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How to Sustain the Customer Experience An Overview of Experience Components that Co-create Value Wit


doi:10.1016/j.emj.2007.08.005

European Management Journal Vol. 25, No. 5, pp. 395–410, 2007 ? 2007 Elsevier Ltd. All rights reserved. 0263-2373 $32.00

How to Sustain the Customer Experience: An Overview of Experience Components that Co-create Value With the Customer
CHIARA GENTILE, Politecnico di Milano, Italy NICOLA SPILLER, Politecnico di Milano, Italy GIULIANO NOCI, Politecnico di Milano, Italy
Nowadays the experience factor plays an increasingly important role in determining the success of a company’s offering. The literature on Customer Experience is growing fast and the debate among scholars and practitioners is fervent. While many studies explore such theme from a theoretical viewpoint, tools aimed at supporting marketing managers in devising the right stimuli to support an excellent Customer Experience are still scarce. In this perspective, this study sheds some light on the concept of Customer Experience, and on how the right environment and setting for the desired Customer Experience should be created in such a way as to contribute to the value creation for customers and the company itself. Drawing from the results of a survey submitted to several groups of customers, this paper attempts to understand the speci?c role of different experiential features in the success achieved by some well-known products. Following the empirical investigation, this work also suggests an interpretative model to support the marketing manager in generating the proper stimuli to activate the various components of the Customer Experience. ? 2007 Elsevier Ltd. All rights reserved. Keywords: Experimential marketing, experience, Customer behaviour Customer

Introduction
Nowadays competing in a global market has become increasingly dif?cult and only the creation of longlasting competitive advantages seems to offer an avenue for survival. But where should a company start looking to develop a competitive advantage? Many scholars advocate that one of the main routes to reach it is by means of a much stronger focus on the customer (Douglas and Craig, 2000; Farinet and Ploncher, 2002; Kotler and Keller, 2006; Peppers and Rogers, 2000). In the last years, and particularly in the process of devising a company’s strategy, this growing attention on the customer resulted in an increased focus on CRM philosophies. More recently, as the number of contact points between a company and its customers increased, such attention to the customer revealed the fundamental importance of monitoring the many experiences that originate from those contact points.

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In this perspective, the central idea is to expand the transaction-based notion of Customer Relationship to the ‘‘continuous’’ concept of Customer Experience. Consequently, it becomes necessary to consider aspects that refer to the emotional and irrational side of customer behavior (Holbrook and Hirschman, 1982) and which, more than the only rational ones, account for the whole experience coming from the set of interactions between a company and its customers. Such experience plays a fundamental role in determining the customers’ preferences, which then in?uence their purchase decisions. In fact, whilst the classical economic theory regards the consumer as a logical thinker whose purchasing decisions are based on rational problem solving, the recent developments on the literature on economics and marketing, and particularly the new stream of the Experiential Marketing, advocates for the exploitation of intangible elements linked to the emotional value perceived by customers. In addition, a similar position can be found in the managerial ?eld; in fact, 85% of senior business managers believe that differentiating solely on the traditional elements, such as price, product and quality, is no longer a sustainable competitive advantage and even more senior managers hold the Customer Experience as the next competitive battleground (Shaw and Ivens, 2005). Despite such vibrant enthusiasm, however, the reality is very different, and far from being close to either what the literature advocates or what many companies claim in their statement of intent. In addition, the scienti?c literature on this topic shows the limitations and inadequacies that are typical of those research ?elds which are still far from their maturity, particularly as it lacks both in terms of a precise terminology and of structured and standardized approaches that can support the adoption of the above mentioned practices. Given these considerations, the aim of this paper is to contribute towards the formalization and the improvement of the existing models and approaches on the matter. In particular, the present study contributes to the scienti?c debate in terms of a further rationalization of the approaches and theories so far developed and in attempting to provide an answer to certain open issues. Speci?cally, in this work it is provided: v a conceptual de?nition of ‘‘Customer Experience’’ based on the most relevant scholarly and managerial contributions; v an analysis of the speci?c role played by the experiential features in a sample of innovative products with respect to the outcomes of their introduction to the market; v an interpretative model aimed to support a company in the process of devising contexts and arti396

facts that are conducive of a (Customer) Experience, and which can then be used by consumers to co-produce their own experience.

