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Online shopping in digital stores and shopping in brick-and-mortar stores offer different forms of experiences. It starts from the environment or setting in which the shopper is situated — being present in a 3D physical retail space or viewing a 2D screen of a computer or mobile device. It is the difference between how much and what specifically a shopper can see and absorb when looking around in a physical store compared with looking at a screen. The difference in setting may have a further impact on behaviour, like how shoppers find products and how they inspect them.

Imagine a shopper, Dan, entering a large fashion store. Dan’s head immediately turns around as much as 180 degrees scanning the scene. Just a few steps in front of Dan there is a low desk with shirts, and another desk with sweaters to the left; to the right Dan observes shirts hanging on a rectangle-shaped stand, and he notices how their designs differ from those on the desk; along the walls are more shirts and trousers, etc. Dan decides to approach first the shirts to the left because they have multiple colours, lifting one or two to look more closely at them; later he also turns to the wall to see trousers and tries to match them with shirts. As Dan’s shopping trip advances he may enter deeper into the store to check on some accessories or another variety of shirts. Very early in the visit the shopper can figure out what may be found in main sections of the scene. Then starts a sort of discovery tour that may be guided by a master goal but progresses as the shopper identifies relevant and visually attractive items (stimuli). The scene is ‘updated’ as the shopper goes deeper into the store, or into adjacent halls, and details that were more distant and vague before become sharper and clearer.

A different kind of shopping process usually occurs in online website stores: first of all because much fewer products (stimuli) can be observed in a relatively short glimpse of the screen-scene. The way merchandise in the online store is located and explored is much more gradual.  An online store actually encourages a more goal-driven search process (e.g., choosing names of categories from a menu, selecting attribute options to narrow down the search to a relevant selection of products). Then starts a back-and-forth process of exploration of different items (e.g., by clicking on item titles or images and entering product pages), and visiting additional major categories of products. However, the experience of search and exploration is so different: whereas in the physical store the shopper can ‘wash the eyes’ with shapes, designs and colours of products, and follow the eyes through the shopping trip, it is much harder to do so in an online store where one has to go step-by-step or in a piecemeal manner. Nevertheless, online shoppers have more flexibility and a wider span of possibilities for viewing product options simultaneously on the screen of a desktop or laptop computer than on the screen of a smartphone.

Certainly there are more clever and creative e-commerce or store websites that are able to generate an improved experience of exploration and inspection of products. For example, there are online stores that show grids composed of tiles of images representing major categories and sub-categories of products. The images are more lively, and some of them exhibit motion as well. With some images, hovering with a mouse on the product photo (before clicking) changes the angle in which a garment or handbag, for instance, is shown. On product pages, some options may be selected that immediately affect the product image (e.g., colours, dimensions, designs); products may be rotated dynamically or by selecting from a line of static thumbnail images under the main frame.

A large majority of shoppers enquire about products online before visiting a physical store. According to a Google/Ipsos survey (‘Omnichannel Holiday Study’, Nov. 2017-Jan. 2018), 78% of US holiday shoppers searched products before going into a store; the online search helps shoppers in planning their shopping trip to the store, narrow down the options they should be seeking at the store, but it also ‘inspires the purchase’ (thinkwithgoogle.com, October 2018). In another research by Publicis (‘Shopper First Retailing’, 2018), an even higher proportion of shoppers, 87%, report that they begin searches in digital channels (online, mobile), up from 71% in 2017 (RetailDive.com, 15 August 2018). Searching the Internet is regarded as a productive method to look for directions and learning about product options, as preparation for making purchase decisions. Shoppers do not feel obliged also to make the purchase online, even if they browse the e-commerce website of an online-only retailer (‘e-tailers’) or of a mixed retailer that operates both a website store and physical stores. Consumers like especially to consult reviews of peer users who have already had experience with products they consider.

This learning process seems functional and goal-driven where shoppers need some guidance to put order into their shopping journey. Online sources, including e-commerce websites, seem to provide an efficient solution for this purpose. The process may indeed inspire shoppers with ideas, perhaps to the extent of helping the shopper to focus on viable and worthwhile purchase options and avoid wandering too long clueless in a store. In such a case in particular, visiting the online store of a mixed retailer can prove most useful before arriving to one of its physical store locations — and this makes the website an even more effective tool for the retailer.

However, retailers that operate physical stores would not want shoppers to come too prepared with their minds pre-determined what to buy. While shoppers usually have a general plan of what they are looking for, final purchase decisions are still made mostly in-store. Hence it is so important for physical stores to be designed and arranged in an appealing and stimulating manner — to allow consumers to complete successfully their shopping trip in-store, and furthermore encourage and induce them to purchase a few more ‘treasures’ they discover in the store.

It may be relevant to consider here two scenarios:

For retailers that operate physical stores in multiple, even numerous locations, there should be a stronger incentive to leave their customers with enough reasons to conclude their shopping in-store rather than on the website store. Thus, the online store has to be visually attractive, user-friendly and informative, but it does not have to be fully equipped with features that convince customers to complete their shopping and purchasing online. The website should not go all the way in effort to draw shoppers from physical stores. Whereas the online store may provide more functional, productive experiences (e.g., efficient, time-saving), the physical store would be more capable in creating pleasant emotional experiences (e.g., excitement, thrill, joy). The positive emotions invoked should not be taken lightly because they drive purchases.

For e-tailers with no physical stores there should be greater need to invest in the quality and feel of experiences they can provide in their e-commerce websites. The introduction of shoppers to the online store should be more delightful as well as informative and user-friendly. Visual elements and interactive features have to be inviting and helpful in guiding the visitor into different sections of the store — on the ‘main stage’ of the screen estate and not just through the menu and search engine.

The latter applies, nonetheless, also to mixed retailers that have stores in just a few locations (e.g., major cities) and wish to reach much greater numbers of customers that do not have a store near them. It may also be relevant when targeting customer segments who for any reason have little time free to travel to a store, and in regions where shoppers are reluctant to go out during harsh weather conditions (e.g., steaming hot and dusty or freezing cold and snowy). [Note: Location data might be used to channel a reduced or enhanced version of a store website according to whether the user is in vicinity of a physical store by the retailer, a form of ‘geo-fencing’].

Delicatessen in Gstaad

The brick-and-mortar stores remain very much in demand. According to a Google/Ipsos online survey (‘Shopping Tracker’, US, April-June 2018), 61% of American shoppers prefer shopping with brands that also have physical stores than ones that are online only. Key benefits suggested for shopping in physical stores are the immediacy in which shoppers are likely to obtain the products they require; getting hands-on — seeing and interacting with products before buying; and being more fun than shopping online (35% feel so) (thinkwithgoogle.com, John McAteer, November 2018). The Publicis study indicates more generally that 46% of shoppers prefer to buy in physical stores (vis-à-vis 35% who prefer shopping using their laptops and 18% on mobile phones) (RetailDive). Apparently, shoppers are not blind to benefits and advantages of shopping in physical stores over online stores, and many are not ready to leave them to fade out.

It is not suggested that online stores necessarily have to be made to appear like physical stores on the screen — mimicking the scene of a brick-and-mortar store may be perceived as just artificial, awkward and inconvenient (though retailers who also have physical locations can integrate actual store images into relevant sections of the online store). On the one hand, the retailer (or e-tailer) should take advantage of the strengths of the digital medium in organising, displaying and tracing information in the online store. On the other hand, online stores may have to breakaway in some degree from rigid structures of tables, lists and matrices. Grids of image tiles make a good start. Yet, more versatile visualisation possibilities have to be considered to provide visitors of store websites (or mobile apps) a more stimulating presentation of the variety of products the store has to offer. The interactive presentation should expose visitors to an array of products available (e.g., by type, use purpose, or brand), and lead their way from there into sub-categories and specific product models or brands.

  • Virtual Reality (VR) technology may be used to emulate a view of a store in 3D space, but the equipment needed to create a truly compelling experience is not in reach of most consumers, at least not yet. The more crucial question is: why should consumers prefer an imitation or illusion when almost everyone can visit real physical stores and shops. At least one aspect VR is unlikely to provide adequately is the social experience.

Instead of treating online shopping and shopping in physical stores as substitutes competing with each other, the more sensible approach for mixed retailers is to create ways in which they can combine and complement each other. The connection can be a two-way street, especially given that shoppers use mobile devices more frequently during store visits (71% of shoppers according to Publicis study cited by RetailDive). From online to store, for example, a mobile app of the retailer used in-store can help the shopper navigate and find the way to the places of products that he or she detected and learned about in a preliminary search and study online (e.g., Home Depot). From in-store to online, the shopper may use the app of the retailer in-store to find more information about products found in the store by scanning a barcode for the product of interest (e.g., Sephora [cosmetics] allows access to product reviews, order history of the shopper, and more) [examples adopted from McAteer in thinkwithgoogle]. More technologies that help in bridging between the virtual and physical domains of shopping include beacons and augmented reality (AR).

  • There are other areas not covered above in which online shopping is distinguished from in-store shopping and require more attention, such as customer service, specifically providing advice and assistance to shoppers, and the fulfillment of orders (a ‘click-and-collect’ programme is another way of linking the physical and online stores).

