Is Customer Experience Experiencing Critical Mass?

In an industry already chock-full of acronyms, CEM -- standing for customer experience management -- appears to be gaining some traction, according to new research from Boston-based analyst firm Aberdeen Group. The report's authors suggest that companies may be increasingly using CEM as more than just a market catchphrase -- with fully 100 percent of companies surveyed telling Aberdeen that they either had CEM in place already or are planning on having it within 30 months.

According to results from the study, "Customer Experience Management: Is Your Entire Company Really Focused on the Customer?," 60 percent of companies surveyed have CEM programs in place; the other 40 percent plan on implementing those programs in the next 24 months to 30 months.

David Boulanger, author of the study and research director for Aberdeen's customer management group, admits the fact that companies are looking to roll these programs out in roughly the next three years speaks to how large an undertaking a CEM program can be. "This looks and smells an awful lot like [the kind of] internal major strategic project [we saw] over the last 10 years like an ERP or supply chain management implementation," he explains. "You must have committed C-level executives, D-level directors, and the best people on the project. You have to expose yourself and say, ‘What I was doing for the past 10 years may have been good for me, but now I have to look at it from an outside-in perspective and [ask] what's best for the customer."   

Aberdeen defines CEM programs as "examining the people, processes, organization, key performance indicators, and supporting technology to ensure that the company is focused on providing the right touch to the right customer at the right time, every time."

The challenge inherent in CEM programs is that they spread across an entire organization -- not solely customer service, but also sales analytics, sales force automation, direct and channel marketing, Web 2.0, and social media marketing initiatives. A larger but crucial challenge, Boulanger adds, is executive buy-in. "Finding the commitment internally to be great on a long-term basis must come from executive sponsorship," he says. "Everything else then falls into place." His survey statistics back up this claim, as 30 percent of Best-in-Class companies -- Aberdeen's classification for the top 20 percent of survey respondents -- and 25 percent of other companies reported inadequate executive sponsorship being a top challenge to implementing a CEM program.

Boulanger says that, after executive buy-in, there are several additional critical needs:

• agreement on a set of metrics to measure across an organization -- including sales, customer retention and satisfaction, as well as profit;
• a means to measure those metrics;
• locating the people to execute the program; and
• aligning business processes accordingly.

As a sign of the CEM markets maturity, Boulanger points to a burgeoning CEM consulting field that's targeting companies that are installing these programs. According to his research, CEM consulting firms include:

• Beyondphilosophy;
• GCCRM (now rebranded as G-CEM to note its focus in the CEM space);
• CGA Consulting;
• Customer Passion LLC;
• Leveraged Technology;
• LRA Worldwide; and
• Strativity Group (the founder of which, in the interests of full disclosure, is CRM magazine columnist Lior Arussy).

While it may be a long-term implementation, the study finds that the overwhelming share of CEM users -- particularly the Best-in-Class firms -- are reaping significant rewards, including year-over-year increases in:

• customer retention (90 percent of CEM users, reporting an average increase of 15 percent);
• customer satisfaction (84 percent of CEM users, reporting an average increase of 19 percent); and
• customer profitability (68 percent of CEM users reporting an average increase of 8 percent).

The potential benefits make the pursuit of a CEM initiative essential to any company, Boulanger says. "If you don't have a [CEM] program, you need one."

News relevant to the customer relationship management industry is posted several times a day on destinationCRM.com, in addition to the news section Insight that appears every month in the pages of CRM magazine. You may leave a public comment regarding this article by clicking on "Comments" at the top; to contact the editors, please email editor@destinationCRM.com.

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