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Customer Experience Management is the set of processes and strategies deployed by a brand or business to improve the quality of their interactions with customers and, ultimately, nurture the relationship between the customer and the brand.
In 2024, Customer Experience Management is an essential area for modern business. Companies that don’t make it a priority to constantly improve and optimise their CX to meet buyers’ preferences at each touchpoint of their journey are at risk of losing customers and relevance as time goes by
What is CXM (Customer Experience Management) and why it matters
In 2024, great Customer Experience (CX) is more important than ever. CXM or Customer Experience Management has become an integral part of any modern business; today’s customers will not be satisfied with just a product that fulfils their needs if it doesn’t come with an outstanding brand experience.
In this article, we’ll explain what Customer Experience Management (CXM) is, why it’s so important, how your business can benefit from investing in CXM, and the best CXM strategies to increase customer retention and satisfaction rates.
The importance of Customer Experience Management/CXM
For the last few years, buyers’ expectations have continued to rise; the customer’s experience when interacting with a brand has become more and more crucial as a factor influencing purchasing behaviour. Today, efficient Customer Experience Management is no longer just a “nice-to-have”; it’s essential if you want to stay competitive.
A quick look at some statistics is enough to make a case for the importance of CX:
77% of brands believe CX is a key competitive differentiator (IDC).
According to a study by The Temkin Group, companies earning $1 billion annually can expect to earn, on average, an additional $700 million within 3 years of investing in customer experience.
A study by Oracle reveals that 89% of customers have walked away from a brand due to poor CX.
Over 4 out of 5 consumers would leave a brand they love after three or fewer instances of poor CX, and about 1 in 5 would after only one instance. (Emplifi)
9 out of 10 customers won’t purchase again from a company after three or even less poor customer service interactions (Customerthink).
US businesses lose $35.3 billion annually in customer churn caused by avoidable CX issues (CallMiner)
But why has CX gained this degree of relevance? The mentioned Oracle study also asked 1,300 senior executives about their opinions on this. The top reasons they gave for why CX is now at the forefront of business priorities were:
Customers’ experiences impact their willingness to be loyal advocates.
Customers are willing to pay more for great customer experiences.
Customers have more power today than a few years ago.
Customers will switch brands because of poor experiences.
Other reasons we could cite are the acceleration of online shopping, the global changes in customer behaviour precipitated by the pandemic, and the diversification of available communication channels through which customers engage with brands and businesses.
An Omnichannel approach is one of the most essential characteristics of modern CXM
In any case, the bottom line is clear: Customer Experience Management is an essential area for modern business. Companies that don’t make it a priority to constantly improve and optimise their CX to meet buyers’ preferences at each touchpoint of their journey are at risk of losing customers and relevance as time goes by.
But what exactly is CXM?
In a nutshell, Customer Experience Management is the set of processes and strategies deployed by a brand or business to improve the quality of their interactions with customers and, ultimately, nurture the relationship between the customer and the brand. This includes:
Tracking, overseeing and organising interactions between a customer and the business throughout the customer journey.
Using quantitative data analysis to understand customers.
Gathering qualitative customer feedback in order to paint a picture of what the customer likes and dislikes, so they can be given more of the former and less of the latter.
Designing new customer interactions to meet or exceed customer expectations.
Deploying customer retention strategies, such as loyalty programs.
Working to create memorable customer experiences through personalised interactions that turn buyers into brand advocates.
Differences between CXM and CRM
While Customer Experience Management (CXM) might sound similar to Customer Relationship Management (CRM), there are important differences between the two.
As you may know, CRM is also concerned with the set of strategies, technologies and practices through which a business interacts with its customers. It also monitors the interactions between a brand and a customer, and it also seeks to gather customer data to best guide future interactions.
However, unlike CXM, CRM proceeds mainly from the business’ perspective. In other words, CRM is concerned with what the customer looks like to the business, whereas CXM is about what the business looks and feels like to the customer.
