Application of the Design Thinking Method in Customer Experience Management
Department of Market and Consumption, Faculty of Economics, University of Economics in Katowice
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Department of Management, Faculty of Applied Sciences, WSB University
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The aim of this paper is to conceptualize Design Thinking and customer experience management (CEM), to situate the use of the Design Thinking method in customer experience management processes and to present its practical application based on a case study from the financial services industry — the trade credit insurer, Euler Hermes Poland, Towarzystwo Ubezpieczeń S.A. This article is an attempt to identify actionable Design Thinking process elements and tools and their intersections with the components of the Customer Experience Management processes.
MINIB, 2021, Vol. 43, Issue 1
Published 30 March 2022
Application of the Design Thinking Method in Customer Experience Management
Although the brand management process is determined by a company’s business activity, the final image of a brand is formed in the mind of a customer (Pitcher, 1985; Brozowska-Woś, 2020). Therefore, it is important to link the category of ‘brand’ with the concept of customer perceived value, which is a nodal marketing category. Contemporary customers look for a dimension of value that will take into account more of their expectations because they are increasingly better informed, know their own needs and, most importantly, are aware of their growing importance, and, at the same time, expect a partner-like, individualized relationship from businesses (Drapińska, 2020). Therefore, they can be described as engaged customers or value (co-)creators (Pluta-Olearnik, 2019), who participate in various forms of non-transactional activity in a relation with the enterprise. They act as prosumers.
The main goal of this article is to identify the brand as a value driver for customer perceived value. The sub-goals are to define two relationships: (1) between the brand and customer engagement, and (2) between customer perceived value and customer engagement.
In the article, a value driver is understood as a product, process or any other result of the company’s business activity that satisfies identified or unconscious customer needs. It is also worth noting that we are inclined to a behavioral understanding of customer engagement, while perceiving value as a customer perceived value, also referred to in the literature as a customer value, perceived or expected (Sojkin, 2015). ‘Identification’ is understood as a means of causing a certain cognitive effect, ‘establishing the identity of the phenomenon or object under investigation on the basis of its most characteristic features’ (Szarucki & Bugaj, 2016), while the concept of relation is treated as ‘a connection, relationship or dependence between objects, concepts, phenomena and quantities’ (New Dictionary of Correct Polish, 1999).
Brand as a customer perceived value driver
There is no commonly accepted definition of the term ‘brand’ in the literature on the subject. It has several levels of meaning. Firstly, a brand may be a name, a term, a symbol, an inscription, a pattern, or any combination thereof, a color composition, melody, or an aggregation of all these elements, which are used to distinguish a specific product from competing products (Altkorn, 2001). Secondly, a brand name is treated as an element that makes it possible to recognize the company’s product and a certain level of quality (de Chernatony, McWilliam, 1989). In other words, a brand is a form of guarantee statement, an assurance of consistent quality of the product. Moreover, in the literature it is treated as a factor that determines the perceived value (Barari et al., 2021). Finally, a brand defines specific intangible assets, and, in this aspect, it is a value judgment, so it has a specific personality, hence it goes beyond the dimension of functionality and usability (de Chernatony, McWilliam, 1989). As Kall concludes (2001), in the United States, brands are limited to the added values that exist beyond the physical form of the offer.
The values and emotions symbolized by an organization become important elements in distinguishing a given company or its products (Maciejewski, Mokrysz & Wróblewski, 2020). A brand gives individual features to a specific product, generates trust, and reduces sensitivity to business cycles (Rytel, 2008). When analyzing brand-related benefits, it is worth adopting two perspectives, i.e., the company’s and the customer’s, as presented below (Tab. 1).
An analysis of the table shows that the brand is a benefit not only for the company, but also for customers. The brand of a given company is an intangible resource and, at the same time, a component of a product. Company brand creation is one of the main strategic investment decisions that result in an increase in goodwill (Rytel, 2008; Howaniec, 2008) and a competitive advantage (Pabian, 2020). The subjectively perceived value of a company or product is a result of how that company’s brand is perceived by its customers (Dolińska-Weryńska, 2018). A brand can be defined as the feelings and experiences of those who use it (Ogilvy, 1985).