State-of-the-art Literature on Experiential Marketing
The concept of Customer Experience was ?rstly conceived in the mid-1980s when, along with the mainstream literature in consumer behavior that deemed customers as rational decision makers, a new experiential approach offered an original view to consumer behavior (Holbrook and Hirschman, 1982). The importance of various hitherto neglected variables was re-considered: ‘‘the role of emotions in behavior; the fact that consumers are feelers as well as thinkers and doers;. . .the roles of consumers, beyond the act of purchase, in product usage as well as brand choice’’ (Addis and Holbrook, 2001). Despite these initial sparks, the concept of Customer Experience came more relevantly to the fore in the 1990s with Pine and Gilmore’s book on the Experience Economy (1999); the authors present the ‘‘experiences’’ as a new economic offering, which emerges as the next step after commodities, goods and services in what they call the progression of economic value. Hence, in the following years a ?ourishing of different contributions focused their attention on the Customer Experience as a new lever to create value for both the company and the customer (Addis and Holbrook, 2001; ` Caru and Cova, 2003; Ferraresi and Schmitt, 2006; Forlizzi and Ford, 2000; LaSalle and Britton, 2003; Milligan and Smith, 2002; Ponsonby-Mccabe and Boyle, 2006; Prahalad and Ramaswamy, 2004; Schmitt, 1999; Schmitt, 2003; Shaw and Ivens, 2005; Smith and Wheeler, 2002). The starting point of these approaches is a renewed way to consider the wellknown concept of consumption: it becomes a holistic experience which involves a person – as opposed to a customer - as a whole at different levels and in every interaction between such person and a company, or a company’s offer (LaSalle and Britton, 2003). In this perspective, the memorability of the ‘‘staged’’ events, as in Pine and Gilmore’s works, is no longer of primary importance: what contributes to the creation of value is not so much selling memorable experiences but to enable the customer to live all the moments of the relationship with a company in an excellent way, even beyond her expectations (LaSalle and Britton, 2003) or, according to the viewpoint of Prahalad and Ramaswamy (2004), to co-create their own unique experience with the company. In this perspective, companies do not sell (or stage, according to Pine and Gilmore’s perspective) experiences, but rather they provide artifacts and contexts that are conducive of experiences and which can be properly employed by consumers to co-create their own, ` ` unique, experiences (Caru and Cova, 2003; Caru and Cova, 2007). Indeed, Schmitt (1999) states that ‘‘as a marketer you need to provide the right
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environment and setting for the desired customer experiences to emerge’’. More recently, a comprehensive contribution has been offered in the book ‘‘Con` suming Experience’’ (Caru and Cova, 2007), in which the authors identify a ‘‘continuum of consuming experiences’’ ranging from experiences that are mainly constructed by the consumers, to experiences that are largely developed by companies (a kind of approach which is close to Pine and Gilmore’s viewpoint), passing through experiences that are co-created by consumers and companies (as per Prahalad and Ramaswamy). Accordingly, the role of the ?rm changes in each stage of the continuum: from a company pursuing almost a traditional product or service marketing approach to a company adopting a holistic and immersive experiential marketing approach (thus providing immersive experiences, whereby a consumer dives into an experience that is fully developed in details by a company), passing through a co-creation stage, in which a company provide the consumer with the basic platform and raw materials that are then being used by the consumer to mold and obtain his/her own experience. As the scienti?c contributions are rich and diverse, so are the different interpretations and conceptualizations of the Customer Experience offered by each author; nevertheless, despite the differences of perspective and the various models proposed, one can identify some common core characteristics of the Customer Experience. First, it has a temporal dimension which originates from the entire set of contact points (or moments of truth, Carlzon, 1987) between the customer and the company, or the company’s ` offer (Addis and Holbrook, 2001; Caru and Cova, 2003; LaSalle and Britton, 2003), then it is strictly personal and it involves and engages a customer at different levels (rational, emotional, sensorial, physical and also ‘‘spiritual’’) so as to create a holistic Gestalt (Brakus, 2001; Schmitt, 1999). While the overall picture offers plenty of potentiality, if we exclude some pioneers, only few companies have adopted the perspective of the Customer Experience, whereas the many are still far from the level of success that can potentially be obtained by leveraging on the Customer Experience. Two facts can then be regarded as main reasons for such slow adoption rate: one is the lack in the extant literature of models, interpretation and conceptualization offering a common terminology and a shared mindset, the other is the lack of structured managerial approaches, which can only be overcome by a deeper comprehension of the role played by the Customer Experience.

from the debate in literature, a de?nition of Customer Experience which underlies the subsequent analysis; the second part delves into the concept of Customer Experience and introduces its elementary dimensions: the experiential components. In the third part we describe a general framework whereby the inter-relations between the concepts of Customer Experience and value exchanged are outlined, as well as the relationships between such concepts, the customer and the company. A De?nition of Customer Experience For our purpose, we consider a de?nition of Customer Experience which takes into account the most relevant scienti?c contributions; speci?cally, we de?ne the concept of Customer Experience as an evolution of the concept of relationship between the company and the customer.
‘‘The Customer Experience originates from a set of interactions between a customer and a product, a company, or part of its organization, which provoke a reaction (LaSalle and Britton, 2003; Shaw and Ivens, 2005). This experience is strictly personal and implies the customer’s involvement at different levels (rational, emotional, sensorial physical and spiritual) (LaSalle and Britton, 2003; Schmitt, 1999). Its evaluation depends on the comparison between a customer’s expectations and the stimuli coming from the interaction with the company and its offering in correspondence of the different moments of contact or touch-points (LaSalle and Britton, 2003; Shaw and Ivens, 2005).’’

