crm vs cem
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to its automated prompting and prodding, but it doesn't give much insight when customers donot respond in the predicted way. CRM is thus unable to determine whether failures are theresult of faulty assumptions, incorrect information or poor execution. It is also unable to tellhow these "failed" interactions affect the customer relationship; it treats all failures as neutral,when in fact the fabric of the relationship may have been weakened or undermined by a
poorly executed service encounter.
CEM's strengths lie in precisely the areas where CRM is weak. By focusing on theexperiences of customers and how those experiences affect behavior, CEM examines both thequality of the company's execution and the efficacy of the result. It aligns customer needswith the company's ability to fulfill those needs, leading to business relationships that aremutually beneficial and that both parties - company and customer - are motivated to improve.
So what does CEM look like? At its most basic, a Customer Experience Management systemcaptures information about individual service events and feeds it back to the organization.The information can be gathered from customers who provide their impressions of recentservice experiences, as well as from objective observers who record specific details aboutservice execution (such as mystery shoppers and call monitoring agents). More sophisticatedsystems integrate data from both sources so that company standards and execution can becontinually calibrated with customer expectations and impressions. Unlike traditional marketresearch reporting, which is delivered weeks after the data are collected, CEM systems feed
back information within days or hours of the service event, allowing employees andmanagers to make small, effective adjustments on an on-going basis.
Capturing and integrating data about service execution and customer impressions isimportant, but it is only the first step. These data need to looped back to training andcoaching content so that knowledge and performance deficiencies among employees aredirectly and continually addressed. Furthermore, CEM programs may extend the linkage toemployee and manager incentives. Thus, front-line employees and supervisors continuallyreceive feedback, training and rewards linked to their day-to-day interactions with customers.
Finally, a comprehensive CEM program also incorporates key metrics related to customer behavior and profitability, such as retention rates, average purchase amounts, store sales,complaint and resolution rates, etc. The strength of a CEM system is in its ability tocontinually align company performance with customer needs and behaviors, enablingcompanies to make small, day-to-day adjustments as well as enterprise-wide changes.
Peter Gurney is the Managing Director of Kinesis . Peter Gurney can be reached by calling206-285-2900.
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Article 4Customer Experience Management
By
Prakash Chandra DashSenior Lecturer
Bhubaneswar Institute of Management and Information TechnologyBhubaneswar
If you do build a great experience, customers tell each other about that. Word of mouthis very powerful.
- Jeff Bezos –
Abstract
The customer experience is central to the corporate goals. Delivering a relevant, personalised, and consistent customer experience can, for instance, improve customer satisfaction, across every customer touch-point. Accelerating the delivery of new brands,messages, and promotions to customers enhances market agility. In addition to these,delivering a consistent customer experience across world markets and languages isessential for building a strong global brand.
However, the truth remains that an optimal customer experience is easier to describethan to deliver. This paper discusses the importance of superior customer experience,opportunities to explore and developing a customer experience strategy to win over thecustomer.
Introduction
When a customer is participating in KBC-2, through Airtel, he can vouch for hisexperience from being a customer of Airtel. Watching world cup grand final with HritikRoshan, gives a better experience of the world cup. So customer experience is the talkof the day. Customer experience can be drawn through expertise and providing bettervalue to the customer. So customer value plays a critical role in shaping the customerexperience. In this regard, significant steps have been taken by companies in their
endeavor to enhance customer value. This has resulted in tumultuous events wheremarket leaders have suddenly found themselves virtually out of business or strugglingfor survival. Today new value creators have been reeling the roost in various sectors. Forexample, the entertainment industry has seen single screen theatres that did roaringbusiness once are now on the brink of shutting down, owing to the enhanced customervalue being offered by multiplexes dotting India's urban landscape. So better customervalue leads to better customer experience. The customer value includes product value,service value, personnel value and image value. The gap between perceived value andreal value can be minimized through the better customer value.
Experience matters
To define more clearly, managing customer experience at every opportunities to buildbrand equity of the service,which leads to sustainable profitability for the organization iscustomer experience management (CEM).however we must keep in mind that CEM is not
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customer relationship management(CRM).The latter in practice is an information drivenapproach to customer analysis and process automation. CEM focuses on delightingcustomers at every opportunity and during all interactions,which is online real time andtough. CEM focuses on the value proposition from customer's point of view and includesall interactions at various touch points.
Many customers are actually looking for a pleasant experience with the organization atevery touch point at every moment of truth(interaction).Whether a customer is a user of a mobile phone ,hotel service,banking,airline or travel service ,all that , he or she looksfor ,is a memorable experience .Since every interaction is unique and important,thecustomer looks for personalized attention and service in each one of them. Even if oneexperience wasn't upto his expectation,it puts him or her down and affects the image of organization. Hence ,CEM isn't about providing 90 percent and above good service,experience to customers, and feeling good about it .But, it is about ensuring a six sigmakind of service to customers, to build a good service image among customers and scorehigh on customers experience .