The physical and digital (virtual) domains have each their strengths in creating different forms of shopping experiences. Physical stores and shops have built-in advantages in evoking emotional experiences while shopping — they are tangible and more direct, can provide good personal care, and may attract and excite shoppers by means of interior design and visual merchandising in their physical spaces. Furthermore, beyond vision, physical stores allow shoppers to enact other senses (e.g., touch, smell) that cannot be experienced in the digital domain. It is unsure how much a store website (or app) can give rise to a similar emotional experience and attachment in shoppers, yet there are aspects that can be borrowed into the digital domain that would make it seem not just functional but also more appealing and immersive. Nonetheless, mixed retailers may have the best opportunity to combine the strengths from the physical and digital domains and link them to produce shopping experiences that are more productive and enjoyable altogether.

Ron Ventura, Ph.D. (Marketing)

 

Many companies are well-known to consumers by their corporate names, including manufacturers, chain retailers and service providers. The corporate name may serve as the leading brand identifier (like an ‘umbrella’ name) for the company’s products or services. But furthermore the corporate-level brand name is the gate to access the organisation’s image as held in the public opinion of consumers. In the last decade companies are increasingly judged by their values, culture, and market and public conduct. Consumers are more strongly influenced in their choice of products or services of a company by what they think of and how they feel towards its corporate brand.

A Tel-Aviv-based strategic management consulting firm, TACK, constructed a two-dimension metric for assessing the image strength (or sturdiness) of companies in Israel. The metric comprises a rational-oriented ‘pillar’ named Logic and an affective-driven ‘pillar’ called Magic. Each dimension of the image strength metric is measured by two (rating-scale) items.

Logic represents how much a company is appreciated by consumers, and to what extent the company makes it worthwhile for consumers to be its customers.

Magic expresses how much a company is loved by consumers, and to what extent consumers believe that the company cares about its customers.

Magic pertains to the emotional ties between the company and its customers and is therefore particularly important to the relationships built by a company with the customers. We cannot underestimate the importance of the logical or cognitive-based evaluation of the company, by weighing its advantages and disadvantages, as the basis for the interest and preference consumers show in using the company’s products and services. However, reasoned appreciation of the company and its offerings will likely not hold-up a relationship without developing an attachment to the corporate-name brand.

TACK applied its Logic & Magic metric for the third continuous year in 2019 to 71 Israeli companies (e.g., food producers, retail chains, telecom service providers, banks). Measures were collected in a survey of 503 adult Israeli consumers (Hebrew-speaking). The companies are not necessarily managed purely as a ‘branded house’; however, this study is not concerned with additional brands owned by the company (e.g., brands that may be endorsed by the corporate brand name or products positioned as sub-brands). The demonstrated mappings of corporate brands (in Hebrew), along the dimensions of Logic and Magic, bring forward some sobering realizations shared below:

Firstly, it is noticeable that, from a consumer perspective, companies that are doing better on the logical-functional front are also more successful on the emotional front, and thus are doing better overall in connecting with consumers. We cannot conclude from this a cause-and-effect relation. But the findings do suggest that a wise strategy that is sensitive to consumers (i.e., it sees things through the eyes of consumers) can win on both fronts. In other words, a company as such that succeeds, through its strategy, in gaining the appreciation of consumers for its performance and advantages of its products and services, is also likely to win the affection, trust and approach of the consumers.

There are hardly any corporate brands that seem to get a high score on Logic but relatively lack in their score on Magic, and vice versa. This implies that a company cannot sustain a ‘cold-minded’ appraisal of its performance and offerings while failing to win the hearts of its customers; and just as well, a company cannot sustain an affectionate connection with its customers without establishing the foundation of approval of its functional benefits to customers (e.g., being relevant and attractive). Nevertheless. it should be noted that the spread among corporate brands with relatively higher Logic and Magic scores is greater than among brands with relatively lower scores on both dimensions (there are more of them and they are more condensed). There is still much variability among the best performing companies — they are not consistently doing better in the same way.

Secondly, the quality of products and services is just one of the factors consumers likely consider in their logical-functional evaluations, and is possibly not the more prominent one. There seem to be large differences in perceived quality of the products of at least some of the companies or in the weight assigned to quality. Moreover, companies whose products appeal in their high quality or expertise to only a relatively small segment of consumers (a niche) seem to fall behind and do not come out favourably in this type of all-market brand rankings. It is not so surprising to realise that the stronger and leading corporate brands are those of companies that aim to fulfill the needs and preferences of the wider common base of the mass market.

Let us look at a few examples:

  1. In the category of retail food chains, a heavy discount retailer, Rami Levy, is positioned close to the top-right corner of the map (both in its category and overall) with high Logic and Magic scores, while a delicacy retailer Tiv Ta’am is at the bottom-left corner of the map. The two major food retail chains are in-between, one in the top-right quadrant (Shufersal) and the other in the bottom-left quadrant (Bittan [Mega]). Tiv Ta’am may bring better-quality products (e.g., fresh produce, imports of delicacies) than other food retailers, but its stores are considered too expensive, lucrative, and they are not liked. Rami Levy and Shufersal are listed among the Superbrands of Israel for 2018 in the retail category.
  2. In the category of coffee houses, we find in relatively high positions the low-cost, basic-service chain of Cofix, and the espresso-bar, self-service chain Aroma. In the worst position we find Arcaffe, an Italian-style chain of coffee bars serving fine coffee, sandwiches and other products, but it fails to receive the appreciation of the greater public for their offerings and service. Aroma is much more popular although their products and its serving standard are moderate. Yet Arcaffe is considered more ‘top-notch’, made for European-connoisseurs, and is relatively more expensive. Eventually, Aroma and Coffix are also much more emotionally appealing to Israeli consumers than Arcaffe. Roladin, a bakery and coffee-house chain, can be argued to be much closer in quality and service standard to Arcaffe than to Aroma; yet, Roladin is appreciated and considered worthwhile (Logic) similar to Aroma and is even a little more loved and cherished (Magic) than Aroma —  the advantage of Roladin over Arcaffe seems to be that they understand better what the greater part of Israelis like to eat and expect to find in a coffee-house for a light meal. Aroma and Roladin are listed among Israel’s Superbrands of 2018 (dining out) whereas Arcaffe is absent.
  3. In the media category, among the news press publishers, HaAretz holds a much lower position on both Logic and Magic than Israel HaYom; Yediot Aharonot is located closer to HaAretz. Two marked differences between them: (a) HaAretz is left-leaning (affiliated with the Guardian and New-York Times) and Yediot is oriented to the centre-left, whereas Israel HaYom is right-wing; (b) HaAretz is superior, especially in some areas, in quality of commentary and analysis to the two other newspapers (tabloid-fashioned). But the political left, and the HaAretz newspaper associated with it, are out of favour in recent years, and perhaps as a result the tolerance to its reporting by large circles of society is low, no matter its apparent news quality. [It is noted that all three also have a news website, though in the case of Yediot the online channel is branded separately as ‘ynet’ — it is positioned close and just a bit better than the press edition]. Yediot (+ynet) and Israel HaYom are listed in the media category of Israel’s Superbrands for 2018 but HaAretz is absent (its economics and business branch TheMarker is included).
  4. Interestingly, the researchers of TACK report that preference for Arcaffe and for Tiv Ta’am, each in its category, is stronger among consumers who describe themselves as leaning to the political left. The relevance of political attitudes to dining-out and food shopping is a little obscure, but it gives an indication of the portrayal of their more likely customers. More importantly, this research evidence amplifies the argument that corporate brands more entrenched in niches — like HaAretz, Arcaffe and Tiv Ta’am — are much less likely to be considered strong leading brands.

Thirdly, response to price and value perceptions are not free of an emotional loading. An economic approach views the calculation of value as a rational procedure of weighing the benefits and cost of a product or service offer. However, when an offer is judged as unfair to the disadvantage of the buyer, this may stir anger and resentment of the consumer in response to the price offer. The resentment is more often directed to the retailer, but it may be pointed towards the manufacturer of a national brand as well, depending on whom the consumer believes to be more responsible for a price differential or increase.

The judgement of unfair price differentials is contingent on the reference price used (e.g., a price paid by a friend for the same product at another store this week). In the case of a price increase, the reaction is subject to whether consumers can see justification to a price increase by attributing the increase in retail price to a rise in cost that retailers or manufacturers could not control (e.g., price of raw materials). In the past decade much resentment developed because consumers failed to find such justifications. Instead, the perception more accepted was that retailers and manufacturers were rolling their cost rises mostly to consumers, and they raised prices merely to improve their profits. In Israel this problem was evident especially in the food category where consumers were witnesses to continued feuds between the food chain retailers and manufacturers. More broadly, many Israeli consumers appear to these days to have little tolerance to retailers, service providers or manufacturers that seem to raise prices unfairly or try to position themselves to be more up-scale and luxurious — disappointment and anger at them motivates consumers to punish them in some way. This kind of resentment and urge to act in revenge is apparent also in the results of the study by TACK.

