In a recent CRM-A (www.crmaassociation.org ) webinar, Paul Greenberg started his presentation with a statement to the following effect—“We all agree that products per se are no longer a source of competitive differentiation; the customer experience is the major source of competitive differentiation.” 

I agree with Paul’s position. However, I am concerned that many people who are trying to capture this source of competitive advantage are starting with too narrow a premise about the customer’s experience. First, it seems that many focus on the experience as a means to an end (something the customer does to get a task done), or something that “delights” the customer (gives them a novel and temporary sensory experience). Second, there seems to be an implication that these experiences will get customers to buy whatever product is focus of the marketing. While I believe these approaches are valuable, I also think they leave a lot on the table and could lead to disappointment in the attainment of sustainable competitive differentiation. 

To make my point, I am going to jump in on a conversation thread that has been bouncing around for a while and came to a head for me in a recent MarketingProfs.com article (link to www.marketingprofs.com/6/duncan4.asp). The main argument was that Experiential Marketing was a component of Customer Experience Management (CEM) and that CEM was the whole enchilada. 

Clearly, what some pass off as experiential marketing activities are really marketing events to wow the customer. Many of these cast the customer in a relatively passive role. They provide sensory stimulation, probably gain short-term attention and may even be pleasurable. They might even sell products in the short-term. My concern is that these experiences do little to engage the customer mentally, emotionally or psychologically. As a consequence, as they lose impact and the wow factor dissipates, the experience no longer remains a source of competitive differentiation. 

A similar argument could be made for CEM implementations that focus on removing negativity in the experience and strive to put the customer in a psychological comfort zone. While this is a good idea, by itself, it does not provide sustainable competitive advantage. Most importantly, it does not create greater or enduring desire in the mind of the customer. 

The whole enchilada, in my view, is the set of principles that lead to customer experiences that are engaging to the customer. This active involvement by the customer, and the interaction with the company is the holy grail of getting to sustainable, win-win relationships; win-win in the sense that both parties get what they value. Customers want emotionally and psychologically enriching experiences that enrich their lives. They also want authentic relationships with businesses, where the interactions lead to trust and this growing trust helps customers reduce complexity in an increasingly complex world. The win for the business is greater customer equity— greater lifetime value and advocacy. Customers don’t seek this relationship in all situations, only in ones that have become meaningful to them. The others, they will handle with mindless indifference, that is as commodities. 

The whole enchilada is the set of principles that enables professionals to win customer mindshare in a way that endures beyond the moment—where some emotional and psychological factors create customer desire. This doesn’t happen when the customers are relatively passive participants in the experiences. The experiences must be compelling enough to the customers for them to leave their psychological comfort zone and become engaged in experiences that lead to intrinsic gratification. When this happens, customers will scrimp elsewhere (i.e., play the win-lose commodity game) to be able to afford to splurge on these emotionally gratifying experiences and win-win relationships. 

As a psychologist with over 20 years of marketplace experience, I am committed to articulating these principles and making them actionable. These are the principles that will enable practitioners to deliver competitive differentiation through the customer experience—whether the method involves Experiential Marketing or CEM. 

My forthcoming book Addicted Customers: How to Get Them Hooked on Your Company, (www.addictedcustomers.com) discusses many of the key principles and provides examples of companies that are putting them into practice and reaping the benefits. My plan for this blog (www.OnCustomers.com) is to share my insights into the psychology of the customer experience, and discuss where and how the principles are being put into action. Most of all, my goal is to stimulate and even provoke an active dialog that helps bring the essence of the customer experience to light and leads to a field with a continually growing basis of practice. I hope you will become mentally and emotionally engaged in making this a reality.

Posted by John Todor on Monday, February 6th, 2006 at 7:44 am.