In the previous article, HRDC explored customer experience, categorized different types of customer experiences, and highlighted the importance of enhancing customer experience for businesses. So, what methods can businesses use to evaluate and implement customer experience management in practice? Let’s find the answer with HRDC.
1. Definition of Customer Experience Management (CEM)
Customer Experience Management (CEM) refers to the processes a company uses to monitor, manage, and organize all interactions between customers and the business throughout the customer’s lifecycle. CEM is a strategy that places the customer at the center of marketing, sales, and customer support activities to foster brand loyalty and repeat business.
Role of Customer Experience Management:
- Cost-saving on customer acquisition: Research shows that increasing customer retention by 5% can lead to a profit increase of up to 25%. This happens for several reasons, but primarily because retaining customers avoids the cost of acquiring new ones, and satisfied customers tend to place more orders.
- Customer feedback drives improvements: Customer data, in the form of web surveys, feedback through review sections on apps, websites, Facebook fan pages, or direct feedback with customer service and support staff, provides valuable insights. This helps businesses assess customer reactions and requests regarding products and services, and subsequently, create and implement detailed plans to improve customer experience and retain customers.
- Happy employees create better brand experiences for customers: Research shows a strong connection between employee experience and customer experience. Companies with the best customer experiences focus on measuring employee voice data to improve experience and retention capabilities.
- Satisfied, loyal customers willingly endorse the brand: Customer testimonials can often carry more weight in purchasing decisions than advertising or marketing efforts.
- Measuring customer sentiment provides insights into competitors: Customers compare brands when making decisions and offer feedback. Knowing this can give a company a more advantageous position compared to its competitors.
2. Some Tips for Effective Customer Experience Management
2.1 Create and Maintain a Complete Customer Profile (Big Data)
To provide excellent customer experience, you must understand your customers better than ever before. This means creating and maintaining a complete customer profile, which helps you understand and measure the customer journey at every touchpoint across multiple channels. The more you know about your customers, the more effective you will be at offering relevant recommendations, thus strengthening the relationship between your business and customers—boosting metrics such as loyalty and retention rates.
In the past, companies used structured data—such as demographic data, transactions, and logs—to build customer profiles. Today, you must also include emerging data types such as social media, video, RFID, sensors, geographic locations, etc., which are tied to cross-channel coordination. Additionally, integrate interactions, feedback, and transaction histories throughout the customer’s lifecycle, along with customer value, profitability, behavioral analysis, and trend scores.
By analyzing both traditional structured data and newer types of data, you can:
- Understand how to improve the customer experience at specific touchpoints.
- Know what your customers want and expect from you.
- Make better decisions faster.
2.2 Personalizing Data
Once you have a clear understanding of your customers, you can use that knowledge to personalize every interaction. Remember to focus not only on the customer but also on the context in which they are operating. Your data can help you maintain this focus, especially if you continue to enrich the existing (core) data with new sources. By adding context to the customer focus, you can make relevant and meaningful recommendations, suggestions, advice, and service actions when customers are most receptive.
Keep in mind that customers have more presence, power, and choices than ever before. If you fail to deliver a personalized, timely, and meaningful message, you will alienate them immediately. But if you do, you will foster brand loyalty.
2.3 The Right Message, Right Place, Right Time – Every Time
To deliver the highest value at each customer touchpoint and improve the customer experience you need to map out analysis for specific stages in the customer lifecycle, so you can deliver the right message to the right place at the right time. Every stage in the lifecycle is crucial from initial consideration, to positive evaluations, to the purchasing moment, and even the post-purchase experience. Each stage is an opportunity to improve the customer experience. And each stage is an opportunity to gather more insights to refine your marketing processes for the next time.
2.4 Innovation in Products and Customer Approaches
Building trust with customers begins by offering great products that genuinely help your customers. There isn’t much time to sell similar products to your customers. You must always seek ways to innovate your products. They must be relevant and different from the status quo. You must continuously strive to make your customers’ lives easier by serving them with excellent and useful products.
2.5 Proactive Communication – Connecting with Customers Effectively
Building trust begins with how you communicate with customers. Communicating well with customers is no longer just through the customer service team as it was in the past. It includes online information, social media presence, advertising, and every written or spoken form through which customers can interact with your brand.
2.6 Guiding Customer Behavior
When you provide customers with helpful information and guide them on how to resolve issues or use your product effectively, you are giving them the information they need to trust your brand. The more you empower your customers through guidance, the less likely they are to need to contact your customer service representatives.
