Customer value in commercial experiences : Expecting the unexpected

Abstract: To an ever greater extent, customers desire experiences that are highly emotional, personally designed and memorable. Today’s customer has an increasing need to be entertained and often searches for pleasurable offerings of hedonic value. Many academics also argue that commercial experiences deliver a higher customer value than goods and services. More research regarding the character of the commercial experience is needed to understand the needs of the customer and what creates value to the customer. However the existing tools and methods for measuring customer value and customer satisfaction seldom contain the elements pointed out as important to customers in a commercial experience. Is it enough to focus on values, methods and tools developed within for instance Total Quality Management (TQM) or is there a need for further development to include the offering of a commercial experience? The overall purpose of this thesis has been to explore the field of commercial experiences and establish new knowledge on how customer value is created when delivering commercial experiences. Within the overall purpose the research also intended to contribute to the area of quality development. In order to fulfill the overall purpose three research questions were asked and three case studies and one validation study were conducted. In the first case study, focus was on exploring the commercial experience sector and searching for best practices as regards how to create value to the customer. One organization was studied and empirical data was collected by site visit, direct observation, participant observation, open seminars, follow-up interview questions and documentation. In the second case study the aim was on how organizations were working to create customer value in commercial experiences. Empirical data was collected at eight organizations where top managers were interviewed. In the third study the aim was to develop a method or tool to measure customer value in a commercial experience. A validation study and a case study were conducted. In the validation study a questionnaire was developed as a measuring tool for commercial experiences and later tested on customers in the third and last case study. The findings in the three case studies presented in this thesis contribute to expanding earlier research concerning commercial experiences and how customer value is created when delivering them. From the findings of research the commercial experience is defined as “a memorable event that the customer is willing to pay for” and identified as a unique business offering providing hedonic customer value. Further the findings describe the commercial experience by three vital factors: strong engagement, highly emotional and being memorable. To additionally describe the characterizing elements of the commercial experience, the research identified these factors as important to customers: having fun, novelty, surprise, learning, a challenge, co-creation, the unexpected, storytelling, being in control, the venue for the experience (or the room of the experience), personal contact with staff and emotions creating strong engagement. Using the theory of attractive quality by Kano is suggested as one way to recognize elements of high customer value and to identify and deliver the unexpected, novelty and surprise the customers. Further findings of the research revealed that existing tools and methods developed for measuring customer value and satisfaction do not sufficiently consider or measure the effect of customer emotions or the characterizing elements of the commercial experience. As a consequence, a questionnaire was developed and tested to identify and measure elements of value to customers in a commercial experience. From the results, a new instrument for measuring variables of value in a commercial experience is proposed. One of the conclusions is that a specific tool for measuring customer value in commercial experiences is both required and needed. It was also concluded that there is a shortage of well-known and applied methods for measuring customer value in commercial experiences and that further research of this area is needed. The research presented in this thesis also proves that successful organizations delivering commercial experiences have a strong organizational culture built on core values. The conclusion was that working according to the core values of TQM is also a successful approach for these organizations, even though this does not seem to be enough. The characterizing element “co-creating” the experience between the customer and the provider was identified as a vital factor of business success. Giving the customer the power to affect the outcome within certain limitations and an opportunity to enhance the customer value meant that the experience becomes more personal and delivers a higher customer value than other offerings. Further identified ways of working to enhance customer value in the offering were: to recruit and select co-workers not only on competence and skills but also based on the core values; to stimulate creative thinking among co-workers and to further enhance the offering with storytelling and theming. These ways of working were categorized as specific and more unique or necessary in the experience industry and can therefore be vital in the competition between different organizations to deliver superior customer value.