetime Value.

NICOLA SPILLER,Dept. of Management,Economics and Indus-trial Engineering, Poli-tecnico di Milano, P.zzaLeonardo da, Vinci 32,20133 Milano, e-mail:nicola.spiller@polimi.it

Nicola Spiller is a Ph.D.Student in ManagementEngineering at Politecnicodi Milano. His research

interests are in the field of Marketing, with a specialfocus on Brand Management, Private Labels, Retailingand Customer Experience.

GIULIANO NOCI,Dept. of Management,Economics and Indus-trial Engineering, Poli-tecnico di Milano, P.zzaLeonardo da Vinci 32,20133 Milano, e-mail:giuliano.noci@polimi.it

Giuliano Noci is FullProfessor of Marketing atPolitecnico di Milano,Dean of the Degree in

Management Engineering of the Como campus(Politecnico di Milano), Member of the ExecutiveCommittee of MIP Business School and ScientificDirector of the Marketing area in all the MBA pro-grammes.His research interests are in the field of Marketing,with a special focus on experiential marketing. He hasdirected and run executive courses and consulting toseveral manufacturing and service firms.

HOW TO SUSTAIN THE CUSTOMER EXPERIENCE

410 European Management Journal Vol. 25, No. 5, pp. 395410, October 2007

How to Sustain the Customer Experience:IntroductionState-of-the-art Literature on Experiential MarketingConceptual FrameworkA Definition of Customer ExperienceThe Multidimensionality of the Customer ExperienceThe General Framework

Research MethodologySampling of the CasesInvestigation MethodologyData Analysis

Results of the SurveyUtilitarian vs. Hedonic ValueExperiential ComponentsComplex Experiences

The Interpretative ModelSensorial ComponentCommitment/Involvement Matrix

Conclusions and Future DevelopmentsManagerial ImplicationsNext Developments

AcknowledgementAppendix 1Sample DescriptionReferencesAppendix 1Sample Description