This de?nition serves as a basis for a deeper conceptualization of Customer Experience, which is explained in the following paragraph. The Multidimensionality of the Customer Experience While still complying with the fundamental rule that a good experience must holistically and consistently involve a person at different levels, and following previous conceptualization, we base our analysis on the psychological concept of modularity of mind (Pinker, 1997). Various psychological and behavioral studies (Anderson, 1995; Brakus, 2001; Fiske and Taylor, 1991; Goleman, 1995; Schmitt and Simonson, 1997; Tavassoli, 1998) distinguish three basic systems – sensation, cognition and affect – each with its own structures, principles and mutual interactions. In addition, when considering a person per se, these studies take into account the set of one’s actions, the system of values and beliefs (from which lifestyles and behaviors are derived) and relationships. Furthermore, the multidimensionality of experiences is also widely recognized in the medical literature. For instance, many neurophysiologic studies support the widely accepted notion that pain is a multidimensional experience including sensory, cognitive
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Conceptual Framework
This paragraph outlines the reference framework of the research. In the ?rst part we elaborate, drawing
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and emotional components (i.e. Fulbright et al., 2001); this is consistently supported by ?ndings from human brain imaging studies showing that multiple cortical regions are activated during the presentation of painful stimuli (Coghill et al., 1994; Derbyshire and Jones, 1998; Jones et al., 1991; Paulson et al., 1998; Talbot et al., 1991). Therefore, drawing from this literature, and following the stream of other scienti?c works (Brakus, 2001; Fornerino et al., 2006; Schmitt, 1999, 2003), we conceptualize the Customer Experience as a multidimensional structure composed by elementary components. Nevertheless, one must keep in mind that, as indeed the study proved, customers hardly ever recognize such kind of structure. In contrast, we expect that customers perceive each experience as a complex but unitary feeling, each component being hardly distinguishable from the others. As above mentioned, our conceptualization of the elementary components of the Customer Experience has some elements in common with the model proposed by Schmitt (1999) and with the results of Fornerino et al. (2006). Moving from the basic idea of ‘‘engagement at different levels’’ Schmitt (1999) proposes a modular conceptualization of the concept of Customer Experience. Speci?cally, Schmitt identi?es ?ve Strategic Experiential Modules: sensory experiences (sense); affective experiences (feel); creative cognitive experiences (think); physical experiences, behaviors and lifestyle (act); and social-identity experiences that result from relating to a reference group or culture (relate). Fornerino et al. (2006) analyze the case of an immersive consumption experience and identify ?ve distinct dimensions: sensorial-perceptual, affective and physical-behavioral (components) and social and cognitive (facets). Hence, drawing from the extant literature, the (experiential) components we have assumed as dimensions of the Customer Experience are: v Sensorial Component: a component of the Customer Experience whose stimulation affects the senses; an offering, whose aim is to provide good sensorial experiences, can address sight, hearing, touch, taste and smell so as to arouse aesthetical pleasure, excitement, satisfaction, sense of beauty (good examples are Jamba Juice bars or Lush stores). v Emotional Component: a component of the Customer Experience which involves one’s affective system through the generation of moods, feelings, emotions; an offering can generate emotional experience in order to create an affective relation with the company, its brand or products (good examples of brands which claim a strong emotional link with their customers are Barilla and Kinder Surprise). v Cognitive Component: a component of the Customer Experience connected with thinking or
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conscious mental processes; an offering may engage customers in using their creativity or in situations of problem solving; furthermore a company can lead consumer to revise the usual idea of a product or some common mental assumptions (as happened with the Barbie, the ?rst doll with the image of a young woman). v Pragmatic Component: a component of the Customer Experience coming from the practical act of doing something; in this sense the pragmatic component includes, but is not exhausted by, the concept of usability (the Apple iMac offers an optimal example of what it means to design an extraordinary practical experience for users based on usability standards). In fact it does not only refer to the use of the product in the postpurchase stage, but it extends to all the product life-cycle stages (see for an example KitchenAid and Whirpool’s initiative called Insperience). v Lifestyle Component: a component of the Customer Experience that comes from the af?rmation of the system of values and the beliefs of the person often through the adoption of a lifestyle and behaviors. Frequently an offering may provide such experience because the product itself and its consumption/use become means of adhesion to certain values the company and the brand embody and the customers share (as in the consumption of no logo products). v Relational Component: a component of the Customer Experience that involves the person and, beyond, his/her social context, his/her relationship with other people or also with his/her ideal self. An offering can leverage on such component by means of a product which encourages the use/consumption together with other people (i.e. Disneyland parks) or which is the core of a common passion that may eventually lead to the creation of a community or still a tribe of fans (i.e. Ducati); ?nally the product (as haute couture apparel) can be also a means of af?rmation of a social identity, inducing a sense of belonging or of distinction from a social group; in this case the link with the lifestyle component is very relevant. While mainly drawing from the results of the above mentioned works, the dimensions of the Customer Experience we propose bear some differences. First, taking into consideration Schmitt’s act module, we distinguish the physical aspects from the values and join the physical part with the sensorial dimension. Such approach is also consistent with recent neurophysiologic studies, whereby the physical and sensitive aspects are considered as a unitary dimension. Secondly, we add a new dimension, namely the pragmatic component, which we drew from the extant literature on the user experience (Arhippainem, 2004; Battarbee and Koskinen, 2005; Forlizzi and Ford, 2000) and which takes into account the aspects related to the human-objects interaction.
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The General Framework Drawing from the extant theories on value creation and co-creation we propose a conceptual framework where the concepts of Customer Experience and exchanged value are encapsulated and their mutualrelations and the inter-relations with the main entities (the company and the consumer) are outlined. As before introduced, the Customer Experience originates from a set of interactions between a customer and a product, a company or part of its organization and the value that the consumer and the company gain is created through that set of interactions (Addis and Holbrook, 2001). Additionally, following Addis and Holbrook (2001) we make a distinction between two kinds of consumer value: utilitarian value (or functional value) and hedonic value (or experiential value). Such distinction draws from the subject-object interaction as described by Holbrook (1999) whereby the type of value depends on the relative weight of the objective (or functional) features of the product over the subjective responses of the consumer (see Holbrook, 1999), which, turn, are elicited by speci?c aspects of the offer, which we refer to as ‘‘experiential features’’. Equally, on the basis on the relative weight of the hedonic value over the utilitarian value, products can be classi?ed into three groups: hedonic products, utilitarian products, and balanced products, for which a balance between the two types of value is present (see Figure 1). On the other hand, on the side of the company, the value generated from the set of interactions between the customer and the company (even when mediated by the company’s offering) has a potential impact both on the traditional performance measures (i.e. market share, sales, pro?tability) and on a set of intangible assets of the company (brand equity and customer equity). The general framework is represented in Figure 2.

Research Methodology
This study takes into consideration the role of the Customer Experience in determining the outcomes of the introduction of some well-known and remarkably successful products; to simplify the choice of the cases to be analyzed, we select our sample of cases among those that are considered, both in the existing literature and in the common opinion, as successful and are characterized by widely-known brands with a very strong image. Furthermore, we speci?cally consider products that are not characterized by a strong superiority in technological aspects (which mainly convey functional value) so as to better isolate and outline the role played by experiential features. As the research project aims at suggesting an interpretative model of the above described phenomena, and due to the novelty of the matters, an explorative study was carried on. For such reason, the analyzed data were partially qualitative. Sampling of the Cases Cases were selected to achieve an appreciable degree of heterogeneity in terms of Customer Experience conveyed to the market. Speci?cally, two variables, namely: v type of knowledge embedded (tacit vs. coded, as per Polanyi, 1983); v durability (non durable, medium range, long range) were considered for the selection process since they have a considerable impact in determining the Customer Experience (see Figure 3).