When treating a brand as a perceived value driver, terms that are involved in this topic should be defined: brand strength, brand value, brand equity, consumer-based brand equity, brand awareness, brand reputation, brand identity and brand image (Tab. 2). And in this area, there are no clear definitions, as researchers often use different meanings (Polański, 2011).
When analyzing all these research categories, it is worth paying more attention to brand equity, i.e., the added value (and therefore customer perceived value) obtained by a product through the use of a trademark (Farquar, 1989). This value can be defined in three ways (Polański, 2011): (1) from the point of view of an enterprise: it involves increasing the competitiveness of an organization, which is related, inter alia, to facilitating the launch of new products and licensing; (2) from the point of view of distribution channels: brand equity results in a higher level of sales compared to other products in a given category; (3) from the customer’s point of view: brand equity involves a positive attitude towards a specific product. It aims, inter alia, to reduce the risk related to the purchase decision and provide the customer with a positive experience when using a product. This is related to how a brand is interpreted as a risk reducer. A brand reduces the risk perceived by a customer and makes customers aware that a specific product represents a value presumed for them (Jones & Nonewac, 2013).
The concept of ‘brand equity’ is defined as the difference between marketing effects and the effects that would accumulate if the product did not have the same brand (Alnsour & Subbah, 2018). Five components (dimensions) of brand equity are highlighted in the literature on the subject (Aaker, 1991): (1) brand loyalty, (2) brand awareness, (3) perceived quality, (4) brand association, (5) other proprietary brand assets (i.e., patents, trademarks, relationships taking place in distribution channels). Importantly, the first four components of brand equity create the so-called consumer-based brand equity, while the last refers to the enterprise (Schivinski & Łukasik, 2017).
It is extremely important to distinguish brand value from brand equity. It should be assumed that brand equity is responsible for what a brand means to customer, while brand value is related to what that brand means to a specific organization. Many researchers do not distinguish these two, which unfortunately does not help in understanding the scientific discourse (Raggio & Leone, 2007). Brand value is mainly related to the financial sphere. It can be discussed when trying to evaluate a brand: it is a financial value that depends on the current and expected strength of the brand and the financial effect of the management board’s ability to use this strength strategically (Kurzyk, 2014). On the other hand, brand equity should be placed in the marketing sphere of an enterprise (Dębski, 2009). As the definition itself indicates, brand equity reduces or increases the value of the product with this brand. It is also symptomatic that some researchers (Leuthesser, Kohli & Harich, 1995) define brand equity as simply a perceived value obtained in comparison to a non-branded product.
Customer associations with a brand involve psychological relationships with a specific brand that are divided into three approaches in the literature (Aaker, 1996): (1) brand as a product (value proposition); (2) brand as a person (brand personality); (3) brand as an organization (associations with the enterprise). The first approach mainly involves functional benefits. The second perspective involves strictly emotional benefits, while the third can be seen when the company’s activity is seen in the broader environment and may be related to CSR activities, for example. This division is crucial in our opinion when analyzing individual dimensions of value. Associations with the product involve the functional dimension of the product (e.g., the location of the trade format), while the approach to the brand personality is more related to the hedonistic dimension, and the perspective of a brand as an organization involves the perception of the company’s activities in the field of the so-called corporate brand.
The concept of customer perceived value was introduced into economics by Drucker in the 1950s (Drucker, 2007), and was developed by Porter (1985). As Khalifa (2004) claims, customer perceived value is a category that is often misused in the social sciences, and in particular in the economic sciences. This is due to the characteristics of the construct, because customer perceived value is treated as personal (i.e., the perception is different from customer to customer) and is truly situation-related in that it depends on the situational context. The consequence of this is a large number of construct definitions (Tab. 3).