From this main differential factor stem many other differences: CRM is strongly quantitative and concerned with statistics, trends, and data; CXM, on the other hand, is qualitative, and values other abstract, yet equally important aspects of the business-customer relationship, such as customer satisfaction and sentiment. But that isn’t all.
The goals of CRM are, primarily, increasing sales; the means to that end are usually customer service improvement, technical support optimisation, and the refinement and targeting of marketing campaigns. However, CXM’s goals are more long-term: the mission of Customer Experience Management is, to put it simply, creating an emotional connection between the customer and the brand.
CXM benefits from the customer data extracted by CRM, but it also considers qualitative customer feedback in order to build seamless, personalised experiences that increase customer loyalty.
Another way to express the difference between CRM and CXM is this: CRM is concerned mostly with optimising the way a business serves its buyers, while CXM is all about engaging customers.
As we have seen earlier, in 2023 customers look for much more than a product that fulfils their needs; they also want their brand to understand them on a deeper level and to provide them with a personalised experience.
What’s more, they’re willing to pay more for it or switch to whoever caters best to those preferences if their current go-to brand gets too complacent. And that’s why Customer Experience Management is so important today.
What can Customer Experience Management (CXM) do for your business?
Help you become a customer-centric company
Customer-centricity refers to a business approach where the customer is at the centre of all business decisions, and everything is geared towards improving their experience.
Amazon is the paramount example of a customer-centred company. From its user-friendly website and personalised product recommendations to its fast and reliable shipping options, Amazon has made it a priority to provide its customers with a seamless and convenient shopping experience. In Jeff Bezos’ own words:
“We see our customers as invited guests to a party, and we are the hosts. It’s our job every day to make every important aspect of the customer experience a little bit better.”
Gain a better understanding of your customers and increase brand equity
The term “brand equity” is used in marketing to refer to the value a brand has in the eyes of its consumers. However, another way to think of it is in terms of the emotions customers feel when they think about a brand.
Positive brand equity can be developed by delivering on promises, offering high-quality products and services, and being responsive, while negative brand equity can be caused by under-delivery and poor interactions.
Unsatisfying customer interactions are one of the biggest CX problems to be tackled by any CXM strategy
The best way to optimise brand equity, naturally, is putting yourself in your customers’ shoes and wondering what it is like for your customer to interact with your business, what are some common pain points, and where you can improve; or, in other words, prioritising CX.
Keeping these things in mind when making business decisions can help brands undertake the necessary changes to make their presence in their customers’ lives more positive, satisfying, and memorable. It can help develop new products, adjust existing ones, or think in more depth about how the brand engages with its customers.
Increase customer retention and loyalty
Placing the Customer Experience among the top priorities of your business and delivering satisfying, memorable, personalised experiences will make your customers feel cared for, increasing their loyalty and making them less likely to switch to another brand.
As we have seen earlier, you should never underestimate the role of customer’s expectations about all the experiences surrounding their relationship with a brand and the influence those have in their buying decisions. Today, a good product is not enough to retain a customer, and CX is a must if you want to stay competitive.
Besides, it’s a known fact that satisfied customers tend to order more. Harvard Business Review found that customers spend 140% more than those who had a bad or less than great experience.
However, there’s more to customer loyalty and satisfaction than increasing sales revenue. To put it simply, gaining new customers is expensive: it usually costs between 5-30 times more to get new customers than retain the ones you already have (Finextra).
And as it turns out, poor Customer Experience is often a big cause of customer churn: as we mentioned earlier, customer churn caused by just easily avoidable Customer Experience issues costs American businesses about $35.3 billion every year (CallMiner).
Bottom line: customer-centricity is not a sweet-sounding buzzword; it’s an investment that pays back in spades and will instantly place any business on top of the competition.
Acquire new customers via word of mouth
We know that satisfied customers are repeat customers, but that’s not all: a brand that delivers a good experience often enjoys the support of enthusiastic customers who are happy to share their experiences with positive online reviews or by telling friends and family about the brand, on top of joining loyalty programs.
