Gartner's Customer Experience definition document

The Definition of Customer Experience Management
Ed Thompson, Gareth Herschel

Most organizations already have multiple initiatives to help improve the customer
experience. The challenge is that each team, department or group has its own
interpretation of what it means by "customer experience," and what it means by
"customer experience management" (CEM). Creating a consistent definition is important
in getting the teams to work together, focus efforts and define metrics.
Key Findings
• Gartner defines customer experience as: "The customer's perceptions and related
feelings caused by the one-off and cumulative effect of interactions with a supplier's
employees, systems, channels or products."
• Gartner defines CEM as: "The practice of designing and reacting to customer
interactions to meet or exceed customer expectations to increase customer satisfaction,
loyalty and advocacy."
Recommendations
• If you don't have a definition, or cannot agree on one, then use Gartner's definition of the
customer experience.
• Use Gartner's definition of CEM to help your organization agree on what it is, and to
outline the goals and scope of your CEM project or program.

ANALYSIS
CEM depends on the definition of customer experience, which, in turn, depends on the definition
of experience. So the best starting point is an understanding of the word experience.
The Definition of Experience
The dictionary definition of an experience is "the sum total of conscious events," but this does not
do justice to the many meanings of the word experience. A thesaurus examination of the word
experience shows six different meanings:
1. To meet with (verb), meaning to incur, to encounter or to realize. The usage of
experience here is in the sense of "to experience," and it could be summarized as
interactions.
2. To feel (verb), meaning to be emotional and to sense. The usage of experience here is
in the sense of "personal experience," and it could be summarized as feelings.
3. Knowledge (noun), meaning knowing, cognizance or recognition. The usage of
experience here is in the sense of "a familiar experience," and it could be summarized
as recognition.
4. Wisdom (noun), meaning intelligence or brains. The usage of experience here is in the
sense of "a life-long experience," and it could be summarized as intelligence.
5. Empiricism (noun), meaning to practice, trial and error, or to use "rules of thumb." The
usage of experience here is in the sense of "guided by experience," and it could be
summarized as best practices.
6. Skill (noun), meaning dexterity, handiness or style. The usage of experience here is in
the sense of "an expert in," and it could be summarized as expertise.
The variety of meanings explains why there are so many interpretations of the term customer
experience. It also shows why making changes to the customer experience involves the use of
intelligence and analysis to improve rational, logical outcomes for the customer, and other
improvements must have a positive effect on customers' emotions. Likewise, it shows why some
activities will be aimed at a single interaction or encounter, while others aim to improve an
experience over a series of interactions, because experience can mean both single and multiple
events. When organizations or individuals talk about the customer experience, they are usually
referring to one of the first two interpretations: interactions or feelings.
The Gartner Definition of Customer Experience
Gartner defines customer experience as: "The customer's perceptions and related feelings
caused by the one-off and cumulative effect of interactions with a supplier's employees, systems,
channels or products."
Based strictly on the definition of experience above, the definition of customer experience should
be "the sum total of a customer's conscious events." The Gartner definition differs from this strict
interpretation because:
• Most practitioners tend to talk about interactions, rather than conscious events.
• It is clear that the perceptions of an interaction, and the feelings it generates, are key to
the customer experience.

