fashion management coursedocenti.luiss.it/protected-uploads/596/2019/10/... · business exceeding...

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FASHION MANAGEMENT COURSE

Carlo Fei

Lesson 3, 4 and 5 September 27th and October 3rd and 4th 2019

1© Copyright 2019 Carlo Fei for LUISS

2019-2020 academic year

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© Copyright 2008-2019 Carlo Fei for LUISS

Brand Style Experience Production Logistic

Distribution RetailFinance PlanningMKTG Communication

MerchandisingPlanning

Customer Knowledge

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the botton panel

The most tangible of the intangible assets…

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© Copyright 2019 Carlo Fei for LUISS

what is a brand

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In past few years we all have seen the triumph of the brand concept; everyone from countries to political parties to individuals in organizations is encouraged to think to themselves as a brand.We really can find so many definitions of brand which, depending on the way we use them, are all correct:•A TM•A signature•A guarantee•……….•……….

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between many definition of a brand (all of them correct), we like the one which

defines the brand as

the idea, the story that exists in the mind of customers

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brand definition

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This “IDEA” is one of the mostimportant assets a Company hasand this is true also for FashionCompanies…

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brand

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In recent years the economic importance of intangiblecompared to tangible assets increased. For Example thecombined market capitalization of Standard & Poor’s 500companies has increased to around 80% compared with 30%of 20 years ago. Hopefully successful companies began tounderstand that

THE BRAND IS A LIVING BUSINESS ASSET

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the idea is a strategic asset

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Brands are not simply economic entities. Apart from theobvious social benefits of wealth creation, most of leaderbrands survive since more than half a century anddemonstrate to be the most stable and sustainable assets inbusiness exceeding management teams, technologicalbreakthroughs and even core business attitude. All thismeaning also social stability. On the political side brands aremost of times trojan horses to fight the global cultural war:think about Disney, McDonalds, Volkswagen, Toyota, Sony,Apple or Louis Vuitton…

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the brand social and political and strategic importance

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brand as a growth driver“Your brand and your business interact to generate growth.

Both internally and externally, the brand is the thing that people “hold on” to, aligning them within your organization and connecting them to those you’re trying to serve.

Your brand is therefore a proxy for your business: it drives your market, product, and service strategy by helping to determine where and how far you can grow.

Understanding the dynamics of your brand and business is essential. Starting with the business, you have to connect the dots between your internal culture and the market and translate that proposition clearly and powerfully to customers in the market.”

Source: Interbrand BGB 2016

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THE NEEDS OF THE BUSINESS THE NEEDS OF THE CUSTOMER


brand as the connection between business and customer

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We all perfectly know different methodologies tocalculate the brand equity or better say the brandcontribution to a company equity.Interbrand Best Global Brands 2019 (download atwww.interbrand.com) where Fashion Companiesobtained important positions.See also Brand Z Millward Brown OPTIMOR 2018(www.millwardbrown.com/branz)

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the brand equity

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http://www.interbrand.com

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Interbrand Best Global Brands 201: look for Fashion Brands ranking at:

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Source: INTERBRAND Best Global Brands

the brand equity

http://interbrand.com/best-brands/best-global-brands/2019/ranking/

https://www.youtube.com/watch?v=iqDEOxSVx6Y

to better understand how you may focus on Branding give a look to this video from Interbrand :

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Interbrad Best Global Brands 2018

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Source: InterbrandBG

B 2018

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Source: InterbrandBG

B 2018

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brand equity according to Interbrand…


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brand equity according to Interbrand…


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…and the two italian brands in the ranking


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brand equity according to BrandZ…

Source: Millward Brown BrandZ Top Brands 2017

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brand equity according to BrandZ (value evolution)…


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brand equity according to BrandZ (ranking evolution)…


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why calculating yourbrand equity?

Brand Equity is a financial resource, aperformance indicator and, overall, a Brandevaluation is the TimeZero step before anystrategic decision as it reveals your strategicstrengths and weakness, what is just atactical tool and what is strategicallyimportant to your company.

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Source: ICM Advisors web site © ICM Advisors 2018

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How you can calculate your Brand Equity?

