This is the first in a series of blog postings on the basic concepts of Customer Experience Management.
They can be found in an e-book—The Customer Experience Management Field Manual which you can order—free—by sending an email to:
The Customer Experience Factory Field Manual:
Part I- Basic Concepts
Part II- Readiness Assessment
By Pieter van Osch and Jay Curry
Interviewed by Marie-Jose Lorty, Director of 3DMarketing.com
Interviewer: Welcome to this field manual about Customer Experience Management (CEM). Part I covers the key concepts of CEM while Part II lets you assess your internal capabilities for implementing these basic concepts.
Are you ready to go? OK, let’s begin with some Basic Concepts.
First, I understand that Customer Experience Management is relevant for all kinds of businesses. Some think it is highly tilted to a Business to Consumer model. Right?
Jay: No, Customer Experience Management (CEM) is relevant to all businesses that have customer. Business to Consumer and Business to Business. But also government agencies, hospitals and non-profits/fundraisers are important because Experiences are just about the only real product they offer—paid for separately or not.
Interviewer: Why are you publishing The Customer Experience Management Field Manual?
Pieter: This Field Manual is not reading literature, but a hands-on working tool for anyone in the organization who deals with your Customers.
Part I of this book will give you an opportunity to review and internalize the basic theory and practices of Customer Experience Management (CEM). In Part II, you can assess and score your current capabilities to implement and profit from CEM.
Interviewer: How did you guys come together?
Pieter: We have known each other for about five years … I had a systems house selling and implementing a package which supported the process of Customer Relationship Management (CRM)
Jay: And I was the originator of Customer Marketing, a methodology to implement and profit from CRM.
We did a small bit of business together but it did not amount to much. Pieter was specialized in the building world which had a different structure than businesses with “normal”, repeating customers. So our past cooperation was short-lived.
Pieter: Last year Jay found himself in the hospital, recovering from a stroke. Being an observant and entrepreneurial guy, he started on a book about Patient Relationship Management with a view to serving the healthcare industry.
He then broadened his view to the commercial world and started thinking about Customer Experience Management
Interviewer: Customer Relationship Management and Customer Experience Management: what is the difference?
Jay: The two disciplines are closely related. But there are some differences.
CRM has as its goal to maximize customer profitability—CEM is not against profits, but its goal is to maximize customer happiness with a supplier and customer loyalty, factors which drive profits as we will see.
Customer Experience covers the total experience enjoyed or encountered by a customer with a company or brand.
The experiences—good or bad—will shape the customer’s attitude towards the supplier and determine—in part—his future behavior.
In short, CRM is about getting something FROM customers: profit, leads, information—or whatever,CEM is all about giving something TO customers: pleasurable/exciting experiences.
Pieter: Yes in research sponsored by CRMGuru.com respondents reported their actions after encountering very positive and very negative experiences, called Memorable Moments.
Customer Actions After a Positive Memorable Moment
Recommended to a friend, family or colleague 31.7%
Praised a company representative 22.2%
Purchased more products/services 19.1%
Continued the relationship about the same 15.7%
Customer Actions After a
Negative Memorable Moment
Complained to a friend, family or colleague. 25.3%
Complained to a company representative 24.8%
Switched to a new supplier/provider 20.1%
Purchased fewer products/services 9.5%
Obviously it is better to generate positive experiences.
Jay: And here we see the macro impact of positive experiences among Toyota customers. Dealers with high satisfaction scores simply made more money than those with low satisfaction scores. The difference can be seen in lower advertising costs.
Happy customers come back for servicing and buying a new car; hence less need for advertising. Plus they recommend their supplier to others, creating more business.
Poorly satisfied customers vote with their feet and move to competitors when they are ready to spend again, and have to be replaced via expensive advertising and promotional campaigns.
The bottom line: positive customer experiences pay off.
Interviewer: I’d like to get a bit deeper into the basic theoretical aspects of Customer Experience Management. What are the basic concepts?
Jay: I think there are five to explore here:
1. Neuro Marketing
2. The Moments of Truth
3. NPS – Net Promoter Score
5. Experience Engineering