Is CEM the new CRM?

Is Customer Experience Management (CEM) the new Customer Relationship Management (CRM)? It just may be, as we see boardroom meetings and industry-leading executives focus interest on the feedback, experiences and takeaways of their customers. This focus is reflected in the creation of Chief Customer Officer positions and Customer Experience teams at top-tier global organizations.

Those who sense a bandwagon and doubt the validity of the term might benefit from this definition, which makes it feel rather less fuzzy. Gartner defines the customer experience as “the customer’s perception and related feelings caused by the one-off and cumulative effect of interactions with a supplier’s employees, systems, channels or products.”

This trend towards focusing on the customer experience has not come out of nowhere. In most industries, customer churn rates are rising. With the delicate state of the global economy, customers have a vested interest to ensure they are getting the best deal that is available to them. This can be particularly worrisome for those industries in which the advent of online comparisons has made it incredibly easy for customers to change suppliers without even leaving the home.
Price only takes you so far.

Forrester research suggests that among companies with the best customer experiences, the number of customers reluctant to move away from that company was 8.2% higher than the industry average. Moreover, the number of customers likely to recommend that company was 8.4% higher than average. With these statistics, it is hard to dismiss a focus on the customer experience as a luxury: It is, unquestionably, a key differentiator.

So what does this mean for the daily operations of an organization?

First, it is important to remember that improving the customer experience is not an end result in itself. It brings about a number of benefits, all of which ultimately affect the bottom line. When you improve your customer experiences, you can increase customer retention, drive more customer referrals and reduce costs. As these benefits are recognized at a senior level, CEM is becoming a priority, with significant budgets being allocated. And such budgets are justified when Forrester estimates that large firms can gain between $177 million and $311 million per year by enhancing loyalty through better customer experiences.

Many companies implemented CRM programs, and many failed. But the ones who did it right saw real benefits. CEM will be the same. Do it properly, or don’t do it at all. But when you’re considering it, remember that the customer perception of your business matters, and there is only way to understand those perceptions: Ask.