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Pam Baker The Transition From CRM to Customer Experience Management

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By Pam Baker

Customer Experience Management (CEM or CX) can seem a bit futuristic; indeed it was portrayed in the forward-looking, sci-fi movie, Minority Report. But in reality CEM is as old as retail. The only thing that is new about CEM is that companies have renewed interest in the individuality of customers and have embraced new technologies to gauge individualism on a grand scale. This new-found interest in customers as individuals was born from necessity.

"After decades of being managed and forced to adapt to companies' internal business processes, consumers have had enough," explains Andrew Hull, director of Product Marketing at RightNow. "They are unleashing their power on the social web and it is rapidly gaining momentum."

"Businesses that ignore this and don't look beyond internally focused customer relationship management systems (CRM) to externally focused customer experience solutions (CX) will not survive," he said.

In Minority Report, talking billboards and point-of-purchase signs greeted Tom Cruise's character by name, in the store and on the sidewalk, and asked him specifically about his last purchase – in detail but conversationally. The signs and portals also offered him suggestions and waited to hear whatever Cruise wanted to say. Such glitzy displays of CEM are not yet in widespread use, but they are not far off either. The intimate customer knowledge behind such glitz, however, is already here.

Aggregating Customer Data For a Holistic View

"CEM is a 'set of applications and methods that turn visibility of each and every customer's experience over time and across all moments of interaction, into tangible business advantage,'" says Anandan Jayaraman, chief product and strategy officer at Connectiva Systems.

Intimate details and trackable data on individual customers, for the most part, already exist. However, it took the advent of CEM technologies to make that data actionable. "Too often, the datastreams that paint the total customer picture exist in silos," says Cheryl Flink, vice president of customer experience solutions for Market Force Information.

"Marketing collects satisfaction and social media data. Operations collects mystery shop data. Merchandising collects competitive pricing information," she explained. "That can create chaos with stakeholders in different silos seeing only a part of the elephant."

"Without integrating the datastreams, it's difficult to know where to focus in order to improve the experience," she said.

It is important to keep in mind that this customer data does not come solely from online information where it is easily mineable in digital form. Indeed, much of the information is gathered from customer input on voice polls and paper customer satisfaction rating forms. Some of the information is gathered from conversations between staff and customers (whether at a call center, an information desk, or a sales register). Sales history may reside in customer relationship management systems while purchase history resides in accounting systems or enterprise resource planning (ERP) applications. Still more is behavioral information that can be collected from parking lots, credit card use, or even paper or plastic bag choices. The goal is to collect as much information on every customer as is possible to ensure a better customer experience and to predict needs before the customer makes the buying decision.

"It requires the incorporation of real-time decisioning technologies that optimize outcomes for both the customer and the company during live customer interactions --across all channels: contact centers, web, social media, and brick and mortar stores," explains Jeff Gilleland, global strategist for Customer Intelligence Solutions at SAS.

"It requires technology that monitors customer behavior 24x7 to detect changes …because these behavioral triggers often signal changes in a customer's needs," he added. "Finally, it requires an institutional memory – that demonstrates to customers that the company is listening to them and that it understands their individual needs."

The Customer Experience Management Pros

Customer Experience Management goes far beyond simple customer satisfaction measurements. After all, such measurements alone are the equivalent of looking in the rear view mirror – you know what happened before but you have no idea what lies ahead. By comparison, CEM helps you track changes in a customer's life cycle and react appropriately – and profitably.

"In fact, stock analysts and traders are tracking companies with good CEM and finding that their stock performs better than others do," says Chris Cottle, vice president of Marketing at Allegiance, a provider of Voice of the Customer software.

Although CEM focuses on building a personal relationship with each customer, the effort is not a soft and fuzzy approach to doing business. "CEM can now be measured the same as accounting and financial metrics," says Cottle.

Although CEM concedes that power is in the customer's hands, it isn't about taking a knee and kissing the ring on those hands.

"I frequently observe the common reaction to this approach as 'Oh, I get it, they want me to be a doormat for the customer and simply say yes to the customers' every whim. If we give away the farm we'll be out of a job,'' says Craig Bailey, founder and president of Customer Centricity.

"CEM is about none of this. CEM is about considering the customers' perspective in everything you do and every decision you make, with the objective of ensuring a mutually profitable -- or for the not-for-profits, mutually beneficial -- relationship," he explains.

