What is Customer Experience? – A synopsis

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Customer Experience is a term that, like its predecessor ‘Customer Relationship Management (CRM)’, is being sufficiently discussed, debated and talked about. Here I would attempt to summarise the vast literature around it in meaningful way, which even a layman can understand while making the best of efforts to ensure sufficient academic stimulation for the well-informed of the field.

1. Customer Touch points

First, let’s look at what is a customer touch-point. A customer touch-point is defined as a point of interaction between the customer and the business that is selling the product/service which the customer requires. This customer-business interaction may happen over any of the channels of communication

2. Customer Experience Channels

There are multiple channels to facilitate interaction between a customer and a business. These could be classified as direct channels (like the call centre) or indirect (like TV advertising). Based on the use of technology, these channels could also be classified as Digital Channels (like Website, mobile phone) and Physical Channels (like retail store). There may also be social channels of customer experience. These are indirect channels typically where a potential customer hears about a product/service experience of a business from his/her friend. These are typically social channels, traditionally limited to word-of-mouth marketing (WOMM) but more recently including new age Digital channels like Facebook, Twitter, etc.

3. Customer Lifecycle & Stages

Customer Lifecycle is the sum-total of all the stages that a customer goes through during his/her interaction with a business from awareness, discovery, attraction, interaction, purchase, use, cultivation to advocacy/termination.Customer LifecycleCustomer Lifecycle

4. Customer Journey

Each stage of the customer lifecycle above has a customer objective and the customer goes through a series of steps to achieve his/her objective. This is known as a customer journey. And Customer Journey Mapping has its promoters and detractors and the benefits have to be weighed in by the business before undertaking it.

Customer Journey Map - Life Insurance CustomerCustomer Journey Map – Life Insurance Customer

5. Customer Experience Definition

With those basic components defined, I believe we are at a point where we can define Customer Experience. Customer Experience is a cumulative total of what a customer feels (experiences) across all touch-points, across all stages of the customer lifecycle, across all customer experience channels.

6. Customer Experience Classification

Several sub-sets of customer experience have been attempted. From online experience to User Experience to Digital Customer Experience, there are many attempts to classify/slice-and-dice customer experience subsets. But most are in its infancy and industry specific.

7. Differentiation from Customer Relationship and other previous concepts

Customer Relationship Management (CRM), Word-of-mouth-marketing (WOMM), Customer Service, Voice of Customer (VOC) initiatives and Net Promoter Score (NPS) are all concepts related to customer experience. Each of them deserves its own discussion but broadly speaking they all represent a segment/subset of customer experience but not customer experience in its entirety. E.g. WOMM & NPS mainly reflect the outcome of customer experience but do not measure its enablers. CX, CRM & Loyalty ManagementCX, CRM & Loyalty Management

8. Challenges of Customer Experience (CX)

Lastly I want to briefly touch upon the current challenges of customer experience. So assuming you comprehend CX, its value to your business but the obvious next question is how? The primary obstacles in enforcing a proper CX strategy in an organisation are as follows, in my opinion:

a. Tools for Customer Experience – There are very few IT tools available for CX namely along the following objectives:

i. Customer Experience Innovation – How do I use technology to innovate CX of my business? Are there existing tools that I can implement and let them suggest innovative solutions to my CX challenges?

ii. Customer Experience Delivery – If I have a CX strategy in place, what IT tools should I procure to implement them in my existing IT ecosystem?

b. Customer Experience Monetization – What CX strategy should I implement so that I get the maximum bang for my buck? I have attempted to address the challenge of “Customer Experience Monetization” for hotels industry in one of my earlier posts.

c. Customer Experience Measurement – How do I as a business quantify “experience” and then measure it? Should I measure it using financial metrics like revenue or service metrics like FCR (First Call Resolution) or survey based metrics like CSAT (Customer Satisfaction) or social metrics like NPS.

I hope the definitions and the challenges articulated would serve to give a foundation to those looking to learn about “What exactly is customer experience?” For experts in the field, I welcome them to contribute about what are the other major challenges that I might have missed out as well as proposing their solutions to the challenges I have elaborated above. I look forward to learning from my peers and seniors in the field…

5 COMMENTS

  1. Hi Bob

    It’s a long discussion in itself and I am working on penning my thoughts. But at the onset, I believe there are few fundamental differences
    1. CRM is an inside-out perspective of the customer whereas CEM aims to define the ‘outside-in’ perspective of a customer’s profile, behavior and needs

    2. Whereas CRM focused on knowing the details about the customer like name, gender, age, preferences, etc, CEM is focused on creating memorable experiences. As much as CEM can be personalized to the same degree as CRM, CEM works equally well for customers who the company does not know (if you’ve got the customer segmentation correct)

    3. From technology perspective, CRM solutions are obviously extending themselves to incorporate principles of CEM, and I believe that is logical. But pure CEM solutions can also be developed like what some of the IBM Tealeaf and Oracle Rightnow has.

    Would most more once I believe I have sorted it out sufficiently. Thanks for reading and commenting

  2. Thanks, I largely argee that the market has decided CRM = inside out and CEM = outside in.

    And it’s certainly true that CRM is more closely associated with tech. Now of course, vendors are increasingly repositioning as CEM.

    You mentioned RightNow as CEM, and yes they went to market that way, and encouraged their customers to use their solutions to improve experiences. But in reality the solution itself was/is a SaaS-based solution for customer service, which is part of CRM, no?

    All of which leads me to say that, vendor marketing aside, the idea of a solution being CRM or CEM is determined by the company, not the vendor. A customer service tool can be used in an inside-out/CRM way (to cut costs, increase efficiency), or in a outside-in/CEM way (to improve the experience and build loyalty). Or both!

    Same tool, but can be used two different ways.

    Perhaps some solutions line up better with CEM, like EFM/VoC. But for the mainstream marketing/sales/service solutions, I’d argue that CRM/CEM is more a matter of marketing (CEM being the preferred positioning now) or company usage.

    Your thoughts?

  3. Hi Bob

    I have a slightly different take on things when it comes to CRM v/s CEM solutions.

    To begin with I believe CEM cannot be point solutions. They cannot be aimed at just loyalty or customer service, which are just phases in customer life-cycle.

    So you are right that vendors are positioning tools in a certain ways and companies may use them in another, but an actual CEM solution would need to have plugs into both the CRM and VoC systems, among others, like customer journey mapping, etc.

    A true CEM offering should help create customer experience, not just loyalty or service.

    But I am still working on my thoughts. Would surely post a piece once I have formulated a more detailed opinion around it.

    regards
    abhishek

  4. There was a time when people said CRM wasn’t a point solution. It should include marketing, sales and customer service to give that “360 degree” view of the customer. But quickly CRM became a label slapped on anything that had some “customer” functionality. Easiest example: SFA which many still call CRM whether it’s integrated with marketing and service, or not.

    When you say CEM can’t be a point solution, then I say there are no CEM solutions now, and they won’t exist for the foreseeable future. Think about the vast array of technology aimed at contact centers, customer service software, digital and social. Add to that “listening” solution (VoC/EFM) and data mining. No one vendor or solution can encompass all of that.

    Tech can play a huge role in CEM, but as soon as vendors starting talking about end-to-end or “complete” CEM solutions, it sounds more like CRM.

    CEM is should be about understanding what the customer perceives on their journey, and delivering experiences that drive loyalty. Technology can play a role, but it doesn’t define what CEM is about, in my view.

    My research consistently shows that humans are a more important factor in delightful experiences. Where is the technology for that? Should we include hiring and training as part of a CEM “solution?” Where does it end?

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