Between the very many methodologies you can find, all credible but slightly different among them, I suggest you one that can help in identifying what really matters when you need to manage your brand.THE BES® Brand Equity Score of ICM Advisors®

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© Copyright 2008-2019 Carlo Fei for LUISS Source: ICM Advisors web site © ICM Advisors 2018

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To evaluate a brand and identify its strengths andweakness, you firstly need to analyse objective andsubjective attributes that influence the final results.assigning a score from 0 to 5 to each of the followingitems (where 2,5 is the competitive parity, 0 isextreme weakness and 5 extreme strength).

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the icm advisors methodology BES®

* deepen on icm advisors website


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• Attractiveness of the industry/segment (size, growth, opportunities, competitive intensity, innovation)• Brand Positioning and Differentiators (price/quality, consumer and channel experience with key field

analysis, brand strategy, longevity)• Business Impact (profitability, market share, price premium)• Market Image/Customer Franchise (awareness, loyalty, relevance, perception)• Customer Experience (Touch points Audit)• Brand Management Practices in place (development strategy, marketing budget, brand architecture, brand

management competencies, legal protection)• Brand Financial Valuation (determine royalty rate (sustainable by the business, comparable licensing

royalties), Brand Equity Score discount, Brand Potential and valorisation opportunities

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ICM Advisors influential brand attributes


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the brand positioning (and its statement)we are all familiar with the word positioning* but are we sure we are able to identify a brand positioning and moreover: do we know how to set, to shape a correct, clear, coherent and winning brand positioning statement?

*…by the way, we mean the position that the brand occupies in the mind of its customers…

the brand positioning


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the brand positioning statement (a framework)TARGET MARKET (TO WHOM)Who is Your Target Market?• This should be a pretty straight-forward question. Who are the types of businesses or consumers you want your

brand to reach? What are their interests? How do they make decisions? Who or what influences them and why? The more specific you can be, the better.

FRAME OF REFERENCEWhat does the Brand Substitute for?• This should be the consumer grouping of products with which the brand competes. • In which mkt am I operating? What is my offer and what is the function, service, I’m fulfilling? It includes all the

options that a consumer has to satisfy a specific need

POINT OF DIFFERENCEWhat Unique Value Do You Provide Them?• This should be the ONE consumer benefit which we want consumers to identify most readily with our brand. It

should be a differentiating benefit rather than a me-too benefit.• What do you think you’re the best in the world at? What value do you provide your customers that no one else can

provide? What service offering are you most confident in?

N.B.: Others suggest to reinforce the point of difference exploring THE REASON WHY answering few helpful questions:• Why Should They Believe You?• How can you back this up? This could mean anything from showing your process to sharing data statements to

prove that you’re for real. Make a list of three reasons to believe. © Copyright 2008-2019 Carlo Fei for LUISS

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In Fashion we can gain benefit from the Brand Identity Model analysis:

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BRAND IDENTITY

RETAIL IDENTITY

COMMUNICATION IDENTITY

STYLISTIC IDENTITY(core of Brand Positioning)

Socio Economic ContextFirm Heritage, Resources and Competences

Product Strategy Distribution Strategy Communication Strategy

the brand identity model


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But this model makes a great oversight: the omission of the CUSTOMER EXPERIENCE

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BRAND IDENTITY

RETAIL IDENTITY


STYLISTIC IDENTITY



CUSTOMER EXPERIENCE IDENTITY



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AND SINCE NOW WE SHOULD CONSIDER S AND CSR AS TWO MAIN CONTRIBUTORS TO THE BRAND IDENTITY.

SUSTAINABILITY AND SOCIAL RESPONSIBILITY!

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BRAND IDENTITY

RETAIL IDENTITY


STYLISTIC IDENTITY




SUSTAINABILITYIDENTITY



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BRAND IDENTITY

RETAIL IDENTITY


STYLISTIC IDENTITY


Product StrategyDistribution Strategy Communication Strategy


SUSTAINABILITY CSR


DIGITAL IDENTITY


*revised and adapted on BIM by Saviolo Corbellini

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how luxury/fashion brands are developed and how they can bemanaged successfully i.e.: luxury/fashion brand 10 corecharacteristics:1. Innovative, creative, unique and appealing products;2. Consistent delivery of premium quality;3. Exclusivity in goods production;4. Tightly controlled distribution;5. A heritage in craftsmanship;6. A distinct Brand identity;7. A global reputation;8. Emotional appeal;9. Premium pricing;10. High visibility.