Price is given priority by more Israeli consumers, and it seems to overweight possible advantages in quality of products, services or the environment of shopping. In some cases consumers may fail to appreciate any such advantages while in others they simply consider the price premium as unjustified or unaffordable (which may add frustration to their evoked emotions). This can be another aspect that explains the differences between companies described above: (a) for instance, the gaps on Logic and Magic between coffee-house chains like Cofix and Aroma compared with Arcaffe,  and vis-à-vis Roladin, or (b) Rami Levi which is probably perceived as making greater effort to charge affordable prices (although it declined a little from last year), far better than a delicacy chain such as Tiv Ta’am. In other categories, it is more difficult to make clear inferences. In telecom services (mobile, TV, Internet), for example, all major companies receive relatively low appreciation and are less loved. A specialised dairy producer (Tara) is positioned less favourably than the two major and larger dairies (Tnuva and Strauss) which happened to be more shaken by consumer protests of several years ago (Tara is more preferred though among ages 55+ according to TACK). Among fashion retailers, a low-cost retailer of casual wear (Fox) is positioned just slightly higher on Logic but lower on Magic than some major main-stream retailers (H&M, Castro, Zara); yet another retailer (Renuar) that is probably somewhat more exclusive appears to be considered less worthwhile and having moderately less of magic (as reference, Polgat [for men], which has visibly better quality clothing, is not included).

The study of image strength by TACK sheds light on the relative positions in which consumers hold corporate brands both in their minds (Logic) and in their hearts (Magic).  It is somewhat surprising to find such a strong association between the logical-functional dimension and the affective dimension — it suggests that a company cannot sustain a positive stance on one dimension without the other for a long time. There is some discomfort also in realising that price could be more dominant than quality, but it is important to acknowledge how perceptions of value, and especially unfairness, can influence the emotional reaction of consumers to the corporate-level brands. Effectively, being attentive and sensitive to what the wider circles of consumers in the country need and expect to have is a key to be regarded overall as a favourable, strong leading brand.

Ron Ventura, Ph.D. (Marketing)


Comment on Methodology:

The brand scores are given in percentages. More detailed values reported for 2017 help to understand the metric’s structure. The score on each dimension (Logic or Magic) seems to be calculated as the sum of the ‘top-box’ proportions for the two items it is composed of (e.g., % who give a rating of 6 or 7 on a 7-point Likert-type scale in agreement with each statement of Logic, where 25% on ‘appreciate’ + 20% on ‘worthwhile’ = 45% on Logic). However, summing up those percentages is not a proper procedure — this sum does not have a meaningful interpretation because the proportions cannot be accumulated. It would be correct to take their mean rather than the sum. Another valid option is to add-up the rating values of the pair of items for each respondent and then calculate the percentage who have given a total score on that dimension of above a threshold (e.g., a score on the index of Logic of above 12) in order to produce a score that may be more easily related to.

Reference on price fairness:

The Price is Unfair! A Conceptual Framework of Price Fairness Perceptions; Lan Xia, Kent B. Monroe, & Jennifer L. Cox (2004); Journal of Marketing, 68 (October), pp. 1-15.

When going through a surgery, the surgery itself would almost unquestionably be the major and focal treatment of the patient during hospitalisation. However, there is an envelope of procedures, treatments and other activities that make up the experience of the patient at the hospital. Furthermore, pre-surgery and follow-up procedures can also be accounted for in the whole experience. Patient experience is receiving increasing attention and greater weight in managing healthcare systems in recent years, side by side with the clinical demands of medical care. Although we cannot fully equate the status of ‘patient’ with ‘customer’ because of the highly specialised aspects and requirements of the medical domain, there are many activities and moments of interaction in which it is fair and right to view the patient as a customer.

Healthcare services are not immune to the growing power of consumers and their higher expectations, as customers, that have become omnipresent in many fields of services and products. Consumers expect greater awareness of their needs and respecting their rights. Yet there are unique challenges in adopting a ‘customer-centric’ approach with medical patients because clinical considerations come first in the responsibilities of medical professionals.  It is a challenge, for instance, to convince doctors and nurses that improved patient experience is more than ‘nice but not necessary’ or that this is not ‘a luxury given their tight schedules’. Another challenge is balancing between the undoubted authority of medical doctors in their domains of clinical specialisations and the need of patients to be informed, assured and comforted about treatments they should receive. How a clinical treatment is communicated and delivered to a patient can influence considerably his or her experience in a positive way; moreover, there are many less critical procedures and interactions through which doctors, nurses and assisting care providers can further improve the patient experience.

A commonly accepted definition of patient experience developed by the Beryl Institute defines it as “The sum of all interactions, shaped by an organization’s culture, that influence patient perceptions across the continuum of care“. First, having a supporting culture is paramount to the successful assimilation of a patient experience approach. Second, there is a recognition among researchers and experts that patients’ experiences should be addressed through their perceptions reflecting what has happened to them (e.g., during clinical procedures, interactions with doctors); measures of satisfaction are inadequate because satisfaction is construed relative to individuals’ prior expectations, without informing what might have to be corrected. Third, steps along a whole journey or continuum of medical care of the patient should be accounted for (e.g., from hospital admission to discharge, covering care given within and outside the hospital walls). A customer-centred approach in the context of healthcare is recognised as Patient-Centred Care which focuses on improving patient experiences.

In a special report of the NHS Confederation (UK) on patient experience, the authors note the complexity of improving patient experience on top of striving to provide high-quality clinical care. In addition to the latter, it should be acknowledged that “Experience is also determined by the physical environment the patients are in and how they feel about the care they receive, including the way staff interact with them“. The report authors state punctually: “Improving the experience of all patients starts by treating each one of them individually to ensure they receive the right care, at the right time, in the right way for them” (boldface highlight added)[1].

Improvements in patient experience in a hospital ward (e.g., cardiology, orthopaedic) seem to happen in small steps, in small details; the staff may not fully appreciate their value to patients and their family relatives . Better experience may arise from greater awareness of the worries, concerns or inconveniences of patients by doctors, nurses and assisting caregivers. It may be achieved by listening to the patients and being more patient and soft with them. It is not an easy demand: the staff may have two or three dozens of patients to attend to in the ward, and yet the staff has a duty to help and make the hospital stay as easy as possible for each patient. One should not overlook the importance of an emotional touch, feelings shown by and with patients. Keeping a peaceful and calm atmosphere in the hospital ward also contributes to patients’ experience and prospects of healing. Doctors in particular can help to improve the patient experience by willing to explain and inform a patient (and family) in plain words and empathy about his or her condition and treatments required, especially upon request (i.e., respecting the right of a patient to be informed). Additionally, doctors should not leave patients out of decisions made about them, where the patient demonstrates interest and capacity in being involved.

Much of the conduct described above can be seen happening more frequently than say five or ten years ago. One may encounter specific members of staff who make an extra effort to help, talk with a patient a little longer, answer questions at the nurse counter or in the patient’s room, and they do it kindly and voluntarily. Yet there is also observable variability where some members of staff appear less committed to providing a better treatment to patients with dignity, compassion and respect; patient experience does not seem to concern those staff members. Efforts in hospitals to increase awareness and training of staff about forms of conduct that improve patient experience, and their value to patients, have to address remaining pockets of inconsistency.

We should also look at processes in administering care to patients as they may have further impact on patient experience in addition to the quality and safety of medical care. For example, it is greatly important to pass and share information about patients between nurses and doctors within a shift and between shifts. Understandably, medical staff may not be able to give a full detailed update about every patient in the brief during change of shifts. But even during a shift there may not be enough time to pass information between staff members (e.g., a change in treatment for a particular patient). It is therefore crucial that staff members update patient records in the computer information system regularly and consult the records frequently to make sure information is not lost, forgotten or missed by the next staff member attending to the same patient. It can matter, for instance, when the patient or family inform staff about medication the patient is taking regularly (or should avoid), or regarding any change ordered in medication administered during hospitalisation. More generally, it would help to avoid situations where staff members ask patients or family the same question several times. Failure to record and pass customer information is a problem well-known and documented in customer service, yet in this case shortcomings in passing patient information can have more critical consequences. Therefore, ensuring that information is available to administer the right treatment at the right time would improve the quality and safety of patient care and thereby his or her personal experience.

Improving patient care and experience by physicians relies on better understanding of patients’ needs which could be achieved by working on three key priorities: competency, teamwork, and compassion; being successful would help in driving loyalty of patients to physicians (James Merlino, MD, an expert advisor with Press Ganey Associates in an interview with Micah Solomon of Forbes, 11 May 2017). It sounds, nonetheless, that this trio of priorities is fundamental and could contribute in multiple settings to patient care by physicians with the mentioned benefit to individual physicians, their clinics or hospital wards (private or public). [Note: Merlino suggests also incorporating patient segmentation and nurturing caregiver engagement as requisites to improving patient experience.]

A study of patient interviews at Royal Bolton Hospital in the UK, cited by the NHS Confederation report, identified two themes that appear to relate to pivotal concerns of many patients: “no needless pain” and “no feelings of helplessness”; the researchers were able to sort interviews along these two leading themes and later held discussions with hospital staff on the issues raised in the interviews. In another example given, the report refers to relationships built with patients and their families, and among staff and executives: a data-driven methodology, Patient and Family Centred Care, developed at the University of Pittsburgh Medical Center assesses different care pathways where each care pathway is studied and an ideal patient experience is outlined respectively. A project is developed in collaboration between professional staff and management to carry out these experience-oriented care plans.

