Published in Business Innovation from SAP on April 26th
The Customer Experience Management Journey
In the business world, we often hear the expression ‘People buy from people’ which is fine; however, in today’s real world with too much information and too many choices perhaps the more appropriate expression should be ‘People buy from predictable preferences’.
Though Customer Experience Management (CEM) systems and programs are still evolving, knowing individual customer preferences could be a differentiator based on buying patterns, big data analytics or from within customers’ spheres of influence (personal, professional community). These day’s customers expect companies to offer a list of customer preferences in order to reduce the buying cycle time and increase the overall value.
I’m reminded of Malcom Gladwell’s TED speech in 2004 about choice, happiness and spaghetti sauce. In the 1970’s Pepsi approached Dr. Howard Metzenbaum to find out the optimum mix of aspartame between 8 and 12 % to make the best Pepsi. After conducting a nation-wide study, Dr. Metzenbaum concluded that there is no perfect Pepsi, but we can have perfect Pepsis. So they concluded that instead of looking for one choice, they should look for many choices. Campbell soup and many other companies followed this route and today we have so many variations which are overwhelming to say the least.
In order to look into CEM, let’s have a quick look into the CRM journey. During the 70’s when companies shifted from being ‘Product centric’ to ‘Customer centric’, it was a breath of fresh air and overtime other companies started to follow. In the 70’s (ecommerce emergence) and 80’s (database marketing) the talk about CRM systems emerged and we had proper CRM systems in the 90’s. Despite the effort and investment in CRM systems, the programs were more employee (customer service, campaigns, marketing etc) efficiency and control based rather than customer relationship improvement based.
With an increasing number of channels and the need for consistent experience, early 2000 onwards we have been hearing about ‘Customer Experience’ systems, which is still evolving. The journey from CRM to CEM, though still within the customer centric domain, marks a significant shift from an internally focused to externally focused solution to offer better customer experiences. Being internally focused gave more time for companies to adopt and evolve, but in the CEM era, companies don’t have the same amount of time – they have to play catch-up if they are slow in adoption.
The balance is between great customer experience that drives loyalty and ‘relevant preference’ that will drive commerce. Here are 5 steps to get the best out of CEM initiatives.
1.) Build seamless interactions both external and internal:
Customers are expecting seamless interactions across traditional channels such as in-store, call-center, online and new channels such as mobile and social. Though technology can play a role in enabling this, employee (internal) based seamless interactions can really transform customer (external) based seamless interactions. While connected channels through CEM give a unified customer experience; social collaboration applications such as Succesfactor, Chatter, Yammer can also help iron out counterproductive KPI’s, policy issues.
2.) Deliver consistent value and experience across channels:
Consistent experience across channels due to end-to-end processes, functionality rich channel systems, decentralisation to harness channel incubation, management commitment offers a chance for customers to build trust. Customer experience is not only a front line issue; recently I attended a digital marketing webinar from Ducati hosted by Infosys, Ducati mentioned that it set-up a web channel in Jan 2000 and sold more than 2000 bikes in one week! To use web as a primary channel 13 years ago and offer consistent offline-online experience shows the level of commitment, agility across the company, benefits of IT partnership models ( outsourced vs central IT) and the functionality richness to make it happen. Flexible and functionality rich solutions across fast moving channels such as social, mobile will help companies deliver consistently in a fast paced environment.
3.) Offer relevant preferences using real-time or just-in-time approaches:
Connecting the customer transaction data, front line interaction information and non-enterprise data such as social, mobile can help companies to understand the current and future needs of the customer. This is no simple feat as it might involve legal obstacles particularly in 2nd and 3rd party data usage as companies have no governance control over vendors in terms of adherence of data protection and privacy rules. Leveraging big data and analytics to come up with relevant preferences for customers will be a key differentiator considering the number of alternatives available. Real-time solutions through Big data, analytics, In-memory and human intelligence (through collaborative networking) is set to transform commerce and customer experience. Just-in-time type of production philosophy could be applied based on acceptance signals from system generated customer preference in order to fine-tune the big data strategy within the company.
4.) Develop a partner ecosystem that can collaborate and complement each other:
Customer Experience management is a cluster of various products that have to work together to offer a holistic solution. It’s critical to have the right set of partners who are innovators, have a good partner ecosystem, and are open to integration with other vendor products. The danger in such a fast paced environment is for one or two partners to become a drag, which will slow down the entire CEM program; as due to competition sometimes vendors tend to block integration programs. Long term vendors who have invested in this ecosystem are critical to the CEM journey due to merger and acquisition volatility in this space as CMOs will spend more than CIOs.
5.) Implement Total Customer Experience (TCE):
In Total Quality Management (TQM) concept the quality of products and processes is the responsibility of everyone involved in the creation and consumption ecosystem. To coin a similar term for CEM – Total Customer Experience (TCE) should be a philosophy across the organisation, not just front line staff. Customer experience is not just a front line issue – internal competition, delays and bottlenecks across departments can badly impact customer experience. In the connected media age where customers immediately share more of their negative experiences than positive ones and other customers look to find out any negative issues before buying something, such negative stories can impact commerce.
Customer experience management is not only about technology, it’s also about organisational culture and TCE shift to make CEM happen, otherwise it will go down the path of CRM implementations which were mainly used to improve staff control and efficiency issues. CEM will continue to evolve due to innovation and customer trends; hence companies must create an ecosystem that is agile, nimble.