From CRM to Customer Experience Management

Customer Experience Management (CXM or CEM) can seem a bit futuristic; indeed it was portrayed in the forward-looking, sci-fi movie, Minority Report. But in reality CXM is as old as retail. The only thing that is new about CXM is that companies have renewed interest in the delivering relevant, personal, contextual and differentiated customer experiences at scale. It's an interest born from necessity.

"After decades of being managed and forced to adapt to companies' internal business processes, consumers have had enough," explains Andrew Hull, former 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 CXM are not yet in widespread use, but they are not far off either. The intimate customer knowledge behind such glitz, however, is already here.

CXM Transforms Data into Experiences

"CXM 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 CXM technologies to make that data actionable for experiences. "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 CRM 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 understanding and to predict needs before the customer makes a 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 CX Upside

Customer Experience Management goes far beyond simple customer transactions and 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, CXM 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 CXM 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. "CXM can now be measured the same as accounting and financial metrics," says Cottle.

Although CXM 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.

"CXM is about none of this. CXM 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.

CX is More than Technology

CXM, 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."