What is Customer Experience Management?
Customer Experience Management (CEM) is currently another area that companies consciously manage to achieve higher revenues or reduce the costs of functioning of the organization. CEM is important both for industries that support a large number of customers (B2C), as well as for B2B sectors. Due to the fact that services and products are becoming more and more similar (it’s the effect of commoditization), it is the right Customer Experience strategy that builds a long-lasting advantage over competition.
Customer Experience (CX) definition
Customer Experience is the sum of all customer experiences, emotions and experiences that are associated with a given product brand or company. The company as a team of cooperating systems, processes and people generates specific events that the client experiences. The sum of the client's interaction with these events builds associations based on these experiences and emotions. This is how Customer Experience is shaped. The general CX consists of customer experience related to various contact points between him and the company or product brand.
Contact points between customer and the company / product brand
- CX related to the sales process - how the purchasing process went well for the customer, what emotions he felt and how did he remember that process.
- CX related to marketing activities - both in terms of marketing information reaching the client, as well as its style, quality, message - the sum of all client feelings and emotions that are associated with this area of the company's operations.
- CX related to the service or product - currently used by the client, just purchased, reviews of it and also the opinions of other people with whom the customer exchanged observations. Depending on the service or product, there are many aspects, e.g. quality of products, convenience of use, availability, price, etc.
- CX related to customer service - associated with customer interactions with a company or institution employees. The more pro-client attitude of the company's employees - from the management to the first-line employees, the better the experience of the customers.
- Previous customers experience with the company or brand - so-called brand reputation - clients opinions about a company. Sometimes it happens that companies after time of "bad" cooperation with clients improve in this matter, but some negative experiences client will still remember and it cannot be ignored.
- Any other customer experience gained during Customer Journey - CJ is customer travel through all contact points with the company or brand.
Customer Experience Management as an integral element of the company
Customer Experience Management must become an integral part of the company in order to work properly. It must become its main philosophy. Be present in all company departments and levels. This allows you to maintain the consistency of the company's image that is received by the customer. Staying in closed, non-communicating pillars of the company is not conducive to the company's pro-client attitude. For this to happen, CEM must be managed in an orderly and predictable manner.
How customer evaluate cooperation with the company
The definition of customer experience says it contains many aspects combined together. One of them is his feelings - so the client, when assessing cooperation with the company, is guided by rational arguments (price, product availability, time of delivery, quality of the product), and on the other hand, his general experience is defined by emotions.
Customer emotions are created by comparing customer experience with previous ones (e.g. client previously bought product and he received it within 24 hours - now he is waiting for 48 hours), and in combination with their expectations (e.g. there was information that client would wait no longer than 24 hours), as well as alternatives (e.g. maybe client should have bought product in a stationary store).
Companies that struggle for a position in an competitive market are bidding in offers and promising their customers more that can offer: realization in a too short period of time or services not entirely technically possible to complete. The client builds their expectations based on the promise given to him by the company.
If the company keeps its word - the client will receive positive experience. If the company fails to keep its promises, it will result in raising customer anger and frustration. Therefore, more frequently we can see the flood of negative comments written by customers in social media, often supported by other users. Effects of them can be various - depending on the company's response - can seriously damage its image or on the contrary - repair the harm that was made to the company's PR.
Customer Experience Management costs reduction
Customer Experience Management can help with saving on advertising expenses. The mechanism is simple - the customer is very satisfied with the service or purchased goods, so he will recommend it to others, for example friends or family members. This is how word-of-mouth marketing works, which is much cheaper than classic advertising methods and can be even much more effective.
It’s important to remember that positive impressions from contact with the brand combined with product or service satisfaction is the foundation for building customer loyalty. An example of proper use of CXM can be based on a positive consumer opinion, which creates an extremely favorable image of the brand. After applying the appropriate actions and improvements, a company can be associated with friendly service, modern design, something fashionable and desirable. All this can be achieved with a small expenses on promotion, and it could be seen to the naked eye how effectively orientations work on customer satisfaction.