By implementing a robust customer experience management plan, a company can not only satisfy and surpass its customers’ expectations, but also attract new ones.
Now that you know how investing in Customer Experience Management can help your business, it’s time to move on to the meat of the matter. In the next sections, we’ll explain what makes a good Customer Experience and how you can implement a Customer Experience Management plan.
But first, we should look at one of the most common pain points businesses face when trying to improve their CXM. While it’s important to know what makes for good Customer Experience Management, it’s equally important to understand while companies fail in this arena so that you can avoid those mistakes. Let’s get down to it.
Common CXM Challenges
Unfortunately, and despite the importance that CX plays in modern business, many companies face challenges when it comes to their Customer Experience Management.
The study by Oracle we mentioned earlier, which discovered that a baffling 89% of customers have ever walked away from a brand after a poor Customer Experience, investigated further the causes of these CX shortcomings.
After enquiring a large base of business executives and decision-makers about the problems they found when trying to optimise their company’s CX, Oracle identified these as the most threatening obstacles for good Customer Experience Management:
Limitations of inflexible technology and application infrastructure (mentioned as the top concern by 29% of those surveyed)
Difficulty regularly tracking performance measures and customer feedback (24%)
Lack of a consolidated, accurate, 360-degree customer view across all customer journey touchpoints (23%)
Siloed systems that prevent team members from easily sharing information or supporting continuous processes across touchpoints (18%)
What do all those obstacles have in common?
That’s right: they’re challenges associated with the technology used by the companies in question.
That’s why deciding on a Customer Experience Management software platform is anything but a trivial choice. To put it crudely, the technology you use for your CXM strategies can make or break the effectiveness of your plans.
Later in this article, we’ll explain what to look for in a Customer Experience Management software platform. But first, let’s start with some basic steps for a good CXM plan.
5 Steps to Optimise Customer Experience Management
Before we start considering how you can improve your CX by implementing these Customer Experience Management strategies, let us consider something for a minute.
As you probably can deduce by now, Customer Experience Management is a strongly heuristic domain in which different solutions will work best for different types of businesses.
Not only that; just like every business is different, every customer is too. What works for one type of customer may not work for another, and it’s a business’ responsibility to find out what their customers like and don’t like in regards to their experience and what they can do to fulfil those demands.
However, while there is not a one-size-fits-all answer about what makes good Customer Experience, there are some steps you must take to find out what your CX policy should look like. Here, we give you 5 necessary steps for effective Customer Experience Management.
1. Understand and segment your customers
The first thing you should do is try to figure out how your customers perceive your brand. In this phase, you have to consider your customers’ needs, wants, intentions, motivations, goals, taste, and preferences.
You can rely on surveys or gather feedback and common questions from your sales or customer service teams.
In a nutshell, a customer journey map is a visual representation of all customer journey stages.
You need to map what happens from the first moment your customer hears about your brand to the moment they decide to buy from you; this should also include how the customer does their own work of research about your product, how they compare you against your competitors, and every experience prior to their purchase. In this article, we have explained how to build the perfect customer journey map.
3. Measure customer sentiment
Next, you need to figure out how your customer feels at each of the customer journey touchpoints.
Gather as much feedback and information about your customers as you can. There are multiple ways to go about this, from satisfaction surveys to insights from your customer service and sales teams. The more information you gather, the better.
You can also use tools within a CXM platform like AI Sentiment Analysis to measure how your customers feel during their interactions with your representatives. These insights will be incredibly useful later for teaching your agents about CX best practices.
An example of a customer call analysed with Connex One’s Sentiment Analysis AI feature
Make a plan on how to structure your customer journey touchpoints from now on, how the relationship with your customers will change, what processes you need to adjust, what information channels you will use, and how your representatives will communicate with customers from now on.
Actioning those changes is often the most difficult part of Customer Experience Management optimisation. However, there are some tools that can make it easier, like Connex One’s Flow, a cutting-edge CX tool for planning, deploying and automating entire customer journeys.
