[MUSIC] Hello, I'm here with Bernd Schmitt, a professor at Columbia Business School where I got my doctorate and Bernd was actually my advisor. And Bernd has written several books. One of them that I rely on Is customer experience management, and that'll be the basis or at least the starting point for our conversation. Bernd, what is a customer experience? >> Well, the way I define customer experiences in my work is that it is the feelings, the thoughts, the behaviors, that are triggered by. Certain brand related stimuli, right? And that result in a differentiation for your product. And just to give a simple example, think of Starbucks. It's not just about the coffee, it's about the entire atmosphere that produces those feelings and those thoughts and those behaviors. Or think of Apple, these are all sort of classics of experience management. It's not just about the information and the device as such, but it's what you can do with it, and that is what creates the experience for customers. >> We tend to hear a lot about business to consumer brands. Do you have any business to business examples of a customer experience? >> Well I've worked with a company called SAP on experience management. And for B2B companies in general, they have fewer ways of creating customer experiences because for end consumers it's all about the product and how the product looks and feels and all of that. Whereas when you have a business software, well, there isn't anything to feel. However, B2B companies have a forced trade shows and at the trade shows, you explain the products, you explain the services, the technology and you can do this either in a more entertaining way or in a more technologically driven product-focused way. If you do it in a more entertaining way, I would call that an experience. But also when the sales people go out to the customers, when you demonstrate the product. You can do that in a let's say educational way that triggers people's thoughts and stimulates them what they can do with software for example. And can bring to mind imaginations on how to run the business so it's very very much about how you do the product demonstration at the sales call. And then finally, of course, all B2B companies have new media presence, the websites, of course, but also to a certain degree social media and there you can also create a positive experiences for customers. So even though for B2C companies it may be easier, and that's also where the concept of expansion initially comes from, there's also a lot that B2B companies can do to really focus more on the customer and their feelings, and on their thoughts and on their behaviors. >> Now you mentioned one thing about Apple, them focusing on the user experience. Now, especially in the business-to-business side, there seems to be a big gap because we don't actually, if you think of SAP, there are actually people using the software. Would that be part of the experience, whatever role I had within the company if I'm using the software? >> Sure, the user experience is absolutely critical, it's closely tight to the product. The user experience is often not coming from something abstract as a B2B business to business. But there are users, right, in every single business. And they have a user experience in terms of how easy it is to use the software, how easy it is to access all sorts of information that you need when you're doing your job. And that is absolutely critical in B2B. >> Now this concept of the customer experience, you've written this book some years ago. Do you think the concept is more or less relevant today than it was in the past? >> Well actually I wrote these books, the first one was actually 1999 called Experiential Marketing. And then there's this book, Customer Experience Management in 2003. So I wrote this books actually more than a decade ago. And I wrote it at a time when there were some leading companies that were focusing on differentiation from experience rather than just product features, often very technical product features. And so in a way I was an early mover, but now this is really in full flow, everybody's throwing at their numerous projects and companies. They're nowadays experienced managers, they're teams that are in charge of creating experiences for customers, so it's become a big, big trend I am very happy to see this because I always felt that companies had too much focus on their product features. What I call features and benefits. Rather than creating broad faced experiences for customers. >> So you mention different teams and experience managers, chief experience managers, I've seen that type as well. How do they work with the rest of the function? Is it a marketing function or does it have a different role in the organization? >> It can be a marketing function. But, the projects that are done on experience management are usually done as cross-functional projects. And that makes a lot of sense. I've done some work for example for Vodafone. So there you had people involved from what is called the user experience as a matter of fact, which is the direct interaction with the phone. But you also had people from CRM being involved, you got product designers being involved, and of course the marketing people. So it works best if you look at it as a sort of cross-functional team rather than if this is just coming from marketing. And the reason for that is actually that there are lots of different touch points with customers and experience marketing and experience management is very, very much about managing all these different touch points with the customers. And different groups within the organization are in charge of managing these touch points. I mean the touch point can be the website and the social media. It can be the retailing, okay? The touch point can also be, of course, the product design when the customer's consuming the product. So to create a great experience really requires that you pull everything together and that everybody is involved in designing the right experience for our customers. >> They mentioned the alternative, and kind of where the starting point for many companies are functional benefits, which it's very difficult to differentiate yourself in the long term. These are easily copied and so forth, but on the product side, I can measure the quality of these benefits. Something washes whiter, something is lighter. Something is, the dropped call rate is lower, how do you measure the customer experience? And how do you have to shift your focus inside the companies? >> Well you could measure the customer experience as you can measure product features. It is a little more complicated, you're right. But you can ask, for example, about the service and that's a key touch point when it comes to customer experience, how satisfied the customer was. You can even drill down in terms of the details about the service. Was it the online service? Was it the face-to-face service? How did the person interact with you? Did he or she say the right things, did he or she behave the right way in a nonverbal way. So you can do this for all the different touch points. You can do it for the product design, you can ask about not just the functionality of the product but you can also talk about the aesthetics and how it looks and feels and how easy it is to use. So I think it can be done. I have also developed a skill actually, to measure it, which focuses on different types of experiences. I call them sense, feel, think, act and relate. The idea that with a sense experience you appeal towards your beauty and excitement in product design, or in retailing, in terms of the entire atmosphere. With feel, you appeal to people's feelings. With think, you get them to think and then to relate to the product and to others and to act. And so, [COUGH] you can measure even different aspects of the experience at the different touch points. So there has been lots of progress over the last few years. And that's not only my scale they're measurements by experienced consultancies so it is becoming more focused on metrics and measurements. It's not just believing that you create a nice experience but you can really track it over time and you can adjust the experience and the touch points accordingly. >> But fundamentally, it sounds like what is being measured shifts from measuring aspects of the product, to measuring across the different senses, the different ways you perceive the world at the consumer level. >> Correct, in the different touch points. So it is more complicated but that's the reality. What the customer ultimately gets is not just the product and whether the product works and performs well. And whether it is good value ultimately when you see the usage relative to the price that you pay. That's certainly important, but there's much, much more. There's the buying experience, there is the subsequent service experience if the product has a problem, breaks down. [COUGH] There's the usage experience, alone or with others, so you need to bring in the social media. You need to bring in the retail environment, the buying process, and all of that. Only then, do you really have a comprehensive understanding of the customer experience. >> Maybe the big question at the end. I wish the Dalai Lama were in the room because ultimately it's all about happiness. Do you think this whole experience focus has made people happier? >> I think so. Because, as companies are no longer looking at people only as, well we are selling to them, okay, we are selling certain products to them and they need to perform they need to do well. I think we have enriched their lives. So take Starbucks, which I mention early, which is a class again experienced management. I mean it's not just getting your coffee either black or with cream or with sugar and cream and so on. But you have a whole lifestyle offer and you provide most importantly a setting where people can do all sorts of things. They can hang out and they can do their work, they can read with a friend, the can just be on their own, and read a newspaper. So, it really enriches lives. It moves in a way, marketing from products to lifestyles, and I think that's good news. >> Couldn't agree more. Thank you Bernd. >> Thank you. [MUSIC]
