What is customer experience management, and why does it matter?

The customer experience can make or break an organization, but what is customer experience management (CXM), and how does it play into the future of your brand? How do you know where you stand? And what strategy do you follow to offer a state-of-the-art customer experience?

You don’t have to tell the average manager that the customer experience is crucial for the success of his company. A study by Gartner shows that nine out of ten marketers expect the customer experience to be the main differentiator for their businesses.

But some companies don’t take the total customer experience seriously. Often they don’t really know what their strengths and weaknesses are, and what information about customer behavior illustrates that. With such a lack of understanding, you’re already two steps behind nowadays.

And, when your customers start complaining, it’s already too late.

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What is customer experience management?

Customer experience management (CXM) is the strategies, processes, skills, and technologies dedicated to understanding customers and their interactions with a brand to cross-functionally deliver outstanding customer experiences that boost customer loyalty, brand advocacy, and customer satisfaction.

For the record: a good customer experience strategy goes way beyond friendly customer service or webcare.

All parts of business – all touchpoints where potential customers come into contact with the company – contribute to or compromise the customer experience.

From marketing efforts to the buying process—both in your shop or via (mobile) websites or apps. But the contact points after the purchase are also of great importance. You have to measure and analyze almost everything to get an idea of the multitude of it all.

There are all kinds of inventive ways to improve the customer experience. For instance, airline company KLM lets you experience business class travel through a 360° video. Or imagine yourself walking through the distillery of whiskey brand Jack Daniel’s in virtual reality. And drink manufacturer Diageo uses the technology to illustrate the dangers of drinking and driving.

The Lufthansa and Jack Daniel’s videos have both been viewed over 200,000 times. These are all potential customers who might consider booking a flight or purchasing a bottle of whiskey. But this kind of content—because of the high entertainment value— is also perfect for telling your brand story and is a great opportunity to reach a bigger audience… including your existing customers.

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Customer experience management: How are we doing?

If you want to know what customer experience management is, it’s smart for any organization to have a critical look at what the customer is experiencing with their brand. How far are we in terms of customer experience maturity? What should we actually do to optimize this experience?

Customer Experience Management (CEM) is the perfect tool to answer these questions and to manage everything accordingly.

Gartner distinguishes five stages of ‘maturity’ in its CEM Maturity Model:

1. Initial: At this stage there is no overarching CEM strategy. There are also no specific requirements or objectives and interaction with customers is organized and registered by department, without cohesion. CEM is not yet a priority in the boardroom.
2. Development: The company begins to realize that it is necessary to develop a CEM strategy. The existing systems for managing the customer experience are being critically reviewed, which brings limitations of the current strategy to light. Plans are being made to implement technological innovations. Senior management acts as a supercharger.
3. Definition: The CEM strategy is beginning to take shape in this important stage of the journey. The company has specific objectives for the short, medium and long term that are discussed with the boardroom. Business processes are standardized across the organization. And policies for governance and compliance are coming into effect.
4. Managed: The field of CEM is developing extensively and the company is beginning to reap the rewards. The investments in CEM may have already been recovered. At all levels, the employees are convinced of its usefulness. They recognize that perfecting the customer experience and the focus on the customer offer a competitive advantage. Training is organized in order to ensure CEM becomes a structural part of the company. Moreover, technology is rolled out for collecting and analyzing all customer data, so that the customer experience can continuously be improved.
5. Optimized: In this phase CEM is already deeply embedded in the organization. No more encouragement for the staff is needed to work in a customer-centric way. The business processes and the technological infrastructure allow the company to measure every customer interaction. All this information comes together in a central hub, where the company is able to distract insights from. The CEM metamorphosis is finally complete.

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Don’t forget measurement: A crucial part of customer experience management

There are several free tools for measuring your customer experience maturity. Such a tool analyzes the entire process from customer experience to customer needs. By doing so, organizations gain insight into how effectively they serve their customers during the seven stages of the customer journey: Awareness, Discovery, Interest, Consideration, Action, Use, and Advocacy.

By now you probably have a good idea of how your customer experience measures up. But what then?

A CEM strategy includes the following steps:

• Log all interactions: First, make sure that you record the interactions with your customers so that they are measurable. From website visits, bounce rates and conversion to customer satisfaction surveys and product reviews. You probably have more data available than you think.
• Provide an overview: Identify which sales and communications channels are already functioning reasonably well to find out where improvement is needed. Try to quantify the available data as much as possible. That way you get a (real-time) picture of the strengths and weaknesses of your customer experience.
• Find out where things go wrong: Just one disappointing interaction or bad experience can turn a loyal customer into a former customer. These moments should be identified, so that you know which touchpoints need to be enhanced. Customer experience software helps you combine multiple data sources.
• Use the insights: The analysis of customer data continuously leads to new insights to improve the customer experience. Connect these insights into concrete actions. Is your website running slow and are you losing visitors because of it? Then find out what the cause is and take measures such as the purchase of a faster server.

Implementing CEM will be a lengthy process, but it has a major impact on all aspects of your company. It means that all business processes, systems, and applications need to be continuously monitored closely. A large part of the technological infrastructure will have to be replaced or renewed. And the way of working also changes.

Chances are that CEM is not mature yet in your organization. But companies that ignore this trend will soon be defeated. The customer reigns, more than ever before. If you don’t roll out the red carpet, someone else will.