What is Customer Experience Management? Lumidatum

Businesses are trying to differentiate themselves from their competitors by how they interact with and treat their customers. The idea behind these efforts is that customers who are satisfied with how you treat them will recommend you, stay with you and deepen their relationship with you. While the practice of increasing these customer loyalty behaviors has fallen under different formal disciplines (see customer loyalty management, customer relationship management and customer value management), I would like to talk about a more recent discipline, customer experience management (CXM).

I think that it is safe to state as a matter of fact that customer loyalty is key to business growth. Businesses that have customers who engage in more loyalty behaviors (e.g., stay longer, recommend, continue buying, increase share-of-wallet, more clicks/views) toward their company experience faster growth compared to businesses that have customers who engage in fewer loyalty behaviors. The key to growing one's business, then, is to understand how to improve customer loyalty.

Each of the disciplines mentioned above focus on using different types of customer data to increase customer loyalty. Businesses tailor ads that resonate with prospects' personal values in order to attract specific types of customers (yes, some people are just more prone to buy, buy, buy; some are more likely to remain loyal). Additionally, businesses target marketing/sales campaigns to specific customers based on customers' purchase/service history. Businesses measure different types of customer loyalty via customer feedback tools to understand how to maximize the lifetime value of customers.

While there are existing definitions of customer experience management, they seem to focus solely on the measurement of customers' perceptions and attitudes about the their experience. I believe that customer experience management programs, to be effective, need to consider two major types of customer data: 1) customers' behaviors toward and interactions with the company and 2) customers' perceptions of their experience. The following definition of customer experience management reflects this idea. Customer Experience Management (CEM) is the process of understanding and managing customers' interactions with and perceptions about the company/brand. Businesses are already realizing the value of integrating different types of customer data to improve customer loyalty. In my research on best practices in customer feedback programs, I found that the integration of different types of customer data (purchase history, service history, values and satisfaction) are necessary for an effective customer feedback program. Specifically, I found that loyalty leading companies, compared to their loyalty lagging counterparts, link customer feedback metrics to a variety of business metrics (operational, financial, constituency) to uncover deeper customer insights. Additionally, to facilitate this integration between attitudinal data and objective business data, loyalty leaders also integrate customer feedback into their daily business processes and customer relationship management system.

An effective CXM program provides a comprehensive picture of the customers' behaviors/interactions with the company as well as their attitudes about the company. As such, the integration of different business systems (e.g., Salesforce, Marketo, Mixpanel, Enterprise Feedback Management (EFM)) makes sense for any CXM initiative. For example, prior research at Siebel Systems found that Siebel customers who had customer satisfaction measurement associated with their Siebel applications reported greater gains in revenue and user productivity compared to Siebel customers with standalone Siebel implementations. The integration of both types of customer data provides a comprehensive picture of the customer at the individual level and at the group level. Integration of customer data allows front-line employees to have immediate access to customer information necessary to resolve specific customer programs. Additionally, senior management can apply deep analytic techniques like machine learning to this richer customer data to help identify the causes (operational, constituency) and consequences (financial) of customer satisfaction/loyalty, driving systemic changes that affect large customer segments.

Customer Experience Management is about understanding both the behaviors and attitudes of your customers to help improve their overall experience. The integration of your customers' behavioral and attitudinal data is more valuable than the sum of its parts. Because the value of Big Data lies in the finding the connections among all your metrics, successful CXM programs require the integration of different types of customer data together in order to gain deeper insight about customers and what is important to them. This integration allows businesses to gain deeper insights regarding the factors that help drive their company forward.