Investigation Methodology The research has been carried out in two phases. In the ?rst part, the experiential features of the offering proposed by the company have been analyzed by means of secondary sources and direct interviews: this phase was meant to understand the marketing strategy used by the company and the aspects of the Customer Experience on which the company focused in its strategy. In the second part, a market research has been performed to assess how customers perceive and evaluate the different components of the Customer Experience and to assess which of the six components were perceived as the most relevant for each of the products analyzed. In particular, following Calder and Malthouse, 2006 a survey, both explorative and descriptive in nature, was carried out by means of a structured questionnaire with multiple choice, rating scale and agreement scale questions based on a 1-4 Likert scale. The choice of the questionnaire as investigation means has been taken both on the basis of some precedents (as the already
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Figure 1 Hedonic, Utilitarian and Balanced Products (Adapted from Addis and Holbrook, 2001)

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Experience
Value proposition

Company
Value realization

Sensorial Emotional Cognitive Pragmatic Lifestyle Relational

Value perception

Consumer
Value expectation

Company value (Ferraresi and Schmitt, 2006)
_ _ _

Consumer Value (Holbrook 1999; Addis and Holbrook 2001)
_Utilitarian _Edonistic

Sales, Market share... Brand equity Customer equity

value value

Figure 2 General Framework

Gatorade

iPod Playstation

Harley-Davidson Smart

Coded
Pringles

Type of knowledge embedded
Haute Couture Brand Bars McDonald’s Nike Swatch Ikea Swarovski

Tacit

Non durable

Durable (Medium range) Durability

Durable (Long range)

education, etc.) about the respondents; the second investigates the motivations on the basis of the purchase by analyzing the role of the experiential features; the last section is aimed at comparing the evaluation of the different components in order to understand which one the customers consider as most relevant. The questionnaire was administered to the sample both in paper and electronic format (on the WWW). Data Analysis The framework for the analysis of the data is based on the conceptualization of the Customer Experience as a multidimensional concept. The ?rst analysis was carried out on the collected data to assess the relative weight of the utilitarian value when compared to the hedonic value. In a second phase each component of the Customer Experience has been analyzed to investigate how customers evaluated it and how much relevant it was when compared with the others. This part of the analysis was aimed at de?ning the interpretative model (see paragraph 6). A factor analysis was carried out to explore the internal structure of the dataset, additionally, further qualitative analyses and a cluster analysis (for some speci?c cases in which it seemed relevant to identify the existence of differences in customer behavior and evaluations) were conducted.

Figure 3 Sample of Selected Cases

mentioned work by Calder and Malthouse, 2006) and on the ground of the fact that data collected through questionnaires permit the use of speci?c statistical analyses, which can be applied to explore the internal structure of the Customer Experience, as it has been conceptualized in our study. The questionnaire has been submitted to a non-statistical sample of almost 200 units (for each analyzed product, totaling 2368 units) chosen among individuals, between 16 and 55 years, who usually buy/use the considered product (for further information on the sample, please refer to the sample description in Appendix 1). We outline that the choice of employing a non-statistical sample implies some problems on results generalizability; this issue, however, can be considered as being not too relevant due to the explorative nature of the research. The proposed interpretative model, in fact, can be subsequently validated and tested on the basis of a multiple case study analysis. The administered questionnaire (a sample of which can be found in Appendix 2) had been pre-tested on a small sample of consumers, hence the ?nal version is made up of three parts: the ?rst is aimed at collecting demographical information (age, gender,
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Results of the Survey
As mentioned in the previous paragraph the analysis of the data obtained by the survey was aimed at reaching two main results:
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v the comprehension of the relative weights of the experiential features over the functional ones in the perception of value (for each of the twelve product analyzed); v the de?nition of the contribution of each experiential component to the overall evaluation of the offer.

Utilitarian vs. Hedonic Value The ?rst analyses were oriented at determining the relevance of the whole hedonic value as compared to the utilitarian one. Figure 4 presents the results and demonstrates that overall the experiential features are perceived by customers almost as much relevant as the functional ones, indeed 7 products out of 12 have been classi?ed as ‘‘balanced’’ and 2 products have been reported to be ‘‘hedonic’’: Harley Davidson and Smart. Such observations should however be tempered with the consideration that certain types of experiences are particularly dif?cult to be investigated simply by means of a questionnaire. Those are experiences which indeed are felt by a customer but often at a sub-conscious level, thus a quick and super?cial analysis, such as that performed while responding to a questionnaire, is likely to miss or underestimate their real impact. Further, people often show a tendency to undervalue the in?uence of communication campaigns, advertising and other marketing strategies on their purchase decisions; often an impulse purchase, mainly dictated by irrational motivations, is later re-interpreted in rational terms and thus underestimated in the reported perceptions of a questionnaire. As for the relational component, the analysis from secondary sources showed that such kind of compo-

nent is associated to certain group of customers, which represent only a fraction of the entire market (i.e. the relational component tied with collecting practices). Consequently, the average score reported by such component is substantially lowered by the large part of the sample which is de?nitely not interested in this kind of component of the Customer Experience. As expected, a cluster analysis con?rmed this line of reasoning isolating two clusters of customers, one remarkably affected by the relational component, the other substantially indifferent. Experiential Components The second set of analyses was oriented at determining the scores of each experiential component for each product under analysis. The results have been summarized in Figure 5 (scores have been calculated as mean of the scores of the components of the Customer Experience). Scores have been divided into three sets according to their distance from the mean of the scale used (which is 2.5); namely: scores much above the mean, scores near the mean or slightly above and scores below the mean. Additionally, two considerations can be drawn from Figure 5: v the value associated with the sensorial component is substantially high (above the mean) across all the considered cases; v the value associated with the relational component does not vary sensibly across products and it is lower than expected, indeed no occurrences have been reported to be much above the mean. This can be explained, as previously mentioned, by the presence of two different groups of consumers within a given polled sample, one of those being substantially indifferent to the speci?c experiential component. Given such particularities, in de?ning the interpretative model (proposed in the next paragraph) we

