CRM Vs CEM – Where Should You Put The Money?


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With the customer soon becoming the constant focal point of any business model, the various data collection & analysis tools that aim to analyze and unravel insight into customer behaviour have grown in prominence. And while growing in prominence, these tools have branched out into 2 major, distinctive subsets.

1. Customer Relationship Management (CRM)
2. Customer Experience Management (CEM)

Here’s an important note:
CRM and CEM are not the same; they are, in fact, mutually exclusive of each other. Although they might seem to bear some resemblance in their monikers arising from common roots (both tools are used to capture customer data, generically speaking), they have separate operational goals and come with functionalities unique in their own way.
That said, understanding the difference between a Customer Relationship Management (CRM) platform and a Customer Experience Management (CEM) platform is still a long-standing conundrum for many, plagued with numerous misconceptions.

For instance, a common question many people in the industry ask is that,
“If my existing Customer Relationship Management (CRM) software gives me data and insight about my customer, then why do I need a Customer Experience Management (CEM) software?”
We’ll answer that question along the way. But first, let’s establish some clarity on what a CRM and a CEM does and how they differ in their basic essence.

What is CRM?
According to,
Customer Relationship Management (CRM) is a term that refers to practices, strategies and technologies that companies use to manage and analyze customer interactions and data throughout the customer lifecycle, with the goal of improving business relationships with customers, assisting in customer retention and driving sales growth.
In simple terms, a CRM software helps a business integrate sales, marketing and customer support by analysing customer data. An ideal CRM platform provides you with analysis of sales cycles, marketing campaigns, customer acquisition strategies and other customer interaction metrics – the time spent by the customer engaging with your business, the cost of each transaction, the quantity of products/services purchased and so on.
A CRM platform records raw, unsorted customer information from various channels such as website, E-mail, brick and mortar stores, before disseminating this information along with the insights gained into various departments such as Sales, Marketing, etc.

What is CEM?
According to,
Customer Experience Management (CEM) is the collection of processes a company uses to track, oversee and organize every interaction between a customer and the organization throughout the customer lifecycle. The goal of CEM is to optimize interactions from the customer’s perspective and, as a result, foster customer loyalty.
Highlighting the phrase ‘customer’s perspective’ here as it makes all the difference. A CEM platform is engineered to collect experiential data from customers – it involves listening to customers, their feedback and viewpoint and then using this information to discover customer insight and optimize the customer journey accordingly.
A Customer Experience Management platform captures only experiential data and integrates the Voice of the Customer to help Businesses take decisions.

Why is a Customer Experience Management (CEM) platform important?
Most businesses have a CRM system in place whereas it is in the space of CEM that they lag – failing to see its benefits, both today and in the long run.

With customers becoming more aware and demanding day by day, it is their perspective that should be weighed in majorly while developing business strategies. Also, given the amount of competition in the market space, Brands that focus too much on CRM data and turn a blind eye towards customer feedback cannot sustain in the long-term.
It’s no longer a monopoly. Even the smaller brands have started creating superior and seamlessly engaging customer experiences that customers want. And that is because, they’ve begun to prioritize CEM systems that have a clear focus to capture the Voice of the Customer and use it to good effect.


Where do you put your money – CRM or CEM?
Ask us and we’d say you need both. That is, if you’re looking to deliver a delightful and highly relevant customer experience. Why is that so?

I think we would all agree by now that a CRM tool is inclined towards capturing transactional data. It doesn’t tell you what the customer ‘feels’ while engaging or interacting with your brand.

Talking along these lines, we can find out, for instance, how many customers spent below 10$ at your store. But this data doesn’t tell us how happy/sad/delighted they were with the experience of shopping in your store. Irrespective of how small an amount they spent, they could still be delighted with the experience, right?

This is precisely where you need a Customer Experience Management (CEM) platform. By capturing and analysing experiential data or the Voice of the Customer, Brands can precisely find out which aspects of the brand experience they are falling behind on and what they need to do to rectify it.

With the addition of a CEM tool, Brands can exactly tell how many of those customers who purchase below 10$ are actually delighted with the brand experience.

Here’s another deliberated example to fully understand the difference in the nature of insights your Brand can unravel by integrating a CRM and CEM software.

With a CRM alone: “50% of my overall customers purchased below 100$.”
CRM + CEM (adding experiential data): “50% of my overall customers who purchased below 100$ said they were not greeted at the entrance and also rated the store ambience below 2/5.”

If there’s one thing you can make out clearly, it is the depth and quality of customer insight which is pretty amazing when you bring a CRM and a CEM platform together.

Am I seeing higher customer acquisition costs where the newer customers are dissatisfied with the experience? Am I finding more customers enjoying the brand experience but the revenue growth not vindicating this?
To answer such challenging questions, an in-depth understanding of your customers is precisely what you require. And such an understanding usually results in strategies that enhance the overall customer experience.

Someone very wise and inarguably important once said, “Any fool can know. The point is to understand” CRM is a great tool to gather data on your customers, to know them as mere data and numbers. But unless you invest in a CEM platform, you will never make sense of that data and fully understand your customers who, in effect, are your Brand’s raison d’etre!

Ganesh Mukundan
I'm a content marketer at Hiver. I've been writing about customer experience for the past 5 years. I'm passionate about narrating delightful customer stories, researching CX trends, and deep-diving into concepts such as VoC and Customer Journey Mapping.


  1. Ganesh, I really wuldn’t subscribe to CRM and customer experience management are mutually exclusive but would see them, together with customer engagement management form a triangle. Imo there is no clear boundary between these three terms. I also think that the differentiation is somewhat arbitrary. My prediction is that the same will happen as with other technology driven terms – most notably SCRM. Look at them as best-of-breed because suites cannot deliver here fast enough. Sooner rather than later this whole mess of different applications (not platforms) will merge again and be seen as one. Whatever the name then is. CEC, ICE, or whatever.

    Just 2 cents from Down Under

  2. Hi Thomas, thanks for your comment! I really liked the idea of the triangle – yes, these systems are interconnected in a way. However, there still is a conceivable difference between CRM and CEM systems. Obviously you can’t have expect a CRM to capture experiential data and a CEM to capture transactional data in depth. But yes, like you said, there might be a point in the future where these systems might merge into one single holistic model but till then, CRM and CEM systems should continue to exist as mutually exclusive entities although they both are engineered to capture consumer-related data.

  3. Hi Ganesh, yes, at the moment there is a difference. But then in earlier times there was a difference between a sales system, a marketing system, and a service system. It is not that obvious that a CRM system cannot capture experiential data. After all engagement (of which a good part is e.g. marketing, or assisted sales processes) are – or has always been – at least partly covered. This, btw, I call CEM (customer engagement management). Where core systems do not cover we will get best-of-breed. This is where we are at currently with CEX (customer experience management). Which is good, as it pushes the envelope. But ultimately CRM, CEM, CEX are facets of the same, and they are not mutually exclusive but augment each other. The glue is analytics (which in my book also includes machine learning).



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