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Source: Luxury Fashion Branding

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branding strategy development

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The key tools are DIFFERENTIATION and EMOTION.

Those four factors should be strongly present in the subconsciousof every participant to the brand creating process:

Strategic Thinking: defined brand vision and long term approach

Creativity: imagination and innovation in creating brand elements

Clarity: a clear idea of what the brand stands for both for company and for target customers

Consistency: uniform and coherent approach in designing every aspect of the brand and indelivering every communication and experience regarding the brand

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Source: Luxury Fashion Branding

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branding strategy development


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out of the box

INSIDE ITALY FASHION SYSTEM

34© Copyright 2008-2019 Carlo Fei for LUISS

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What is Made in Italy?Made in Italy is one of the best known and

appreciated brands in the world (and certainly the most counterfeited!)

The ‘Country of Origin Effect’ for Italian products has a very high commercial value to the point that foreign consumers are willing to pay an average

premium price of up to 20% on Italian products, putting the brand Made in Italy on same level of brand awareness as Coca Cola and Visa*

*Source: KPMG, 2011©2018-2019 Copyright Carlo Fei for LUISS

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few numbers

With a GDP nominal value of $1.807 trillion, representing 2.46% of world GDP, the International Monetary Fund puts Italy as the 9th largest nationaleconomy in the world and the 4th in the Eurozone*

*Source: IMF 2017

©2018-2019 Copyright Carlo Fei for LUISS

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few numbers

Manufacturing activities count 16% of the overall Italian GDP*

Six sectors accounts for more than 30% of domestic GDP**:fashiontourismautomotivemachineryfood and beverageboating

Source: *World Bank 2017 **Deloitte 2018

with 5 over 6 related to LIFESTYLE…


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more numbers

Italy is one of five countries* in the world and the second in Europe with

a trade surplus for manufacturedgoods exceeding $100 billion

*others are China, Germany, Japan, and South KoreaSource: Osservatorio GEA Edison 2018-UN Comtrade


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What is Made in Italy made of?

The italian factor characterizes the Made in Italy…


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yes but, what is the italian factor?

WHAT MAKES THE DIFFERENCE?

A STEREOTYPE? YES AND NO…


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let’s go back on some historical pillars of Made in Italy

Craft guilds emerged in Italy in the 13th century and were a key part of the country’seconomic development. The first documented guild was shoemakers, followed by luxury goods (especially in the textile industry), precious metals, jewellery and leather. Florence alone accounted for 26 “great” and “lesser” guilds.

Source: L. Carcano-G. Lojacono©2018-2019 Copyright Carlo Fei for LUISS

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let’s go back on some historical pillars of Made in ItalyConcurrently, four maritime republics were established: Amalfi, Genoa, Pisa and Venice. These ports

became flourishing international trade centers for raw materials and gems, helping artisans to improvetheir crafting skills and build a reputation throughout Europe.

Source: L. Carcano-G. Lojacono and history of La Serenissima Zorzi

the Venice arsenal is the first example of an assembly line. In the construction of the ships, each work team produced a part that was subsequently assembled. This allowed a very advanced specialization, a speeding up of production processes(10 ships a day ...) and above all a very accurate quality control: each piece was signed by the chief craftsman and if therewere serious defects the responsible team leader was sentenced to death...THE BEST QUALITY CONTROL EVER!!!


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let’s go back on some historical pillars of Made in Italy

In the 14th century a new era began, bringing about a renewed wave of creativityin art, architecture, literature and philosophy: the Italian Renaissance. Italian craftsmen became established artists as the demand for luxury goods and artistic commissions grew more and more. This cultural heritage has always beenat the center of Italian Identity.

Source: L. Carcano-G. Lojacono ©2018-2019 Copyright Carlo Fei for LUISS

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key features of Made in Italy firms

Made in Italy

Family Business SME's

Culture and know

howTerritories

and Regions

Qualityand

CraftmanshipPassion

and Beauty

Niche and Premium

Price

Lifestyle Mkt

B2B and B2C

Long TermVision

Flexibility

Problem solving

44Adapted from The Made in Italy’s flower L. Carcano and G. Lojacono

83% of Italian Fashion Companies are family businesses

91% in the forniture industry

70% in the food and beverage industry

Made in Italy firms, independently from their industry, are characterized by key features in terms of ownership, governance and management that allow them to take advantage in the global competitive scenario. During our lesson we deepen each element which is key to understand the Made in Italy industrial system.

