However, it is a customer retention study Prof Sasser conducted with global management consulting firm Bain & Company that will resonate most with organisations weighing up their next customer experience play. Exploring the theory that one cannot overestimate the importance of loyal customers, his research found that even a 5% increase in customer retention can lead to an increase in profits of more than 25%.
Reasons for the profit boost include that people are likely to spend more money with companies they have already done business with and repeat customers are more likely to refer businesses to others. The cost of acquiring new consumers is also high, with research finding that marketing is increasingly being weighted towards retaining existing customers as businesses realise it is more profitable in the long run to keep an existing shopper happy than trying to recruit an unknown one.
So, with happy customers more likely to transact more often, spend more when they do and better promote a company’s products and services, it makes sense that organisations should be doing all they can to find out how their customers feel about them – and that is where Customer Experience Management (CEM) comes into play.
Before diving into the meaning of CEM, let’s remind ourselves that customer experience (CX) is defined as a customer’s perceptions – both conscious and subconscious – of their relationship with a brand based on all their interactions with it during the customer life cycle. Every online visit, every service call, every advertisement they encounter combine to create their CX and the more positive one is, the more likely a person is to spend more dollars and more often.
Given that, organisations are increasingly committed to delivering a better customer experience and this is where CEM comes into play. As defined by research and advisory company Gartner: “Customer experience management is the discipline of understanding customers and deploying strategic plans that enable cross-functional efforts and customer-centric culture to improve satisfaction, loyalty and advocacy.” Of course, this is a high-end definition that may resonate more in a boardroom than an office floor. When it comes to a more practical level, CEM is best defined as the various processes a company uses to track, oversee and organize every interaction between a customer and an organisation during the customer lifecycle.
It is also important to note that CEM is not CRM – customer relationship management. While CRM software focuses directly on sales and outreach to customers, customer experience management is a strategic play that puts customers at the centre of marketing, sales and customer support in an effort to increase brand loyalty and repeat business. CEM is more about customer sentiment and adjusting related factors to reinforce positive perceptions and correct negative ones.
Implementing a quality CEM strategy can deliver various benefits.
Customer experience management requires companies to have an intimate knowledge of their customers, which can be achieved via several key steps.
As companies increasingly realise the pivotal role CX has to play in driving profit growth, executives are investing more resources in the field of customer experience management. This includes staff or entire teams dedicated to executing the above steps, with the likes of Chief Customer Officers and Chief Experience Officers overseeing analysts and liaising with the CEM team and associated departments such as marketing, sales and IT.
In particular, CEM executives and teams can enhance CX via techniques such as:
Befitting a world that is powered by digital innovation, a CEM strategy that fails to incorporate complementary technology is a CEM strategy destined to fail. There are a range of customer experience management platforms that can manage CX from end to end, with major components including:
The days of leaving customer experience to chance are over. It is all about improving the quality and consistency of CX that turns customers into advocates, with the development and deployment of a well-honed customer experience management strategy the key to better understanding the people you serve and improving the journey they take.
Integrating digital interventions and solutions into the customer journey can boost overall customer experience. Just ask one of Australia’s leading full-service supermarkets, which streamlined its eCommerce-related contact centre processes to achieve a 41% decrease in effort-to-service customer interactions and adopted tailored process solutions to improve CX.