The definitions of customer perceived value can be divided into four groups. In the first, the attributes of a product and service are emphasized, in the second, the relationship between the enterprise and the customer, in the third, value is perceived as a result of benefits and costs perceived by the recipient, whereas in the fourth, the value is recognized in the context of the goals that the recipient achieves as a result of purchase or use of a product.
Value creation with an enterprise improves brand image not only among the cooperating process participants, but also among less engaged customers. Therefore, the process of value creation is antecedent to brand image creation. It is also worth referring to the research by Ind, Iglesias and Schulz (2013). According to these researchers, customers who participate in value co-creation strongly associate with a specific brand. Participants like these are often more are inclined to express positive opinions about a particular company, thus promoting its brand (Dijk, Antonides & Schillewaert, 2014). Therefore, customer engagement is an inherent element of this process. Brands with a strong capital equity generate greater commitment, which in turn influences the motivation for customer engagement (van Doorn et al., 2010). In the literature on the subject, statements can be found that brand equity is a collection of judgments, attitudes, and customers’ behaviors. Thus, this construct is directly related to value creation by customers (Polański, 2010).
Relationships Between Customer
Engagement and a Brand Customer engagement (CE) has become one of the most thoroughly exploited categories in the theory of marketing management (Vohra & Bhardwaj, 2019; Kucia, 2018; Krowicki, 2022). However, it is not a homogeneous concept — its meaning is far from being unambiguous, which raises controversy (Chan, Zheng, Cheung, Lee & Lee, 2014). Researchers agree that the customer’s power is growing. Customers are increasingly interested in creating value both for theirselves and for others. Free access to information and to the ways it is spread through virtual customer communities have empowered the customer in relation to the enterprise. The contemporary customer has become more educated, aware of their role and, as a result, encounters the company’s employees or other stakeholders more frequently, which makes them more engaged. From a passive recipient of marketing messages, the customer has transformed into a co-creator of communication.
CE is defined in various ways (Tab. 4) and can be considered from three perspectives: (1) three-dimensional, cognitive-emotional-behavioral (Patterson, 2006; Gołąb-Andrzejak, 2021), (2) two-dimensional, cognitive-emotional (Bowden, 2009) and (3) one-dimensional, mainly behavioral (Żyminkowska, 2018a; Maciejewski & Krowicki, 2021). The latter perspective treats CE as customer behavior towards a brand or company that is not related to purchasing and results from motivational factors (van Doorn et al., 2010). The authors of the present article stand for a narrow behavioral approach to customer engagement. This behavioral interpretation of CE does not overlap with the constructs of affective and cognitive commitment or customer involvement (Harmeling, Moffett, Arnold, & Carlson, 2017). Importantly, the narrow, non-transactional approach to CE does not overlap with the behavioral loyalty approach — the non-transactional nature of the customer engagement construct differs from purchasing regularity. In our view, customers’ transactional behavior should be eliminated from the conceptual frames of the CEB concept. Then, this approach does not coincide with the concept of relations with a customer and thus, it only applies to intangible sources of customer value (Żyminkowska et al., 2018a).
Customer engagement is related to the concept of customer perceived value. According to the theory of consumption values (Sheth, Newman, & Gross, 1991; Grzegorczyk, 2019) and the concept of customer value (Holbrook, 2006), the customer’s motivation to engage depends on the values they expect to obtain. This is confirmed by Vivek et al. (2012). According to these researchers, value is both an antecedent and a consequence of customer engagement (Vivek, Beatty, & Morgan, 2012). Maslowska, Malthouse and Collinger (2016) show that engagement affects customer perceived value, and this is also confirmed by Sobocińska (2015). Hollebeek (2013) also notes that customer engagement generates customer perceived value: therefore, CE is a perceived value driver. Interestingly, Hollebeek analyzed brands with both a hedonistic and a utilitarian orientation, and it turned out that in the case of both types of brands, CE is a perceived value generator. After testing the model of customer engagement/value interface, she showed that in the case of hedonistic brands, customer engagement affects the customer perceived value more. In Polish research, the analysis by Witczak (2013) is noteworthy. In his view, user involvement in the brand profile can be used in building brand identity and, as a result, it can increase its value.