Hedonic Value

Utilitarian Value

Type of product

SWATCH PRINGLES HARLEY DAVIDSON SMART IPOD NIKE H.C. BRAND BARS PLAYSTATION GATORADE MCDONALD’S IKEA SWAROVSKI

2.40 2.13 3.03 2.98 3.02 2.28 2.48 2.59 2.56 2.31 2.81 2.65

3.13 2.91 1.71 2.63 3.35 3.07 2.93 3.22 2.81 3.04 3.06 3.08

Utilitarian* Balanced Hedonic* Hedonic* Balanced Utilitarian* Balanced Balanced Balanced Utilitarian* Balanced Balanced

Figure 4 Main Results of the Survey (a). *ANOVA: p-value < 0.05

Figure 5 Main Results of the Survey (b)

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decided to analyze separately the sensorial and the relational component.
SWATCH

Score

Sensorial Experience

Link with core functionalities

3.48 2.65 3.53 2.70 3.63 3.21 3.62 2.90 2.53 2.67 3.31 3.63

Sight Taste Sight Sight Hearing Sight Sight Sight&Hearing Taste Taste Sight Sight

No Yes No No Yes No No Yes Yes Yes Yes Yes

Complex Experiences The main objective of the factor analysis was to study whether the experiential components were actually being perceived separately by customers or not. Such investigation is important both from a theoretical perspective and from a managerial perspective. Theoretically, as we hypothesized the existence of complex experiences whose modularity cannot be decomposed (as perceived by customers), and managerially since managers, while greatly bene?ting from a simple and straight-forward tool (operating on single and separated components) de?nitively ought to take into account potentially complex interactions, should they be identi?ed in the factor analysis. Indeed, the results of the factor analysis showed that each case reported both pure components (that is, factors that can be related to a single experiential component) and ‘‘mixed components’’ (that is, factors whose variables belong to different experiential components). Mixed components can be considered as a cue for the hypothesized existence of interrelations between components, which in turn stand for complex experiences. Complex experiences thus emerge as speci?c case in which the components are so intimately intermingled that consumers are unable to draw any separation between them. An example of the results of the factor analysis for the iPod case is reported in appendix.

PRINGLES HARLEY DAVIDSON SMART IPOD NIKE H.C. BRAND BARS PLAYSTATION GATORADE MCDONALD’S IKEA SWAROVSKI

Figure 6 Typologies of Sensorial Component

this uniformity of results, an in-depth analysis revealed that whenever a clear link between the core functionality of a product and a natural sense could be established (e.g. iPod/hearing, Pringles/taste, etc.) then that speci?c sensorial component was perceived as being the most relevant for the user. On the other hand, when a clear link could not be identi?ed, the results showed that sight was the sense perceived as most important. Figure 6 reports when such a link could be established between core functionalities of a product and the speci?c sensorial component. Such observation poses some caveats from a managerial point of view, and speci?cally when conceiving how and what speci?c features of the offering should be framed so as to address the sensorial component.

The Interpretative Model
The interpretative model consists of two parts. First of all, on the bases of the evidence reported in the discussion of the results, other qualitative analyses were carried out to infer further insight on the sensorial component. In the second part, ?rst we analyze the relevance of the four components that reported the highest differences in scores among the analyzed cases: emotional, cognitive, pragmatic and lifestyle. Then, the relational component was analyzed separately: taking into account the results of the cluster analysis, the model de?nes different typologies of relational component proposing a link between them and the characteristics of the product analyzed. The output of this second part is the Commitment/Involvement Matrix. Sensorial Component As before mentioned, the sensorial component was reported to score high across all the cases. Despite
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Commitment/Involvement Matrix The analysis of the scores reported in association to the emotional, cognitive, pragmatic and lifestyle components suggested the de?nition of two variables that could account for the differences of relevance reported for the four components. Namely the two variables are: v Customer involvement, which is the level of importance a customer attributes to an object, an action or an activity and the enthusiasm and interest they can generate (Dalli and Romani, 2000; Goldsmith and Emmert, 1991). Such variable is affected by two factors: cost of the offering (both in absolute terms and in relative terms when compared with competitors’) and impact on the customer’s self image. In this case, a higher cost of the offering requires a greater willingness to pay, which is more likely to be attained when
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the offer provides a signi?cant emotional component. On the other hand, when a product has a relevant impact on one’s image the sharing of the values embedded in the offer is fundamental (lifestyle component). These assumptions can be compared with the data collected to verify the existence of a relation between customer involvement and the emotional and lifestyle components. Considering the means of the score obtained for the two modules and contrasting them with the 2.5 cut-off value (mean of the 1-4 Likert scale) it was possible to divide the analyzed cases into two groups: one set with scores higher than the mean (marked in grey in Figure 7), and the other set with scores lower than the mean (marked in white in Figure 7) and thus ascertain that actually the ?rst group includes cases characterized by higher involvement than the ones in the second group. v Customer commitment, which is the effort in terms of resources the customer makes to use the product (adapted from Grandinetti and Paiola, 2003). Such variable is in?uenced by two factors: purchase/use frequency and level of complexity in using the product. A higher level of the former makes an easy and comfortable use/consumption (pragmatic component) desirable; a higher level of the latter requires a greater rational engagement (cognitive component). As before, we compared these hypotheses with the data collected to search for the existence of a link between customer commitment and the cognitive and pragmatic components. Even in this case we considered the means of the scores obtained for the two