The Customer Experience Management Cons

CEM, like every technology before it, is imperfect. However, most of the cons have to do with how the organization behaves rather than how the software technology performs.

"It can be hard to walk away from looking at the world in nice compartmentalized buckets of service, sales and marketing departments," says RightNow's Andrew Hull. "In today's world, customers don't care which department they are speaking with, they want to be serviced, not managed."

Changing corporate culture – and corporate data – to make this transformation can be quite an undertaking and internal resistance can be difficult to overcome. This is no mere software upgrade.

"Customer experience management is not just repackaged CRM," says Hull. "The internal focus of CRM often left the consumer out in the cold. CX marks the shift from internally focused solutions to solutions that focus externally to deliver superior customer experiences." End

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Comments (7) — Comments for this page are closed —

Guest Marty Little
  I think this article speaks to the reasons why customer experience management will eventually morph with CRM, and not be regarded as a separate discipline. Why every analyst firm currently detaches CEM from CRM is beyond me. Maybe its a billing thing. The first generation of CRM software systems were all about managing customer data. Very inward facing and did little for customers. Now CRM software systems are better facilitating a focus on the customer. CRM apps have been/are being redesigned to empower businesses to improve the customer experience in order to cultivate loyalty and long-term profitable relationships. However, CRM systems are only part of the solution. As you point out, customers now regularly communicate over more channels so companies must capture and use customer data across channels such as phone, email, chat, social networks, online communities and more. It's not enough to be reactive with customers. Customer data must be collected, compiled, available to the right people at the right time, and used in a proactive way if organizations are to outperform their competitors.

Guest David Ritter
  I think customer experience management and social crm are the two big drivers which are advancing CRM software from operational systems to systems of intelligence and action. The prior generation of CRM software was little more than forms on a database which produced (largely underused) data repositories. Now after collecting volumes of customer data, most companies are figuring out how to use the data for competitive advantages. Figuring out how to slice and dice it, learn from it, get the learning to the right people that can make action happen. CRM is finally advancing from technology to business strategy for the masses.

Guest Bay Lee
  Good points. Retaining customers is not easy, and getting more challenging for many unprepared companies. The web has made it far easier for customers to seek out new vendors, has lowered the time and cost of switching vendors and has accelerated the commoditization of products, thereby driving down pricing. Customers can now constantly source their procurement, use automated comparative shopping engines and review candid online opinions from a vendor's customers. These buyer capabilities will only continue to grow thereby requiring vendors to find differentiation beyond their products. For many, the customer experience is the new competitive differentiation.

Guest Gustavo Rodriguez
  The whole CEM makes sense. So why do so few companies implement real CEM programs?
  Denise Denise Holland
    Good question. About 6 months ago I attended a presentation at the CRM Evolution by Bruce Tempkin, who had at that time just left Forrester where he spent 12 years researching CRM and CEM. He shared some high level research which effectively illustrated that the top obstacles to implementing a CEM program are i) other competing priorities (71%), ii) management lacks a clear CEM strategy (52%), iii) the company has conflict across internal organizations (50%), and iv) limited funding (49%).

Guest Mike Shuck
  We're about to implement a voice of the customer and CEM program. We interviewed some consultants and asked if there was a roadmap, secret sauce or set of best practices that could be referenced, but didn't get anything concrete. Do you have any suggestions?
  Denise Denise Holland
    Certainly there are best practices to learn from, and to adapt to your business and customers. At the most strategic level, I believe the 4 top critical success factors for CEM success include:
1) Committed leadership - clear vision, purpose and mission coming from the top of the company; 2) Clear customer understanding - know exactly what customers want and are willing to pay for;
3) Consistent processes and link between brand and value at every customer interaction; and
4) Strong employee engagement - unengaged staff do not create engaged customers.
 

 

Customer Experience Management

While CRM solutions focus on sales, marketing and support from the company perspective, CEM has emerged to focus on customer needs and desires. CEM software solutions integrate strategy, processes and technology to optimize each customer experience. The increased alignment delivers increased customer activity, loyalty, advocacy, referrals, revenue and customer share.

 

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Too often, the datastreams that paint the total customer picture exist in silos. Marketing collects satisfaction and social media data. Operations collects mystery shop data. Merchandising collects competitive pricing information. That can create chaos with stakeholders in different silos seeing only a part of the elephant. Without integrating the datastreams, it's difficult to know where to focus in order to improve the customer experience."

~ Cheryl Flink, Market Force Information

 

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