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Customer Experience Management: From Utility to Delight
CEM promises to be the new level of strategic differentiation and innovation for businesses.
Posted Jun 1, 2005
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Faced with marketplace factors like cross-channel behavior, media fragmentation, and advertising saturation, there's little wonder companies have such difficulty attracting and retaining today's empowered, demanding, and media-savvy customer. Enter customer experience management (CEM). Currently a hot topic with business executives, CEM promises to be the new level of strategic differentiation and innovation for businesses.

Indeed, it has captured the attention of so many because it is an effective response to the challenges that plague marketers today. Where many current marketing strategies are channel-specific and siloed, customer experience strategy is holistic and integrated. Where the majority of current advertising is loud and fleeting, rich customer experiences and interactions are personal and immersive. Where brand communication is designed today to speak about the benefits of a product or service, customer experience design improves the offering itself.

But while much has been written about what it is and why it works, very little has been written about how to do it, and particularly where to start. What follows is a series of six questions designed to help companies address the fundamental areas they need to consider before any changes should take place.

Defining Experience Goals: What are you trying to achieve?
As passionate and committed as you might be about embarking on a customer experience initiative (and you should be), we don't recommend meeting with your executive and requesting funding for something that promises to improve the experience. Obviously creating a superior customer experience is not an end in itself, rather, it is a means to deliver benefit back to the business in a more efficient and cost-effective way than other alternative approaches. Ultimately a superior customer experience increases market share, creates strategic differentiation in the marketplace, and increases the value proposition of the business.

To achieve this advantage, first identify those individual and supporting business metrics that you intend to positively impact, and determine if and how changes to customer experience can deliver against them. After identifying those relevant business levers, quantify the impact that the resulting changes in customer behavior will have for your business. To illustrate that connection, match the business metric with the associated behavioral change that you are driving.

For example:

  • For a telco trying to reduce churn: better anticipate and respond to moments of defection in the call center.
  • For a retailer trying to increase average basket size: provide personalized recommendations through an in-store kiosk.
  • For an automotive manufacturer trying to increase retention: provide complementary auto detailing to customers with an expiring lease during service appointments.

    Only when what you are trying to achieve aligns with the strategy for your business will you receive the funding and sponsorship required to make customer experience changes happen.

    Understanding Your Customers: What do customers want, and how do they want it...from you?
    Most companies have developed fairly detailed profiles of their target segments, effectively answering the question, Who are they? While this initial step is key, CEM requires a different and deeper exercise that is aimed to answer two other questions.

    What do they want from you? For a company to build a superior customer experience it needs to recognize both the overt desires and latent needs of customers, many of which are overlooked during traditional segmentation analysis. Overt desires will inform the company of the more immediate and functional needs of consumers. Understanding latent needs will provide the company with a more emotional perspective of its customers, with detail regarding their values and aspirations.

    The more a company can understand how a customer relates to and interacts with others through a customer experience, the more it can identify ways to leverage that network effect to deliver a richer experience to customers and generate more value for the business.

    How do they want it from you? Depending on the characteristics of the customer, the nature of their need, and their relationship with your company, customers will interact with you through different channels and processes. It is important to study how customers identify those key channels that they rely on, and to understand the cross-channel connections that exist. It also helps to recognize opportunities to right-channel interactions and to innovate service and delivery to better and more profitably serve customers.

    It is important to note that where traditionally competitive movement and technology advancement were the primary drivers for innovation, true customer experience innovation comes from intimately and accurately understanding your customers.

    Articulating the Customer Experience: How should your experience feel?
    In today's business environment, brands are only as unique and as strong as the customer experience itself. By focusing on over-servicing the primary needs of customers, companies can provide an efficient experience. However, that experience is potentially undifferentiated from competitors. To truly use experience to create sustainable advantage, a company needs to determine how it can make customers feel differently when they are interacting with it, in a way that is closely tied to the particular strengths of a company.

    You need to discover the core of your experience by identifying your company's unique set of strengths--those that differentiate it from competitors and give it advantage within its marketplace. These strengths may be related to areas such as the company's supply chain, retail network, or brand. The idea is to ensure that customer experience is a direct outgrowth of areas of competitive advantage.

    Designing the Experience: What behaviors do you want to change, and how do you plan to change them?
    While delighting customers may seem like the main goal that a customer experience strategy aims to achieve, it is not. Customer experience involves changing specific customer behaviors by changing how companies and customers interact.

    Here are a few steps to help to begin designing the future experience:
    o Identify important business interactions, such as high volume and high cost, as well as those that are important to the customer--high involvement and high perceived importance.
    o Evaluate performance: How are these interactions currently handled by your company? Are there opportunities for improvement?
    o Focus on hot spots: Identify the areas that require your greatest focus and will provide the greatest potential return.

    The key to developing a successful new customer experience is to develop a response to a customer need that is unique, compelling, and adoptable. A response so attractive that customers are willing to change long-standing, often deeply ingrained behavior.

    Empowering the Experience: How are you going to deliver, support, and manage customer experience?
    Now with a clearer idea of what you want to do, you can shift your focus to how you are going to do it. Developing a customer experience strategy may seem simple compared with the challenges of executing the plan internally -- delivering the new experience through your existing customer service resources and business operations.

    How can it happen? Focus your attention on three key areas: people, processes, and tools.
    o People. Does your company currently have the people and partners that are required to employ strategy, technology, and design expertise to implement an end-to-end experience solution? Where are the gaps?
    o Processes. Is your company organized to deliver this? Do you even have a single senior level executive who is responsible for customer experience, as it applies across a number of traditionally siloed channels and touch points?
    o Tools. Does your organization have the infrastructure and tools in place to implement and manage this change? Do you have the tools required to measure performance and act on customer intelligence?

    Although many of your answers might be no, it is important to ask the questions. Your answers will help gauge the readiness of your organization in embarking on these types of changes, as well as help you to identify the types of customer experience partners required to bring these changes to life.

    Evolving the Experience: What's next?
    A sure way to kill a customer experience strategy for a company is to consider it a project. Taking a short-term approach negates all future opportunities to deliver value back to the business and sustain competitive advantage. To keep the longer-term strategic focus that CEM requires and to help you figure out what's next, here are a few tips.

    Develop a road map. Identify a large number of opportunities to improve customer experience. Do not lose sight of the opportunities you identified in earlier steps. Rather, prioritize the changes and form a road map for future improvements.

    Continue to deliver resultsBy continually delivering benefit back to the business, you will grow the executive level support required to keep CEM a strategic pillar for your business.

    Innovate. Be different, be relevant, be more than your competitors. Truly delight your customers, and listen carefully to them to discover how.

    Continuous improvement is key to the success of customer experience. A company must have the appropriate mechanisms and feedback loops in place to measure success and identify areas to optimize. It must have the analytical tools and talent required to draw the right conclusions from interactions with and feedback from customers, the true source of customer experience innovation.


    Tim Dolan is manager, strategic consulting; Frank Elbert is interaction architect; and David Rossellat is manager, interface development, at Blast Radius. www.blastradius.com.

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