Customer Experience Management in practice
The improvement in CXM is primarily decided by companies in which a lot of customer interaction occurs. Telecommunications companies are a good example here. In their case, contact begins when the customer hears about the brand for the first time. It is necessary to ensure that this is positive information.
The next contact is the potential customer visit to the website. Here, the concept of web usability becomes the key, i.e. constructing a page that is convenient, user-friendly and easy to navigate. In addition, the customer should find in this place all the information he needs without wasting too much time searching for them.
It would be helpful if he also read positive opinions of other people there - thanks to this, a psychological mechanism called social proof will work. This concept is based on the fact that people who are undecided or have insufficient knowledge often follow the opinions of others. To extend the reach of opinions, a rating and review system can be used on the brand's website. Cooperation with online price comparison websites that have a built-in module of this kind can also help a lot.
In the case described here, the next contact with the customer is the moment when he comes to the stationary point to order the service. Here, the look of the premises he comes to is extremely important - its size, aesthetics, even music played in the background. The customer should not wait too long in the queue, and if such situations cannot be avoided, it is worth using a system of notifying about the expected waiting time.
A snack or coffee for customers can do a lot in terms of positive brand perception. Once the consumer has been served, the next stage of interaction is post-transaction service. It is obvious that there may always appear issues and technical problems - inevitable things that are difficult to improve as part of CEM.
It is important to ensure that the assistance provided to the recipient is of the highest quality. For this reason, comprehensive training of employees working on the hotline is necessary. Unfortunately, many companies decide to outsource such services. This results in low quality of service - the phones are very often picked up by people poorly oriented in the subject, not well paid and overloaded with work. Technical support is often the victim of cutting costs. Call center employees only know the basic formulas and patterns of actions that allow them to solve several problems, but their knowledge is not sufficient to help customers in more complex cases. It’s the biggest weak point of many companies - the critical opinions of callers and negative comments about the services provided are the obvious proof of that matter.
CEM Performance Evaluation
For e-commerce, there are many tools that can be used to measure customer satisfaction. The most basic technique is surveying - in the form of questionnaires sent to the customer e-mail or short, non-invasive questions embedded somewhere in the content of the website. It is worth carefully analyzing the traffic on the website of the online store, because statistics can tell a lot about the satisfaction of visitors. Much of the attention should be paid to the circumstances of canceling the purchase. If a potential customer abandons the shopping cart on the payment page, it probably means that he has not got at his disposal convenient forms of payment for the transaction. It may also be that he was scared off by unclear terms of agreement, poor warranty coverage or high shipping costs. All these elements are very important in case of client evaluation of the whole purchase process.
Collecting customer feedback is difficult in regular businesses. Surveys are not very effective because hardly anyone likes to do them. Asking for quality of service a person carrying shopping bags and rushing home is a very bad idea. A better choice is to put the survey on the company's website, although in this case, the “freshness” effect is lost - the question should be asked immediately after the transaction is finalized. More and more often we can see in stores that at the checkout there are placed touch screens with which buyers can quickly and easily determine the level of their satisfaction with the service. Various techniques for answering the questions are available but the most common (and universal) are three smileys - sad, cheerful and neutral - which can perfectly reflect the opinion of the consumer. It also seems a good idea to place terminals with more complex questions that can be used voluntarily by customers. Usually customers are interested in such things and, moreover, they do not feel the pressure that arises when questions are asked by the employee - for these reasons, such a solution is a reasonable option.
Employee Role in CEM
Often, companies on the market proclaim the slogan "The customer comes first", however they do not care much about the satisfaction of their employees, which of course negatively affects how these employees treat customers.
Generally speaking, the role of employees in creating customer experience is huge, but often very underestimated. For how should an employee be enthusiastic and positive about clients if his supervisor and his environment do not create an atmosphere of work that promotes such an attitude? Building employee engagement affects how they interact with customers. The more satisfied they are, the more satisfied the client will be.
