Years ago Peter Drucker, dubbed "the man who invented management" by BusinessWeek magazine, succinctly defined business in a pure customer context: "The purpose of business is to create and keep a customer." Achieving this goal is harder than ever in today's customer-driven world. Companies need to provide engaging experiences that will compel customers not only to respond and ultimately purchase, but also to become loyal and, ideally, act as ambassadors for the brand.
The process of managing the customer's experience, however, precedes and extends well beyond the point of a purchase transaction. To succeed requires a dedicated focus on customer experience management (CXM) across the entire customer journey. Companies need to learn how to understand their customers on contextual and individual levels, and they need to optimize their customers' experience wherever they are, whatever they're doing, on any device, across any channel.
CXM is a both a strategy and a practice, and it takes a coordinated effort across organizational silos to deliver a consistent and compelling experience. Some of the most successful companies are reaching and retaining customers by adhering to the following three modern rules of CXM.
1. Develop "insights" into your customer base
To survive in the experience economy, it is critical to enable your organization to make data-driven decisions. This involves more than just gathering the data. The process for understanding and leveraging customer insight is challenging, costly, and often time-consuming.
Typically, very little data that organizations collect about customers is used in decision-making. This represents a lost opportunity for companies, and huge frustrations for customers. There is an expectation from the customers' perspective that the information they are providing—be it through their behavior or more explicitly via profiling questionnaires, interactions, or transactions—is used. When customer understanding is not exhibited in an interaction, this leads to customer disappointment and dissatisfaction.
Outcomes of customer insight include the perfectly timed special offer, the inspirational video clip, and the helpful customer review. Organizations need to identify technology that not only gathers data from each customer touch point, but also transforms it into something actionable. In particular, mobile interaction places heavy demands on contextual relevance. It places pressure on organizations to be able to localize their offers to geography, language, and culture, as well as factors such as device capabilities, personas, previous interactions, and even such environmental factors as the weather.
Continuous measurement is also necessary because the customer environment—the use of different channels and devices—can change from moment to moment. To build an effective customer experience strategy that benefits both customers and organizations, companies need to gather research, develop insights, and provide benchmarks to measure success. This insight needs to be captured throughout the customer journey to determine what customer experience is needed at any point. After all, data shows that the average consumer goes to more than 10 sources before deciding on a single purchase, a figure that has doubled since 2010.
2."Orchestrate" excellent customer experience practices
Research shows that a key barrier to CXM success is having employees who do not feel empowered to meet customer expectations with the right systems, processes, and tools.
Many CXM providers claim their solutions can integrate all processes and provide a holistic architecture from which to manage data as well as customer engagement. Such approaches have proven to be unrealistic. The reality of business is that silos will always exist; data will be created faster than the ability to integrate, and employees will need to be empowered to work effectively across silos.
Solutions must be able to tailor the process so that teams can collaborate to ensure quality and alignment, thereby offering their customers consistency, relevance, and excellence at each touch point. In addition, many organizations are now modifying their use of internal expertise to reflect the cross-channel nature of their customers' experience. For example, roles such as chief experience officer and groups like customer advisory boards are becoming prominent and influential, sharing responsibility for customer engagement.
Strategic partnerships also can offer tremendous value since they are able to use a wealth of information gathered for specific sectors and goals. They see beyond the bubble of a single organization, bringing multiple technologies, organizations, target audiences, regulatory environments, and processes to the challenge. Partners often view things with a more holistic perspective.
For example, Abbott, the company that produces nutritional products such as Similac, Ensure, and Zone, worked with CXM services provider Tahzoo to transform its content management system update plan into a coordinated CXM strategy. This ensured the solution would not only accommodate Abbott's Web presence, but also support its internal processes and its overall CXM strategy.
3. Take an omnichannel, "contextual" approach
Customers interact with brands in many ways. They engage on mobile sites, shop online, scan product reviews, tweet slogans and links to funny ads, and weigh in with likes and comments on their favorite products. To ignore a single outlet can have a major impact, since every brand competes for customer attention across multiple channels. Companies need to reach consumers where they want to be, which often is in different places at different times of the day. This requires attention to multiple channels—social, print, mobile, e-commerce, even email—in an organized, integrated manner.
Transamerica Insurance, the North American unit of Aegon, understood that its traditional approach to customer communication and marketing needed a substantial upgrade. Facing intense competition, it launched a new digital strategy that centers on the customer experience. Today, instead of simply referring prospective customers to call or visit an agent, Transamerica now provides personalized experiences on the Web, simplifying the experience and producing improved results.
Organizations need to embrace this omnichannel, contextual world when procuring Web content management solutions, social media, e-commerce, analytics, and other marketing automation systems, as integration is no longer a consideration, but an absolute requirement.
CXM means different things to different organizations. But the end game is the same: Customers want positive, relevant, and rewarding experiences. To compete in an increasingly commoditized world, companies need to pay close attention to each part of the customer journey and deliver compelling and engaging experiences informed by a contextual understanding of their customers at an individual level. Following a few simple rules as explored above, companies can succeed not only in reaching their customers more effectively, but also in turning them into satisfied, loyal brand advocates and ambassadors.
Grant Johnson is chief marketing officer at SDL, a provider of global customer experience management technologies, and services.