As suggested above, a calm and pleasant atmosphere in the hospital ward can have a positive effect on patients’ feelings (e.g., soothing, relaxing). Contributors to the desirable atmosphere are the behaviour of medical and assisting (nursing) staff but not least also the design, furnishing and atmospherics of the physical environment in a hospital ward. Colours, windows and the sunlight they allow into rooms, warm materials (e.g., wood) and ergonomics, artwork hung on walls, and even pleasant odour should help in generating an atmosphere conducive to better healing (e.g., stronger improvement in the clinical condition of the patient, shorter hospital stay). In fact, research supports positive effects of the environment and ergonomics on healing of patients but also on staff sentiment and conduct (e.g., by reducing fatigue and stress).

According to a review of literature prepared by the Economist Intelligence Unit, sponsored by Siemens Healthineers (healthcare division), improved patient experience has been shown to have positive impact on clinical outcomes and care delivery for patients, financial outcomes for hospitals (efficiency, cost reduction), and morale and productivity of staff. The review further supports the importance of improving patient experience throughout the continuum of care: before, during, and after hospital admission; it should also engage patients, staff, system and interfaces inside the hospital and outside (e.g., pre-surgery and follow-up treatments and clinical examinations may be provided by the hospital and complemented in other clinics)[2].

Patients themselves also believe in the positive effect that better experience can have on their healing prospects. A consumer survey (2018) conducted by Beryl Institute found that 69% of consumers believe a good experience contributes to their healing / good health outcomes. It was also learned from consumers that being listened to, communicated to them in a way they can understand, and being treated with dignity and respect are the three most important factors to them influencing their (patient) experience.

Patient experience cannot be separated from the overall programme of care they receive in the hospital; it embodies all that happens to them, the treatments they receive and interactions they have with members of staff, and how they feel about it all. As healthcare professionals increasingly appreciate, it would be wrong to brush away this subjective and emotional viewpoint of patients on their experience in the hospital or see it as inferior to the clinical aspects of medical care. They go hand-in-hand, and as research has shown improved experience of patients is likely to have a positive impact on their clinical condition and healing prospects. A broad perspective on patient experience is nonetheless necessary, encompassing any components of care that are part of hospitalisation or tied to it; involving different types of staff (doctors and nurses, assisting caregivers, and administrative staff as well); and it could take a step forward and consider care given inside the hospital and outside it. Improvements in patient experience can already be discerned in the past decade; yet this is an area of continued work and effort where more can be done to create even better and more consistent patient experiences.

Ron Ventura, Ph.D. (Marketing)

Notes:

[1] “Feeling Better? Improving Patient Experience in Hospital”, The NHS Cofederation, 2010

[2] “Improving Patient Experience”, Siements Healthineers Global, 13 June 2018 (Whitepaper)

 

A classic view regarding decision-making holds that attention serves foremost to acquire the information most relevant and important for choosing between alternatives. Thereby the role of attention is largely a passive one. However, an alternative view that is gaining traction in recent years, especially due to the help of eye tracking research, argues that attention plays a more active role in decision processes, influencing the construction of decisions.

This is a key message delivered by Orquin and Mueller Loose (2013) in their review on the role of attention in decision-making, as can be learnt from tracking of eye movements and subsequent fixations [1]. The approach taken by the researchers, however, is less usual: They do not constrain themselves concretely to the domain of decision-making; instead, they start their review and analysis of evidence from theories or models of tasks similar or related to decision-making (e.g., perception, information processing, visual search, working memory, top-down and bottom-up processes, problem solving).  Then they try to project how the functions of attention in such tasks may project to or be expressed in decision processes.

Furthermore, Orquin and Mueller Loose examine the extent to which the evidence coincides with four alternative theories and associated models of decision-making (i.e., whether empirical evidence substantiates or refutes assumptions or conclusions in each theory). They review evidence from previous research on similar or related tasks that could also be traced specifically in decision tasks, based on eye tracking in decision-making research, and evaluate this evidence in the context of the alternative decision-making theories.

The theories and related models considered are: (1) rational models; (2) bounded rationality models; (3) evidence accumulation models (e.g., the attention drift diffusion model [aDDM] posits that a decision-maker accumulates evidence in favour of the alternative being fixated upon at a given time); and (4) parallel constraint satisfaction models (a type of dual process, neural network model based on the conception of System 1’s fast and intuitive thinking [first stage] and System 2’s slow and deliberate thinking [second stage]). Rational models as well as bounded rationality models more explicitly contend that the role of attention is simply to capture the information needed for making a decision. ‘Strong’ rational models hold that all relevant, available information about choice alternatives would be attended to and taken into account, whereas ‘relaxed’ rational models allow for the possibility of nonattendance to some of the information (e.g., attributes or object [product] features). Bounded rationality models suggest that information is acquired just as required by the decision rules applied. The two other categories of models are more flexible in regard to how information is acquired and used, and its effect on the decision process and outcome. However, the authors argue that all four theories are found to be in deficit to a smaller or larger degree in their consideration of the role and function of attention in decision processes, having at least some of their assumptions being rejected by the evidence evaluated.

Selected insights drawn from the review of Orquin and Mueller Loose are enlisted here only briefly to shed light on the significance of attention in consumer decision-making.

A crucial question in decision-making is how information enters the decision process and is being utilised in reaching a choice decision: information may be acquired through attention guided by a top-down (goal-driven) process, yet information may also be captured by a bottom-up (stimulus-based) attentional process. The entanglement of both types of processes when making a decision is a prime aspect in this domain and has multiple implications. A more efficient selection process may be driven by greater experience with a task (e.g., more important information cues have a higher probability of being fixated on) and increased expertise in comprehension of visualisations (e.g., more fixations to relevant areas, and inversely fewer fixations to irrelevant areas, requiring shorter fixation durations, and longer saccades [‘jumps’ between more distant elements of information in a scene]). The interaction between bottom-up and top-down processing can amplify attention capture and improve the visual acuity of objects perceived. Bottom-up attention in particular is likely to be influenced by the saliency of a visual stimulus; however, it may not take effect when the task demands on attention are high, wherein priority is given to top-down directives for attention. Decision-making research has shown that visually salient alternatives or attributes are more likely to capture attention and furthermore affect the decision in their favour.

An interplay occurs between working memory and ‘instant’ attention: As the load of information fixated becomes larger, more elements are passed to working memory, and information is accessed from there for processing; however, as the strain on working memory increases, consumers turn to re-fixating information elements and consider them instantly or just-in-time (i.e., fixations are thus used as external memory space). This type of interplay has been identified in tasks of problem solving. Toggling between working memory and fixations or re-fixations in decision tasks can be traced, for instance, in alternative comparisons. Greater demands imposed by information complexity and decision difficulty (due to greater similarity between alternatives) may require greater effort (operations) in acquiring and processing information, yet the process may be shortened on the other hand through learning.

  • Another area with interesting implication is processing of visual objects: Previous research has shown that visual objects are not encoded as complete representations (e.g., naturalistic product images) and the binding of features is highly selective. Thereof, encoding of particular features during an object-stimulus fixation may be goal-driven, and a re-fixation may be employed to refer just-in-time to specific object [product] features as needed in a decision task, thus saving on working memory capacity.

Consumers have a tendency to develop a bias during a decision task towards a favoured alternative. This alternative would get more fixations, and there is also a greater likelihood for the last alternative fixated to be the one chosen (put differently, consumers are likely to re-affirm the choice of their favourite alternative by re-fixating it just before making the decision). A desired or favoured attribute can also benefit from a similar effect by receiving more frequent attention (i.e., fixations). The authors point, however, to a difficulty in confirming evidence accumulation models: whether greater likelihood of a more fixated alternative to be chosen is due to its higher utility or greater exposure to it. They suggest a ‘soft’ model version in support for a greater effect of extended mere exposure leading to choice of an alternative. They add that a down-stream effect of attention from perception onto choice through a bottom-up process may play a role of gatekeeping the alternatives entering a consideration set. It is noted that a down-stream effect, arising from a bottom-up process, is clearly distinguishable from a utility effect, since the former is stimulus-driven and the latter is goal-driven.

Consistent with bounded rationality theory, heuristics shape patterns of attention, directed by the information that a heuristic calls for (e.g., by alternative or by attribute). Yet, eye-tracking studies conducted to trace the progression of decision processes could not corroborate the patterns of heuristics used as proposed in the literature. More formally, studies failed to substantiate the assumption that heuristics in use can be inferred from the patterns of attention recorded. Transitions of consumers between alternative-wise and attribute-wise rules during a decision task make inferences especially difficult. Not only decision rules influence what information is attended to, but information cues met with during the decision process can modify the course of the decision strategy applied — consider the potential effect that salient stimuli captured unexpectedly in a bottom-up manner can have on the progression of the decision strategy.