The study by Dong, Evans, and Zou (2008) on customer participation in the repair service showed that customer perceived value leads to customer engagement, whereas a subsequent analysis by Carlson, Rahman, Taylor, and Voola (2019) confirmed that value in the brand page experience (VIBE) contributes to customer engagement and also confirmed that various forms of CE are stimulated by this value. The research by Brzozowska-Woś (2020) also indicated that the perceived value of a brand has a positive impact on customer engagement, as did the analysis by Ngo, Nguyen and Kang (2019) conducted in Vietnamese restaurants. It is also worth noting that, according to Gupta and Pandey (2021), CPV (customer perceived value) is a factor that precedes customer engagement in the retail area. Barari, Ross, Thaichon, and Surachartkumtonkun (2021) see perceived value in a similar way. The concept according to which value is the antecedent of customer engagement is associated with the fact that customers are engaged by a specific value (benefit) that they expect to get through that engagement. Jaakkola and Alexander’s offline research conducted in an offline real environment is extremely interesting. It shows that customer engagement behavior can generate a wide range of benefits for a company, customer(s) and other stakeholders. It is also worth observing that the researchers noticed that the nature of the customer engagement process is cyclical. According to these researchers, the motives, manifestations and consequences of CE are repetitive, because the positive antecedents of customer engagement motivate them to stay active, whereas the company is motivated to support this kind of behavior. This is confirmed by the analyses by Żyminkowska (2018b), who, based on means-ends models, states that the benefits of CE (expected effects of customer engagement) can be treated both as consequences and motivating factors of CE.
To sum up, it should be clearly stated that the concepts of customer perceived value and customer engagement are closely related to each other. In the literature on the subject, various formulations of CE are presented where customer perceived value is treated as a motive of engagement or as an effect.
When analyzing model views of customer engagement and brand, van Doorn et al.’s (2010) concept is worth looking at, according to which brand characteristics and company image are a prerequisite for CE, while brand commitment is an important factor from the customer’s perspective. The issue of brand is also raised by Żyminkowska and Żyminkowski (2016). In their model, the attitude towards the brand is treated as an antecedent of customer engagement.
In the literature on the subject, the influence of brand equity on the online customer engagement in relation to a brand has already been shown. In other words, the more brand equity is perceived as higher, the more actively the customer reads, comments, shares and creates brand-related content (Schivinski & Łukasik, 2017). Research also shows that a high brand reputation increases recipient interest in the marketing communication of this brand and makes reception of such a message more positive (Brzozowska-Woś, 2020).
When identifying the relationship between CE and brand, it is impossible not to pay attention to the concept of customer engagement in its relationship with the brand (CBE). Therefore, interactions with the brand are subsumed in customer engagement. This category is precisely defined by Martí et al. (2014), while defining CBE as the ‘customer’s mental state shaped as a result of interaction with a specific brand’. According to Algesheimer, Borle, Dholakia, and Singh (2010), CBE is ‘a mechanism that lets you strengthen a customer’s relationship with a brand’, whereas Hollebeek (2011) defines this construct as ‘a level of customer engagement triggered by a brand as well as the customer attitude and mood formed by the customer’s direct and indirect contacts with a brand.’ These relationships can have various dimensions: cognitive, affective and/or behavioral (Kieżel & Wiechoczek, 2016). In our view, the behavioral interpretation is also the most appropriate in the case of this construct. CBE is nothing but a type of customer engagement, where the brand is the subject of interest. The psychological approach to CBE will introduce chaos in the interpretation. Brand engagement is influenced by brand activities, brand quality and brand value, brand innovation, brand responsiveness and delivering the brand promise (Hollebeek & Chen, 2014).
