Back in 2006 BSM (Before Social Media), we published an article entitled ‘Manage the Customer Experience and the Relationship Will Follow’.
The paper argued that the main drivers of future business success, in an era of customer empowerment, were the quality of your customer base; the strength of the relationship you have with them; and your ability to leverage that relationship (‘up’ and ‘cross’ sell). This requires an integrated and coordinated approach to building a Quality Customer Growth Programme (QCGP) aimed at Identifying, Acquiring, Retaining and Growing Quality Customers i.e. ‘High Value’, ‘High Growth’ potential customers.
Delivering exceptional customer experiences, especially at key ‘Moments of Truth’, is critical to building a successful QCGP. Positive experiences build customer loyalty, retention and growth. Negative experiences lead to customer defection.
Following our attendance at a recent Hubspot Inbound Marketing Workshop, where presenters spoke about ‘flooding the sales funnel with suspects’ (see our previous response here), we revisited our 2006 paper and would argue that the key principles of Customer Experience Management (CEM) are even more relevant in 2011 DSMR (During the Social Media Revolution).
A brief synopsis of the paper is presented below. Follow up posts will discuss the critical role of social media in Customer Experience Management and building Quality Customer Growth Programmes (QCGP).
The best way of explaining Customer Experience Management (CEM) is to compare it to more ‘traditional’ approaches to Customer Relationship Management (CRM).
In ‘traditional’ CRM, every customer interaction is seen as providing your organisation with an opportunity for improving its level of customer knowledge and understanding. Information captured at the point of interaction is used to build customer insight through profiling, micro-segmentation, predictive analysis etc.
The main objective is to improve the efficiency and effectiveness of the sales and marketing effort through delivering more focused, highly targeted campaigns, with products, services and promotional material being customised to the specific needs of clearly defined customer segments. The ultimate goal is complete personalisation of sales and marketing on a ‘1-to-1’ basis.
In other words, ‘traditional’ CRM is ‘About Us’. Tell ‘US’ more about yourself. ‘WE’ can then better target ‘OUR’ sales offerings.
CEM reverses this approach. In addition to viewing each interaction as an opportunity for learning more about your customers, the opposite is also true. Interactions provide your customers with an opportunity for learning more about you, your organisation, culture and attitudes. There is a clear ‘cause and effect’ relationship between what the customer learns at each interaction and their subsequent behaviour.
The key propositions of CEM can be summarised as follows:
– The real source of customer loyalty, retention and growth is the quality of the experience that each customer has in dealing with your organisation, not your ability to customise or personalise sales messages. Junk (e)mail is still junk even when it is personalised.
– Every time a customer interacts with your organisation, they experience what it is like to deal with your people, systems, organisation and culture. Customer experiences during these interactions, especially at key ‘Moments of Truth’ (MOT), will have a major impact on future behaviour. Positive experiences will help to build customer loyalty. Negative experiences lead to customer defection.
– Customer experiences occur across multiple ‘touch points’ (e.g. sales, customer service, call centres, reception desk, advertising, brochures, web sites, meetings, project management etc) and at different stages of the customer life cycle (sales prospect, recently acquired customer, long-term repeat customer etc). As companies cannot avoid providing experiences at each ‘touch point’, it is critical that these are proactively managed in ways that impact positively on future customer behaviour. Achieving consistency and quality across all ‘touch points’ is critical. Customer experiences are increasingly taking place on social media.
– Based on the above, CEM can be defined as the proactive management of the critical interactions that take place between an organisation and its customers in ways that deliver exceptional value to the customer and to the business. Managing positive customer experiences will generate loyalty, retention and growth. Negative experiences will lead to customer defection. CEM, therefore, should be an integral part of an organisation’s overall approach to customer and brand management.
– In terms of bottom line business benefits, effective CEM can deliver short, medium and longer term customer advantage – immediate improvements in customer satisfaction and retention, sustained customer loyalty and competitive differentiation.
The paper concluded that a coordinated and integrated approach to CEM is a key building block of a successful relationship management strategy. It should also be a key component of your brand management strategy. While brand expectations are built using traditional marketing channels, the actual delivery of the brand takes place through customer interactions. Brand image and reputation have become increasingly dependent on the experience customers have in dealing with your organisation. People remember experiences more than products or services, especially very good or very bad experiences. Customer dissatisfaction and attrition are the natural consequences of the failure to match brand expectations and brand experience.
Given the growing importance of social media to the above, we would argue that a key challenge for many organisations is to socialise the customer experience. Rather than looking at social media as a broadcast or PR channel, ‘spreading your content as widely as possible’ as recommended by the Inbound Marketing school, a more appropriate question to ask is how can we use social media to deliver exceptional experiences at all stages of the ‘Customer Journey’ with our organisation. That way you might just differentiate yourself from the noise, building the long-term loyalty and life-time value of your ‘Most Valuable’ and ‘Most Growable’ customers. At the same time, you will erect barriers that will stop your competitors stealing your best customers
Be Bold. Be Different. Be Social.
More to follow……
As usual, feeback and comment are very welcome. How well do you think organisations are using social media to enhance the customer experience? Who are the exemplars of ‘best’/’worst’ practice in socialising the customer experience? What bad online customer experiences have you had?
Jim, Alan, Vincent