Customer Care … CRM … Customer Experience — What’s the Difference?

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Customer Care … Customer Relationship Management … Customer Experience — what’s the difference?

All of these terms are components of customer experience management (CEM), which is the broadest and deepest way of viewing customers and their role in the success of any organization (for-profit, non-profit, or government). The purpose of any organization is to serve a customer need. The results of serving that need are typically financial (revenue, profit, funding, paychecks). In essence, customer experience is what makes the world go around!

Customer experience management is sometimes confused with the following concepts. Indeed, CEM encompasses all of these practices, and more. They can be categorized by Customer Profitability, Customer Knowledge, and Customer Well-Being.

Customer Profitability (efforts to increase revenue and profit from customers)

  • Customer relationship management (CRM) — use of a database of customer transactions and facts that enable customized communications (1-to-1 marketing), upselling, cross-selling, and data-mining
  • Experiential marketing — events and  campaigns that build customer advocacy
  • Customer advocacy — word-of-mouth promotion (buzz marketing) of a brand by enamored customers
  • Branding — creating and communicating a distinctive identity
  • Customer lifetime value (CLV) — profitability of customers’ cumulative purchases
  • Customer retention — efforts to extend a customer’s duration of ongoing purchases
  • Customer loyalty — efforts to expand customers’ share of wallet
  • Customer lifecycle management (CLM) — achieving customer lifetime value by using customer relationship management over time
  • Customer experience journey map — pictorial representation of a customer’s thoughts and actions while shopping or using a product or service
  • Customer community — opportunities for customers to engage with one another
  • Customer references — testimonials from customers
  • Co-innovation — joint product development efforts with customers

Customer Knowledge (ways of understanding customers)

  • Voice of the customer (VoC) — monitoring customer sentiment
  • Net promoter score (NPS) — a way of summarizing voice of the customer: percent who would recommend a brand minus percent who would not
  • Customer intelligence — integration, mining, and analysis of customer data
  • Internal branding — internal understanding by each employee, supplier, and alliance partner of their specific impact on external customer experience
  • Internal customer satisfaction — attention to quality and timeliness of handoffs between internal departments

Customer Well-Being (efforts to translate customer knowledge into organizational attitudes and behaviors)

  • Customer care — organization’s conscience in favor of customers’ welfare, and outreach to customers accordingly
  • Customer satisfaction — comparison of customer’s reality versus expectations
  • Service excellence — delivery of purchased services or remedial services, or post-sale assistance to customers
  • Customer-centricity — degree that customers’ welfare is at the center of the solution provider’s decision-making and actions
  • Customer experience improvement — process-wide problem resolution and prevention
  • Customer complaint resolution — solving issues and communicating solution to complaint originators
  • User experience (UX) — intuitive and inviting environment for customers’ use of the product or service, or for exploration and purchase of the product or service, e.g. retail store or website
  • Customer touch points — opportunities for customers to interact with the solution provider or its messages or products/services
  • Customer experience innovation — designing and implementing novel methods to enhance customer experience
  • Customer experience management strategy — overall objectives and approach for the enterprise that determine the degree of customer-focus

Customer experience management is a dedication to serving customer needs from their perspective. All organizations can reach higher potential by carefully managing the above dimensions of customer knowledge, customer well-being, and customer profitability. Make sure CEM is integrated in your strategies and culture!

7 COMMENTS

  1. Lynn: I love the way you’ve organized it… what a comprehensive approach. Prince Hal over at Pitney Bowes Business Insight recently talked about yet another dimension — which may overlap a lot of what you’ve touched on here: and that is how business processes often drive customer experience. One line caught my attention: “At the end of the day, a business that masterfully manages and aspires to influence the customer lifecycle by generating a living customer experience strategy must have the fundamentals of business processes in place.” Thank you for this great post (here’s a link if you want to see that full Hal post: http://www.pbinsight.com/blog/details/living-customer-experience/

  2. Hi Ed,
    Thanks for your comment. Very nicely put — fundamentals of business processes are indeed the foundation of successful customer experiences. It’s common sense, but it can be more tempting to focus on sizzle rather than steak! In addition to the glossary above, I recently wrote about the essential characteristics of customer experience — I believe your point is included in the 7th characteristic: Operational: customer experience is shaped by all the contributors to an organization’s processes, policies and culture, in addition to the physical product or service associated with the customer’s need. This post is part of a 10-part series that explores each of the essential characteristics. See Customer Experience Management is Doing the Right Thing.

    Lynn Hunsaker helps companies improve customer data ROI, customer-centricity and customer experience innovation. She is author of 3 handbooks. See ClearAction.biz, Twitter.com/ClearAction, Facebook.dj/customerexperience.

  3. Hi Lynn:
    Any chance to add two more items to your list?
    – Customer Lifecycle
    – Customer Journey

    Looking forward to you definitions.

    Roberto

  4. Hi Roberto,

    Thanks for the reminder! These are both Customer Profitability tools:

    Customer Lifecycle Management (CLM) — achieving customer lifetime value by using customer relationship management over time.

    Customer Experience Journey Map — pictorial representation of a customer’s thoughts and actions while shopping or using a product or service.

    I’ve now added these terms to the original post.

    Lynn Hunsaker helps companies improve customer data ROI, customer-centricity and customer experience innovation. She is author of 3 handbooks. See ClearAction.biz, Twitter.com/ClearAction, Facebook.dj/customerexperience.

  5. Another one to define under the heading of Customer Well-Being . . .

    Customer effort: how much effort the customer has to put forth during their experience with a company.

    Note that the notion of “customer effort” was initially directed at contact centers’ customer service transactions. It includes customer empowerment, service agent empowerment, and prevention of future issues as well.

    I prefer to use this phrase in the context of the entire customer experience (service as your CEM strategy is too little too late), and I often refer to it as the “customer hassle factor”. I’ve written about it as the denominator of the “customer value quotient”: http://www.customerthink.com/blog/what_s_your_customer_experience_value_quotient

    Ultimately, from the customer’s viewpoint, “customer effort” is the denominator in their ROI — what they have to go through in order to get the value needed to move along in their life/business.

    Here’s a pictorial definition of Customer Experience: http://www.slideshare.net/clearaction/what-is-customer-experience-17086729

  6. Hi Lynn,

    Thanks for breaking this down appropriately. I am looking to do a course/training in Customer Experience Management. Initially was looking at customer service as a whole, but then again, i thought customer relationship management should be an add on, till i saw CEM and the definition here.

    My question is, do you have any pointers i should look at as regards training for CEM? I would greatly appreciate your feedback.

    Regards.

  7. Thanks for your comment, Ebi. I recommend this online course: https://clearactioncx.com/product/ccxp-exam-prep-course/

    It is the quickest way (2.5 hours) to learn the full scope of customer experience management. It goes beyond most CEM courses, to help you understand how to leapfrog common fallacies in CEM.

    It’s designed as preparation for the certification exam managed by CXPA. And it’s equally useful to anyone who just wants to get up-to-speed on customer experience.

    Lynn

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