Customer Loyalty Programs in the USA and Canada

The two briefly overviewed brand equity models reveal that Keller’s CBBE model (figure 4) is made in light of Aaker’s brand equity model (figure 3) and therefore, both the models share some common premises. Even though Aaker’s model gives a good overview on the sources of brand equity, Keller’s CBBE model is more detail oriented and presents it in four vertical sequential steps in a form of a pyramid. Furthermore, Keller (2008) argued the requirements of lower level need to be fulfilled in order to move to higher level. Focusing on simplicity, the thesis will adopt a combined conceptualization of both Aaker’s and Keller’s brand equity models. 

Customer Experience Impact on Service Brand Equity


Departing from the perspective that customer experience has a direct impact on brand equity, this section will review a related conceptual framework presented by Biedenbach & Marell (2010). It will therefore increase the understanding of increasing brand equity by means of providing positive customer experience through various touchpoints. In seeking to illustrate the impact of customer experience on the formation of brand equity, Biedenbach & Marell (2010) have developed a Hierarchical Customer Experience–Brand Equity Model (figure 5), which takes the combined perspective of Aaker and Keller’s brand equity models as explained in the previous section. Nevertheless, important to note that this conceptual model is based on B2B service setting, is based on two interrelated principles. First of all, the authors illustrate that customer experience has a direct positive effect on all four dimensions of brand equity such as brand awareness, brand associations, perceived quality and brand loyalty (shown in bold-line). Secondly, the indirect impact takes place on overall brand equity following the hierarchical manner (shown in dotted-line). 

The fundamental premise of this theory is that the direct interactions between customers and service providers act as the basis for the formation of brand equity.

 


Putting such emphasis indeed provides good insights on the significance of direct customer experience as a means to influence on creating and sustaining brand equity. A single touchpoint can often belong to more than one place on the wheel (Davis & Dunn, 2002), and the direct interactions between customers and service employees might take place in all three phases of touchpoints wheel. However, it needs to be remembered that customer experience is a holistic concept and thus include other indirect forms of influence e.g. word of mouth, corporate website which typically takes place on pre-purchase stage. As such, it can be assumed the model presented by Biedenbach & Marell (2010), does not explicitly consider the whole touchpoints wheel in defining customer experience. Indeed, this can be regarded as a limitation of the model, which to some extent, limits its applicability to a broader perspective, where pre-purchase touchpoints play a vital role in influencing the total customer experience and subsequently the brand loyalty and brand equity. In conclusion, it can be stated that although Biedenbach & Marell (2010) present good insights on direct customer-employee interactions in increasing brand equity, they do not relate indirect form of customer experience. With the purpose of overcoming the above discussed limitations, a new framework will be presented in the following section, providing a holistic approach to explain the interrelationships of total customer experience and brand equity.

Integrating Customer Experience Touchpoints Wheel with Brand Equity


As discussed in above, the existing brand equity literatures do not relate the holistic view of customer experience in increasing brand equity. Having identified the gap, an integrated framework is presented below explaining the influence of customer touchpoints wheel in increasing brand equity. Having considering all these facts, this thesis holds the view that whether or not to include direct and indirect customer experiences is somewhat an insignificant argument. As such, the paper place importance on the whole touchpoints wheel. Nevertheless, one might argue that not all touchpoints are important for a company. Identifying the key touchpoints is a matter of another discussion, which will take part in a later section (2.4.3.3). Which means, by adopting Keller’s sequential manner of increasing brand equity, the thesis will use Aaker’s mentioned sources of brand equity as: brand awareness → brand associations → perceived quality → brand loyalty. Based on this statement, the following section will analyze and establish the importance and impact of customer experience on building service brand equity. In other words, the interaction between customer and service provider results in brand awareness as being the first, which establish necessary conditions for brand associations in customers’ memory, and thus the chain of effect, goes on as: customer experience → brand awareness → brand associations → perceived quality → brand loyalty.

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