In summary, regarding the decision-making theories, Orquin and Mueller Loose conclude: (a) firmer support for the relaxed rational model over the strong model (nonattendance is linked to down-stream effects); (b) a two-way relationship between decision rules and attention, where both top-down and bottom-up processes drive attention; (c) the chosen alternative has a higher likelihood of fixations during the decision task and also of being the last alternative fixated — they find confirmation for a choice bias but offer a different interpretation of the function of evidence accumulated; (d) an advantage of the favoured alternatives or most important attributes in receiving greater attention, and advantage of salient alternatives receiving more attention and being more likely to be chosen (concerning dual process parallel constraint satisfaction models).

Following the review, I offer a few final comments below:

Orquin and Mueller Loose contribute an important and interesting perspective in the projection of the role of [visual] attention from similar or related tasks onto decision-making and choice. Moreover, relevance is increased because elements of the similar tasks are embedded in decision-making tasks. Nevertheless, we still need more research within the domain because there could be aspects specific or unique to decision-making (e.g., objectives or goals, structure and context) that should be specified. Insofar as attention is concerned, this call is in alignment with the conclusions of the authors. Furthermore, such research has to reflect real-world situations and locations where consumers practically make decisions.


In retail stores, consider for example the research by Chandon, Hutchinson, Bradlow, and Young (2009) on the trade-off between visual lift (stimulus-based) and brand equity (memory-based); this research combined eye tracking with scanner purchase data [2]. However, it is worth looking also into an alternative approach of video tracking as used by Hui, Huang, Suher, and Inman (2013) in their investigation of the relations between planned and unplanned considerations and actual purchases (video tracking was applied in parallel with path tracking)[3].

For tracing decision processes more generally, refer for example to a review and experiment with eye tracking (choice bias) by Glaholt and Reingold (2011)[4], but consider nonetheless the more critical view presented by Reisen, Hoffrage and Mast (2008) following their comparison of multiple methods of interactive process tracing (IAPT)[5]. Reisen and his colleagues were less convinced that tracking eye movements was superior to tracking mouse movements (MouseLab-Web) for identifying decision strategies while consumers are acquiring information (they warn of superfluous eye re-fixations and random meaningless fixations that occur while people are contemplating the options in their minds).


 

It should be noted that a large part of the research in this field, using eye-tracking measurement, is applied with concentrated displays of information on alternatives and their attributes. The most frequent and familiar format is information matrices (or boards), although in reality we may also encounter other graphic formats such as networks, trees, layered wheels, and more art-creative diagram illustrations. Truly, concentrated displays can be found in shelf displays in physical stores and also in screen displays online and in mobile apps (e.g., retailers’ online stores, manufacturers’ websites, comparison websites). However, on many occasions of decision tasks (e.g., durables, more expensive products), consumers acquire information through multiple sessions while constructing their decisions. That is, the decision process extends over time. In each session consumers may keep some information elements or cues for later processing and integration, or they may execute an interim stage in their decision strategy. If information is eventually integrated, consumers may utilise aides like paper notes and electronic spreadsheets, but they do not necessarily do so.

Orquin and Mueller Loose refer to effects arising from spatial dispersion of information elements in a visual display as relevant to eye tracking (i.e., distance length of saccades), but these studies do not account for temporal dispersion of information. Studies may need to bridge data from multiple sessions to accomplish a more comprehensive representation of some decision processes. Yet, smartphones today can help in closing somewhat the gap since they permit shoppers to acquire information in-store while checking more information from other sources on their smartphones — mobile devices of eye tracking may be used to capture this link.

Finally, eye tracking provides researchers with evidence about attention to stimuli and information cues, but it cannot tell them directly about other dimensions such as meaning of the information and valence. The importance of information to consumers can be implied from measures such as the frequency and duration of fixations, but other methods are needed to reveal additional dimensions, especially from the conscious perspective of consumers (vis-à-vis unconscious biometric techniques such as coding of facial expressions). An explicit method (Visual Impression Metrics) can be used, for example, to elicit statements by consumers as to what areas and objects in a visual display that they freely observe they like or dislike (or are neutral about); if applied in combination with eye tracking, it would enable to signify the valence of areas and objects consumers attend to (unconsciously) in a single session with no further probing.

The review of Orquin and Mueller Loose opens our eyes to the versatile ways in which [visual] attention may function during decision tasks: top-down and bottom-up processes working in tandem, toggling between fixations and memory, a two-way relation between decision strategies and visual attention, choice bias, and more. But foremost, we may learn from this review the dynamics of the role of attention during consumer decision-making.

Ron Ventura, Ph.D. (Marketing)

References: 

[1] Attention and Choice: A Review of Eye Movements in Decision Making; Jacob L. Orquin and Simone Mueller Loos, 2013; Acta Psychologica, 144, pp. 190-206

[2] Does In-Store Marketing Work? Effects of the Number and Position of Shelf Facings on Brand Attention and Evaluation at the Point of Purchase; Pierre Chandon, J. Wesley Hutchinson, Eric T. Bradlow, & Scott H. Young, 2009; Journal of Marketing, 73 (November), pp. 1-17

[3] Deconstructing the “First Moment of Truth”: Understanding Unplanned Consideration and Purchase Conversion Using In-Store Video Tracking; Sam K. Hui, Yanliu Huang, Jacob Suher, & J. Jeffrey Inman, 2013; Journal of Marketing Research, 50 (August), pp. 445-462.

[4] Eye Movement Monitoring as a Process Tracing Methodology in Decision Making Research; Mackenzie G. Glaholt and Eyal M. Reingold, 2011; Journal of Neuroscience, Psychology and Economics, 4 (2), pp. 125-146

[5] Identifying Decision Strategies in a Consumer Choice Situation; Nils Reisen, Ulrich Hoffrage, and Fred W. Mast, 2008; Judgment and Decision Making, 3 (8), pp. 641-658

‘Experience’ has gained a prime status in the past decade — everything seems to revolve around experience in the universe of management, marketing, and even more specifically with respect to relationship marketing. It has become like a sine qua non of operating in this universe. There can be multiple contexts for framing experience — customer experience, brand experience, user (or product) experience, and also employee experience. Nevertheless, these concepts are inter-linked, and customer experience could be the central point-of-reference just because all other forms of experience eventually contribute to the customer’s experience. After all, this is the age of experience economy (cf. Pine and Gilmore).

This focus on the role of experience and primarily customer experience (CX) in contemporary marketing surely has not escaped the attention of companies involved with data-based marketing particularly on the service side (e.g., technology, research, consulting). In mid-November 2018 enterprise information technology company SAP announced a stark move of acquiring research technology firm Qualtrics for the sum of $8 billion in cash (deal expected to materialise during the first half of 2019). Qualtrics started in 2002 by specialising in survey technology for conducting consumer and customer surveys online, and has later on broadened the spectrum of its software products and tools to address a range of experience domains, put in a framework entitled Experience Management (XM).

However, less visible to the public, Qualtrics made an acquisition of its own of Temkin Group — an expert company specialising in customer experience research, training and consulting — about two weeks before announcing the SAP-Qualtrics deal. Qualtrics was reportedly engaged at the time of these deals in preparations for its IPO. Adding the knowledge and capabilities of Temkin Group to those of Qualtrics could fairly be viewed as a positive enforcement of the latter prior to its IPO, and eventually the selling of Qualtrics to SAP. Therefore, it would be right to say that Qualrtics + Temkin Group and SAP are effectively joining forces in domain knowledge, research capabilities and data technologies. Yet since the original three entities (i.e., as before November 2018) were so unequal in size and power, it raises some major questions about how their union under the umbrella of SAP will work out.

SAP specialises in enterprise software applications for organisational day-to-day functions across-the-board, and supporting software-related services (SAP was established in 1972, based in Germany). It operates today in 130 countries with 100+ innovation and development centres; its revenue in the 2017 financial year was $23.46 billion. Many of the company’s software applications can be deployed on premises, in the cloud, or hybrid (SAP reports 150 million subscribers in the cloud service user base). The two product areas of highest relevance to this story are CRM & Customer Experience solutions and the Enterprise Resource Planning (ERP) solutions & Digital Core (featuring its flagship platform HANA). The two areas of solutions correspond with each other.

The S4/HANA platform is described as an intelligent ERP software, a real-time solution suite . It enables, for example, delivering personally customised products ordered online (e.g., bicycles). For marketing activities and customer-facing services it should require data from the CRM and CX applications. The ERP platform supports, however, the financial planning and execution of overall activities of a client organisation. The CRM & Customer Experience suite of solutions includes five key components: Customer Data Cloud (enabled actually by Gigya, another acquisition by SAP in 2017); Marketing Cloud; Commerce Cloud; Sales Cloud; and Service Cloud. The suite covers a span of activities and functions: profiling and targeting at segment-level and individual level, applicable, for instance, in campaigns or tracking customer journeys (Marketing); product order and content management (Commerce); comprehensive self-service processes plus field service management and remote service operations by agents (Service). In all these sub-areas we may find potential links to the kinds of data that can be collected and analysed with the tools of Qualtrics while SAP’s applications are run on operational data gathered within its system apparatus. The key strengths offered in the Customer Data Cloud are integrating data, securing customer identity and access to digital interfaces across channels and devices, and data privacy protection. SAP highlights that its marketing and customer applications are empowered by artificial intelligence (AI) and machine learning (ML) capabilities to personalise and improve experiences.