The brand helps customers to build their own identity, and the show effect and the need to belong are crucial in this process. This is confirmed by the research by Muntinga, Moorman, and Smit (2011). According to these researchers, it is the personal identity that is the factor that motivates customers to contribute content and create content in the online environment. It is also worth paying attention to the research by Bartkowiak and Michalak (2020), which showed that recognition and selfesteem are among the motives of customer engagement. Shah (2004) also draws attention to how important it is to build and maintain an individual’s reputation and strengthen identity and self-image in the CE process.
Conclusions and recommendations
Brand is a value driver. Creating a specific customer perceived value is closely related to the stage of its communication. With that, the brand image is created. Furthermore, it can be said that a brand can have a meaning like value because it speaks of values delivered to a customer.
Brand exists in the area of communication (Polański, 2010), hence it can be assumed that communicating the value is the key stage in identifying the relationship between the concept of customer perceived value and the brand. This phase is one of the elements of the value creation process aimed at positioning, and thus shaping the brand image.
On the other hand, customer engagement is becoming progressively more important in the effective and efficient management of this communication. In the marketing value network, the customer becomes the sender of messages, engaging in various forms of customer engagement, i.e., word of mouth marketing (WOM), participation in marketing events, reactions in social media, or content contributions in a virtual environment. By co-creating value, positive customer engagement can strengthen the brand’s image.
An analysis of the literature on the subject allows us to state that in some perspectives brand image is close to customer perceived value, while brand identity is a construct related to the value proposition. Brand identity refers to a set of features and benefits that the product is to provide to the customer, while brand image is the result of the constructed identity. Therefore, it is worth noting that this relationship resembles the relationship presented in the literature on the subject between two perspectives of value for the customer, i.e., customer value proposition and customer perceived value. The customer perceived value is the actual result a company developing a set of distinguishing attributes (Landroguez, Castro, & Cepeda-Carrión, 2013).
Incorporation of brands into the process of building one’s own identity is also a specific feature of the contemporary customer. Brand personalization allows a customer to emphasize their place in the social hierarchy (Mazurek-Łopacińska, 2021). In the postmodern era, consumption is more important than production, while value is not only a feature of a product, but also becomes a feature of a created image (Maciejewski, 2014). Brand is a condition of customer engagement. It is of great importance in creating your own image. By engaging in contact with a brand and its community, a desire to present one’s individuality, unique identity and one’s own preferences is emphasized. This is also one component in a customer society that glorifies self-creation.
The company’s goal should be to manage the brand so that it confirms the customer perceived value. This is related to the aspect of risk reduction, which is extremely important in the context of a constantly increasing number of brands on the market and the crisis of confidence. Customers, who are an integral part of branding, should be part of brand management. From this perspective, a brand can be treated as a risk reducer and customer perceived value. Therefore, to build a brand so that it encourages various forms of engagement and thus creates customer perceived value is a challenge.
We are aware of the limitations of this research. The conclusions of the critical literature review should be treated as an incentive for further discussion on the relationship between the brand and customer perceived value as well as CE. In addition, it is worth looking at the issue of customer value through the prism of the company. From this perspective, it is necessary to link the issue of customer value with the construct of the value of the company, which has been described by B. Dobiegała-Korona (2014; 2015). In other words, customer value should generate value for the company. Undoubtedly, empirical research that analyses these relationships would be of great theoretical and applied value.
This research received no funds
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Michał Prorok — PhD Student at the SGH Warsaw School of Economics and Customer Experience Manager at TEB Akademia. His research interests cover customer experience and customer experience management.
Izabela Kosicka — Customer Experience Manager, passionate in creating outstanding customer experiences in all touchpoints within the financial industry (B2B, B2C). Her professional mission is to enhance constant change and professionalization of both products and services for consumers.