2.7 Mapping the Customer Journey
What are the customer touchpoints—or the moments when customers interact with your business (Touchpoints)—during the customer experience journey (Customer Journeys) in terms of services/products?
What are your customers’ expectations?
Why is it important to map the customer experience journey? A great customer experience is a combination of multiple expectations being met at customer touchpoints.
To map the customer experience journey, simply scan all your service processes and list all the touchpoints where your business and customers interact. Once you have the customer journey, you can identify the key touchpoints that need improvement and develop strategies to surprise customers at these crucial points.
At this stage, you’ve completed about 30% of the journey in building Customer Experience.
2.8 Identifying Customer Expectations
Improving the customer experience is the most challenging step. There are two ways to answer this question:
- Proactively set and build customer expectations
- Ask customers directly about their expectations through surveys
* Proactively Set and Build Customer Expectations
- Don’t let your customers imagine too much, causing their expectations to exceed reality and then disappoint them when they encounter you. Stop this by providing realistic images or detailed descriptions of the good and bad aspects, so customers understand what to expect.
- For example, on an auction site in Japan, in addition to the shiny images of the product, there are also images explaining that the bag has defects, which helps customers consider before purchasing. Why does the seller do this? Simply because they are resetting customer expectations, and when the customer receives the product, they won’t complain about being deceived. In this case, the customer buys an imperfect product, but they are still satisfied with it, and the overall customer experience remains positive.
* Ask Customers Directly About Their Expectations Through Surveys
- With the second method, you ask customers about their expectations so you can improve services/products to meet them. Customer satisfaction surveys help explore whether customers are satisfied or dissatisfied with the products or services they received from the company. This analysis will help determine what changes the business needs to make to improve.
- This method requires you to design surveys that are clever and subtle enough to gather detailed responses. Allocate a budget for this, as it is crucial and should be done regularly because customer expectations vary, and these expectations change according to the market every day due to competitors and customer needs.
- At this stage, you’ve completed about 70% of the journey in building the customer experience. The final step is to maintain and manage the customer experience through systems.
- Increase the presence of surveys by using tablets to survey at counters, or by using QR codes to link to surveys printed on bills, tables, doors, parking lots, or even in toilets so that customers can provide feedback anytime.
2.9 Listen and Respond Quickly
Respond to customers immediately when you receive feedback to show you are listening to them and that you are responsible for solving their issues. 100 compliments don’t hold as much value as a single complaint. What’s important is identifying the issues in your service and resolving them quickly to meet customer expectations before they decide to leave.
3. Challenges in Customer Experience Management
- Managing Customer Data Repositories
A company cannot accurately measure customer experience without a large dataset, and it cannot address customer experience issues it is unaware of. Filtering and managing this data repository helps the company develop more practical and useful strategies, targeting the right customer segments, and delivering better customer experiences.
However, gathering and accessing large amounts of data or customer details is not easy, especially in today’s competitive environment. Moreover, having data is not enough; it is essential to know how to use it effectively.
- Multichannel Customer Engagement
Customers have many ways and channels to discover and interact with a brand. It is the business’s responsibility to create interactions with customers across various channels to retain them.
However, during this process, many customers become frustrated and disappointed because they cannot get closer to the brand through their preferred channels. On the other hand, some customers may discover the business through too many channels, but the information across these channels is inconsistent.
The challenge businesses must overcome is to build a synchronized, accurate multichannel strategy to deliver a seamless customer experience.
- Lack of Multichannel Support for Customer Access
Customers have numerous ways and mediums to discover and interact with a brand. It is essential for businesses to create interactions with customers across multiple channels to retain them.
When a brand fails to listen or assist customers on the channels they are using—whether through email, social media, live chat, mobile apps, or smart speakers—customers may feel their wants and needs are unheard. Customers who do not feel listened to are more likely to switch to competitors.
- Ignoring Qualitative Data
Brands should collect and analyze individual comments in open-ended survey fields, which can provide much deeper insights into customer experience issues that need addressing, compared to numerical rankings. Qualitative data can also spark new ideas for improving the overall experience.
- Poor Internal Communication
The CX team must analyze the customer journey, create the voice of customer programs, and gather customer data insights to improve the experience. However, these initiatives will not succeed unless CX leaders distribute this information clearly to stakeholders in sales, marketing, customer support, and senior leadership.
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