Today’s customers have high expectations of the experiences they receive from their interaction with the businesses they choose to deal with. This is fuelled by the wide range of choices and the volume of information available to the consumer, especially online.
Effective Customer Experience Management (CEM) aims to ensure that each touchpoint revolves around the customer and what they want, creating a positive customer experience. CEM is often misinterpreted as Customer Service; while customer service is a component of the overall customer experience, it is, generally, a reactive process put in place predominantly to manage satisfactory customer experiences.
Effective CEM can be a critical differentiator for many – if not all – businesses, delivering tangible business value through repeat sales and referrals from satisfied customers – and resulting in increased revenue (and profits) for the business.
The concept of CEM had its genesis back in the late 1990s as part of the CRM movement – Customer Relationship Management – driven initially by US-based consultants Peppers & Rogers. Interestingly, CRM started life as a business philosophy and strategy but was later hijacked by the IT industry. In essence, CRM was about managing customer relationships on a ‘one to one’ basis to drive greater ‘products or sales per customer’ through upsell and cross-sell and retention; in the case where businesses had large customer or transactional bases (such as banks or telcos) the CRM strategy needed to be underpinned by effective data management. Sadly, the IT industry sought to overcapitalise on the CRM wave in the post ‘millennium bug’ period; significant investment was made in so-called CRM systems that promised enhanced financial benefits as a result of their use. With rare exceptions, these financial benefits did not materialise, as the focus had shifted from using CRM as a business philosophy or strategy to implementing it as an IT solution. Disheartened, the gloss came off CRM, even though many businesses persisted with some of its key elements.
Move forward to the second decade of the 2000s, and businesses, in light of the greater choices and information afforded the consumer, are realising that a focus on better managing the customer experience – delivering consistency and value – across all touchpoints with the business is an effective business philosophy. Sadly, though, many give lip service to the notion of CEM without taking action, mainly because they ‘just don’t know how to get there’.
What needs to be clear is that CEM is very much a whole of business philosophy, and can be very effectively delivered across any size of business. However the reality is that small and medium enterprises are generally better positioned to implement a well-considered and designed approach to CEM than larger, more cumbersome, enterprises. CEM is first and foremost a management mindset, and without that any CEM strategy will be unlikely to succeed. Because of their typical ownership model and structure, this mindset is more likely to be embraced – and acted upon – by small and medium enterprises than it would by a large enterprise, where a diverse range of individuals and functions make achieving a common mindset more difficult.
What needs to be clear is that CEM is very much a whole of business philosophy and approach and can be very effectively delivered across any size of business.
CEM is first and foremost a management mindset and without that any customer focused strategy will be unlikely to succeed. The reality is that smaller to medium enterprises are generally better positioned to implement a CEM strategy than a large enterprise. Larger enterprises tend to be more cumbersome and it is difficult to embed a customer orientation and common mindset throughout every level and fact of the business. Given the typical ownership and structure of small to medium sized businesses, the desired mindset is more likely to be embraced and acted upon. Although this is not without its challenges and expert assistance is often required to help facilitate the necessary change and discipline required to deliver a successful CEM strategy.
Bottom line is that, effective CEM – assuming it is adopted across the enterprise correctly – can strengthen the customers brand preference, improve customer loyalty, boost revenue and profits and decrease business costs by reducing customer churn and complaint resolution.