  • At the technical and analytic level, SAP’s Digital Platform is in charge of the maintenance of solutions and databases (e.g., ERP HANA) and management of data processes, accompanied by the suite of Business Analytics that includes the Analytics Cloud, Business Analytics, Predictive Analytics and Collaborative Enterprise Planning. Across platforms SAP makes use of intelligent technologies and tools organised in its Leonardo suite.

Qualtrics arrives from quite a different territory, nestled much closer to the field of marketing and customer research as a provider of technologies for data collection through surveys of consumers and customers, and data analytic tools. The company has gained acknowledgement thanks to its survey software for collecting data online whose use has so expanded to make it one of the more popular among businesses for survey research. Qualtrics now focuses on four domains for research: Customer Experience, Brand Experience, Product Experience, and Employee Experience.

  • The revenue of Qualtrics in 2018 is expected to exceed $400 million (in first half of 2018 revenue grew 42% to $184m); the company forecast that revenue will continue to grow at an annual rate of 40% before counting its benefits from synergies with SAP (CNBC; TechCrunch on 11 November 2018).

Qualtrics organises its research methodologies and tools by context under the four experience domains aforementioned. The flagship survey software, PER, allows for data collection through multiple digital channels (e.g., e-mail, web, mobile app, SMS and more), and is accompanied by a collection of techniques and tools for data analysis and visualisation. The company emphasises that its tools are so designed that use of them does not require one to be a survey expert or a statistician.

Qualtrics provides a range of intelligent assistance and automation capabilities; they can aid, guide and support the work of users according to their level of proficiency. Qualtrics has developed a suite of intelligent tools, named iQ, among them Stats iQ for statistical analysis, Text iQ for text analytics and sentiment scoring, and Predict iQ + Driver iQ for advanced statistical analysis and modelling. Additionally, it offers ExpertReview for helping with questionnaire composition (e.g., by giving AI-expert ‘second opinion’). In a marketing context, the company offers techniques for ad testing, brand tracking, pricing research, market segmentation and more. Some of these research methodologies and tools would be of less relevance and interest to SAP unless they can be connected directly to customer experiences that SAP needs to understand and account for through the services it offers.

The methods and tools by Qualtrics are dedicated to bringing the subjective perspective of customers about their experiences. Under the topic of Customer Experience Qualtrics covers customer journey mapping, Net Promoter Score (NPS), voice of the customer, and digital customer experience; user experience is covered in the domain of Product Experience, and various forms of customer-brand interactions are addressed as part of Brand Experience. The interest of SAP especially in Qualtrics, as stated by the firm, is  complementing or enhancing its operational data (O-data) with customer-driven experience data (X-data) produced by Qualtrics (no mention is made of Temkin Group). The backing and wide business network of SAP should create new opportunities for Qualtrics to enlarge its customer base, as suggested by SAP. The functional benefits for Qualtrics are less clear; possible gains may be achieved by combining operational metrics in customer analyses as benchmarks or by making comparisons between objective and subjective evaluations of customer experiences, assuming clients will subscribe to some of the services provided by the new parent company SAP.

Temkin Group operated as an independent firm for eight years (2010-2018), headed by Bruce Temkin (with wife Karen), until its acquisition by Qualtrics in late October 2018. It provided consulting, research and training activities on customer experience (at its core was customer experience but it dealt with various dimensions of experience beyond and in relation to customers). A key asset of Temkin Group is its blog / website Experience Matters, a valued resource of knowledge; its content remains largely in place (viewed January 2018), and hopefully will stay on.

Bruce Temkin developed several strategic concepts and constructs of experience. The Temkin Experience Rating metric is based on a three-component construct of experience: Success, Effort and Emotion. The strategic model of experience includes four required competencies: (a) Purposeful Leadership; (b) Compelling Brand Values; (c) Employee Engagement; and (d) Customer Connectedness. He made important statements in emphasising the essence of employee engagement to deliver superior customer experience, and in including Emotion as one of the pillars of customer experience upon which it should be evaluated. The more prominent of the research reports published by Temkin Group were probably the annual series of Temkin Experience Rating reports, covering 20 industries or markets with a selection of companies competing in each.

Yet Temkin apparently has come to a realisation that he should not go it alone any longer. In a post blog on 24 October 2018, entitled “Great News: Temkin Group Joins Forces With Qualtrics“, Temkin explained as the motivation to his deal with Qualtrics a recognition he had reached during the last few years: “it’s become clear to me that Qualtrics has the strongest momentum in CX and XM“. Temkin will be leading the Qualtrics XM Institute, built on the foundations of Temkin CX Institute dedicated to training. The new institute will be sitting on top of Qualtrics XM platform. In his blog announcement Temkin states that the Qualtrics XM Institute will “help shape the future of experience management, establish and publish best practices, drive product innovation, and enable certification and training programs that further build the community of XM professionals” — a concise statement that can be viewed as the charter of the institute Temkin will be in charge of at Qualtrics. Temkin has not taken long to adopt the framework of Experience Management and support it in writing for the blog.

The teams of Temkin and Qualtrics (CEO and co-founder Ryan Smith) may co-operate more closely in developing research plans on experience for clients and initiating research reports similar to the ones Temkin Group produced so far. Bruce Temkin should have easy and immediate access to the full range of tools and technologies of Qualtrics to continue with research projects and improve on them. Qualtrics should have much to benefit from the knowledge and training experience of Temkin in the new XM institute at Qualtrics. It seems easier to foresee beneficial synergies between Temkin Group and Qualtrics than their expected synergies with SAP.

However, there is a great question arising now, how all this vision and plans for Temkin and Qualtrics working together, and particularly their project of Qualtrics XM Institute, will be sustained following the acquisition of Qualtrics by SAP. One cannot overlook the possibility that SAP will develop its own expectations and may require changes to plans only recently made or modifications to Qualtrics CX Platform and XM Solutions so as to satisfy the needs of SAP. According to TechCrunch (11 Nov. 2018) Qualtrics will continue to function as a subsidiary company and will retain its branding and personnel (note: it may be gradually assimilated into SAP while keeping Qualtrics associated names, as seems to be the case of Israel-based Gigya). Much indeed can depend on giving Qualtrics + Temkin Group autonomy to pursue with their specialisations and vision on XM while they share knowledge, data and technologies with SAP.

Bill McDermott, CEO of SAP, is looking high in the sky: as quoted in the company’s news release from 11 November 2018, he describes bringing together SAP and Qualtrics as “a new paradigm, similar to market-making shifts in personal operating systems, smart devices and social networks“. But it is also evident that SAP still sees the move through the prism of technology: “The combination of Qualtrics and SAP reaffirms experience management as the ground-breaking new frontier for the technology industry“.

Temkin’s viewpoint is much more customer-oriented and marketing-driven vis-à-vis the technology-driven view of McDermott and SAP, which may put them in greater conflict with time about priorities and future direction for XM. Qualtrics headed by Ryan Smith will have to decide how it prefers to balance between the marketing-driven view and technology-driven view on experience. Temkin, for example, has reservations about the orientation of the technology known as Enterprise Feedback Management (EFM), suggesting instead a different focus by naming this field “Customer Insight and Action (AIC) Platforms”. In his comments on the acquisition of Qualtrics by SAP (16 November 2018) he explains that organisations “succeed by taking action on insights that come from many sources, combining experience data (X-data) and operational data (O-data)“. In his arguments in favour of joining SAP with Qualtrics, Temkin recollects an observation he made in an award-winning report from 2002 while at Forrester Research: he argued then that “widespread disappointing results of CRM were a result of a pure technology-orientation and that companies needed to focus more on developing practices and perspectives that used the technology to better serve customers”; he claims that much has changed in the field since that time. Yet it is hard to be convinced that technology has much less influence now in shaping organisational, managerial and marketing processes, on both service side (e.g., SAP) and client side.

  • As a note aside, if SAP gets the upper hand in setting the agenda and does not give sufficient autonomy to Qualtrics as suggested earlier, the first sector at risk of having most to lose from this deal would be ‘marketing and customer research’.

SAP and Qualtrics are both involved in development and implementation of technology, yet SAP is focused on information technology enabling overall day-to-day operations of an organisation, whereas Qualtrics is focused on technology enabling experience and marketing research. Qualtrics and Temkin Group are both engaged in domains of experience: Qualtrics specialises in the technology that enables the research, while Temkin Group brought strengths in conducting research plus strategic thinking and training (education) on customer experience. In order for their joint forces to succeed they all will have to find ways to bridge gaps between their viewpoints, to ‘live and let live’, and at the same time complement one another in areas of shared understanding and expertise.

Ron Ventura, Ph.D. (Marketing)

 

One does not have to be a faithful Christian to enjoy a good Christmas market, and the Swiss markets in Zürich during the Advent period (22 November – 23 December) are very good indeed. Truly, those markets are useful and delightful for non-Christians just as well. As a market, it is a commercial event at its core. But much beyond its commercial function, the Christmas market has the flare of a festive fair, and this is well felt in Zürich.

