Does Customer Experience Management Really Work?

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Everybody is talking about Customer Experience Management (CEM). Go to a customer-related conference and half of the speakers will be talking about it. But nobody will have the same definition of what it is! And anecdotal evidence aside, none of them will be able to provide hard evidence that it increases customer satisfaction, that it increases customer loyalty and most importantly, that it increases customer cashflows.

And that is not just down to the limits of a 45 minute speaking slot. I have quizzed literally dozens of managers responsible for CEM projects at conferences over the past couple of years and not one, not a single one, had hard evidence that it really works. Many of them had business cases, but they were so full of rosy assumptions and had so few results directly attributable to CEM that they were in effect meaningless. The plethora of recent CEM books don’t help much either. They all view CEM differently, few of them provide much in the way of detailed case studies and none of them describe how to construct a business case for CEM. And neither does the academic literature. A recent search I carried out on Google Scholar revealed only one or two studies into the effects of CEM on satisfaction, loyalty or profitability.

Don’t get me wrong. Based upon my own experience implementing customer strategies with blue-chip companies over the past 20 years and the research I carried out into CEM during a six-month sabbatical some years ago, I do believe that CEM can increase customer cashflows if done properly. But I don’t see much evidence of the end-to-end, joined-up thinking required to do CEM properly. Instead, I see lots of managers in a hurry to make this exciting new thing, CEM, work in a post-CRM world. And lots of rebranded CRM consultants, or worse, branding consultants, selling their services to those same managers desperate for advice about how to make CEM work.

Why is there so little hard evidence that CEM really works? Is it because like CRM a few years ago, we are still working out what it is? Is it because we are still coming to terms with how to profitably deliver value to customers? Is it because we still don’t really understand how customers assess touchpoints, episodes and entire experiences? Is it because we are only just starting to identify the neurobiological roots of experiential perception in customers? Or is it a combination of these things and many more?

So the next time you are thinking it is time to kick-off your first CEM project, take a long-hard look at what we already know about CEM. About what CEM is. About how to make it work. And about how to make it pay back. Only when you understand these things should you start with the project. The time for wishful thinking about CEM is over.

What do you think? Do you have hard evidence that CEM really works? Or is your project running on a wing and a prayer?

Post a comment and get the conversation going.

Graham Hill
Independent CRM Consultant
Interim CRM Manager

Graham Hill (Dr G)
Business Troubleshooter | Questioning | Thoughtful | Industrious | Opinions my own | Connect with me on LinkedIn https://www.linkedin.com/in/grahamhill/

7 COMMENTS

  1. I was alerted to a new post – “Most Admired” Bank Opens Customer Strategy Vault” – http://www.1to1media.com/view.aspx?DocID=30767 – on the financial benefits of CEM over at the Peppers & Rogers website. The introduction to the article talked about the positive financial benefits of CEM. How timely I thought. But, when I dug deeper into the article it was actually more about new databases, closed-loop marketing and call centre campaign response measurement, in other words CRM, than about CEM. The article talked a lot about the value through cost savings accruing to the bank, but didn’t talk much about what value accrued to the bank’s customers. Perhaps the claimed USD$1.2 million in savings for the bank would be better attributed to CRM, rather than to CEM.

    Is this a sign of the times; that all those things that were CRM yesterday suddenly mutate to become CEM today?

    Graham Hill
    Independent CRM Consultant
    Interim CRM Manager

  2. As a matter of fact, Graham, to take your analogy a little further, I believe that the same way the term CRM got corrupted into a term that equated with “systems,” the same is happening with CEM. I have an ongoing search alert on Google for things having to do with customer experience management. When I put it in place about two years ago, I got stories and posts on strategy: What’s the best way to build a good customer experience? And things like that. Now, though, 98 percent of what turns up is about technology that vendors have labeled “CEM.” Did they just want to go with the new kid on the block? Did they want to abandon all the bad connotations of CRM and take on only the new? In any case, we’re back where we started. Is CEM a strategy in which you use technology and other tactics to examine, create and achieve the ideal customer edxperience? Or is it just another name for a system?

    Gwynne Young, Managing Editor, CustomerThink

  3. When I got started in this “industry” 10 years ago, there were a number of competing terms like TERM (Gartner’s Technology Enabled Relationship Management), CAS (Customer Asset Management) and loads more proposed by various vendors and consultants.

    Somehow “CRM” became the de facto industry term by the late 1990s, and over the next few years, any vendor that sold anything with even a faint whiff of customer-related technology, started saying they were a CRM vendor.

    As the gloss faded from CRM by the end of the 1990s, some vendors abandoned ship for other terms like CEM, hoping to ride the next wave of excitement.

    As we’ve studied both CRM and CEM projects over the years, there’s actually a fair amount of overlap if–and this is a big if–they are approached as strategic company initiatives. So in some cases, the choice of label is not all that important.

    From my standpoint, the fact the bank case study does not mention much in the way of customer value that builds loyalty, means it’s not a great CRM project either. Nothing wrong with process automation and analytics, but I’d prefer these just be called what they are: IT projects, not CRM initiatives.

    Bob Thompson, CustomerThink Corp.
    Blog: Unconventional Wisdom

  4. So what really works? CRM doesn’t work… CEM doesn’t work…

    In their book What Really Works?, Joyce, Nohria, and Roberson outline 4 primary areas (strategy, execution, culture and structure) and 4 secondary areas (talent, leadership, innovation, and mergers and partnerships) that are imperative for sustained superior performance.

    Surprisingly, relationship and experience are not mentioned.

    Daryl Choy
    Make Little Things Count
    wisdomboom.blogspot.com

  5. Daryl

    I wouldn’t worry too much about business books. They are the expression of someone’s ideas. They are a guide to someone’s opinion. They are not management research. They are not fact. And two books about the same subject often contradict each other.

    That is why I rely more and more upon a combination of harder-edged published management research (for the know what), and going and seeing how things work in practice (for the know how) to guide the formulation of my own ideas.

    That is not to say that business books are not worth reading. They can be a great introduction to a new topic. The trick is in knowing which ones are worth reading and which not.

    Graham Hill
    Independent CRM Consultant
    Interim CRM Manager

  6. Daryl

    Not sure I agree.

    There are many good business books out there, but there is also a lot of unadulterated rubbish. Spencer Johnson’s ‘Who Moved My Cheese’ for example. The trouble is, the cheesy books distract all too gullible business readers from focussing on what is really important.

    As GBS might have said, ‘The only thing we learn from rubbishy business books is that we learn nothing from rubbishy business books’.

    Graham Hill
    Independent CRM Consultant
    Interim CRM Manager

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