Team managers should pay close attention to what they say and how they work. It is quite simple, but in practice not everybody are aware of this. Team members are like a sponge that absorbs every gesture and every word of their supervisor. Appearance of the boss in the workplace, with a certain attitude, facial expression, the tone of voice is immediately noticed by the employees. If there is any inconsistency between what the boss says and what he does in practice, it will be immediately sensed by others. Repeating slogans - "we make products for customers", "we meet with customers to make even better products", "we keep our word if we promise something to our customers" - will be irrelevant if the company (and in this case - the management) will not keep such promises, or when in practice employees discover that it is "only such a corporate talk" that is not followed by a genuine attitude. Let’s imagine a situation where the customer assistant yells at the client over the phone. Such an employee has definitely been trained how to work with the client and in this situation the reason for this behavior may be the management staff who did not properly care for consistency between what they proclaim and what happens in practice in the company.
Employee training in Customer Experience
In companies where the adventure with building positive customer experiences begins, it is worth starting the project with proper employee training. It is important to show why the customer is important, not to be afraid of presenting examples of both bad and good scenarios, when the actions of the company or employees have contributed to better or worse customer experience. Training should teach employees empathy and patient attitude towards clients but above all how to focus on solving the customer’s problem, no matter what is the issue. The training should explain what are the contact points between the customer and the company (Customer Journey), as well as what influences the client's experience and how the employee can improve it with his actions. However, training with Customer Experience should be started from the management staff in the first place, and after that with employees that are lower in the company hierarchy structure..
The building of CEM processes in a nutshell
It all begins with understanding the client and his point of view. According to the idea of Customer Experience Management, organizations should start possible changes by learning about the client's needs, wishes and goals that he wants to achieve by purchasing the offered product or service. Due to the diversity of these needs, in many cases it will be necessary to perform customer segmentation or other marketing analysis.
The next step is to proceed with "designing customer experiences". It is about thorough development and optimization of service processes using all forms of communication (i.e. personal contact with a company representative, by phone, via email, chat, SMS, letter) and at every stage of the life cycle of the customer relationship (i.e. before buying, during and after purchase).
There can be up to several dozen company-customer contact points throughout the entire customer life cycle. Therefore, it is also important to isolate the key ones that are most important from the client's point of view. This should be done in order not to invest in the development of those to which the client does not pay attention to.
The next step is to create tools to measure the effectiveness of these processes. This is often one of the obstacles to the effective management of customer experiences. Not everything is measurable and quantifiable, but it’s required to somehow control the current state and the destination point. Potential measures can be here the amount of new customers who purchase a product or service, number of recommendations generated by clients, average time of customer-company relationship.
A cyclic audit of experience is an inseparable element of CEM. Its purpose is to check whether what we offer is what the customer really expects and whether it is definitely unique on the market. As a result of such research, it may turn out that the experience of being a customer of some companies are at most average and do not stand out from the competition.
The entire strategy of managing customer experience is largely focused on changing the mentality of employees. At first glance, this may seem impossible, but with the right tools and exemplary behavior it can be achieved.
CEM is not a one-time project, but a strategy - a long-term process of building an organizational culture focused on developing the best experiences at contact points with the client. It is a difficult and expensive strategy, but can be very profitable. Everything depends on the performance. If it is done properly, the first results may be visible even within a month. However, if it’s done wrong, then CEM becomes an art for art and a waste of resources - giving nothing beneficial for the company.
At least once every six months it is worth asking the question whether recent CEM activities have shown improvements in business and the way customers perceive the company. If at this stage there are answers like "it depends", "it's hard to say", "it can't be measured so quickly", "we need more time", "yes, but in terms of image" - then it is worth rethinking the entire CEM strategy.
Facts about Customer Experience
- Customer Experience can't be decided on, you are already in it - Those who think that Customer Experience is not for them are very wrong. Every company, whether it wants it or not, participates in the race for the customer, not only through the product, but also through the experience it provides. The rivals in this race are not only direct competitors, but also companies from other industries that show the customer that "it can always be better". The only question is whether the company will consciously stand up to competition, equipped with the right tools to manage customer experience and have full control of them or whether allowed to be surprised by competitors and in the worst case scenario - lose customers.
