If ceding power to the customer is more effective in achieving the company's objective, perhaps CEM should facilitate customer-enabling rights and features.
Posted Nov 24, 2003
Customers don't want to be managed, but CRM, customer experience management (CEM), and delivery management can make it easier for the customer to acquire products and services in ways that contribute to long-term profitability. If ceding power to the customer is more effective in achieving the company's objective, then perhaps CEM should facilitate customer-enabling rights and features.
CRM applications primarily benefit the company, not the customer. They automate marketing and sales activities to increase efficiency and accuracy, and integrate post-sales service (such as the call center) to create a seamless sales and service process. Regardless of the size and complexity of the CRM portfolio, the program pushes offer information from the company out to the customer and to the employees who provide after-sale support.
A sample CRM portfolio includes:
Call center automation
Campaign planning and management
Sales force automation
Whereas CRM applications push information out to the customer, customer experience management (CEM) applications pull information about the customer into the organization--information about how the customer perceives his or her interactions with and treatment by the company. Integrating CEM and CRM information and analyzing it for insights closes the loop for the next CRM information push. Ideally, the result is an offer that more closely aligns with that customer's (or segment's) interests and preferences. The degree to which the CEM portfolio allows the company to "see" an interaction from the customer's perspective, and to collect, analyze, and advocate factors customers say are important--regardless of company beliefs--the more likely the ideal will be achieved.
A sample CEM portfolio includes:
Customer advisory board
Customer satisfaction research
Focus group research
Mystery shopper research
Usability design and testing
One of the principals of my company tells a great customer experience story. A friend recommended a fabulous shampoo sold by a .com beauty company. The Web site was gorgeous: It was easy to navigate and ordering was simple. Imagine her surprise when she received a form letter several days after her order was confirmed apologizing that the order would not be filled because the item was out-of-stock. Ordering was a dream, but the company's failure to link ordering with delivery and follow-up soured the experience.
The best sales and purchasing experience is completely undermined by unreliable inventory or incompetent support. CEM must monitor customer experience from offer through post-sales service because customers do not compartmentalize their experience --either they got what they wanted or they didn't.
Delivery management includes:
Call center operations
Billing and payment processing
Supply chain management
An Integrated Model
CRM, CEM, and delivery management integrate to give the customer and the company the best mutual experience possible. The customer is able to get what he needs, in a way that he considers convenient, speedy, and reasonably priced. The company makes a sale, builds trust with the customer, and invites--maybe even motivates--repeat business.
Synergy among CRM, CEM, and delivery management includes:
The capabilities included in the CRM and CEM portfolios, the kind of information those programs yield, and how it is used depends on the customer strategy.
Customer strategy is the key driver for CRM and CEM. Whether product-centric or customer-centric, a company can develop benefit from CRM and CEM. The nature of the programs and will differ wildly, though.
Strategy Drives Brand, CEM and CRM Programs
The greatest risk investing in CRM and CEM comes from not understanding whether the company is product-driven or customer-driven, particularly if purchasing vendor packages to support the programs. The risk is that the vendor's assumptions about "customer" conflicts with the company's. Misalignment reduces return on investment, confuses or alienates customers, and potentially invokes cynicism and mistrust among employees when you fail to walk the talk.
Rate Your Company
Many companies say they are focused on the customer but have product-focused business procedures. Use the following checklist to figure out whether your company is customer-centric or product-centric:
__ 1. Information about every product owned by a customer is available from a single report, query or database.
__ 2. Products are developed and managed as part of portfolios that target specific customer segments.
__ 3. The company supports an ongoing customer satisfaction program.
__ 4. The customer satisfaction survey not only asks for a rating on some aspect of a product or service, but also asks the customer to rate how important that aspect is to her.
__ 5. All customer information is stored and maintained in a single, integrated repository.
__ 6. The sales force is organized and compensated by customer segment.
__ 7. A chief customer officer (CCO) or similarly titled executive level position is accountable for customer strategy, programs, policies and procedures.
__ 8. Bonuses are calculated on measures associated with share of wallet, customer value, or segment growth rather than the number of widgets moved.
__ 9. Employees are rewarded for identifying problems that affect the customer; and rewarded even more if they recommend and implement a solution.
__ 10. Call center representatives are empowered to make adjustments and offer premiums to customers experiencing problems.
If you checked five or more, your company is more customer-centric than product-centric.
What Belongs in the CEM Portfolio?
Knowing whether information will be pushed to or pulled from the customer is not the only consideration when determining whether an application is CRM or CEM. CEM depends on intent; if the intent of the application is to walk a mile in the customer's shoes, it is CEM.
CRM applications and their intent
Customer Advisory Board: Get honest feedback on the effectiveness of a planned offer or campaign.
Focus Group Research: Introduce a new concept to target customers and find out if they would purchase it.
Mystery Shopper Research: Evaluate the look and feel of a sales channel against corporate standards.
Suggestion Box: Make customers feel like they are part of the brand family--provide little or no infrastructure for using the input
Usability Lab: Observation and click stream analysis of users interfacing with sales channel tools.
CEM applications and their intent
Comment Complaint & Handling: Turn around a customer's feelings of anger, disappointment or distrust as a result of doing business with the company.
Customer Satisfaction Research: Discover and improve the aspects of interacting with the company that matter most to the customer.
Dissatisfaction Analysis: Uncover and remediate variables causing customer defection and dissatisfaction.
New Product Research: Understand existing customer's problems and priorities, and use that knowledge to design innovative products and services.
Personalized Web Pages: Give customers some control over sales, marketing, fulfillment and delivery.
Building CRM and CEM Capability
Because of their strategic contribution to the business, CEM and CRM will develop and evolve over time. Treating either as a project, with static objectives, and hard start and end dates limits value. Strategically, treating CEM and CRM as a one-time project is defensive, but treating them as integral to the way you do business is offensive. You set the bar against the competition and they scramble to catch up. While they are catching up, you reset the bar a bit higher. Build capabilities incrementally in response to real business pains and problems but knowing that each project is a foundation for the next increment, and risks will be manageable and the value imminent.
About the Author
Linda McHugh, Ph.D., is director of management consulting for Baseline Consulting Group, a business advisory and technology solutions firm.
Ventana Research's latest benchmark study lays out the difference between the two, and suggests why the "E" might have more future success than the "R."