Remarkably, the Christmas markets of Zurich do not have the appearance and feel of an over-commercialised event. A careful observer may find signs of event marketing and brand marketing, but they are woven cleverly and tastefully into the market happening so it should not disturb the visitors. Big brand names are not omnipresent or dominating the markets. Instead, stalls seem to be inhabited mostly by small and independent local traders, and much of the merchandise is made by handicraft. The magic of this organisation is in giving the sense of older-times retailing. These characteristics may signify, more broadly, a distinction between European and American approaches to commerce and marketing. Nevertheless, the Zurich Christmas markets seem to exhibit elements of a well-thought marketing design, yet without making them imposing or too apparent to celebrating visitors-shoppers.

Just to remove any doubt before continuing: These markets involve not only merchandise — food and drinks play a major role in them. More will be said about eating and drinking at a Christmas market later in the post.

Several Christmas markets operated this year (2018) in Zurich, the three major ones were in the main railway station (Hauptbahnhof); in front of the Opera House near the lake; and in the Niederdorf Quarter in the Old Town of Zurich (on the north bank of the Limmat river).

The Christkindlimarkt in the large hall of the Hauptbahnhof (i.e., it is located indoors) is the most immediately accessible to anyone arriving to Zurich by train. But furthermore the station is a major hub of travel and shopping for anyone passing through (note: the station lays over a large underground shopping centre). It is the central market of the city with 150 stalls. The Christmas market in the station is therefore said to be the most busy one in the city, and it can feel over-crowded at times.

The market is arranged in a squared block with two longitudinal ‘avenues’ running Swarovski Christmas Treethrough it with stalls on both sides, and some passes connecting between them. In the middle of the market features the main attraction: a 15-metre-high sparkling Christmas tree with glass decorations, courtesy of Swarovski. The tree is surrounded at its base by displays of glassware jewelleries, figurines and other decorations by the Swarovski retail brand, with a little hut-shop next to the tree (a Swarovski store is situated across the street from the railway station). The tree makes a very impressive attraction, nevertheless, and lures many visitors circling around it. Overall, the market looks and sounds cheerful and busy, and while the Swarovski-branded tree acts as a market’s anchor, it does not seem to distract visitors-shoppers from attending the many stalls in the Christkindlimarkt with their various gift-opportunity offerings and food delights.

A greater festivity takes place, nonetheless, at the Christmas village (‘Wienachstdorf’) in the large square in front of the Opera House (Sechselautenplatz) just next to the Zurich Lake promenade. This Christmas market-village entails around 100 stalls, arranged in free-form, curve-shaped areas. Not least, it seems to offer the best opportunities for Christmas Market Village near Operaeating and drinking in between looking for merchandise. A large place is dedicated in the centre of the village for sitting at long tables to eat some of the delicacies like Swiss raclette or a French crêpe. Since this market is open-air, and it can be freezing cold, a most popular hot drink at this time of year is Glühwein (mulled wine) — many people can be seen walking and warming up with cups of Glühwein. There are, however, some more protected areas to stay, eat or drink, particularly two indoors halls that resemble pubs in atmosphere. The market is plentiful with merchandise at the stalls, so much it is impossible to cover here its variety.  Most products can fit appropriately as gifts for family and friends, but they also suit shoppers wishing to spoil themselves for Christmas. One may find there winter accessories, decorations and toys of all sorts, woodcraft, and much more.

Two main attractions are especially noteworthy; each is of a different type, and either is hosted by an Alpine mountain resort site. The major leisure attraction is an ice skating rink, hosted by Arosa mountain resort (neighbouring Lenzerheide in the Graubünden Canton). Little children are welcome to join skating with the aid of ‘penguins’. Traditional Christmas songs (as back in time as from the 1940s) play in the background to complete the nice entertaining experience. A culinary attraction on site of the Christmas village is the Fondue Chalet hosted by Klosters, the Klosters Stübli (Klosters is a resort village neighbouring the more famed town of Davos). Inside the chalet, diners are seated at long wooden tables on benches with woolen covers, giving the place the atmosphere of a public dining house. Having a fine cheese fondue with a glass of cider makes a wonderful meal. True, the two resort sites make a promotion for themselves ahead of the winter vacation & skiing season, but in view of the pleasant benefits they provide to the visitors of the Zurich Christmas market, such a branded initiative appears legitimate and welcome. They fit well as event marketing attractions in the Wienachstdorf that add to the whole festive atmosphere, like one big street party.

The third key Christmas market is in the Niederdorf Quarter of the Old Town. It is centred at Niederdorfstrasse, but it has ‘satellite’ extensions along the streets, starting from the large cathedral of Gross Münster. The headline advantage of this market is the relaxing atmosphere that the Old Town architecture provides. It is relatively smaller as well as calmer than the two previous markets described.

Smaller concentrations of Christmas market stalls can be found in another part of the city centre, along and around the Bahnhofstrasse. One concentration, for instance, can be found in a pedestrian street running between the Jelmoli aChristmas Market near Globusnd Globus department stores, and continuing in front of the latter. It adds light and buzz to that area that is not available in other times of the year. Another Christmas market happening takes place not far from there, at Werdmühleplatz, next to the main shopping and business Bahnhofstrasse. There beside the stalls stands a large Singing Christmas Tree; in the evenings different choirs from the Zurich district stand on elevations around the tree and sing Christmas songs in various languages to the pleasure of a pedestrian audience. This gives a special celebrating atmosphere to the small market.

To complete the picture, add to the Christmas markets the sights of Christmas lights in different decorative forms and colours, hanging above streets and on the facades of buildings, especially those housing large stores, banks, and other prominent businesses. The Christmas lights will follow shoppers most of the way moving from one market to the other. A special tram for children runs between sites in the city in a round tour starting nearby the Wienachstdorf; the children are hosted by Christmas angles (Christkindli) on their trip, sponsored by Jelmoli department store.

A Stall in Christmas Market near Globus

It must be emphasised that stalls selling food and drinks are available for visitors-shoppers in each of the Christmas markets, including serving the Glühwein, a necessity when temperatures drop to zero degrees Celsius. Similar food delicacies may be found in most of the markets (e.g., raclette, sausages, crêpes, Berliner, mini mousses), yet the market in front of the Opera seems to be the culinary centre with a greater variety of foods (e.g., including also Asian cuisine). Lines may be found in front of every food stall at the Wienachstdorf, and the tables in the village centre are almost always fully occupied.


Notwithstanding the markets in Zurich, an experience of an even greater Christmas market is awaiting those willing to go farther along the Lake of Zurich (less than an hour journey by train) to Rapperswil-Jona, its lakeshore promenade and the Old Town. The Christkindlimärt spreads over the large place of the promenade and extends into theChristmas Market in Rapperswil-Jona streets of the Old Town going up to the castle. The market inhabits over 200 stalls of nearly anything one can ask for in gift merchandise for the holidays, foods and drinks. Notably, more handcrafted artifacts appear to be available in this market than in the city. Overall, there seems to be much greater variety of products in this market, if you include stalls on the promenade and within the town. Additionally, one may find there food produce to buy for home (e.g., varieties of cheese, salami). Musical performances are playing from a stage in the promenade to make the celebration merrier. As a note aside, no conspicuous brand marketing could be readily traced in this event, except perhaps for the event marketing of the whole market. In summary, the Christkindlimärt of Rapperswil-Jona offers a special and rich experience that feels more free, like a holiday in the countryside, to anyone willing to make the modest distance.


 

The Christmas markets of Zurich, as described above, are well organised and designed to create festive events — the markets are both commercial events and celebrating events for the seasonal holidays. There is a flourishing shopping activity that visitors are engaged in, but it is enveloped with leisure, culinary and entertainment activities and experiences. Visitors walking through the markets can mix between all these possibilities to create each his or her favourable experience. The style of these markets, not unexpectedly, is orientated more towards the traditional marketing and retailing rather than modern design. But it has to be well planned in our days to sustain those earlier characteristics. In that sense, the markets appear to manifest good practices of event marketing. The city of Zurich can be complimented for creating attractive festive markets for residents as well as tourists.

Ron Ventura, Ph.D. (Marketing)

 

 

Health insurance, financial investments, telecom service plans — consumers frequently find it harder to make choice decisions in these exemplar domains. Such domains are more susceptible to exhibiting greater complexity: details, many and technical, to account for, multiple options difficult to differentiate and to choose from, and unclear consequences. In products, we may refer in particular to those involving digital technology and computer-based software that some consumers are likely to find more cumbersome to navigate and operate. When consumers are struggling to make any choice, they develop a stronger tendency to delay or avoid the decision at all. They need assistance or guidance in making their way towards a choice that more closely matches their needs or goals and preferences.

Handel and Schwartzstein (2018) are distinguishing between two mechanism types that obstruct or interfere with making rational decisions: frictions and mental gaps.

Frictions reflect costs in acquiring and processing information. They are likely to occur in earlier stages of a decision process when consumers are encountering difficulties in searching for and sorting through relevant information (e.g., what options are more suitable, what attributes and values to look at), and they have to invest time and effort in tracing the information and organising it. Furthermore, frictions may include the case when consumers fail to see in advance or anticipate the benefits from an available alternative  (e.g., consider the difficulty of older people to realise the benefits they may gain from smartphones).

