Book Description

Customer-driven service is more important than ever. The Marketing Science Institute (MSI) lists customer experience as a top research priority (2014-2016) and according to a recent Forrester (2010) study, more than 90% of senior executives say that improving the customer experience is a “top strategic priority” for their organizations. However, there are two major problems that impede the commitment to customer experience. First, there is a lack of clarity to what customer experience is and how to measure it. Second, firms are profit and shareholder focused, and many top executives do not see direct value with investing in the customer experience. Thus, building on recent customer experience literature, this research conceptualizes customer experience in a way that is generalizable across multiple industries and to various customer types. Furthermore, the benefits of improving customer experience are demonstrated by connecting the construct to key business metrics. Specifically, a relationship is established between customer experience and both brand equity and financial performance. Results show that customer experience elicits higher customer-based brand equity and financial performance. The connection of customer experience to these metrics from thousands of customers and hundreds of companies provides legitimacy to expending resources to improve the customer experience. Finally, I study two moderating effects. I look at the impact of brand level advertising expenditures on the relationship from customer experience to brand equity and the impact of firm financial leverage on the relationship from customer experience to financial performance. This manuscript concludes with potential theoretical implications for the marketing academic literature, including the literature streams of advertising, brand equity, customer experience, and financial performance. Drawing on these implications, I discuss the importance of the current research for the further development of customer experience measures, including the use of physiological measurements. I also offer practical implications that can help marketers, managers, and executives better understand customer experience and develop strategies for customer experience management.