What is customer experience management?

If any executives needed more proof that enhancing customer experience should be at the top of their to-do list in 2022, a quick chat with Earl Sasser would do the trick. Something of a legend at the Harvard Business School, the Baker Foundation Professor is an expert on the business of doing business and has written countless books and journal articles on subjects such as the value profit chain, service management and leadership.
What is customer experience management? | Probe CX

However, it is a customer retention study Prof Sasser conducted with global management consulting firm Bain & Company that will resonate most with organisations weighing up their next customer experience play. Exploring the theory that one cannot overestimate the importance of loyal customers, his research found that even a 5% increase in customer retention can lead to an increase in profits of more than 25%.

Reasons for the profit boost include that people are likely to spend more money with companies they have already done business with and repeat customers are more likely to refer businesses to others. The cost of acquiring new consumers is also high, with research finding that marketing is increasingly being weighted towards retaining existing customers as businesses realise it is more profitable in the long run to keep an existing shopper happy than trying to recruit an unknown one.

So, with happy customers more likely to transact more often, spend more when they do and better promote a company’s products and services, it makes sense that organisations should be doing all they can to find out how their customers feel about them – and that is where Customer Experience Management (CEM) comes into play.

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What is Customer Experience Management?

Before diving into the meaning of CEM, let’s remind ourselves that customer experience (CX) is defined as a customer’s perceptions – both conscious and subconscious – of their relationship with a brand based on all their interactions with it during the customer life cycle. Every online visit, every service call, every advertisement they encounter combine to create their CX and the more positive one is, the more likely a person is to spend more dollars and more often.

Given that, organisations are increasingly committed to delivering a better customer experience and this is where CEM comes into play. As defined by research and advisory company Gartner: “Customer experience management is the discipline of understanding customers and deploying strategic plans that enable cross-functional efforts and customer-centric culture to improve satisfaction, loyalty and advocacy.” Of course, this is a high-end definition that may resonate more in a boardroom than an office floor. When it comes to a more practical level, CEM is best defined as the various processes a company uses to track, oversee and organize every interaction between a customer and an organisation during the customer lifecycle.

It is also important to note that CEM is not CRM – customer relationship management. While CRM software focuses directly on sales and outreach to customers, customer experience management is a strategic play that puts customers at the centre of marketing, sales and customer support in an effort to increase brand loyalty and repeat business. CEM is more about customer sentiment and adjusting related factors to reinforce positive perceptions and correct negative ones.

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Why is CEM important?

Implementing a quality CEM strategy can deliver various benefits.

  • Help increase customer retention, which costs less than acquiring new customers
  • Secure customer feedback that helps inspire improved customer experiences
  • Strengthen brand preference through differentiated experiences
  • Nurture happier employees, who project a better brand experience to customers
  • Inspire returning customers to become loyal brand advocates
  • Gain information about competitors via customer sentiment surveys
  • Lower costs by reducing customer churn.

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Creating a successful CEM strategy

Customer experience management requires companies to have an intimate knowledge of their customers, which can be achieved via several key steps.

  • Study your customer: understanding customers’ needs and behaviours allows companies to better appreciate how to target them. Developing customer profiles with information such as ages, interests and spending habits means businesses can implement customer segmentation, which in turn leads to more targeted marketing and interactions.

  • Develop a customer journey map: while many organisations are good at gathering data about their customers, a customer journey map helps communicate their experiences and frustrations. Using storytelling and visuals, the map showcases the perspective of the customer and helps businesses better understand and address their needs and pain points. It is about identifying touchpoints and anticipating how customers will interact with one’s products or services.

  • Tap into emotions: it is not enough for an organisation to simply offer products and services. The best customer/business relationships are those based on an emotional connection that stems from creating a brand personality that nurtures such sentiments. The more an organisation can evoke positive emotions within a customer, the more likely that customer is to keep returning.

  • Measure customer feedback: the hard work does not end with a sale. Collecting and analysing customer satisfaction in real-time is pivotal as it can help track their perceptions, enable improved systems and feed into the ongoing development and enhancement of a customer experience management strategy.

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CEM in Practice

As companies increasingly realise the pivotal role CX has to play in driving profit growth, executives are investing more resources in the field of customer experience management. This includes staff or entire teams dedicated to executing the above steps, with the likes of Chief Customer Officers and Chief Experience Officers overseeing analysts and liaising with the CEM team and associated departments such as marketing, sales and IT.

In particular, CEM executives and teams can enhance CX via techniques such as:

  • Content generation: with the modern consumer at risk of being overwhelmed by content, it has never been more important for brands to deliver well-planned and executed research, marketing pieces and sales content to ensure cut-through. Personalised customer-facing content is also crucial for improving relevancy and customer engagement, with individualized emails, text messages and web content all having a role to play.

  • Customer differentiation: a one-size-all-approach is a one-way ticket to CX failure. Different customer groups have different wants and needs, which is why brands need to create an engaging customer experience by developing customer profiles and then using them to create sub-groups that can be marketed to and catered for like the unique collectives they are.

  • Loyalty programs: the battle to retain customers starts with making them feel special and customer loyalty programs are a simple but effective way of doing that. Frequent customers not only want but deserve to feel valued, with well-executed programs that deliver savings and bonuses not only inspiring them to keep coming back but spending a little more along the way.

  • Touchpoint evaluation: knowing where customers make their purchasing decisions is vitally important for businesses that want to refine their customer experience, as is identifying when they are most likely to cease their customer journey in favour of a rival’s offerings. Evaluating touchpoints helps to achieve these goals and put the power that comes with knowledge in the hands of CEM teams.

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Customer Experience Management software

Befitting a world that is powered by digital innovation, a CEM strategy that fails to incorporate complementary technology is a CEM strategy destined to fail. There are a range of customer experience management platforms that can manage CX from end to end, with major components including:

  • CRM: CRM software is the backbone of Customer Relationship Management and allows sales and marketing agents to access and manage customer information. By pulling data from a variety of channels and touchpoints, it ensures staff have immediate access to crucial data when dealing with customers and prevents the latter from the frustration of needing to repeat information.

  • Survey engine: tracking feedback across all customers is an essential part of any CEM strategy and this is typically achieved by using a survey engine, which offers customer surveys at various touchpoints and pulls the responses in the CEM platform. From web and SMS surveys to Interactive Voice Response (IVR) and live chat modules, CEM teams can gather the feedback they need to offer a better customer experience.

  • CX dashboard: customisable, role-based dashboards are a great way of providing a single and easily digestible view of CX feedback and data to the people who need to see it. Not everyone in an organisation needs to see the same data, which is why advanced dashboard systems allows CEM teams to control who sees what, be it an executive with a strong interest in the latest NPS scores or a retail agent who will benefit from real-time customer feedback.

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The days of leaving customer experience to chance are over. It is all about improving the quality and consistency of CX that turns customers into advocates, with the development and deployment of a well-honed customer experience management strategy the key to better understanding the people you serve and improving the journey they take.

Integrating digital interventions and solutions into the customer journey can boost overall customer experience. Just ask one of Australia’s leading full-service supermarkets, which streamlined its eCommerce-related contact centre processes to achieve a 41% decrease in effort-to-service customer interactions and adopted tailored process solutions to improve CX.

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