Will Customer Experience Management
grow up big and strong like its rich cousin CRM?
By Adam Ramshaw
(Director)
For reprint permission please email
info@genroe.com.au
In the last 12 months Customer experience management (CEM) has started to get
more profile but it is still just a good idea emerging into an area of
marketing thought currently dominated by CRM. A quick check on Google cites
approximately 250 times more listings for CRM as it does for CEM. According to
Overture, for every one person searching on CEM almost 90 search on CRM.
Yes, CEM is currently a poor cousin to CRM. If it is to grow up and become a
powerful business tool it must move out of marketing and directly link itself
to business outcomes.
Having actively worked in CEM for the past three years I believe that there are
four areas that are currently holding CEM back from its full potential:
Viewing customer experiences and business value in isolation
Bernd Schmitt’s, often quoted definition of CEM as "the process of strategically
managing a customer's entire experience with a product or a company" is flawed
to the extent that it doesn’t explicitly connect the experience to business
outcomes.
Forget the motherhood statements, lets get practical. We are all trying to meet
company goals, whether they be revenue, profit or market share. If we can’t
demonstrate how our investment in customer experience improves those business
outcomes then we’re not going to be here very long.
As an example of this type of gap we recently worked with a financial services
organization that conducts tens of thousands of customer surveys a year,
gathering a range of experience data. Yet at no time did they link the survey
data with customer records and profitability patterns, even anonymously. As a
result they could tell you volumes about the customer experience but nothing
about the incremental business value of that experience.
In order to get traction; the customer experience, the cost to implement and the
business benefit need to be directly linked and stated in cold hard terms.
Companies still measure the wrong outcomes.
Thankfully, some companies are starting to see that customer satisfaction scores
are almost meaningless in predicting customer behavior. However, even with a
range of research to support this view, many still swear by them. Customer
satisfaction ratings will stay around for awhile because they are integrated
into so many KPIs and bonus plans but satisfied customers are now just table
stakes: you have to have them but they don’t differentiate you.
So what should you measure? Start with something useful: demonstrated customer
loyalty, i.e. how do individual customers actually behave in terms of
re-purchase, customer lifetime and customer profitability. They are a basis for
understanding the value of each customer and in turn the value of their
experience with your company.
Remember, if you don’t measure the right outcomes you will be forever chasing
the wrong drivers.
Companies don’t know what drives behavior
I’m still flabbergasted by the number of organizations that collect immense
amounts of data (transactions, web stats, customer surveys) but fail to analyze
it to understand which elements of the customer’s experience drive behavior. If
you don’t know which customer experiences drive behavior how can you do any
customer experience management?
One of our clients undertakes rolling six monthly customer surveys. A few
surveys ago we identified that "documentation" was a key driver of
client discontent and gave them some concrete suggestions on changes to make.
Over the course of six or eight months they resolved the issues and their score
lifted. This resolved customer discontent and reduced help desk support
requirements.
In another case a credit card company was about to build a new call centre to
reduce customer hold times because a survey indicted that it was a driver of
customer satisfaction. Some additional focused research and analysis showed
that yes customers did want the phone answered quickly and it was a driver of
customer satisfaction but it was only a one percent driver of the key customer
behavior: loyalty. There were many more important things to do first.
Understanding which customer experiences drive customer behavior allows you to
focus your attention on the few important areas not the unimportant many areas.
Waiting for perfection
If I had 10cents for every customer that told me their data was no good or
"we’re waiting until our new CRM/call centre/data matching/etc/ system to
be implemented," I could retire.
The truth is that there is always something that you can do with what you have
now. Plus, if you get started immediately you will have some runs on the board
and be better prepared when the CRM/call centre/data matching/etc/ system
finally arrives.
These are certainly not insurmountable barriers. If we can get CEM over them, it
will be a significant driver of company profitability and value in the medium
term. If we can’t then it will become just another good idea that gathers dust.
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