NB: red and green colors are not negative or positive but represent the Italian flag


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what is in the Italian DNA?

Is Italy the humanistic “soft skills Country”?©2018-2019 Copyright Carlo Fei for LUISS

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what is in italian DNA?but what is the definition of soft/hard skills?


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what is the italian DNA?

we are the Country of the soft skills, our challenge is to transform our soft skills into the hard side of a product, a vision into a masterpiece, an

intuition into an innovation, an idea into a garment, a passion into an expertise, creativity into solutions, a new practice into a process

a culture into a business


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italian dna

a meticulous attention to details, beauty habits, a bent to natural/innate creativity,

the attitude to instill the history, tradition, art, the “BBF” craftsmanship in actions, products and relations with the marketplace, customers, and the rest of the world,

products and behaviours as storyteller of the DNA.


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so be familiar with the BBF concept and the BBF+S

Now that we have a clear view of what are the Made in Italy peculiaritiesthat bring the BBF (bello e ben fatto) concept remember that we willexplain you how to move to the next level BBF+S (bello, ben fatto e sostenibile) as a key point to set one more consistent competitive advantage to the Made in Italy industrial system. Fashion is a paradigmatic complex sample to understand this move.


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Let’s come back to our (my?...) favourite definition:the idea, the story that exists

in the mind of customers

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brand definition

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© Copyright 2008-2019 Carlo Fei for LUISS 51

fashionbrand

so where can I act, what can I do to manage this idea? which is/are the tools I can use?

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fashionbrand

this “idea” is one of the mostimportant assets a company hasand this is true also for fashion companies…

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…and customer Experience is one of the most important tools to build it.

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fashionbrand

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Brand StyleExperience

Production Logistic

Distribution RetailFinance PlanningMKTG Communication

MerchandisingPlanning

Customer Knowledge

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the botton panelIn our panel Customer Experience has been for long (and surprisingly)

the most neglected tool, then became a key mentioned topic but mostly in a rethoric and non consistent way. But it is the tool that can

really make the difference of your business. Let’s try to see how.

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Few definitions

• Customer Experience are the impressions, perceptions, emotions, actions andreactions a customer has while interacting with a company through any touch-point,whether through marketing, branding, customer service, support, in-store experience,design and usage of a product, service or Web site, etc.

• Customer Experience Management is create the right customer experience able tocommunicate, emphasize, transfer the brand values, maintain the brand promise andbuilt advocacy exceeding Customer Expectations.

Terms of reference

• Companies can only defend their brands by creating great, brandable and/or brand-compatible multi-sensory experiences.

• The customer’s experience is inevitably part of the brand and is the result of the skillsof companies to transfer brand values and pod to consumer through right experienceusing the right experience providers.

© 2007 – 2018 Copyright of TCSG TreCentoSessantaGradi srl All Rights Reserved

customer experience management - issues

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To understand Customer Experience we need to understand experiences and, from a business point of

view take a look to

Experiential Marketing



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THE PAST THE FUTURE


HOMO OECONOMICUS

QUALITY OF PRODUCT/SERVICE

NEED

RATIONAL BEHAVIOUR

BENEFITS AND FEATURES

BRAND ID

HOMO LUDENS

QUALITY OF THE EXPERIENCE

DESIRE AND ENJOYMENT

EMOTIONAL BEHAVIOUR

LIFESTYLE and HOLISTIC EXPERIENCE

BRAND ES

the typical aims of traditional marketing become the prerequisites of experiential marketing

from traditional mktg to experiential mktg (bernd schmitt)


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5858

why experiential marketing?

“Tell me and I’ll forget, Show me and I mightremember, Involve me and I’ll understand.”

CONFUCIUS and BENJAMIN FRANKLIN



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“One of the most powerful forms of conspicuous consumption today is not the accumulation of goods, but the accumulation of memories.”

Gillian Tett, US Managing Director of the Financial Times


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why experiential marketing?Brand experiences are more and more conveyingsensorial, emotive, cognitive, behavioral and relationalvalues that support, or even take the place of thosefunctions, demonstrating how traditional marketing hasnot only lost its effectiveness but has given way toexperiential marketing.



