Customer Experience Management Defined

I would like to provide my definition of customer experience management. Before I do, I would like to talk about my understanding of the field as I see it.

Customer Loyalty is our Ultimate Criterion

I think that it is safe to state as a matter of fact that customer loyalty is key to business growth. Businesses that have customers who engage in more loyalty behaviors (e.g., stay longer, recommend, continue buying, increase share-of-wallet, more clicks/views) toward their company experience faster growth compared to businesses that have customers who engage in fewer loyalty behaviors. The key to growing one’s business, then, is to understand how to improve customer loyalty.

Seemingly disparate  fields in the CxM space, whether explicitly or implicitly, all focus on increasing customer loyalty (isn’t optimizing customer loyalty the goal of all business solutions?). These disciplines include:

Businesses Use Different Types of Customer Data to Increase Customer Loyalty

Each of the disciplines focus on using different types of customer data to increase customer loyalty. Businesses tailor ads that resonate with prospects’ personal values in order to attract types of customers (yes, some people are just more prone to buy, buy, buy; some are more likely to remain loyal).  Businesses target marketing/sales campaigns to specific customers based on customers’ purchase/service history. Businesses measure different types of customer loyalty via customer feedback tools to maximize the lifetime value of customers. It is clear that improving customer loyalty is not solely a service problem. Improving customer loyalty can occur throughout each phase of the customer lifecycle (from marketing and sales to service).

Businesses are realizing the value of integrating different types of customer data to improve customer loyalty. In my research on best practices, I found that the integration of different types of customer data (purchase history, service history, values and satisfaction) are necessary for an effective customer feedback program. Specifically, I found that loyalty leading companies, compared to their loyalty lagging counterparts, link customer feedback metrics to a variety of business metrics (operational, financial, constituency) to uncover deeper customer insights. Additionally, to facilitate this integration between attitudinal data and objective business data, loyalty leaders also integrated customer feedback into their daily business processes and customer relationship management system. For example, prior research at Siebel Systems found that their customers received more value from their Siebel implementation (e.g., improved revenue, improved efficiency, increased customer satisfaction) when the customers integrated their Siebel CRM system with their customer feedback program.

Customer Experience Management Defined

While there are existing definitions of customer experience management, they seem to focus solely on the measurement of customers’ perceptions and attitudes about the their experience. Considering the benefit of integrating different types of customer data in customer feedback programs, customer experience management programs need to consider two major types of customer data: 1) customers’ interactions with the company and 2) customers’ perceptions of their experience. The following definition of customer experience management reflects this idea.

Customer Experience Management (CEM) is the process of understanding and managing customers’ interactions with and perceptions about the company/product.

Effective Customer Experience Management System

EFM and CRM = Effective CEM

An effective CEM program provides a comprehensive picture of the customers’ interactions with the company as well as their attitudes about the company. As such, the integration of CRM vendors and Enterprise Feedback Management (EFM) vendors (or, at least, the underlying business processes that support both) makes sense for any CEM initiative. This integration of behavioral and attitudinal data allows front-line employees to address specific customer’s needs; additionally, senior management can apply analytic techniques to the customer data to help understand the causes (operational, constituency) and consequences (financial) of customer loyalty that will help them improve prioritize improvement opportunities to address systemic changes. Integrating all customer data provides businesses the opportunity for discovering deep insight about ways to optimize the customer experience and maximize customer loyalty.