Tuesday, February 01, 2005

Three Interviews in Rotman Magazine

The winter 2005 edition of the magazine from the Rotman School of Management at the University of Toronto (PDF) has not one, not two, but three interviews with experts about customer experiences (well, the cover is quite unambiguous about the topic of this issue)

First there’s an interview with Joseph Pine and Jim Gilmore, authors of the book The Experience Economy.

How do they distinguish a service from an experience? Here’s a copy/paste:

Goods are tangible and services are intangible, but experiences are memorable.

Second, the questions are for University of Michigan Professor Claes Fornell, inventor of the American Customer Satisfaction Index. This is the reply to the last question in the article, about the key drivers of customer satisfaction. (Ctrl C and Ctrl V again, with some Ctrl B):

In general, there are three: Market matching, quality, and price.

Market matching is the most potent. It simply means that both buyer and seller do a good job – the buyer in terms of judicious choice and the seller in terms of buyer selection, targeting and segmentation. If the buyer selects the ‘wrong’ product or if the seller convinces the ‘wrong’ buyer to purchase, the outcome will not be favourable.

Quality as a general concept also plays a fundamental role.

Price has an effect, but it is much more limited. A low price may make someone buy, but its effect on customer satisfaction is relatively minor. In the end, satisfied customers are very good for business, but dissatisfied customers have even more impact in the opposite direction. A bad customer experience does more harm than a good one does good.

Third, the founder and chairman of IDEO candidly talks about designing products and services, including ‘experience prototyping’.

And as a bonus, there’s also an article by David Dunne, who is a professor at the Rotman School. This is the opening paragraph:

The secret of great brands is the customer experience. If more companies recognized this, brand experiences could go much further in connecting with consumers.

It’s good to see that customer service and experiences are getting more attention from the academic world (check our previous post).