Cognitive Component

Pragmatic Component

Pragmatic + Cognitive Components

SWATCH PRINGLES HARLEY DAVIDSON SMART IPOD NIKE H.C. BRAND BARS PLAYSTATION GATORADE MCDONALD’S IKEA SWAROVSKI

1.65 1.60 3.42 2.96 2.46 1.33 1.55 2.60 3.12 1.86 2.09 2.44

2.74 2.95 2.34 3.63 3.68 3.57 N.R. 3.32 2.67 3.01 3.03 N.R.

2.19 2.28 2.88 3.30 3.07 2.45 0.78 2.97 2.90 2.44 2.56 1.22

Figure 8 Cognitive ANOVA: p-value < 0.05

and

Pragmatic

Components.

modules and contrasted them with the 2.5 cut-off value (mean of the 1-4 Likert scale). Hence, it was possible to divide the analyzed cases into two groups (one group with scores higher than the mean, marked in grey in Figure 8, and the other with scores lower than the mean, marked in white in Figure 8) and verify that actually the ?rst group includes cases characterized by higher commitment than the ones in the second group. Customer Commitment and Customer Involvement were used to explain the relevance of the four components; in the case of the relational component the same two variables could be applied to describe three sub-typologies of the relational component. Accordingly, three kinds of relational component could be identi?ed: v absent or super?cial: when a low-level customer involvement is present the relational component stems from interpersonal relationships that are temporally limited to the time spent while using the product (e.g. Playstation and Pringles); v connected to collecting practices; when the relational component is more intense than in the previous case (due to the high level of customer involvement), but the low commitment level indicates that the relational component is mainly generated by collecting practices stemmed from the ownership of the product (e.g. collectors clubs for Swatch and Swarovski); v profound: for the high-involvement/high-commitment products the relational component is even more intense and is due to the existence of communities of customers. In this case, interpersonal relationships are built not exclusively on a common interest, but on shared lifestyles
403

Emotional Component

Lifestyle Component

Emotional + Lifestyle Components (mean)

SWATCH PRINGLES HARLEY DAVIDSON SMART IPOD NIKE H.C. BRAND BARS PLAYSTATION GATORADE MCDONALD’S IKEA SWAROVSKI

3.03 1.79 3.83 3.59 3.45 1.31 2.66 2.44 2.71 2.15 N.R. 2.65

2.28 1.53 2.85 2.82 3.08 1.98 1.98 2.02 1.83 N.R. N.R. 2.90

2.65 1.67 3.34 3.21 3.27 1.65 2.32 2.23 2.27 1.08 0 2.78

Figure 7 Emotional and Lifestyle Components. ANOVA: p-value < 0.05

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Target Scope

Source/occasion

Absent or superficial

Whole target market

Usage of the product

according to the matching association between the reported scores and a given con?guration of the set of four components. Furthermore, depending on the combination of the Commitment/Involvement couple, the relational component assumes one of the three sub-typologies earlier speci?ed (also reported in Figure 10). Finally, once each product has been positioned in the matrix, one can observe how the chosen variables suitably characterize the four clusters obtained.

Profound (community)

Specific segment within the target market

Ownership and usage of the product

Collecting

Specific segment within the target market

Ownership of the product

Figure 9 Relational Component: Target Scope and Sources

Conclusions and Future Developments
The above analyses show how important it is to pay attention to the new arising tendencies in customers’ behavior interpretation. The study proved that a relevant part of the value proposed to customers, and actually recognized by them, is linked to experiential features; we found that, regardless of the context, customers want to live positive consumption experiences. Living a positive Customer Experience can promote the creation of an emotional tie between a ?rm’s brand and its customers which in turn enhance customer loyalty. Yet this does not imply that customers neglect the importance of functionalities: sometimes as required standard, sometimes as factors enabling an optimal experience. We notice that the functional value (or utilitarian value) obtains almost always (except in two cases) a score near the experiential (hedonic) one; in some cases even a little higher. Therefore this part of the study based on the analysis of best practices proves that it is important to deliver an adequate balance between utilitarian and hedonic value. The results also show that these successful products involve customers’ senses, emotions, thoughts, acts, values and relations in different ways: each product leverages on more than one component, the particular combination depending on the characteristics of the product itself. Furthermore, we can infer that, by leveraging on more components, it is theoretically possible to intensify the whole hedonic value thanks to the existence of positive interferences among the activated components. Hence, resting on psychological and sociological interpretations about the generation and elaboration of sensations, thoughts, emotions, behaviors and relationships and of their interactions and interrelations (Goleman, 1995), we can hypothesize the existence ‘‘complex experiences’’ involving more than a single component. Indeed, we found that each of the products we analyzed leverages on some experiential components; but at a deeper investigation, we noticed that the components are not activated independently: sometimes there are relevant overlapping areas and clear interrelations, as reported by the factor analysis (possibly an issue to be further investigated in future researches). From a managerial viewpoint, this
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and systems of values and are originated both from the joint usage/consumption of the product and from its ownership (e.g. Harley Davidson and Smart). Each sub-typology of the relational component presents speci?c characteristics depending on the scope of the target for which the relational component is relevant, and on the sources and the occasions in which the relational component is originated and takes place (Figure 9). Considering the two proposed variables, the role played by the relational component and the results reported in Figure 7 and in Figure 8, a four-quadrant matrix (Figure 10) can be drawn. Each quadrant contains offers with a speci?c combination of the Commitment/Involvement couple. Accordingly, each quadrant identi?es a speci?c con?guration with respect to the four components considered. The products were then positioned within the quadrants