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The brand in all its aspects, represents to all effects the main driver of the company value and amongthe attributes, which make up its value, is customer experience, viewed as the means by which thebrand values are relayed and communicated to the customer, and is its fundamental element which isevermore at the core of the successful strategies of business firms.

BRAND

MKTG

SALESFINANCE

EVERYTHING TURNS AROUND THE BRAND

MAIN DRIVER FOR:

•FINANCE

•MARKETING

•SALES

PROMISE

CUSTOMER

EXPERIENCE

CUSTOMEREXPECTATIONS



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customer experience management – issuesthe moment of truth• Communication is the bridge between Company Think and Customer Think and represents a

promise to customers.• Customer Experience, as part of the communication, is the bridge between Brand Values and

Customer Expectations and represents the delivery to customers, the moment of truth.

COMPANY THINKING

BRAND VALUES

CUSTOMER THINKING

CUSTOMER EXPECTATIONS

COMMUNICATION

CUSTOMER EXPERIENCE

PROMISE

DELIVERY

“A broken promise anywhere is a broken promise everywhere”


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customer experience management – issues

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And what about Luxury and Fashion Markets?

• Product, Quality, Customer Satisfaction are taken for grantedand companies begin to recognize the need for a holistic,coordinated and deliberate approach to the CustomerExperience (in order to deliver memorable experiences throughall touch points).

overtaking product and style centricity

Source: TCSG TreCentoSessantaGradi srl All Rights Reserved

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Why is Customer Experience important?• Anything you live takes advantage on the surrounding experience

you are in

Joshua Bell Washington Post Experience

(video April, 2007)



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customer experience management – issuesfrom traditional customer satisfaction to customer experience (bernd schmitt)

CUSTOMER SATISFACTION MANAGEMENT

LIMITED INQUIERES INTO PROCEDURES

HR COERCIVE and

ASSERTIVE APPROACH(PROCEDURE CENTRIC)

GENERIC MS ACTIVITIES (SUPERFICIAL and SUBJECTIVE APPROACH)

LACK OF COMPETITIVE KNOWLEDGE

COMPANY NEEDS BASED PROCESS

CUSTOMER EXPERIENCE MANAGEMENT

EXTENDED INQUIERES INTO EXPERIENCES

HR COMPANY VALUES SHARING and

MOTIVATIONAL APPROACH(EXPERIENTIAL CENTRIC)

DEEP C.E. AUDIT ACTIVITIES(OBJECTIVE and COMPARABLE METRICS)

BENCHMARKING(CORRECT COMPETITIVE CONTEXTUALIZATION)

CUSTOMER EXPECTATIONS BASED PROCESS

THE PAST THE FUTURE

to get wisely from the past to the future a new approach to the present is needed



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the luxury/fashion branded experience

customer expectations are concentrated on emotional aspects more than rational

fashion products don’t satisfy needs but satisfy desires/dreams

they expect a luxury branded fashion experience (which is more than just politeness)


“When you enter a Luxury/Fashion store is not because you really need a new jewel or garment but a new experience”.


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67*Source: Shaun Smith & Co/Beyond Philosophy

Products(Functional)

Services(Valuable)

Experiences(Emotional)

Natural C.E. Organisation

AdvocateCustomers

the cem staircase*

the luxury/fashion brands area

Naïve

Transactional

Enlightened



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customer experience management issueswhat’s happening when we experience? The experiential curve (Daniel Kahneman*)

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parking products for testing First approach SA Product Contact disappointing food product available home setting

• Past experiences are judged almost entirely on how they were at their peak and how they ended (Peak & End Rule).

• A balanced ratio between positive and negative moments have no impact on the customer’s memory. • The experiences are strictly related to the person’s expectations

CUSTOM

ER EXPECTATIO

NS

BRAND VALUES AREA

2002 Nobel Prize for having proven that human decision-making processes systematically violated some principles of rationality since they were strongly conditioned by emotive factors, founder of Behavioural Finance.

Source: TCSG TreCentoSessantaGradi srl All Rights Reserved © Copyright 2008-2019 Carlo Fei for LUISS

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Emotional areas are the strongest places where a customer experience could be provided, thatmeans:

• Human Relations• Emotional Experiences• Five Sense Envolvement• Physical Envolvement, Touchpoints• Surprising Emotions/Relation With A Reference, Product Or Even Place

All customer experiences are based on customer expectations and competitive benchmark perception

And In Which Area Are We More Sensitive To A Pos/Neg C.E.?

