Customer Experience Management: What It Is And Why It Matters
Gartner defines customer experience management as “the practice of designing and reacting to customer interactions to meet or exceed customer expectations and, thus, increase customer satisfaction, loyalty and advocacy.”
Beyond Philosophy, a company led by customer experience authors Colin Shaw and David Ive, believes that a customer experience is the customer’s conscious and subconscious perception of an interaction with an organization.
Importantly, Shaw and Ive go on to say that “a customer experience is not just about a rational experience. More than 50 percent of a customer experience is subconscious, or how a customer feels.”
So, what are Shaw and Ive actually saying?
They purport that the customer experience is not about how quickly you answer a phone or what hours you are open. Instead, it is about how your customer feels about the experience they received when you answered the phone, or how they feel about your hours of operation.
Furthermore, the customer experience is not about individual experiences. According to Rawson, Duncan, and Jones, who conduct research into and consult on customer journeys, organizations able to skillfully manage the entire experience reap enormous rewards. These rewards include enhanced customer satisfaction, reduced churn, increased revenue, and greater employee satisfaction.
Why Customer Experience Management Matters
The concept of customer experience has received much attention in the past 12 to 24 months. As companies recognize that their industries are becoming over-crowded with similar competitors, they are exploring ways to differentiate themselves.
Enhancing the customer experience is viewed as one way to create a point of differentiation. Companies that can offer personalized and individualized customer experiences give themselves the best opportunity to create a competitive advantage.
A good customer experience has a number of benefits:
Reduce customer churn.
Customers are constantly being wooed away by competitive offers. Whether they are influenced by better pricing or a better service, a great customer experience can keep them from churning. Strive to offer an experience that is unmatched by your competitors. A strong customer experience will make it very difficult for any customer to leave.
Increase customer satisfaction.
Happy customers are loyal customers. Over time, continuously delivering a consistent customer experience that goes ‘above and beyond’ their previous experiences will lead to customer loyalty. A loyal customer is willing to stay with your brand, even if it is easier or cheaper to go with someone else.
More customer advocates and business referrals.
A study by the Strativity Group (2009) found that higher customer referral rates and customer satisfaction were reported by 860 corporate executives who increased their investment in the customer experience. Can you afford to ignore higher referrals rates?
Create differentiated customer experiences.
Your company can no longer compete on price alone. Your customers want more: They want an emotional connection with your company. Amazing experiences will give customers what they want and keep them coming back for more.
Challenges of Customer Experience Management
Consistency across all channels
Research by Rawson, Duncan, and Jones found that customers do not care about singular touchpoints across the customer journey. Instead, they care about their cumulative experiences across multiple touchpoints and channels over time.
Customer satisfaction can no longer be gauged by solely measuring individual customer experiences. A more accurate representation of satisfaction appears to be based on the overall experience.
This research is further backed up in a study by McKinsey & Company, which found that measuring satisfaction across a customer’s entire journey is a 30 percent better predictive measure of overall customer satisfaction than measuring happiness for each individual interaction.
- Focus on the entire customer journey, not individual experiences.
- Empower sales, support, customer service, and marketing to work together to create a unified, consistent experience.
Getting the right technology to help you deliver personalized, individual experiences
Esteban Kolskey, a customer strategist, sheds light on the topic of customer experience and technology. Here is what he had to say when asked if technology is necessary?
“There are many parts of changing the customer experience that are not dependent, reliant, or that even need, technology. Some of the experiences your customers expect are not based on more or better technology, but in changing the training plan, or changing a location, or even changing a manual process.”
The above mindset is a great way to approach technology within the context of the customer experience. I am a big believer in using technology to enhance the experience, not to create it.
There are so many technology options available that it can be difficult to choose which one fits your needs. A good strategy with which to approach this challenge is to first ask yourself, what experience do you want to create? Then, discuss whether technology can help you make that experience better or more efficient.
- Define the customer experience you want to deliver, and then find a technology that can help you enhance the experience or make it more efficient.
- Simple email marketing programs and customer satisfaction software are great tools available to small businesses to get started.
