Customer Experience Management 2.0: Using New Technologies to Create Brand Advocates

The goal of customer experience management is to move customers from satisfied to loyal and, ultimately, to be advocates for the brand.

The management of "customer satisfaction" was recast as customer experience management in the latter part of the 20th century. The transition officially began in 1998 when The Harvard Business Review published an article by Jim Gilmore and Joe Pine titled, "The Experience Economy." The boiled-down message for franchisees: customers don't just buy goods or services, they ultimately buy experiences.

It is not simply what customers get, but how they get it that creates a branded customer experience--that is, one you can't get anywhere else. In customer experience management, version 1.0, smart franchisors use scientific methods to understand which elements of the customer experience drive customer satisfaction, loyalty, and advocacy.

Most commonly, franchisors use receipt-based survey invitations to solicit feedback from a large number of real customers each month. With a representative customer sample, they uncover the key drivers of a positive customer experience using correlations and regression techniques. The leading franchisors support their franchisees by funding the research and analysis to answer crucial questions such as: What matters most to customers? What is most important in getting them to return and recommend? How effective is each franchisee location at winning customer loyalty?

Clear-eyed franchise firms link customer experience scores to transaction data to predict their future sales. Franchisees now expect data, not just franchisor opinions, about how brand service standards drive average sale amount and comp sales. Monthly reports used to simply track customer satisfaction scores. Now "performance improvement reports" provide prescriptions for the unit-specific actions that are most powerful in customers from satisfied to loyal to brand advocates.

Customer experience management 2.0

What's new? I use the expression "customer experience management 2.0" to describe the evolution that is happening now in three areas: 1) closed-loop alert systems, 2) text analysis of customer comments, and 3) engaging customer survey respondents in social media.

Closed-loop alert systems empower franchisees to interact with customer survey respondents. Customers ask franchisees to contact them for a few reasons: they have a complaint; they have a compliment; they have an idea to share. In each case, they want to engage! They have shown some passion around your brand. These are opportunities to rescue unhappy customers, deepen the relationship with your fans, and learn from customers.

Alert systems enable franchisees to hear from these engaged customers in real time. Closed-loop alert systems ensure that all customer requests receive responses in a timely manner. By using automatic alerts and tracking responses to customers (and with business rules to escalate the response to a higher level if not completed in a timely manner), franchise organizations ensure responsiveness to customers.

Text analysis of customer comments has opened new doors to understanding what customers are trying to tell us. While no human being can read, comprehend, and synthesize thousands of customer comments, the new natural language processing (NLP) technology can do just that--in real time.

Research firms today combine the science of linguistics with massive computer processing to automatically sort through verbatim customer comments and sort them into categories such as speed of service, quality of products, etc.

Text analysis can now be combined with business rules to create new types of real-time alerts. For example, companies can forward comments to unit managers that include the names of employees, and forward to multi-unit franchisees comments that mention the word "manager." Comments with the words "lawsuit" or "lawyer" or "illegal" can be automatically forwarded to the franchisor's legal department.

Further, NLP can measure the intensity and sentiment of customer comments. For example, survey respondents who leave highly positive comments can be offered a direct connection to the franchisor's loyalty program sign-up page; or they can be directed to Facebook or Twitter networks to share a recommendation with their social network.

Franchise organizations can apply business rules to identify survey respondents who indicate they are highly satisfied, highly likely to return, and highly likely to recommend. Then they can engage their best fans to make recommendations through social media immediately after they complete a customer survey.


Just as the world wide web morphed from the read-only model to the read-write model, so customer experience management is evolving to an interactive model that senses and responds to the voice of the customer.

As we complete the 2001-2010 decade, let's welcome the new action of customer experience management 2.0. Ask your franchisor to show you how they are applying marketing science and technology to improve the measurement, and management, of the customer experience of your brand.

SMG Vice President Jack Mackey helps multi-unit operators improve customer loyalty and drive growth. To request "Connecting with Customers Beyond the Survey," contact him at 816-448-4556 or

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