Customer experience management

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customer experience management

What is customer experience management?

Customer experience management (CEM) involves understanding your customers and implementing effective plans that encourage a customer-centric culture across the company and increase customer satisfaction, loyalty and advocacy.

It is essentially the collection of processes that companies employ for the purpose of tracking overseeing and organizing each interaction between a customer and the organization throughout the entire customer lifecycle.

Every organization has various departments that interact with customers. Customer experience management focuses on overseeing these interactions and improving them to strengthen the customer’s relationship with your brand and to improve your overall customer experience.

It focuses on gathering experiential data from customers through direct feedback, reviews, surveys and other forms of communication, understanding the voice of the customer, and using that information to optimize the customer journey, encourage brand loyalty, and increase the customer lifetime value.

It seeks to help you move away from the customer experience that you are currently providing and reach the customer experience that you want to deliver and your customers wish to receive.

customer experience management
Source: Marketing91

What is the purpose of customer experience management?

The whole purpose of customer experience management is to put customers at the center of marketing, sales, and customer support in order to increase brand loyalty and encourage repeat purchases.

It seeks to collect feedback from customers so that the business can make improvements and bridge the gap between the experiences that the business wants to deliver to customers and the actual experience that its customers end up receiving.

It also helps create a better employee experience because that is very deeply tied to the customer experience. Disgruntled employees won’t bother creating a good customer experience, they wouldn’t take any efforts to improve it. But happy and satisfied employees tend to radiate a positive brand experience and create better customer experiences.

Since customer experience management actually involves listening to your customers and tweaking the experience depending on how your customers feel, they will enjoy doing business with you and even recommend your brand to their friends, family, and any other people in their circles. They might even share testimonials about your brand which would be very valuable in your advertising and/or marketing efforts.

Another major advantage of customer experience management is that while customers share feedback about your brand they also make comparisons against your rivals and competitors. Understanding what your customers like and dislike about your competitors could help you position your brand more effectively against your competitors and thus win over new customers.

Even though customer experience management could help you earn new customers, it is primarily focused on retaining existing customers and increasing their customer lifetime value. Customer retention can be just as important as customer acquisition, if not more important. Customer acquisition could cost 5 times more than customer retention costs. But focusing on customer retention is incredibly important and powerful, Studies have shown that even a 5% increase in customer retention could trigger a 25% growth in profit.

What is the difference between CRM and CEM?

The biggest difference between customer relationship management (CRM) and customer experience management (CEM) is the perspective from which things are seen. Customer relationship management helps you understand what the customers look like from the company’s point of view. On the other hand, customer experience management helps you get a better understanding of how your company looks from your customers’ point of view.

CRM strategy concentrates on sales, marketing, and outreach to customers from the company’s perspective with an aim to increase your revenue. A customer experience management strategy, however, concentrates on employing voice of the customer programs to quantify customer sentiment about their interactions and experiences with your organization. The CEM program will tweak elements of the customer experience that generate negative feedback to improve them and correct those negative perceptions.

Essentially, customer relationship management deals more with the things that happen before you acquire a customer, and customer experience management is more about what happens after you’ve acquired and onboarded the customers and are seeking to retain them and increase their lifetime value. 

CEM is all about understanding what a customer wants, figuring out what would keep them coming back to you, and then adjusting your experience in line with those insights.

Customer experience management also empowers you to manage all the touchpoints that a customer could interact with your business over and thus engage them with the most appropriate strategies and tactics.

What are the main objectives of customer experience management (CEM)?

Objectives of customer experience management (CEM)

The main objectives and Components of customer experience management are:

Understanding customer behavior

You can’t deliver a better customer experience if you don’t even know what your customers want in the first place. This objective of CEM involves monitoring customer behavior, identifying problems or issues that they are facing, and then proactively taking action to solve these problems. 

Having a good understanding of customer behavior is very important with regards to improving engagement, retention, conversion, lifetime value, and good experience.

Analytics are used to derive insights from the data collected from customers. This is even merged with operational data to get a deeper understanding of customer behavior and what needs to be improved.

Interacting with all customers

Customer experience management is not limited to interacting only with customers which have complaints. It involves proactively reaching out even to customers who do not have complaints. You could even add some personalization into your interactions based on the customer’s behavior patterns. Not all disgruntled customers will reach out to you, many of them would just leave without saying a word. With customer experience management, one of your goals is to proactively reach out to them, solve their problems, and minimize this churn

Listening to and acting on feedback

A lot of companies collect feedback from their customers; not enough of them actually act on that feedback. 

You need to be great at collecting, analyzing, and acting on feedback to improve the customer experience. You can even simplify the feedback-providing process for your customers by using chatbots that make life easier for your customers with a conversational interface.

The key, however, is to take action on the feedback that your collect. If you don’t, your customers will feel like you don’t care about their opinions and problems.

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