High

CUSTOMER COMMITMENT

Gatorade, Ikea, Playstation C+P R: Absent or superficial

Harley-Davidson, iPod,Smart E+L+C+P R: Profound (community)

McDonald’s, H.C. Brand Bars, Pringles,Nike Low R: Absent or superficial Low

Swarovski, Swatch E+L R: Collecting

High CUSTOMER INVOLVEMENT

Labels: E = Emotional component L = Lifestyle component

C = Cognitive component P = Pragmatic component R = Relational component

Figure 10 Commitment/Involvement Matrix

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observation suggests that when devising a value proposition focused on the Customer Experience, companies should carefully regard at potential interactions between the components of the Customer Experience on which their products leverage so as to fully exploit the effects above described.

Managerial Implications Due to the lack of a rigorous phase of validation of the suggested model, we need to precise that the results do not allow a straight generalization. However, that notwithstanding, we can still draw some implications and suggestions aimed at supporting a manager in devising a value proposition, especially when the value delivered to the customer should ideally be driven both by experiential features (hedonic/experiential value) and by functional characteristics (utilitarian/functional value), thus possibly increasing the odds of a good market response. We sum up these indications into four guidelines: 1. Develop Experience-driven innovations; more than Technology push or Market driven innovations, the ones leveraging on experience have better chances to get a positive market response as they seem more likely and more capable of meeting new customers’ needs; 2. Consider the functional features of the commercial offer in order to create a sustainable competitive advantage with respect to competitors. Because the utilitarian value is still one of the main drivers of customers’ evaluation and perception of a new product, it ought to be paid full attention, particularly when those functionalities act as enabling factors for great experiences. 3. Provide a venue for an integrated Customer Experience according to the position in the ‘‘Consuming Experience’’ continuum where the Customer Experience is being provided. Speci?cally, when experiences are mainly created by consumers, the experiential features of the product or service being offered should be systematically addressed (as it is for Pringles and Gatorade cases). In the case of experiences that are co-developed by companies and consumers, companies should enable the molding and forging of a consumer’s own experience by providing the experiential basic materials (as it is for Harley-Davidson case). Finally, for experiences that are mainly created by companies, the whole set of products, services and context should be addressed in a systematic and consistent way (as it is for McDonald’s and Haute-Couture Brand Bars cases). 4. Keep in mind that the different components of the Customer Experience depend on the characteristics of a given product. Speci?cally, at an operational level, the proposed interpretative model can be used to identify:
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v which sensorial component should characterize a new offer (in the light of its core functionalities); v which components of the Customer Experience are consistent with the levels of Customer Involvement and Customer Commitment of the offer; v which sort of relational component is to be activated when dealing with different levels of customer involvement and customer commitment of a speci?c offer.

Next Developments The main drawbacks of this study are connected to the fact that complex experiences (that is, experiences originating from the interaction of two or more components) were isolated in the factor analysis but not accounted under the interpretative model. Such interactions could be further explored by means of a multi-way ANOVA so as to isolate both the main effects of the ‘‘pure’’ components and account for the interaction effects which originate the complex experiences. Moreover, while our study was not intended to develop a general scale for measuring each experiential component, we recognize that such is an important area which deserves a speci?c investigation. Another avenue for a further path of research would entail the exploration of whether certain types of experiences (such as very common experiences or experiences which are particularly familiar to a customer) can still be accounted as a legitimate Customer Experience. In this respect it would be interesting to account for a sort of updating mechanism whereby the expectations of a customer are systematically updated as he or she lives a speci?c experience. A further advancement of the research would take into considerations the sets of experiences that can be originated across each speci?c stage of the purchasing process (e.g. in-store experience), thus exploiting a much wider scope of experience than the one which can be offered by mere products. Eventually, a further validation of the model is needed, for instance by means of multiple case studies so as to achieve an analytical generalizability. Acknowledgement The authors would like to thank the anonymous referees and the editor of this paper (Prof. H. Laroche) for the insightful comments and suggestions. The authors also gratefully acknowledge the support of Fabrizio Rossi and Pablo Daini for their collaboration in survey data collection and preliminary analysis.
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Appendix 1. Sample Description
Product Number of Sex questionnaires F (%) 221 184 219 207 187 198 188 239 191 186 174 174 Education level High school or less (%) Swatch Pringles Harley Davidson Smart iPod Nike H.C. Brands Bar Playstation Gatorade McDonald’s Ikea Swarovski 51 46 76 83 67 70 62 89 80 73 58 66 37 48 6 11 6 17 40 4 24 49 69 81 Age M (%) 16–20 (%) 21–30 (%) 63 52 94 89 94 83 60 96 76 51 31 19 Region Degree or North more (%) (%) 49 54 24 17 33 30 38 11 20 27 42 34 77 82 83 61 70 67 98 50 75 59 77 68 CentreSouth (%) 23 18 17 39 30 33 3 50 25 41 23 32 25 21 0 7 20 25 16 47 33 29 4 4 41 59 28 63 57 55 59 45 48 52 64 50 31–40 (%) 40–55 (%) 1 16 54 24 16 15 22 7 14 14 25 33 33 4 18 6 7 5 3 1 6 5 7 13

Swatch Pringles Harley Davidson Smart iPod Nike H.C. Brands Bar Playstation Gatorade McDonald’s Ikea Swarovski

Employment Status Homemaker + Student Unemployed + (%) Retired (%) 3 3 1 0 1 3 0 4 2 5 3 12 41 55 5 24 43 55 34 59 50 44 29 22 Employed (%) 56 41 94 76 56 42 66 37 48 51 68 66