5. Measure and develop
After you make any needed adjustments to improve your Customer Experience, it doesn’t end there. Customer Experience Management is an ongoing process, and you can never learn too much about what your customers like and don’t like when they engage with your brand.
Just like you took the effort to put yourself in your customers’ shoes at the beginning, you will have to keep constant track of their experiences after implementing a new Customer Experience plan. That way, you can stay adaptable and versatile, making sure that you’re always looking for ways to make your brand maintain a positive presence in your customers’ lives.
Here, you can read in more detail about how to best follow these 5 steps to optimise Customer Experience Management.
As we have mentioned, there are multiple tools within a CXM platform you can use for CX optimisation. And while, as we have also said, every business has different needs just like every customer does as well, there are some must-have features you can’t go wrong with if you want to improve your Customer Experience Management. In the following section, we’ll consider four of them.
What makes a good CXM platform: 5 essential features
Customer experiences can happen anywhere, and you need to be present wherever that is. Today’s customers use different devices and different channels to communicate with each other, and it only makes sense that they would choose to do the same when engaging with brands and businesses.
A study conducted by Harvard Business Review found that around 73% of consumers prefer shopping through multiple channels. Furthermore, Salesforce found that 75% of consumers look forward to a consistent experience across multiple engagement channels, or, in other words, an Omnichannel experience. What’s more: 73% declare that they will likely switch brands if they don’t get it.
The bottom line is clear: you need to make yourself available to your customers on every channel. The best way to do that is to adopt an Omnichannel software solution, which will enable your representatives to switch between channels seamlessly at your customers’ convenience, reducing wait times, making for a smoother experience, and increasing customer satisfaction.
Omnichannel, or availability across all channels, is one of the crucial steps of any successful CXM strategy
As we have seen, measuring customers’ preferences, interests, preferences, and attitudes is a crucial part of any CXM strategy. That’s why it’s so important to rely on Customer Experience Management software that allows you to gather customer data in a variety of ways, so that you can get the most complete picture possible of what your customer feels, wants, and cares about.
One tool you can use for this part of Customer Experience Management is AI Entity and Keyphrase Analysis. This function of AI is designed to recognise the most common words, phrases, or entities (such as products or prices) mentioned by your customers; this information will be incredibly useful to spot what your customers think of and want from you.
Within a CXM platform, tools like AI Sentiment Analysis can also be an invaluable resource: with this function of AI, smart algorithms will read your customers’ emotions from their tone of voice, inflection, and choice of words during calls with your staff, providing you with invaluable insights into what your customers care about, how they feel at each of the customer journey touchpoints, and what pain points they are encountering.
We have also talked about the importance of constructing accurate, comprehensive customer journeys. These should include each and every touchpoint of your customers’ engagement with your brand, and, ideally, you should be able to design and remodel them easily. Customer Experience Automation will be your biggest ally when it comes to implementing new customer journeys and tweaking them as you spot opportunities for improvement.
Our Flow feature is designed to make designing and deploying personalised customer journey maps easier than ever. Using an intuitive, code-free, drag-and-drop interface, you’ll be able to dictate every step in the customer journey, with a comprehensive view of all touchpoints. Then, workflow automation will take care of everything, sorting and directing all your interactions and saving your business time and resources.
Your organisation has access to a wealth of data beyond customer feedback, including website analytics, CRM tools like Salesforce, and HR and finance data. These systems frequently offer APIs that simplify data transfer to other systems.
Connecting your CRMs like Hubspot and Salesforce with CXM platforms will empower you to gain deeper insights into your CX processes, enabling you to get a clearer and more complete picture about where you can improve and the effect of your CX strategies.
Customer self-service is any action or task that can be completed by a customer, without the involvement of an agent or employee. Customer self-service is getting more popular by the day: in a report by the Harvard Business Review, 81% of customers stated they would prefer to handle an issue themselves before seeking assistance.
Ways of enabling customer self-service include building a Knowledge Base, creating product knowledge training courses, making training videos, or adding Live Chat to your website.
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