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Just What Is Customer Experience Management, Anyway?

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A growing number of books and articles are actively promoting the concept of Customer Experience Management (CEM).

Popular leaders include Bernd Schmitt, author of Customer Experience Management and Experiential Marketing. Joseph Pine and James Gilmore, co-authors of The Experience Economy have also gained a great deal of exposure. You may have read Managing the Customer Experience by Shaun Smith or Customers.com by Patricia Seybold. You may also have seen articles about and by Harvard Professor Gerald Zaltman, author of How Customers Think.

There are also a growing number of agencies and consultancies claiming expertise in CEM—all with varying degrees of involvement and expertise in the arena.

While there's a clear reason to become a staunch supporter of CEM, there's a great deal of confusion over what it really is. As more individuals get on board the CEM bandwagon and build services, confusion seems to be increasing. It's time to demystify the hype.

Defining CEM


While no individual really "owns" the term "Customer Experience Management," it is often attributed to Bernd Schmitt, who in 2003 defined CEM as "the process of strategically managing a customer's entire experience with a product or company." Building further on Schmitt's definition: "The term 'Customer Experience Management' represents the discipline, methodology and/or process used to comprehensively manage a customer's cross-channel exposure, interaction and transaction with a company, product, brand or service."

When we look at the nature of Customer Experience Management, there are essentially five key areas that CEM practitioners or "Experience Architects" examine. While these are broken down by consultants in slightly different ways, based on individual methodologies, they can be described, at a high level, as follows:

1. The Customer. CEM analysis focuses on developing a multidimensional understanding of customers. This understanding includes cultural, sociological, behavioral and demographic analysis, and culminates in a detailed ability to articulate the needs, wants, desires, expectations, conditions, context, and intentions of various customer groups. This understanding informs audience segmentation and guides the prioritization of key segments. Customer analysis is proactively benchmarked against a company's capability to meet customer needs—both in a present and a future state capacity.

Customer understanding therefore serves as the primary driver in shaping the business approach, aligning strategy and investment.

2. The Environment. Examining the "landscape for brand discovery" is an essential tenet of CEM. This landscape is composed largely of market conditions, competitive factors, channel use (and channel/cross-channel dynamics), the process for purchasing (steps to buying), the "real" purchasing environment (store, phone, Web, etc.), and the service environment.

Leveraging this knowledge against customer analysis, CEM strategists work with companies to create integrated plans which "order the paths" that customers commonly follow in the purchasing process. These multi-path strategies work to ensure that customers have an intuitive, pleasing experience at every step in the journey to brand discovery.

As a part of Environmental Analysis, strategists also focus on applying experience innovation to customer environments to remove barriers that confuse, inhibit, discourage or de-motivate customers, and create a more engaging, efficient, pleasing, personable or memorable environment within which to interact.

3. The Brand. From a tactical perspective, this analysis involves the development of visual identity, assets, taglines, communications, logos, and other brand assets that help shape perception and define the brand in the marketplace. From a strategic perspective, however, this analysis focuses on innovation and differentiation.

This includes the consistent and iterative evaluation, planning, and refinement of product or service features, functionality, pricing, options, attributes, benefits, and positioning of the company, service, or product.

4. The Platform. A company's operational infrastructure is the platform on which customer experience is delivered. As a result, operational efficiency has a direct impact on customer experience. As companies move from an "inside-out" focus (on internal operational constraints such as production, capacity, etc.) to an "outside-in" focus (on customer-centric delivery), operational analysis is essential. This includes comprehensive evaluation and improvement of people, process, policies, technology, and systems that facilitate, track, and measure customer interaction and transaction.

CEM Platform analysis may include workforce evaluation, fulfillment and logistics analysis, process improvement, technological analysis, policy reviews, and a myriad other tasks. The goals of platform analysis include streamlining operations, increasing time to market, removing barriers to customer satisfaction, lowering costs, and improving the overall customer experience by creating operational excellence.

5. The Interface. This area of CEM analysis focuses on the interaction between consumers and the brand, from a human-to-technology, human-to-human, and human-to-environment perspective. Simply defined, this area focuses on refining and optimizing the customer interaction within any channel to produce desired and pleasing outcomes.

At a tangible level, CEM Interface analysis may center on improving the usability of electronic applications or products (e.g., a Web site or a TiVo interface, or the buttons and information flow on a cell phone). However, it also concentrates on optimizing the interfaces within other channels, such as brick-and-mortar outlets.

CEM strategists focus on how customers interact within and across channels, often examining the end-to-end shopping and service-delivery process. This may include task-based analysis of various interactions and transactions, such as a customer's discovery, browse, shop, purchase, and post-sale experience.

CEM practitioners focus on improving the quality and efficacy of customer dialog. This may include conducting analysis of the call center or voice-response systems, as well as optimizing the approaches of sales or other customer-facing staff.

* * *

It's relatively easy to find individuals who can work within one or two of the areas above. What separates CEM practitioners from the pack is an adamant dedication to examining all five functional areas with companies to develop truly cohesive strategies and plans that result in tangibly improved customer experiences and better business outcomes.

It's easy to confuse CEM with CRM, Usability and "Experiential Marketing"—but we'll talk more in future articles about how it all fits together.

Note: Resources for this article include materials produced by Bernd Schmitt, Joseph Pine/James Gilmore, and other authors referenced in the initial paragraphs of this book.


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Leigh Duncan Durst (leigh at livepath dot net) is a 20-year veteran of marketing, e-commerce, and business and the founder of Live Path (www.livepath.net).

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Comments

  • by Olga Verbytska Thu Aug 7, 2008 via web

    Very helpful article. My Master Thesis is about CEM and I found here some important info to get a better understanding of CEM

  • by Adam Thu Nov 13, 2008 via web

    I think many companies take customer experience for granted. Professional companies such as CXO Global Solutions (http://www.cxogs.com) can make a tremendous impact on customer experience which can directly impact revenues and long-term customer loyalty. Businesses that reli=y on customer experience in this competitive landscape should really seek the advices of experts.

  • by Kevin O'Brien Mon Feb 22, 2010 via web

    This article has a great deal of shelf life. 4 years later and there is still significant truth to what you have written here. Nice work.

    Kevin O'Brien
    Chief Marketing Office
    RiverStar
    http://www.riverstarsoftware.com

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