Customers are ever-more demanding, and they expect the companies they have a relationship with to know them intimately. They want companies to provide the right information and offers based on what they are interested in at that moment—and they put a high value on customer experience. PwC estimates people will pay up to a 16% price premium on products and services for a great experience. Their loyalty increases, too.
However, CRM alone cannot shape that kind of experience. CRM captures and manages only a limited amount of customer data. The depth and intimacy of dynamic customer experiences require a more comprehensive approach to information. They require CXM—customer experience management—to ensure better strategy, more relevant experiences, and a critical competitive edge. CRM is just a subset of a complete CXM strategy, and relying on CRM alone can lead to something like this:
CXM is the orchestration and personalization of the entire end-to-end customer experience in a moment-to-moment way that scales and carries across every channel, in real time. CXM is both a strategy and the technology that enables this strategy. And, more than ever, it’s central to customer experience success.
When customers are at the critical early stages of the customer journey, such as when they are researching or comparing products, CRM data provides little value. Inherently, the information in a CRM system is limited in its ability to provide predictive data based on real-time customer activity, which is fundamental to shaping the customer experience.
3 CRM Challenges
While CRM systems can help drive personalization and optimization at scale, in today’s always-on, experience-first landscape, a trio of hurdles stand between this traditional approach and meaningful customer experience success:
1. Out of date: CRM is a record of historical data—often of past interactions and what happened at the end of the customer journey funnel. While the information can tell salespeople and marketers about a customer’s past behaviors, it doesn’t inform them about what the customer needs right now and what they intend to do next.
2. Limited and imperfect: While many companies think CRM is the be-all and end-all of customer data, in reality it’s just one source of data.
The transactional information in a CRM system doesn’t include online behavior, customer satisfaction, and other more immediate data that can be used to create a worthwhile customer experience. In addition, CRM often depends on fickle and imperfect data entry. A busy salesperson may be required to interpret conversations and determine how much detail to record while her mind is already on her next meeting. Inevitably, this manual approach results in the loss of nuance and information that is critical to understand the customer’s needs and intent.
3. Not in real time: The systems that support CRM aren’t capable of stitching, processing, and representing data in real time. CRM isn’t a strong customer data platform (CDP).
While CRM systems might talk about a “360-degree view of customers,” they were never meant for data sharing, and they lack the ability to bring data into a single environment where artificial intelligence can truly process this information. A “360-degree view of customers,” in CRM parlance, might mean only seeing and acting on fragments of the customer in real time, using only a single channel.
CRM simply batches records and lets you call up a record when you need it at a discrete point in time. It hardly offers the type of insight that will help you present the most relevant offer to a customer who is browsing products online with a credit card in their hand, at the ready to take action on the right offer.
Shifting From Seller To Buyer Demands CXM
CRM systems came onto the business landscape in the late 1980s, offering the tantalizing prospect of a single place to store all customer information. Half a century later, the amount and types of customer information have expanded significantly.
So have customer expectations. In a faster, more demanding era of commerce, the data management capabilities of CRM are insufficient to create a customer experience. CRM simply doesn’t support the shift from sellers to buyers that is changing everything about how commerce is conducted today. It was never meant to.
Creating a customer experience—the intersection of customer knowledge with customer fulfillment—exceeds the abilities and purpose of CRM. While CRM excels at quantitative tasks, it lacks the qualitative aspects that are key to the customer experience.
That’s where CXM comes into play. CXM is a true strategy for the customer experience—the intersection of customer knowledge with customer fulfillment. CXM is the focal point for capturing and using all-important behavioral data, such actions taken are the result of email marketing, or every click and interaction a customer has with a website.
CXM data is not only at a higher signal, but it’s also at a higher volume and higher velocity. This requires new capabilities to stitch, process, and distill the flood of data into distinct insights that can be applied in real time.