- For bigger businesses and enterprises, you should evaluate one of the big software vendors (Oracle, Salesforce, Adobe, IBM, SAS)
Creating a customer-first culture
A customer-first culture can help frame your employees’ actions. Such a culture is formed through the values your company embodies. Through these values, your employees acquire direction as to how they should properly engage, interact, and communicate with customers.
To create a customer-first culture, your company needs to embody these values. A great example is Zappos. CEO Tony Hsieh encourages his employees to break the rules in order to create amazing customer experiences.
Namely, he gives employees the ability to spend that extra 10 minutes on the phone to really make a memorable impression. He also empowers employees to think outside the box and to send a bouquet of flowers to a customer who might, for example, be experiencing a rough time.
Such small gestures cannot be systemized. Instead, they are engrained in your employees through the company culture. They are values that encourage your employees to become people focused, not system focused.
- Create a people-focused company culture.
- Evaluate your company mission statement. Does it focus on your business goals or your customers? Make sure it communicates your mission to customers.
- Read this blog post: How to Leverage Company Culture to Improve Customer Satisfaction
Customer Experience Management Solutions
The first customer experience management solution you can utilize is customer feedback. By leveraging feedback, you can continuously adapt and improve your customers’ experience.
I suggest integrating two or three customer feedback loops into your business processes. You might try quarterly customer satisfaction surveys, semi-annual client meetings, and spontaneous customer care calls.
Each of these ‘feedback loops’ are an opportunity to gain insight into the customer’s feelings about the experience, in accordance with Shaw and Ive’s above remarks, the customer experience is not about how you deliver your service, it is how the customer feels about it. These feedback loops help you better understand your customers’ feelings toward each touchpoint and the customer journey as a whole.
Technology is a great enabler of the customer experience. When tasked with creating a consistent experience across all marketing channels, there is no way to do it without leveraging software.
I will not recommend any specific software products; instead, I want to explain why you need them.
In today’s ever changing world, your customers are using multiple platforms and channels to communicate with your company. Whether they still use the phone, email, Twitter, or Facebook, they expect a rapid response.
Furthermore, they expect you to remember the conversation that took place when they called customer support six months ago with another enquiry.
So now you’re in a position where your social media team has responded to a tweet, support has answered a phone call, and sales just responded to an email. How are you going to ensure that everyone on your team knows the details of this customer relationship and are responding consistently?
There are software solutions that bring all of your channels together and integrate customer information into one unified platform. These solutions enable all of your departments and employees to have complete access to past conversations and important customer data. By leveraging technology, you can empower employees to offer a personalized and individualized experienced based on past data.
These experiences add value to the customer—they show that you remember previous conversations, and that you care about the relationship.
Now that is what creates an amazing customer experience!
Many companies—and probably your competitors—are doing so right now. So guess what? You’re customers now expect this level of personalization, that is, their expectations are higher.
Do you have the systems in place to ensure you meet their new expectations? If you do not, you risk losing customers
Experience-focused value propositions
A Bain & Company survey (2005) found that only 8% of companies truly deliver a superior customer experience. On the flipside, when the survey asked companies to rate themselves, 80% thought they delivered a “superior experience” to their customers.
According to Allen, Reichheld, and Hamilton, an experience-focused value proposition sets these 8% of companies apart from the rest. They focused on creating a superior customer experience in the eye of their customers.
To achieve this goal, these authors investigated further and found that those 8% of companies pursue three key imperatives simultaneously.
1. They design the right experience-focused value propositions.
2. They strive to deliver value to the customer.
3. They develop capabilities to do it over and over again.
Keep reading about these tactics here: The Three ‘Ds’ of Customer Experience
Customer Experience Management Resources
Keen to read more? Check out these amazing resources to keep learning about customer experience management:
- The Secret Sauce to a Superior Customer Experience
- 5 Customer Experience Strategies That Work
- Customer Experience Marketing: What is it and Why it Matters
- Leveraging Technology to Achieve Total Customer Experience
- The Truth about Customer Experience
- Beyond Philosophy Explains, What is Customer Experience?
- Customer Experience Management Insights from SAS Institute