- Customer Experience is not really a method - Customer Experience Management is not one of the next types of "Management" known to every organization (such as Process Management, Project Management, Management by Objectives). These have been carefully written, have specific assumptions for use and implementation in the organization, although of course not always easy. Customer Experience is not a method or tool - there are no ready-made and simple instructions on what to do in order to have CX in your company. CX is something much wider than the concept of process management, something wider than satisfaction survey or project management using specific methods. Customer Experience is a kind of approach to running a business - one that takes into account the client, his perception in company activities and recognizes him as a valuable resource. A resource that can be lost or that can be multiplied. This short definition of Customer Experience Management includes both the goal and the means to achieve it. In simple words, we can paraphrase it into an operational suggestion - we will multiply our resources (clients) if we include the client and his perception in running a business. In every place of organization, in every unit and at every level of management. Since we are talking about an approach to running a business, not a method, it has to be taken into account that the transformation of an organization's attitude into a pro-client will not be an easy, short and one-dimensional action.
- Customer Experience can not be implemented - It would be much simpler if it could be, but unfortunately transforming the organization into a pro-client in every inch is a long process, sometimes lasting even several years. Such process covers many areas of the company operations, not at the level of individual departments, but the contact points between customer and the organization - sales employees, product packaging, manuals, explanation of the price plan, each document and message that "goes out to the customer", first contact resolution, courier's attitude, time needed to respond to a complaint, guidelines on recruitment of employees or timely delivery of documents to branches, etc. We are talking here about the full transformation of the organization into a "customer-minded" - perfectly understanding that good customer experience can tie clients to the company for many years and reduce or rather optimize the costs of acquiring that client. Continuing, we are talking about a transformation into an organization in which every employee will understand his role in providing good experience to clients. What's more - into an organization that understands that the customer attached to the brand - more often and more willingly forgives minor mistakes, stays longer in the relationship with the company and most importantly - will buy more.
- Customer Experience is a long-term investment - Is it possible to run a business by providing clients average or poor experience? Actually, yes - it is possible. The only question is, how long will such a strategy pay off for the company and should we treat clients worse if we can do better? Does investing in good customer experience bring reimbursement? The answer is - yes, although it is worth realizing that investing in Customer Experience is similar to investing in marketing campaigns. John Wanamaker, the marketing pioneer and father of modern advertising said once: “Half the money I spend on advertising is wasted, the trouble is I don't know which half". The effectiveness of marketing campaigns is evaluated on the basis of estimates, and in most cases so do the initiatives of Customer Experience. The efficiency of both can be seen post factum, but they differ in time in which the return of effort is noticeable. Marketing campaigns bring results quite quickly, while the Customer Experience results need much more time. No one in the 21st century questions the necessity of spending resources on marketing or Public Relations. It is no different in terms of investment in new products, rebranding, new IT systems or training of thousands of sales department employees. Although it is well known that not every amount spent pays back and it is not always possible to clearly calculate ROI (Return of Investment) - which is rather estimated than calculated. And how to estimate the ROI of a Customer Experience approach? How to calculate how many benefits a company gains when their client is satisfied because he sees an interesting advertisement, easily finds information he needs and buys at a reasonable price, uses a good product, has problems but solves them quickly, meets helpful and competent brand representatives and finally buys again knowing that he will have good experiences. How to calculate the investment cost, which is the sum of the activities of most company areas? There is no simple answer. Companies that have been investing for years agree that although they do not know the exact amounts, they surely profit more than they lose. It is worth considering that time is indeed crucial here and results should not be expected in the short term. It’s also needed to think deeply about what costs will result from not investing in a CX approach. How much will the company lose if it will not prepare for the race and will be overtaken by the competition. And this calculation is even more difficult to make, although it is known that the loss will surely take place.