Appendix 2. Questionnaire (iPod)
Demographic information Age  Less or equal to 20  21–30 Gender  Male Education  High school or less Employment  Homemaker  Student City/town of residence:________________________ Respondent-product interaction information How often do you use your iPod?  Often, once or more frequently a day  Occasionally, some times a week  Rarely, some times a month  31–40  More than 40  Female  Degree or more advanced  Employed  Unemployed  Retired

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Appendix 2 (continued) Respondent-product interaction information What is the main reason that you use your iPod?  Listen to the music  Record conversations  Store any kind of ?les  Other reasons (please specify): ____________ Please tell us the main reasons why you chose an iPod over other mp3 players (please select at maximum 3 answers)  Quality/price ratio  Performance (battery life, quick ?le transfer. . .)  Aesthetical aspects  Ease of use  Distinctiveness with respect to other mp3 players  Apple brand  Opportunity of being part of a community  Other reasons (please specify): ____________ Please tell us which of the following statements about you and your iPod are true:  I use it to record conversations  I use it to transfer any kind of ?le  I use speakers to listen to my music even without earphones  I use extra functions of my iPod such as the diary, the alarm, the calendar, etc.  I play with my iPod’s included games Please tell us how much you agree / disagree with the following statement (1-4 Likert scale)  It is easy and comfortable to use  The interface is user-friendly  File transfer to and from a PC is quick and easy  It is comfortable to carry and to use even in motion (dancing, running, working out. . .) Please tell us how important each of the following statement is for you (1-4 Likert scale)  Opportunity of being part of a community  Opportunity of sharing and exchanging tunes with other iPod users Please tell us how important each of the following features of the iPod is for you (1-4 Likert scale)  Design  Essential and slick style  Color and material  Sound clearness  Sound quality When do you normally use your iPod?  When I want to relax  When I want to have fun  When I am travelling  Other occasions (please specify): _____________ What kind of image about yourself do you think you are expressing when using your iPod?  Young and active person  A person different from the mass  A person who loves having fun  No speci?c image  Other (please specify): _____________________ Please tell us how important each of the following features of the iPod is for you (1-4 Likert scale)  Quality/price ratio  Performance (battery life, quick ?le transfer, etc.)  Aesthetical aspect (form factor, design, color,. . .)  Sound quality  Distinctiveness with respect to other mp3 players  Image of the iPod (young, innovative, dynamic, etc.)  Extra functions (diary, games, calendar. . .)  Apple brand  Ease of use  Opportunity of being part of a community  Use during moments of fun and entertainment
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Appendix 3. Factor Analysis iPod (6 factors)
Pure Components Answers FACTOR 1: SENSORIAL COMPONENT Sound clearness Sound quality FACTOR 2: PRAGMATIC COMPONENT The interface is user friendly It is easy and comfortable to use FACTOR 3: RELATIONAL COMPONENT Opportunity of being a member of a community Complex experiences FACTOR 4:SENSORIAL/LIFESTYLE COMPONENTS Design Elegant and essential style Material and colour Esthetical aspects (shape, colour, design. . .) Speci?city and distinctiveness with respect to other MP3 players iPod image (young, innovative. . .) FACTOR 5: PRAGMATIC/COGNITIVE/LIFESTYLE COMPONENTS Simple and fast ?le transfer from P.C. Extra functions (diary, games, calendar. . .) Existence of a dedicated line of accessories (loudspeakers, cases, car accessories,. . .) Prestige and fame of Apple brand FACTOR 6: PRAGMATIC/RELATIONAL/EMOTIONAL COMPONENTS It is easy-to-carry and to use even in motion (dancing, running, working out. . .) Opportunity of sharing musical ?les with other iPod owners Usage for fun/entertainment Coef?cient Experience typology Sensorial Sensorial Pragmatic Pragmatic Relational

0.848 0.859 0.807 0.759 0.880

0.848 0.773 0.717 0.728 0.543 0.590 0.432 0.660 0.707 0.462 0.468 0.557 0.776

Sensorial Sensorial Sensorial Sensorial Lifestyle Lifestyle Pragmatic Cognitive Cognitive Lifestyle Pragmatic Relational Emotional

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CHIARA GENTILE, Dept. of Management, Economics and Industrial Engineering, Politecnico di Milano, P.zza Leonardo da Vinci 32, 20133 Milano, e-mail: chiara.gentile@polimi.it Chiara Gentile is a Ph.D. Student in Management Engineering at Politecnico di Milano. Her research interests are in the ?eld of Marketing, with a special focus on Customer Experience Marketing, Customer Equity, Customer Lifetime Value. NICOLA SPILLER, Dept. of Management, Economics and Industrial Engineering, Politecnico di Milano, P.zza Leonardo da, Vinci 32, 20133 Milano, e-mail: nicola.spiller@polimi.it Nicola Spiller is a Ph.D. Student in Management Engineering at Politecnico di Milano. His research interests are in the ?eld of Marketing, with a special focus on Brand Management, Private Labels, Retailing and Customer Experience.

GIULIANO NOCI, Dept. of Management, Economics and Industrial Engineering, Politecnico di Milano, P.zza Leonardo da Vinci 32, 20133 Milano, e-mail: giuliano.noci@polimi.it Giuliano Noci is Full Professor of Marketing at Politecnico di Milano, Dean of the Degree in Management Engineering of the Como campus (Politecnico di Milano), Member of the Executive Committee of MIP Business School and Scienti?c Director of the Marketing area in all the MBA programmes. His research interests are in the ?eld of Marketing, with a special focus on experiential marketing. He has directed and run executive courses and consulting to several manufacturing and service ?rms.

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