Defining Customer Experience | Summary and Q&A

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February 6, 2020
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Stanford Graduate School of Business
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Defining Customer Experience

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Summary

In this video, the speaker discusses the concept of customer experience and highlights the importance of understanding that it extends beyond just the interaction with a product or service. The customer experience also includes the before and after stages, such as planning, anticipation, and memories. The speaker emphasizes the role of psychology in customer experience and introduces the three sources of utility: anticipated utility, experienced utility, and retrospective utility. The management of all three sources is crucial in creating a winning customer experience. The speaker also mentions the significance of specific moments in the experience rather than the overall film.

Questions & Answers

Q: How do most people typically define customer experience?

Most people typically define customer experience as the time in which customers interact with the service person or organization, focusing only on that narrow interaction.

Q: What aspects of the customer experience should be considered?

The customer experience extends beyond the narrow interaction and should also include the before and after stages, such as planning the experience, anticipation, and memories.

Q: What is the significance of word of mouth in customer experience?

Word of mouth is crucial in customer experience because the memories associated with the experience influence people's likelihood to share their positive experiences with others.

Q: What are the three sources of utility in psychology?

The three sources of utility in psychology are anticipated utility, experienced utility, and retrospective utility.

Q: How does anticipated utility contribute to customer experience?

Anticipated utility refers to the amount of utility or well-being someone expects to gain from a product or experience. It includes factors like thinking about which product or service to choose and getting excited about it.

Q: What is experienced utility in customer experience?

Experienced utility is the actual utility or well-being experienced during the use of a product or service. It is the component that people typically associate with customer experience.

Q: How does retrospective utility impact customer experience?

Retrospective utility refers to how people remember their experience. Memory significantly influences word of mouth and the reputation of a product or service.

Q: Why is it important to manage all three sources of utility?

Managing all three sources of utility is crucial in creating a winning customer experience because they collectively shape the overall perception and likelihood of positive word of mouth.

Q: How does memory work in relation to customer experience?

Memory works by storing moments or snapshots of an experience instead of recording the overall film. These moments of delight, despair, or indifference are critical in managing and improving the customer experience.

Q: Why should marketers understand consumer experience?

Understanding consumer experience allows marketers to rewire their approach to marketing, ensuring that all stages, including before and after interactions, are considered to create a more effective and satisfying customer experience.

Takeaways

Understanding the customer experience requires considering all stages, including the before and after interactions with a product or service. Anticipated utility, experienced utility, and retrospective utility are three sources of utility that need to be managed to create a winning customer experience. Memory plays a significant role in shaping word of mouth, and marketers should focus on managing specific moments of the experience rather than the overall film. By understanding and optimizing the customer experience, marketers can rewire their approach to marketing and achieve better results.

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