- Customer Experience versus "How many customers does it affect?" attitude - Another challenge for an organization that wants to be pro-client is the situation when appears an information that one of the clients has had some bad experience and a proposal emerges to invest in changing experience in this area. It should not be asked how many customers have complained about - the question should be quite different: Do we want to experience any customer like that? Does it matter who complained? Who quietly frustrated went to the competition? Who remembers that we cannot always rely on our company? The answer is - no. The most important thing is to reduce the risk that any customer will feel any dissatisfaction. In that case, does Customer Experience require the removal of all clients' pain points? The answer is also no. The company should absolutely be guided by business logic. There are customer problems that have little impact on satisfaction and the willingness to make a purchase or recommend our company. In Customer Experience there are also so called “moments of truth” - the situations in which the customer would cancel the service because his frustration reaches such a high level that he no longer wants to accept it. If we make a conscious business decision (for example due to too high costs of removing a given problem) and leave a given state of affairs as it is - lets be aware of the consequences of such actions.
- Customer Experience is not a matter of customer service department - This is probably one of the most common simplifications. Over the years and with the expanding environment of people dealing professionally with Customer Experience topics, it’s less and less often heard, but in many organizations there is still such conviction. Let's explain - customer service or complaint department in many situations only try to deal with what has been broken at earlier stages of the client's relationship with the company: product or service preparation, its implementation in various places in the organization - during sales, packaging, delivery, communication with the client, in the signed agreement and many other places, depending on the specifics of the industry. Of course, during the "customer service" process, they can also add a problem themselves. Regardless, customer service departments actually clean up after themselves and other departments. They are unable to provide a positive customer experience in his entire relationship with the company. For good customer experience must be responsible every department, every employee, subcontractor or partner of the company, from CEO to assistant, from marketing departments to the so-called staff cells like PR, HR or internal audit. Everyone in the organization is responsible for the image of the company, its products, processes and other employees - and this will decide on how the customer will perceive the company.
- Customer Experience is about people and feelings - Maya Angelou (one of the greatest American poets, activist for the civil rights of the black population in the US, actress and director) said once - “People will forget what you said, people will forget what you did, but people will never forget how you made them feel.” You can argue with the word "never." It can also be said that we remember our activities, we know what we did and when. Research that is conducted with clients of various companies denies the thesis about our reliable memory. A few days after something happens or we do something, we are rarely able to recall details of our actions and their order is also blurred (unless it results from the logic of the process). It is much easier for us to recall emotions and even easier if they were strong - both negative and positive. Emotions are triggered by experience, and experience is created by people. Because it is people who contact clients, create processes, principles of promotion and its communication, build applications, design showrooms, stores or branches, decide on the price level and what information will be on the invoice for the client. And they are responsible for all comments such as "we have such procedures", if they smile or not during service or have a nice or unpleasant tone in conversation with the client. It is people who create other people's experiences. Social psychology defines an attitude as "a relatively constant tendency to positive or negative attitude of an individual to a given object, event or other person". In the case of Customer Experience, we respond to the customer, his needs and emotions at every contact point. That is why Customer Experience is a challenge and a long process - it requires a change in our attitude towards the customer and towards our role in the organization. It requires understanding that a smile, kindness and willingness to help an internal or external client is one of the duties of an employee, that he gets paid for it and is evaluated every day by the strictest jury - our clients.
- Customer Experience facts summary - The facts described above should be the basis for anyone looking for sources of competitive advantage in the CX area. Thanks to knowledge about them, it’s easier to understand the approach and functioning of Customer Experience, as well as more effectively adjust activities and manage the expectations of various stakeholders. And most importantly - get better and faster effects of transforming your organization into a client-oriented one.
Customer Experience Management Summary
It should be remembered that, unlike advertising, Customer Experience Management is a system of comprehensive and long-lasting activities, not a campaign closed in time schedule. Its implementation is basically a reorganization of the company in all its aspects that relate to customer interaction. Marketing as a product-centered activity is an important complement to CXM. If the product or service is of poor quality and does not meet client expectations, even the most friendly staff can do little in this case.
It is also worth knowing that replacing advertising campaigns with Customer Experience Management is a good thing mainly for large companies with an established position, fighting on the market with few rivals. Small and emerging enterprises should not give up extensive promotional activities, as they are necessary to raise brand awareness among potential customers. First it’s needed to find customers who will choose the product or service from the offer of the company and recommend the brand to others.