CRM vs. CEM
What When How monitored Who uses theinformation
Relevance to futureperform
CustomerExperienceManagement(CEM)
Captures anddistributes what acustomer thinksabout a company
At points of customerinteraction "touchpoints"
Surveys, targetedstudies,observationalstudies, "vice of customer"research
Business or function alleaders, in order tocreate fulfillableexpectation andbetter experience withproducts and services
Leading locatesplaces to addoffering in the gapsbetweenexpectations & experience
CustomerRelationshipManagement(CRM)
Captures anddistributes what acompany knowsabout a customer
After there is arecord of acustomerinteraction
Point-of-salesdata, moarketresearch, websiteclick-through,automatedtracking of sales
Customer-facinggroups such as sales,marketing, fieldservices and customerservice, in order todrive more efficientand effectiveexecution
Logging Drivescross selling bybundling productsin demand withones that aren't
The Importance of Superior Customer Experience
In product marketing, typically 30% of an organisation's resources and spent onproviding a good customer experience and 70% goes into marketing the sameinnovatively. The entire focus is on marketing, to dominate the customers' mind space.However, in services marketing, 70% of a company's resources need to go into creatinga great customer experience and the balance should be spent on "marketing thesuperior experience delivered "among prospects. Once the companies focus is oncreating good customer experience, it automatically generates strong referrals, and word
of mouth complements the 30% spent on marketing the service. Several studies haveshown that repeat purchases have mostly been based on quality of service delivered,commitments honored, product/service quality, continuous innovations and theexperience with the product/service. The focus is less, and less on price. Customersvalue and remember the quality of their interactions with the service providers .The ruleis: higher the quality, higher the positive word of mouth and loyalty from thecustomers .In a survey by CRM Guru, positive and memorable experiences withorganizations were found to be the key reason for profit growth.32% of happy customerssaid they recommended their service provider to a friend or colleague, and 19% saidthey purchased more products and services from same service provider. The bad newsis, negative experiences lead to customer defections and reduced spending on theservice .In the same survey, it was found that while 77% attached importance to
superior product or service by customers to be loyal with the organization,78% attachedimportance to high quality interactions with people and systems to be loyal. only 31%linked importance to lowest price or cost of ownership of the service, clearly outlining
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the importance of managing the customer experience better .Lastly,the survey alsooutlined how business performance improves with the improvement in customerexperience. Higher the customer experience score, higher the business performancegrowth and vice versa. In India leading companies like Taj Hotels, Airtel,Hutch,JetAirways,Kingfishers Airlines,ICICI Bank have all succeeded due to their focus onmanaging the customer experience well with their services and products consistently.Though, they haven't reached the six sigma levels in delivering defect free customerexperience.
Opportunities and challenges
However, along with this tremendous growth comes the challenge to the service industryto live upto the growing demands of customers, who are continuously benchmarking oneexperience with another and expecting improved services in every area. Their alsobecoming list tolerant to delays and failures in service, and expect every service providerto deliver world class experience in every interaction. This growing demand for serviceexcellence also gives an opportunity to every service provider to emerge as leaders intheir chosen field .To date, few companies have optimised this entire create-to-publishcustomer experience process. The lack of an enterprise-wide strategic approachundermines the very objectives that executives are seeking to achieve, resulting in someimportant issues or shortcomings. The first of these being decreased customersatisfaction. Inaccurate, out-of-date, or incomplete customer information preventspeople from understanding companies and their products, and can drive customersaway. The second issue is sluggish market execution. Labour-intensive manualprocesses require months-long lead times to roll out brand changes, new products, andnew campaigns, delaying launches and weakening competitive advantage. The next inthe line is brand dilution. Without the capability for centralised control, brands andmessages become distorted as they are altered for the requirements of different touch-points and diverse global markets. At the same time, another penalty is incurred,because customer experience inefficiencies increase the cost of each customerinteraction. This can damage the bottom line.
Developing a Customer Experience Strategy
To develop a customer experience strategy, we must first find out what the customersreally want from the service during their interactions with the service provider? It iscalled "customer specifications for service" on the service expected. But in ourenthusiasm ,"we should not over specify''.Most customers look for a pleasant experience(quick service with minimum hassles or procedures) with the service providers and not a"wow" experience every time. Understanding this thin difference is critical in order toavoid over specifying and incurring high cost to provide "unnecessary"experience tocustomers.
One of the telecom service providers has provided in their showrooms several mobilerelated services including one of customers taking their photographs instantly anddownloading in their mobile phones and printing them. Though there are alwayscustomers waiting for their turn at the showrooms to meet the customer relationshipexecutives, rarely do any of them use the service, since all that they are looking for at amobile showroom is quick connection or quick resolution to their problems. They have notime to spend on all these "over specified" services. Though these over specified servicesimprove the ambience of the showroom, they don't service the real purpose thecustomers are looking for, from these facilities.
It is a good idea to map the customer expectations with service provider at all the touchpoints through one-on-one interviews. These interviews will enable companies tounderstand "what is really important from the customers' point of view" and what to
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all geographies, and throughout all stages of the customer lifecycle, from attractingcustomers through fulfilment to retention
Reference
Books
• CRM at the Speed of Light. Joseph Pine & James Gilmore• Mariton, John. Smart Things to Know about Brands and Branding .Mumbai, Indian
Books Distributors Limited, 2000.
Electronic Resources
• The Economic Times Knowledge Series .Times Multimedia,2001(CD-ROM)• "ET in The Classroom", Times Multimedia ,2003(CD-ROM)
Internet Resources
• www.economictimes .com• www.marketingprofs.com• www.businessstandard.com• www.netmba.com• www.hbr.edu
Prakash Chandra DashSenior Lecturer
Bhubaneswar Institute of Management and Information TechnologyBhubaneswar
Source: E-mail October 21, 2008
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