Source: TCSG TreCentoSessantaGradi srl All Rights Reserved© Copyright 2008-2019 Carlo Fei for LUISS

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customer experience management – issuesand what about the customer experience during the crisis?

even in an economic downturn, 50% of consumers will pay more for a better customer experience


Source: Customer Experience Impact Report. Right Now Technologies/Harris Interactive 2011

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customer experience management – issuesand what about the crisis?

Companies successful in creating bothfunctional and emotional bonding hadhigher retention ratios (84% vs 30%) and cross selling ratios (82% vs 16%)

compared with those that didn’t

Source: IBM Study/Ogilvy Loyalty Index/Brandz Survey

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1. Recommendations fromconsumers 78%2. Newspapers 63%3. Consumer opinions postedonline 61%4. Brand websites 60%5. Television 56%6. Magazines 56%7. Radio 54%

customer experience management – issuesand what about the 2007 crisis?

Source: Nielsen 2007 Global Survey

Word of mouth is the main source of persuasion and orientation towards purchase

8. Brand sponsorships 49%9. Email I signed up for 49%10. Ads before movies 38%11. Search engine ads 34%12. Online banner ads 26%13. Text ads on mobile phones 18%

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what happened in 6 years time?

Source: Nielsen 2013 vs 2007 Global Survey© Copyright 2008-2019 Carlo Fei for LUISS

with Facebook and fakenews scandals how do youthink the ADV trust evolved?

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an interesting slide on trust and action…


N.B.: higher trust and action in developingmarkets…

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an interesting slide on trust and action through generations…

Not surprisingly, Millennials (now age 25-39), who cameof age with the Internet, have the highest levels of trust in online and mobile formats, followed closely by Generation X (now age 40-54). But it’s not just online and mobile advertising formats where Millennials exceed the average. They also show the highest levels of trust in 18 of 19 advertising formats/channels, including TV, newspapersand magazines, and they’re also the most willing to take action on 16 of 19 formats. “Millennials consume media differently than their oldercounterparts, exercising greater control over when and where they watch, listen and read content—and on whichdevice,” said Beard. “But even if they rely less heavily on traditional channels, their trust and willingness to act on these formats remains high. While an integrated, multi-channel approach is best across all generations, it carrieseven more importance when reaching Millennials

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customer experience management - issuesHow to drive the process succesfully?

“Customer experience is the successful reason of many innovative brands and all that became possible thanks to a cultural change moving from SMALL THINK to BIG THINK”

BERND SCHMITT (Columbia UNIVERSITY)

SMALL THINKINERTIA AND RESISTANCE

(to every innovation process which is disruptive and thinkingout of the box)

NARROW MINDEDNESS(sticking with the status quo, and the same old procedures

and killing creativity right from the start)

RISK AVERSION(stifling true innovation)

SILO MENTALITY(small slice of the business view/ independent operations/ each

others as riivals view)

SHORT TERM FOCUS(being hostage to the next quarterly earnings report)

MOVING WITH SAFEST CHOICES(on directions that dozens of other companies have already taken)

BIG THINKCREATIVITY AND CHANGE

(facing challenges creatively reasoning about themfrom new angles generating innovative ideas and actions)

VISIONARY LEADERSHIP(managing people and teams driving organizational change)

BOLD IDEAS AND ACTIONS(it envolves actions: it is not simply creating something new,

It is behaving differently)

INTEGRATION ACROSS CORE IDEAS(it rallies the whole organization around a few core ideas)

CHECKS OFF THE TRADITIONAL BOXES(bringing creative processes into strategic planning derivingboth from internal and external ideas without any prejudice)

LASTING IMPACT(it creates new business models products and services

transforming consumer expectations, preferences and experiences)

THE PAST THE FUTURE

To get wisely from the past to the future a new approach to the present is needed© Copyright 2008-2019 Carlo Fei for LUISS

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Experience touchpoints (examples)

• Pre-purchase experience touchpoints• Adv, DM (Direct Mktg), WOM (Word of mouth), WEB, phone, e-mail, special events, etc.

