A customer experience management (CXM) system can take customer relationships to a new level, helping organizations to build brand loyalty while minimizing customer attrition, yet while simultaneously lowering the cost to serve. But what is customer experience management, and does it strengthen the customer-brand connection?
What is customer experience management?
However, CXM also requires understanding — knowing who the customer is, decoding their customer journeys and the ability to understand data from the customer’s perspective and analyze it to create actionable insights. This blend of skills, strategy and disciplines is the reason why building cross-functional teams with responsibility for customer success is CXM best practice — 64% of large organizations considered as experience leaders attribute much of their success to having a coordinated program involving expertise across the business.
Customer experience management — often abbreviated to CXM — is about actively and consistently steering an organization’s customer experience strategy so that it continuously aligns with evolving customer needs and expectations in a way that increases customer engagement and satisfaction, with the ultimate goal of driving brand loyalty.
As such, it’s an approach to building and maintaining a customer base for long-term success that is equal parts art and science. Customer experience management requires the right choice and application of tools and technology and the ability to collect data and align with metrics.
Customer relationship management (CRM) vs. customer experience management (CXM)
A customer relationship management (CRM) system is a repository for customer contact and interaction information and, over time, can be used to build up a picture of a customer’s history and preferences. It also captures information regarding sale leads and can be used for accelerating internal processes. As its name suggests, it is a powerful tool for building relationships with the customer base. However, it is focused primarily on the business, rather than the customer. It facilitates internal processes, and its utility is only as good as the information it can capture and hold.
While both CRM and CXM serve to strengthen the customer relationship, that’s where the similarities end. Customer experience management is a discipline and a strategy supported by a platform of systems and tools focused on capturing and understanding customer experience across every touch point and along each customer journey.
CRM captures past history, and CXM is focused on the future. When adopted as part of a wider digital transformation, customer experience management not only brings an organization closer to its customers, it can help the business get into the minds of their customers, being able to identify potential issues before they become real customer frustrations and identify and evolve customer experience delivery in line with changing customer behaviors and emerging trends.
Customer experience management and business performance
The positive impact on business performance that can be realized from building stronger customer relationships through CXM should be clear.
By taking a proactive approach to the end-to-end customer experience, organizations are better able to identify and deliver on customer needs and expectations. It ensures a consistent experience across touch points and throughout each customer journey, from onboarding to ongoing post-purchase support — all of which fosters customer loyalty and minimizes attrition.
Businesses considered as customer experience management leaders experience a 1.6x increase in customer lifetime value and a 1.7x improvement in customer retention rates as projects come to fruition. And because a customer experience management system is fueled by data and driven by teams that encompass skills across the entirety of the organization, it generates new levels of insight that can be used to drive everything from better products and services to greater customer lifetime value while lowering the cost to serve.
For 63% of organizations that have identified the link between customer experience and customer loyalty, they have also found that being able to combine data, teams and customer understanding is the key to delivering the types of innovative experiences that strengthen customer relationships.
How to improve customer experience
Customer experience management targets the key aspects that, when optimized, improve customer experience, starting with a greater understanding of the consumer behavior and traits that drive business towards an organization’s brand.
Because CXM makes it simple to merge customer and operational data, with the right combination of tools and expertise, it becomes easy to identify the needs and expectations existing customers have in common. Feeding these findings into marketing strategies makes them more focused and effective, while the insights that come from customer interactions enables an organization to improve the initial touch points at the top of the sales funnel that can move a consumer from discovery to consideration.
The purview of these tools can then be expanded to analyze existing end-to-end customer journeys and single out steps on the path to purchase (and beyond) that require attention and potential improvement. Again, it’s the combination and operationalization of different data sources that makes it possible for customer experience management to deliver in this respect. This lack of understanding and, as a result, inability to deliver customer experience in line with expectations could be impacting revenues by up to 20%.
An omnichannel view
The next aspect of improving customer experience is being able to achieve an omnichannel view of each customer. Through CXM, every interaction across all channels can be tracked and captured and fed back into operations. And, crucially, the information generated stays connected to that customer.
