Growing Importance Of Customer Experience Management

Karim Razek

Part 1 of the three-part series “Why Customer Experience Management Matters

Customers are more informed than ever and unquestionably consider experience as part of any research they do or purchase they make. They are also becoming increasingly demanding and price-sensitive, which is why, more than ever, it is becoming important to keep your existing customers.1,2

But how does an organization set out to differentiate itself in the market while making its customers’ experiences exhilarating and memorable enough to keep them engaged, loyal, and willing to promote the product or service to others? How can these organizations manage tremendous amounts of customer data and generate meaningful information from it that will allow them to manage a complete, end-to-end customer journey and customer experience ecosystem? How can they leverage emerging technologies and trends while maintaining a lower total cost of ownership?

Customer experience (CX) is so much more than just measuring the “pulse” of your customers and your experience across a various touchpoints. It’s also about how your organization is set up to act on these experiences.

Differentiation through CX

With increasing globalization and greater micro-economic pressures, consumers are becoming more price-sensitive and less loyal because of their increasing diversity of options. This makes differentiating your organization even more challenging.

So, what do you do? Do you differentiate based on price? Product? Place? Promotion? Undoubtedly, these traditional marketing-mix elements have impacts on costs and profitability to varying degrees.

But how does an organization differentiate itself from a growing number of competitors in an ever-shrinking world? By providing a superior customer experience.

The goal of any organization is to make money by capturing the biggest wallet share amid the increasing challenges of rapidly evolving trends that have significant impacts on competitive and economic landscapes (Figure 1).3

Figure 1 Trends and Challenges Facing Most Organizations Today

Figure 1: Trends and Challenges Facing Most Organizations Today

These factors are putting organizations under increasingly diverse pressures and stressing the importance that business growth is driven by creating and maintaining loyal customers by providing first-class customer experiences.

What is customer experience management?

An experience occurs when a company intentionally uses services as the stage, and goods as props, to engage individual customers in a way that creates a memorable event.4 It is an attempt to engage with these customers at a level that precedes a materialistic experience and seeks to create an impact at an intellectual, emotional, and at times, spiritual level.

Customer experience management (CXM) is not just about managing touchpoints; it’s also about managing the end-to-end journey.5 This means that there are many influencing processes and activities that impact the customer experience, and not only those the customer touches or sees.

CXM is not CRM

CXM is often confused with customer relationship management (CRM).

CXM is a methodical framework that seeks to understand, analyze, and enhance customers’ experience as they progress through the organization’s end-to-end processes and policies and to closely manage those parts of the journey that have the greatest impact on customer loyalty.

While traditional CRM looks to maintain a 360-degree view of the customer at any point throughout their interaction with the organization, CXM relies on the information that can be extracted to help manage customer expectations and experiences.

Figure 2 CX Focus
Focuses on the quality of interactions with customers throughout the entire customer journey Focuses on optimizing business processes that are associated with customers.

This article will be followed by a series of articles related to customer experience management, including achieving customer loyalty, building the customer experience strategy, avoiding pitfalls in the strategy, creating a customer experience ecosystem, and devising a journey map.

Sources

  1. Temkin B.D., (2007), “Experience-Based Differentiation,” Forrester Research, p. 18.
  2. Sellers P., (Autumn–Winter 1993), “Keeping the Customers You Already Have,” Fortune Special Issue, p. 57. See also Markey R., Reichheld F., Dullweber A., “Closing the Customer Feedback Loop”, Harvard Business Review, p. 1.
  3. Mulins J.W., Walker Jr. O.C., Boyd Jr. H.W., (2003), “Marketing,” Edinburgh Business School, p. 384.
  4. Pine J.B., & Gilmore J.H., (1998), “Welcome to the Experience-Based Economy,” Harvard Business Review, p. 98.
  5. Rawson A., Duncan E., and Jones C., (2013), “The Truth About Customer Experience,” Harvard Business Review, p. 4.

For more insight, download a free whitepaper from IDC about how to drive a great customer experience from the design of new products, through to their operation at a customer.


Karim Razek

About Karim Razek

Karim Razek is the Business Enterprise Principal Consultant at the Qatar office at SAP. He is responsible for the development and alignment of SAP clients’ business processes, customer experience, and IT strategy to help meet their enterprise strategic goals. Karim is a certified Six Sigma Black Belt from Quality America, Global Business Transformation Manager, and Enterprise Architect EA200. He also holds an MBA from Maastricht University and specializes business process analysis and advanced discreet process simulation techniques. Other areas of expertise include customer journey management, strategy development, business process management, and business process engineering.