• Purchase experience (physical) touchpoints• Experience provided by sales team (selling ceremony):

– welcoming– relationship with customer (empathy, collusive attitude, willingness, heeding attitude, interpretation of

customer needs, proactive attitude, helpfulness, kindness, consistency to Company values, sense ofbelonging to the Company, etc)

– relationship between collegues– expertise– socio-cultural background (local socio-cultural appropriateness, conformance with Company style, etc);

• Merchandising• In-stock availability• Store Orderliness• Convenient hours• Others (Return Policy, CRM Program, etc).



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© 2009-2018 Copyright of TCSG TreCentoSessantaGradi srl All Rights Reserved

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Experience touchpoints (examples)

Purchase experience (emotional) touchpoints• Interior Design• Atmosphere• “Lovemark” feeling• Surprising aptitude• Entertainment• 5 sense involvement• Aptitude to Establish a Link• Etc.• Sustainability• CSR

Post-purchase experience touchpoints• Customer recourse policy & process• Warranty• Reminders• Surveys

© 2009-2018 Copyright of TCSG TreCentoSessantaGradi srl All Rights Reserved


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HOW TO INSTALL AN EFFECTIVE CUSTOMER

EXPERIENCE

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customer experience strategy – issuesbut how do we manage all that?

Installing Customer Experience Managementmeans creating, managing and carrying out thebest customer experience capable ofcommunicating, highlighting and relaying brandvalues, maintaining brand promise and building upcustomer loyalty/advocacy.


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The eight needs of the Effective Customer Experience Strategy


Top Management Sponsorship (CEO)

Brand Value Coherence

Creativity Targeted on C.E. (scientific approach)

HR Total Involvement Program (motivational approach more than assertive)

Deep C.E. Audit (monitoring and compensation score process)

Experiential Benchmarking (in and out of the box)

Knowledge of Customer Expectations (beyond CRM: lifestyle, etc.,)

Neverending Innovative Process

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The basic elements of customer experience planning are:

1st Step:Awareness of Brand ValuesIn-depth knowledge of consumer (the customer’s

experience, background of consumption/use) and the customer’s expectations

Customer Experience competitive (and comparative) assessment.


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2nd Step:Innovative C.E. design

3rd Step:HR alignmentC.E. executionC.E. objective measurement & qualitative centric compensation score metricsNeverending Innovative Process


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Customer Experience key question

Is this customer experience able to communicate, emphasize, transfer the brand values, maintain the brand promise and build

loyalty exceeding customer expectations?


customer experience design - issues

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The Delivery Process of Customer Experience

METHOD

RELATIONSHIP

EMOTION



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SELLING CEREMONY

PEOPLE

(relational aspects)

CUSTOMER EXPERIENCE(strictly speaking)


The Delivery Process of Customer Experience


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in store emotional touchpoints

WelcomingNeed of underlining that we are entering a totally different world: the ABCExperience/world (Kahneman first impression)

Interior DesignThis very involving tool represents the world you’re in. It’s the first visualcommunication item of the Brand Values and a foundation brick in the C.E. Strategy.

AtmosphereCreated by People, Interior Design, 5 sense Involvement and Innovation is asurrounding feeling that will affect all the Customer journey through the ABC in storeexperience.

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“Lovemark” feeling“Lovemarks reach your heart as well as your mind, creating an intimate,emotional connection that you just can’t live without. Ever”Kevin RobertsMistery (Surprising Attitude), Sensuality (5 sense involvement), Intimacy(Passion) are the key points to build a real Lovemark feeling beyond theBrand.Surprising aptitudeTo exceed customer expectations nothing has to be predictable A newInnovative C.E. managed by motivated and smart people makes ABC beingbrand with a strong surprising aptitude,


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Entertainment

Innovative feeling: We are surrounded byentertainment and we are constantly looking forentertaining ourselves. Innovation is the tool able tosatisfied this latent expectation.Innovation as an emotional involvement


In Store Emotional Touchpoints

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Sustainability

New reasons to buy: Behaving green is a good one.Companies are declaring themselves being eco-friendly but do they really behave and deliver asustainable Customer Experience?


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In Store Emotional Touchpointscustomer experience design - issues

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5 senses involvement”It is through the five senses weexperience the world andcreate our memories.”