• The sum total of a single interaction is a single experience, while the sum total of
multiple interactions is a cumulative effect.
There are many other definitions of customer experience that also focus on interactions, for
example:
• CRMGuru: 50% of survey participants agreed with the definition "the sum total of all my
interactions with a brand's products, services and people."
• Wikipedia: "Customer experience is the sum of all experiences a customer has with a
supplier of goods or services, over the duration of their relationship with that supplier. It
can also be used to mean an individual experience over one transaction; the distinction
is usually clear in context."
This focus on interactions means that customer experience has often been associated with
customer service. Early definitions of CEM often saw customer experience as one of the
responsibilities of the customer service department, because of the department's concern with
customer satisfaction goals. More-recent definitions now see customer service as just one among
many departments that all have a role to play in improving the customer experience, along with
logistics, sales, marketing, R&D, manufacturing, finance and all other departments that have
interactions with the customer..
Experiences generate feelings, and the most recent definitions since 2005 have tended to also
focus on the impact on the customer's perceptions and feelings about the interaction, for
example:
• CustomerThink (2006): "A customer experience is the customer's perception of
interactions with a brand, from marketing communications to sales and service
processes to use of the product or service."
Perceptions are formed from expectations that the customer has prior to the interaction, and are
reset based on what happens during the interaction and what happens afterwards in response to
the interaction. Expectations are formed from past experiences, those created through word of
mouth and the promises made by the supplier either directly or indirectly.
Customer experience is often used to mean brand experience and user experience. However,
they have subtle different meanings. User experience has a narrower meaning related to the use
of the product or core service, rather than the whole customer experience. The brand experience
has a broader meaning than the customer experience, probably because the customer's
experience of the brand is only one (albeit the most important) viewpoint, and other stakeholders,
such as shareholders, suppliers and employees, also have an experience of the brand. These
three different terms are clearly related. User experience is a subset of the customer experience,
which, in turn, is a subset of the brand experience.
However, the big question is: How do your customers define the customer experience? Gartner
clients state that the understanding of the term customer experience by their customers varies
widely, particularly between industries. For example, in the automotive industry, the repairs
experience is second only to the driving experience. In retail, the customer experience is heavily
determined by the customer's ability to check-out without queuing, locate products and gain
assistance in how to make use of products.
Action Item: Understand what your customers think of when they hear the term "customer
experience." If you don't have a definition, or cannot agree on one, then use Gartner's definition.
In particular, find out what the key "moments of truth" are — those moments that either
significantly improve the customer experience or make it worse within a customer-facing process.
Publication Date: 7 August 2009/ID Number: G00169354 Page 4 of 5
© 2009 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
For more details, see "Seven Steps to Customer Process Re-Engineering" and "How Customer
Process Attributes Affect the Customer Experience."
The Gartner Definition of CEM
Gartner defines CEM as: "The practice of designing and reacting to customer interactions to meet
or exceed customer expectations to increase customer satisfaction, loyalty and advocacy."
The definition of CEM has developed steadily over the past 20 years, since the publication of Jan
Carlzon's book "Moments of Truth." Other key publications that have moved the definition forward
since then include:
• Frederick Reichheld — "The Loyalty Effect," 1996
• Joseph Pine II and James Gilmore — "The Experience Economy," 1999
• Colin Shaw and John Ivens — "Building Great Customer Experiences," 2002
• Bernd Schmitt — "Customer Experience Management: A Revolutionary Approach to
Connecting With Your Customers," 2003
• C.K. Prahalad and Venkat Ramaswamy — "The Future of Competition," 2004
• Martin Lindstrom — "Brand Sense," 2005
• Fred Reichheld — The Ultimate Question," 2006
Some consistent themes emerge from these publications. CEM is concerned with the actions
taken by a supplier not only to handle an interaction appropriately, but also to provide a designed
and structured approach to anticipating, planning and even constraining the customer experience
from end to end. It tends to imply putting a customer's needs first and becoming more customercentric
as an organization, but it is always balanced by what is economically viable for the
supplier. It means being more balanced in weighing the customer's needs and the organization's
goals. Often, those talking about CEM refer to the ethic of reciprocity. For example:
• Strativity — "A business strategy that focuses and redefines the business from the
customer viewpoint. CEM assumes that products and services are no longer sufficient to
satisfy the customer and elevate the value proposition to the level of an experience. At
the core of the CEM strategy is an organizational experience that defines the value for
both employees and customers."
Most definitions of CEM have a focus on the goals of CEM. If CEM is a management discipline or
strategy, then it will have goals. The most common are to improve customer satisfaction, loyalty,
retention, customer advocacy and brand strength. These goals are all interrelated as first
demonstrated by work on the service-profit chain in 1994 (see "Putting the Service-Profit Chain to
Work" Harvard Business Review, 1994). The Harvard Business Review article describes it as:
"The service-profit chain establishes relationships between profitability, customer loyalty, and
employee satisfaction, loyalty, and productivity. The links in the chain (which should be regarded
as propositions) are as follows: Profit and growth are stimulated primarily by customer loyalty.
Loyalty is a direct result of customer satisfaction. Satisfaction is largely influenced by the value of
services provided to customers. Value is created by satisfied, loyal, and productive employees.
Employee satisfaction, in turn, results primarily from high-quality support services and policies
that enable employees to deliver results to customers."
Most organizations already have at least one plan, program or initiative to improve the customer
experience. Most large organizations have multiple disconnected projects and initiatives to
Publication Date: 7 August 2009/ID Number: G00169354 Page 5 of 5
© 2009 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
improve the customer experience (see "Fifty Things to Do Right Now to Improve the Customer
Experience"). The challenge is that each team, department or group has its own interpretation of
what it means by "the customer experience," and what it means by "CEM." Creating a consistent
definition is important in getting the teams to work together, focus efforts and define metrics. The
lack of focus and oversight, and duplication of effort in many organizations is expensive, wasteful
and even counterproductive. For this reason, the wording of the definition of customer experience
is less important than the internal agreement on a definition.
Action Item: Use Gartner's definition of CEM to help your organization agree on what CEM is
when setting the goals and scope of your CEM project or program.
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