While it’s clear that businesses compete based on customer experience, a good deal of uncertainty exists about what an effective customer experience management (CXM) strategy looks like.
Experts say the framework for building a CXM strategy ultimately revolves around an equal focus on people, process, and technology. Any weak link in the chain can undermine or break the entire operation.
“Unfortunately, too many [customer experience] decisions are driven by shiny object syndrome and panic,” said Peter S. Fader, a professor of marketing at The Wharton School of the University of Pennsylvania. “There is too much of a focus on doing the same things competitors are doing in a better way, rather than developing a framework that delivers maximum results and returns for a specific company.”
A best-practice approach relies heavily on customer data, which is still fragmented in many organizations today. Breaking down those silos and stitching the data together is what will separate the winners from the losers, according to experts.
The Coveted Single View
An effective CXM strategy identifies customer needs and desires, maps customer journeys, and finds ways to insert innovation—and perhaps even disruption—into a business model.
“Too many companies have completely lost touch with what it is like to be a customer,” said Erin Young, founder and principal consultant at digital agency Slide UX.
The key to better understanding and empathizing with customers is through the use of a real-time customer profile, said Amit Ahuja, vice president of ecosystem development at Adobe. (CMO.com is owned by Adobe.) This profile is made up of all of the different data signals about individual customers and lives in an accessible dashboard, empowering cross-functional teams to deliver personalized experiences at scale.
“The profile is imperative, and it fuels CXM,” Ahuja told CMO.com. “It is the brain and the heart of everything that happens within the experience. And it has to, by definition, be real time to be able to deliver the right experience to the consumer wherever they are.”
But just having the profile alone is not enough. The profile also needs to connect to all of the company’s marketing technology in order to deliver those experiences intelligently, Ahuja explained.
“That’s where CXM, from a technology standpoint, is very different from CRM,” he said. “CRM tends to be more of a manual-entry batch-reporting tool. What we’re talking about here is a real-time living and breathing profile that is connected into all your channels, like email, advertising, call support, whatever it might be. This is very different and far superior to CRM.”
Indeed, a real-time customer profile can help companies better identify promotions or coupons that work, find ways to improve marketing and sales, and determine what treatment customers should receive for everything from sales to support. An organization might also gain insight into how to empower employees to handle situations on a person-by-person basis.
A CXM strategy must reflect the heterogeneity of customers across the spectrum, The Wharton School’s Fader added. It’s wise to analyze CX metrics beyond such basic indicators as customer happiness or satisfaction. This might include switching costs—what it takes for a customer to find and switch to a new business provider—for example. Finally, instead of deploying CX within broad initiatives, it’s important to experiment—using A/B testing, for example—to more narrowly target groups and understand how different market segments and personas respond to different CX methods.
All of this can be integrated with other important data that revolves around past purchases, Web analytics, and actual interactions with a business. Using predictive modeling, machine learning, customer surveys, and more, it’s now possible to address key business questions: Has a customer’s behavior changed? Are they buying more, less, or differently? Are they responding to marketing or promotions differently than in the past?
Perfecting The Experience
The end goal, said Donna Tuths, senior vice president and global head of Cognizant Interactive, is personalization at scale across the entire customer journey. Some describe this as Experience 2.0. This piece of the CX puzzle requires human thinking and analysis to apply the data and formulate an effective approach.
Ultimately, a CXM framework must span channels, devices, platforms, and interaction points. “It doesn’t do any good if a customer, particularly a top-tier customer, isn’t treated consistently,” she said.
At the same time, there’s a need to make CX simpler and easier at all interaction and transaction points. This may lead a company to voice or image recognition technology, augmented reality, or a digital wallet, such as Apple Pay. It could mean tying together sensors, devices, and systems within the Internet of Things to create entirely new features or business models. Although there’s no single route to success, the common denominator is a focus on value.
“You need to design from the customer-out,” Tuths explained.
When organizations thoroughly understand customers and establish the right personas, it’s possible to take UI, UX, app features, and business policies to a new and far more advanced level, Slide UX’s Young said. What’s more, the “process” part of the equation snaps into sharp focus.
“When you know what they are trying to accomplish, what their pain points are, and where the gaps exist, you can build a CXM strategy that truly addresses their goals and motivations,” she said.
While CXM seems like a straightforward-enough concept, it’s complicated by the fact that the number of touch points in the customer journey continue to grow. Of course, the sum of all these interactions translates into how customers view a company or a brand.
Best-practice CXM spins a tight orbit around a few critical factors: understanding customers, establishing a clear customer vision and roadmap, delivering an experience that translates into authentic value, and, ideally, motivating customers to forge an emotional connection with the brand. Along the way, there’s a need for companies to think very differently than a decade or two ago, especially when the average tenure on the S&P 500 is forecast to shrink to just 12 years by 2027.
Regardless of what industry a company competes in, the common theme is that expectations are rising while conditions are changing, Adobe’s Ahuja said.
“Business leaders must understand that consumers no longer distinguish between companies in a particular industry, Cognizant’s Tuths added. “A credit-card company is not competing against other credit-card companies. They’re now compared to best-in-class overall—the Amazons, Ubers, and Airbnbs of the world. Customers expect this level of experience.”