Sight

Smell

Sound

Taste

Touch

Key Questions

To what degree does the revised sensory brand manage to achieve the desired effects?To what extent is the sensory appeal loyal to its heritage (and brand values)?As a result of this sensory integration, is the brand still perceived as authentic?

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In Store Emotional Touchpointscustomer experience design - issues

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5 sense involvement

Sound can actually influence a purchasing decision.

Journal of Consumer ResearchRonald E. Millman demonstrated that the pace of music playing in the back groundaffected service, spending, and traffic flow in stores and restaurants. The slower themusic, the more people shop. The faster the tempo, the less they spend. (+29% higherbill). Romantic and Sensual music resulted in greater levels of purchase intent(“Shopping Therapy” related matter).

FONTS:The Influence of Background Music on the Behaviour of Restaurant Patrons by Ronald E. MillmanArousal Hypotheses and the Effects of Music on Purchasing Behavior, Journal of Applied PsychologyRetailer and Consumer Attitudes Towards Background Music (Texas University)Psychological Science magazine


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A brand like ABC has immense potential. The theme is strongly tied to stylistic choicesand in this area we concentrate more on methods than on content. We are subjected toso many constant visual stimuli that they are no longer striking. Technology provides thepossibility of proposing new visual stimuli in a stimulating and therefore an emotionbuilding way.


Sight is our first sense but to be really effective a innovative striking approach is needed

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customer experience design - issues5 sense involvement

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Taste and smell are two senses with an incredibly evocative power - superior to sight andhearing (Study carried out by Trygg Engen at Brown University).

Offering customers food and drinks tied to the company’s brand values (-.-.-.-) provides animmense experiential opportunity.

Possible suppliers that respond to ABC values and standards and to customer expectationsare currently being selected.


Taste: food and beverages used as an opportunity for hospitality

Taste and Smell: the strongestevocative power between 5 senses

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An environment permeated with a pleasant perfume makes consumers more willingto spend (study by Pieter Aarts and J. Stephan Jellinek for Nike and Harrah’sCasino in Las Vegas).

Today room perfumes are formulated by neurologists to increase the effectsdesired.

A nice perfume for personal use is not necessarily suited to an experience-orientedenvironment.


Scent as a seductive brand experience to boost spending willingness

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Every touching experience is a sort of holding experience simulation

Tactile experience: shapes, materials, leather and fabrics can provide a uniquebrand experienceABC is in itself a brand that is strongly oriented towards tactile experience with richfabrics and tooled leather. Making this involving and participatory experience moredirect brings the product experience closer and makes it more personal.Programs for customizing a “tactile” journey are an available opportunity thanks toinnovative technologies.

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Central theme: the starting and ending point for an effectivecustomer experience is its ability to establish a link - the true test ofthe brand’s experiential offer. It is an element that is influenced notonly by interpersonal aspects but even more by experiential ones.


The Aptitude to Establish a Link is the true test of C.E. Effectiveness

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“You can design, create, and build the mostwonderful place in the world. But it takespeople to make the dream a reality.”

Walt Disney

HR Activities


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FINANCIAL VALUE (Customer Profitability)

CUSTOMER VALUE (Acquisition, Retention, Expansion, Advocacy)

CUSTOMER EXPERIENCE

INTERNAL RESOURSES (Mktg, HR, Data Mgmnt, Corporate Creativity)

EMPLOYEE EXPERIENCE© 2007 – 2018 Copyright of Bernd Schmitt All Rights Reserved

FIRM VALUE

HR Activitiesto deliver a good customer experience a good employee experience is needed.

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Vulnerable Customers Star Customers

Lost Cause X Free Riders

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Delivering value to Customers

© Copyright of Sunil Gupta and Donald R. Lehmann All Rights Reserved

•Star Customers receive high value from a firm’s products and services and provide high value in margins, loyalty, andretention.• The Lost Cause does not get much value from a firm’s products and services. At best, they may provide marginal value tothe firm by allowing for economies of scale. If not, companies should consider reallocating resources from this group.• Vulnerable Customers provide high value to firm but do not get a lot of value from the firm’s services.• Free Riders get superior value from a firm’s products and services but provide little value because of their large size orintensity of competition. The firm needs to reduce service or raise prices for them. This risks defection but will enhancetheir value to the firm.

customer experience design - issuesCustomizing the C.E.

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