What is Customer Experience Management?
Co-Founder & CEO
January 31, 2020
Understanding Customer Experience Management
Great Customer Experience Management (CXM) requires coordination across all of the functions of a company. This guide is your introduction to the basics: why CXM is important and how to be great at it so that your company’s customer experience can rise above your competition and stay there.
What is Customer Experience Management?
Customer Experience Management, also known as CXM, is the process an organization uses to coordinate the utilization of resources and employee efforts spent managing customer perceptions and behaviors towards its business or brand.
Every employee in a company and every decision a company makes impacts the customer experience either directly or indirectly. How these decisions are made every business day determines whether the company’s relationships with their customers strengthen or not and is directly correlated to future sales, profit margins, growth and sustainability.
Why is Customer Experience Management important for your business?
Managing customer experience is extremely important for any company. If your competitors do a better job than you at customer experience management, your customers will be more likely to give their business to them. Conversely, companies that excel at customer experience management are able to consistently deliver positive experiences, keep customers coming back for more, and produce strong reviews and social chatter that perpetuates growth.
According to the Harvard Business Review report Lessons from the Leading Edge of Customer Experience Management, customer experience management is markedly more important to leading-edge companies. Seven out of ten say it’s a significant strategic priority. Nearly half of all lagging companies (45%), by contrast, said that customer experience is not at all important.
The benefits of great Customer Experience Management include:
- Improved service
- Reduced costs
- Increased revenues
Great customer experience management drives demand for your products and services. When customers perceive your business as a company that puts its customers first, word travels fast in today’s world. When customers have bad interactions with your company, other customers and prospective future customers read their reviews, watch their videos, and hear about it on social media. A single customer interaction – positive or negative – has implications on future revenues and the ultimate sustainability of your business.
What parts of your company’s Customer Experience need to be managed?
In order to effectively manage customer experience, a company needs to first define the essential parts of their customer experience: who their customer is, what their customer’s experience with their company is, and what the intended outcome of their experience is for their customer. The following three instruments can be used to effectively define and manage these essential parts of a company’s customer experience:
- A Customer Persona is a description of a customer based on demographics, behaviors, lifestyle, motivations, challenges and needs.
- The Customer Experience Journey Map tells the step-by-step story of a customer’s interactions with a company beginning with the first time the customer becomes aware of the company’s brand.
- The Customer Experience Goal is a measurable customer action that is the intended result of the customer’s experience with the company.
What is good Customer Experience Management?
As previously mentioned, Customer Experience Management requires company-wide coordination because every employee impacts the customer experience either directly or indirectly. So in order to effectively manage customer experience, every employee must share an understanding of the customer persona, the customer experience journey map, and the customer experience goal. If employees do not share an understanding of these essential customer experience components, how can they possibly coordinate the utilization of company resources and employee efforts?
But sharing an understanding of the customer experience is only the beginning. The customer persona, customer experience journey map, and customer experience goal are always changing with the market and the company’s objectives and strategy. Therefore it’s most critical to have an innovation process in place to continuously evolve and improve each of these components. With company-wide alignment and a process for improvement, good customer experience management is achievable.
What causes bad Customer Experience Management?
Bad customer experience management is easy to diagnose. Suppose you were to theoretically interview every employee about your company’s customer experience asking them three questions: 1) Who is the customer? 2) What is their experience? 3) What is the goal of the experience?
How many different answers would you get? If employees don’t share a common definition of the customer experience, how can they possibly be expected to coordinate their efforts to manage and produce it? Lack of a common understanding of a company’s customer experience is the number one symptom of bad customer experience management.
The number two symptom is poor communication. Companies that struggle to communicate with their employees also struggle to keep employees engaged in managing their customer experience. Managing customer experience is not easy. It requires constant communication to coordinate efforts, share learnings and improve processes. Without communication and coordination, functions inside companies become silos working to improve the parts of the customer experience that they are responsible for without the context of the overall effort.
Why you need a system for Customer Experience Management
While a company’s intentions may be in the right place, without a system to ensure constant coordination, silos between functions are inevitable. The customer experience cannot effectively be managed with functions inside a company syncing up quarterly or even monthly. Everyone in the company is involved and strategies and plans are in constant flux. Today’s customer markets are changing faster and faster every day. Customers are changing. Competition is changing. In fact the one guarantee that we have is that there will be change and the companies that are able to adapt fastest can not only ensure survival but also thrive in such an environment.
A customer experience management system provides a strategy for alignment and evolution. By plugging everyone into a system for managing customer experience, the need for additional communications and training can be greatly reduced. The alternative – trying to manually keep everyone on the same page through meetings, emails, webcasts, training and retraining – is an incredibly complex method of management that can be successful to a degree. However, every degree out of alignment a company’s employees and departments operate results in wasteful actions and investments that aren’t focused on achieving the company’s goals.
To manage something as complex as the customer experience across functions, departments and geographies, company’s must turn to technology. And not technologies that must be bolted together to manage all of the elements of the customer experience separately. Companies must use a system for collaboratively managing customer experience that enables them to manage holistically and ensures that every employee can understand their role in the context of the overall effort.
How to measure and analyze Customer Experience Management
A customer experience management system is working if a company is able to measure and track improvement in the following areas:
Goal performance measures the percentage of customers that experience the intended result of the company’s efforts with the aspiration of achieving the goal for every customer and prospect customer a company has.
Employee Engagement measures the percentage of employees that are actively engaged in helping manage the company’s customer experience with the goal of getting and keeping every single employee engaged every day.
Rate of Innovation measures the amount of ideas that employees produce on a daily, weekly and monthly basis to improve the company’s customer experience.
Rate of Improvement measures the changes made to the customer persona and journey map to improve the experience the company is delivering to the customer.
By measuring and tracking these four key performance indicators for customer experience management, companies can set a baseline and then demonstrate improvement as well as the return on investment for all of their investments and efforts spent managing their customer experience.
A great Customer Experience Management example
Here is a practical example of how implementing a customer experience management system can impact the success of a company.
One of our customers, healthcare provider DaVita, delivers kidney care to people with chronic kidney disease and end stage renal disease. The company developed a revolutionary program for their patients that was designed to provide benefits beyond the scope of any program that had come before it. Patients in the program could receive assistance with travel to and from dialysis clinics, health club memberships and even dental coverage that could potentially put them on a path towards getting a kidney transplant.
The problem DaVita was facing was that 40% of the patients that enrolled in the program were opting out of the program before receiving any of the benefits. It’s important to note that the program was not paid for by the patients. It was entirely paid for by the government. So they had a program with life-saving benefits that was free to patients but 40% of them were opting out of the program.
By taking a step back and implementing a customer experience management system, DaVita focused their resources and efforts on making sure that every patient that enrolled in the program started receiving the most valuable benefits for their needs on day 1. The result was that every patient began understanding and experiencing the value of the program immediately upon enrollment and not a single patient opted out of the program after the system was implemented. Patients’ lives were enhanced tremendously and DaVita was able to further their vision of building the greatest health care community the world has ever seen.
Customer Experience Management Simplified
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