So, for instance, if a customer begins a customer journey on a website, then engages with a chatbot and finishes by using online chat to engage with a live agent, the data related at each stage moves with that customer. It means that rather than simply tracking negative interactions — issue resolutions and complaints — CXM allows an organization to connect and engage with every customer, understand their preferences and begin to develop a personalized customer experience. Nine-in-10 of the world’s best performing businesses attribute their long-term growth to being able to anticipate and deliver on customer needs along each customer journey.
With an omnichannel view comes the ability to obtain omnichannel feedback, both solicited and unsolicited. It becomes easy to conduct voice of the customer (VOC) programs and monitor metrics such as customer satisfaction (CSAT) and Net Promoter Score (NPS), all of which will help to optimize individual touch points and validate changes already made to customer experience delivery.
However, it’s also possible to capture unsolicited feedback, such as the emotional sentiment of customers reaching out to live agents — whether via chat, messaging, email or phone — to understand how a brand is perceived and potential problems and weaknesses in customer experience delivery that wouldn’t be picked up or identified and repaired through tracking other types of metrics. For instance, CSAT surveys show if a customer is satisfied or unsatisfied with a particular aspect of customer experience, but it doesn’t explain why.
How digital technology is employed in managing the customer experience
Data is the beating technological heart of CXM. More specifically, it’s the ability to absorb different formats of data from different sources and turn it into actionable insights. This is data generated from direct customer interactions with an organization’s digital assets, information being posted to social media networks, information flowing into the contact center, plus data across the enterprise, including the CRM.
For many organizations, siloed and incompatible data is the biggest barrier to digital transformation, meaning that they will struggle to gain a clear customer vision or understand exactly where they’re aligned with the customer base and where there are gaps that require urgent attention. Only 33% of U.S. organizations, say that due to a lack of silos, they can actively collaborate across departments and functions in order to deliver on customer experience goals.
Thanks to artificial intelligence (AI), natural language processing (NPL) and machine learning (ML), it becomes simpler through customer experience management to automate data capture and processing, moving information from various areas of the business and into a single source of truth.
This same automation also enables an organization to eliminate manual processes related to customer experience. For instance, robotic process automation (RPA) can remove the need for agents to manually input customer data and accelerate back office operations. This, in turn, enables a business to better manage and deploy resources.
Use an omnichannel engagement platform to optimize customer journeys
The depth and quality of data captured is due to the deployment of an omnichannel engagement platform. This allows customer-specific data and insights to flow from one interaction to the next and for that data to feed back into the business to maintain a 360-degree view of each customer.
An omnichannel engagement platform is crucial to building and optimizing customer journeys in line with changing customer behavior and preferences and in adding features and experiences that meet developing expectations while reducing total cost to serve. For instance, data captured across the platform regarding common contact drivers can be used to build chatbots and other self-service features that will let customers resolve their own issues, in their own time, rather than being forced to use live channels, within traditional business hours.
Perhaps the most powerful technological element of a customer experience management system is real-time speech and text analytics. Sitting at the center of the omnichannel platform is the ability to capture and analyze 100% of customer contacts flowing through each channel, in real time, to deliver insights in the moment.
When combined with intelligent automation, it means that information pertinent to a customer’s request can be automatically searched for and displayed on an agent’s screen as he or she is connected to the customer. It also enables the agent to stay focused on the call as all data entry is automatically captured, transposed and entered into the system, thanks to NLP and ML.
As the volumes of data passing through the platform begin to grow, speech analytics can take experiences a step further, identifying caller disposition and the emotional sentiment being expressed so that the agent can adopt the right approach to resolving an issue. This capability can also extend to providing real-time prompts for agents regarding the type of vocabulary that’s most suitable and signaling the next best action.
With the right CXM system, delivered by a multi-discipline team, making real-time improvements to customer experience becomes a real-time possibility. Data can be used, with confidence, in relation to business intelligence and actionable customer insights. Building three-dimensional customer personas and identifying the common traits that brand advocates and detractors have, and taking the appropriate steps to increase customer loyalty while reducing churn are all within reach.
To learn more about customer experience management and creating a consistent brand experience, download the best practice guide.