Mental gaps are likely to make an impact at a more advanced stage: the consumer already has the relevant information set in front of him or her but misinterprets its meanings or does not understand correctly the implications and consequences of any given option (e.g., failing to map correctly the relation between insurance premium and coverage). Mental gaps pertain to “psychological distortions” that generally may occur during information-gathering,  attention and processing, but their significance is primarily in comprehension of the information obtained. In summary, it is “a gap between what people think and what they should rationally think given costs.”

In practice, it is difficult to identify which type of mechanism is acting as an obstacle on the way of consumers to a rational decision.  Research techniques are not necessarily successful in separating between a friction and a mental gap as sources of misinformed choices (e.g., choosing a dominated option instead of a dominating one apparent to the rational decision-maker). Notwithstanding, Handel and Schwartzstein are critical of research practices that focus on a single mechanism and ignore alternative explanations. In their view, disregard to the distinction between mechanisms can lead to spurious conclusions. They suggest using counterfactual approaches that test a certain mechanism, or a combination of explanations, and then argue against it with a ‘better’ prospective mechanism explanation. They also refer to survey-based and experimental research methods for distinguishing frictions and mental gaps. The aim of these methods is to track the sources of misinformed decisions.

Consumers often run into difficulty with financial investments and saving plans. In some countries policy makers are challenged with driving consumers-employees towards saving for retirement during the working years. Persuasion per se turns out to be ineffective and other approaches for directing or nudging consumers into saving are designed and implemented (e.g., encouraging people to “roll into saving” through a scheme known as ‘Save More Tomorrow’ by Thaler and Sunstein).

Confronting employees with a long list of saving plans or pension funds may deter them from duly attending to the alternatives in order to make a decision, and even risks their aborting the mission. When consumers-employees have a hard time to recognise differences between the plans or funds (e.g., terms of deposit, assets invested in, returns), they are likely to turn to heuristics that brutally cut through the list. Crucially, even if information on key parameters is available for each option, decision-makers may use only a small part of it. Similar difficulties in choosing between options may arise in financial investments, for instance when choosing between equity and index funds or bond funds. One may be assisted by suggesting a default plan (preferably, recommending a personally customised plan) or sorting and grouping the proposed plans and funds into classes (e.g., by risk level or time horizon). However, it should be acknowledged that consumer responses as described above may harbour frictions as well as mental gaps, and it could help to identify which mechanism has the greater weight in the decision process.

A key issue with health insurance concerns the mapping of relationship between an insurance premium and the level of deductibles or cost-sharing between the insurer and the insured. For example, consumers fall into a trap of accepting an insurance policy offered with a lower premium while not noticing a higher deductible they would have to pay in a future claim. An additional issue consumers have to attend to is the coverage provided for different medical procedures such as treatments and surgeries (given also the deductible level or rate). Consumers may stumble in their decision process while studying health insurance plans as well as while evaluating them.

  • Public HMOs (‘Kupot Holim’) in Israel offer expanded and premium health insurance plans as supplementary to what consumers are entitled to by the State Health Insurance Act. Yet in recent years insurance companies are prompting consumers to get an additional private health insurance plan from them — their argument is that following changes over the years in the HMOs’ plans and reforms by the government, those plans do not offer adequate coverage, or none at all, for more expensive treatments and surgeries. The coverage of private insurance plans is indeed more generous, but so are the much higher premiums , affordable to many only if paid for by the employer.

In addressing other aspects of healthcare, Handel and Schwartzstein raise the issue of consumer preference for a branded medication (non-prescription) over an equivalent and less costly generic or store-branded medication (e.g., buying Advil rather than a store-branded medication that contains the same active ingredient [ibuprofen] for pain relief as in Advil). Another vital issue concerns the tendency of patients to underweight the benefits of treatment by medications prescribed to them, and consequently do not take up medications satisfactorily as instructed to them by their physicians (e.g., patients with a heart condition, especially after a heart attack, who do not adhere as required to the medication regime administered to them).

Customers repeatedly get into feuds with their telecom service providers — mobile and landline phone communication , TV and Internet. Customers of mobile communications (‘cellular’), for example, often complain that the service plan they  had agreed to did not match their actual usage patterns or they did not understand properly the terms of the service contract they signed to. As a result, they have to pay excessive charges (e.g., for minutes beyond quota), or they are paying superfluous fixed costs.

With the advancement of technology the structure of mobile service plans has changed several times in the past twenty years. Mobile telecom companies today usually offer ‘global’ plans for smartphones that include first of all larger volumes of data (5GB, 10GB, 15GB etc.), and then practically an infinite or outright unlimited use of outgoing talking minutes and SMSs. While appealing at first, customers end up paying a fixed inclusive monthly payment that is too high relative to the traffic volume they actually make use of. On the one hand customers refrain from keeping track of their usage patterns because it is costly (a friction). On the other hand, customers fail in estimating their actual usage needs that will match the plan assigned to them (a mental gap). In fact, information on actual usage volumes is more available now (e.g., on invoices) but is not always easily accessible (e.g., more detailed usage patterns). It should be noted, however, that companies are not quick to replace a plan, not to mention voluntarily notifying customers of a mismatch that calls for upgrading or downgrading the plan.

A final example is dedicated here to housing compounds of assisted living for seniors. As people enter their retirement years (e.g., past 70) they may look for comfortable accommodation that will relieve them from the worries and troubles of maintaining their home apartment or house and will also provide them a safe and supportive environment. Housing compounds of assisted living offer residence units, usually of one or two rooms of moderate space, with an envelope of services: maintenance, medical supervision and aid, social and recreational activities (e.g., sports, games, course lectures on various topics). The terms for entering into assisted living housing can be nevertheless consequential and demanding. The costs involve mainly a leasing payment for the chosen residence and monthly maintenance fee payments.

Making the decision can be stressing and confusing. First, many elderly people cannot afford taking residence in such housing projects without selling their current home or possibly renting it (e.g., to cover a loan). In addition the value of the residence is depreciated over the years. Second, the maintenance fee is usually much higher than normal costs of living at home. Hence residents may need generous savings plus rental income in order to finance the luxury and comfort of assisted living. Except for the frictions that are likely to occur while looking for an appropriate and affordable housing compound, the prospect residents are highly likely to be affected by mental gaps in correctly understanding the consequences of moving into assisted living (and even their adult children may find the decision task challenging).

Methods of intervention from different approaches attempt to lead consumers to make decisions that better match their needs and provide them greater benefits or value. Handel and Schwartzstein distinguish between allocation policies that aim to direct or guide consumers to a recommended choice without looking into reasons or sources of the misinformed decisions (e.g., nudging techniques), and mechanism policies that attempt to resolve a misguided or misinformed choice decision by tackling a specific reason causing it, such as originating from a mechanism of friction or mental gap. From a perspective of welfare economics, the goal of an intervention policy of either type is to narrow down a wedge between the value consumers obtain from actual choices subject to frictions and mental gaps, and the value obtainable from a choice conditional on being free of frictions and mental gaps (i.e., assuming a rational decision). (Technical note: The wedge is depicted as a gap in value between a ‘demand curve’ and a ‘welfare curve’, respectively.)

Policies and methods of either approach have their advantages and disadvantages. An allocation policy has a potential for greater impact, that is, it can get farther in closing the welfare wedge.  Yet, it may be too blunt and excessive: while creating a welfare gain for some consumers, it may produce an undesirable welfare loss to consumers for whom the intervention is unfitting. Without knowing the source of error consumers make, it is argued that a nudging-type method (e.g., simplifying the structure of information display of options) could be insufficient or inappropriate to fix the real consumer mistake. A fault of allocation policies could particularly be, according to the authors, that they ignore heterogeneity in consumer preferences. Furthermore, and perhaps as a consequence, such policies overlook the presence of informed consumers who may contribute by leading to the introduction of far better products at lower prices.

Mechanism policies can in principle be more precise and effective while targeting specific causes of consumers’ mistakes, and hence correcting the costs of misinformed decisions without generating unnecessary losses to some of them. The impact could be more limited in magnitude, yet it would be measured. But achieving this outcome in practice, the authors acknowledge, can be difficult and complicated, requiring the application of some costly research methods or complex modelling approaches. They suggest that “[as] data depth and scope improve, empirically entangling mechanisms in a given context will become increasingly viable”.

The analysis by Handel and Schwarztsein of the effects of intervention policies — mechanism versus allocation — could come as too theoretical, building on familiar concepts of economic theory and models, furthermore being difficult and complicated to implement. Importantly, however, the authors open up a door for us to a wider view on sources of mistakes consumers make in decision-making and the differences between approaches aimed at improving the outcomes of their decisions. First, they clarify a distinction between mechanisms of frictions and mental gaps. Second, they contrast allocation policies (e.g., nudging) versus mechanism policies which they advocate. Third, to those less accustomed to the concepts of economic analysis, they demonstrate their ideas with practical real-world examples. Handel and Scwharzstein present a perspective well deserving to learn from.

Ron Ventura, Ph.D. (Marketing)

Reference:

Frictions or Mental Gaps: What’s Behind the Information We (Don’t) Use and When Do We Care?; Benjamin Handel and Joshua Schwartzsetein, 2018; Journal of Economic Perspectives, Vol. 32 (1 – Winter), pp. 155-178. (doi: 10.1257 / jep.32.1.155)