Brands must offer memorable experiences to customers if they want to differentiate themselves from their competitors.
Our findings in the Journal of Business Research demonstrate how positive brand experiences come with many benefits: they increase customer satisfaction, boost affective commitment and enhance the quality of the relationship between customers and brands. They also strengthen brand equity – that is, the overall perception customers have of a brand’s commercial value.
Building favourable brand experiences is even more crucial when selling services. Compared to products, services are intangible and heterogeneous, so offering memorable brand experiences is a more challenging task. To test our hypothesis, we analysed insights from more than 1,700 customers in one of the world’s key service-driven sectors: the banking industry.
Positive brand experiences increase customer satisfaction
We chose this industry because of its undermined reputation after the financial crisis – a reality that has forced banks to provide better customer experiences to regain trust.
Sensory brand experiences
Brand experiences can be sensory, affective, intellectual and behavioural. However, we suggest that sensory experiences are particularly relevant in firms offering services to their customers, especially in the banking industry.
Have you recently walked into a bank and noticed a pleasant smell or encountered smart designs? As part of their renewed brand strategy, many banks are introducing superior sensory brand experiences in their branches to connect with their customers’ senses.
For example, Santander Bank is opening new offices with an innovative design that includes smart lightning and visual and auditory systems to improve the customer’s experience and comfort. Others, including Lloyds Bank, National Australia Bank and China Merchants Bank, are developing their own fragrances and perfumes to enhance their customers’ sensory experiences.
These sensory experiences have proven to be very effective at improving brand equity in areas such as catering services and the airline industry, but our research demonstrates that their effect, while also positive, is not as direct in the banking sector.
We show that for these sensory experiences to improve a consumer’s overall perception of a brand, two additional triggers are necessary: customer satisfaction and affective commitment.
Customer satisfaction and affective commitment
Our research shows that if brands in the banking sector want to turn sensory experiences into improved brand equity, they must develop customer satisfaction. Customer satisfaction is the holy grail of brands because engaged customers are less sensitive to price variations and isolated episodes of poor brand performance.
According to our findings, once customers are satisfied, this positive perception boosts their affective commitment to the brand. This affective closeness is a highly desired outcome for companies because when customers affectively commit to a brand, they are more likely to forgive occasional service failures and blame such lapses on external factors.
This relationship between a customer’s level of satisfaction and his affective commitment are the two key triggers that help to build brand equity.
Employees and empathy
Employees who interact with customers are the key interface for successful customer-brand interactions and can make or break the brand. In essence, when employees are empathic – when they understand customer needs and desires and deliver experiences accordingly – they can become the key driver of customer satisfaction.
When employees are empathic they can become the key driver of customer satisfaction
Our research proves a finding that may seem counterintuitive. We demonstrate that the higher the levels of empathy employees have when interacting with customers, the lower the impact of sensory brand experiences on customer satisfaction.
In other words, if brands want to boost customer satisfaction, they should remember that when employee empathy is high, sensory brand experiences become less relevant.
From the opposite perspective, when employee empathy levels are low, positive sensory brand experiences become more relevant and have a higher impact on customer satisfaction. In short, sensory experiences can help to compensate for low levels of employee empathy.
An ecosystem for sensory cues
Brands in the banking industry should leverage the potential of music and fragrances to build an ecosystem of sensory cues to create a more pleasant atmosphere and experience. These sensory cues, such as signature fragrances and music lists, should be designed in line with the brand identity and aimed at boosting brand equity.
The presence of sensory cues is important because even though employees have a crucial role in achieving higher customer satisfaction, their performance cannot be consistent across the board.
Managers should understand that designing a superior sensory brand experience can be an extremely valuable tool to compensate for the fluctuation of employee empathy levels and improve a company’s overall service levels.
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