Rethink CRM to be CEM

Rethink CRM to be CEM

Businesses are in a difficult situation. Today’s customers demand more experiences and contextually relevant engagements than they are equipped to deliver. The secret behind the abbreviation CEM is more important than ever. This places the businesses on a difficult and challenging trail that they need to carefully navigate in order to be and stay successful.

The business challenge is that technology helps everyone, especially customers. This is because to the increasing proliferation of consumer technology, it is far easier and cheaper for customers to implement and use technology to their advantage as it is for businesses. A director of merchandising of a 1 Bn+ retailer put like this: “By the time we catch up to technology it will have moved past us again.”

Examples for the truth of this statement in the past decade include the meteoric rise of messaging services and, before that, social media, powered by smartphones that made the Internet ubiquitous. As a consequence of this today’s customer is less depending on company marketing- or sales organizations and has a far higher reach when it comes to satisfying an information need. Consequently, Google finds that a whopping 99.8 per cent of all online ads are simply … ignored. Sales representatives are on the verge of becoming irrelevant. An increasing number of studies find that customers contact a sales representative only after a product decision has been made.

Other studies determine that customers are abandoning shopping carts already following a single poor service experience. While these studies often are commissioned by vendors there still are too many of them to not indicate that there is a problem. After all there is bound to be a fire where there is smoke.

Then and Now

The 1990’s customer happily believed in corporate messaging that got delivered via unidirectional channels like TV, radio, or the newspaper.

Today’s customer is always online, digitally connected and socially networked. She trusts peers, ‘people like me’, far more than corporate executives, spokespersons, or consultants/analysts/influencers. This trend is clearly shown by the ongoing changes in the Edelman Trust Barometer and it gave birth to notions like ‘a company like me’ or the debatable one saying that ‘the customer is in charge’.

Today’s customers are using technology to navigate their individual journey. This journey stretches across devices and channels. It is non-linear and proceeds at the customer’s pace, and it doesn’t end with the purchase.

Customers are simply following their own preferences, not a company’s. Yet customers have precise demands to the companies:

  • Customers want the company being available on their communications channels of preference.
  • Customers want the company to know more about the product or service that they are inquiring about than they already know themselves.
  • Customers want the company to know and address their intentions and not being bombarded with irrelevant and out of context messaging. Information they volunteer to the company needs to be used to their benefit.
  • At the same time customers do not want their data being used outside the boundaries of their interests. They do not give a perpetual license to use their information.
  • Most of all, customers want to feel valued by the company. And one of the most valuable commodities customers have is their time.

Pre- and post sales, companies need to address these demands by offering a menu of interlinked contact points that collect the right data and offer meaningful information in real time, so that the customers can proceed on their journey with minimum friction and loss of time. This includes the usage of the product or services – which, of course, doesn’t necessarily give or collect data (anyone seen a can of chili collect usage data?).

Pre- and post sales, and interaction with products, are also why I chose the term contact points instead of the better known touch points, as the term touch points is nowadays somewhat delimited to marketing. Anyone having a better term please let me know…

Companies that succeed in building this menu have established a technical foundation for engaging in a way that results in good experiences. Of course a technical foundation is not enough. Companies also need to cover the even more important aspects of people, process, or culture.

But: Why do experiences matter?

And how to get there?

Experiences Are Created Through Engagements

In an operationalized adaptation of a definition given by Paul:

“Customer Engagement is the ongoing interaction between company and customer, using contact points that are offered by the company and chosen by the customer.”

This is where the traditional notion of CRM falls short and where we need to turn it into Customer Engagement Management – CEM.

CRM in a traditional sense, rightly or wrongly, focuses on making the transaction and is mainly driven by a strategic focus on internal needs. As a consequence there is no view on a long-term customer relationship and therefore the value added for the customer is comparatively low. Once can also see this in many traditional loyalty schemes that are rather built for ring fencing customers than for making them loyal. It is an inside-out view that emphasizes the interests of the company over those of the customer.

What if a company took a different stance? A position where not the transaction and the company needs are taking center stage but customer interactions, conversations, and service and where strategic decisions are taken around fulfilling the customer’s needs? This way the company is able to offer a high value to the customer during a long-term relationship. Conversely, the customer shares this added value with the company through repeat transactions. The transaction is no more a goal but an engagement amongst others, an engagement that leaves an experience.

In a way one can say that businesses serve themselves best by serving their customers best.

CRM to CEM

But how does this tie into customer experience, I hear you ask.

According to Wikipedia

“Customer Experience is the sum of all experiences a customer has with a supplier of goods or services, over the duration of their relationship.”

Of course there can be positive and negative experiences. And there is another catch: Experiences, good and bad, fade over time. The most recent ones supersede older ones. This is why companies can ‘turn around’ bad experiences with good customer service. But this observation also says that it pays off to be consistent – after all customer service can be expensive.

On the other hand there is also no point in striving for consistently exceeding customer expectations. For one this ambition leads to a vicious circle; expectations rise endlessly.

The Simplified Maslov Pyramid of Customer Expectations

Similar to Maslov’s hierarchy of needs customer expectations form a hierarchy that stretches from basic to ones of higher order. It is simplified in the sense of having only three layers that start from rationality and bring more and more emotions into the picture.

And there is no point in concentrating on the higher order expectations if the basic ones are not met before. Efficiently selling a customer something that she doesn’t want nor need is probably not going to be a (lasting) good experience.

Customer Expectations Hierarchy

Customer experience is not about continuously exceeding expectations but about first consistently fulfilling the customers’ needs and then using the change created by that to create little ‘wow’ moments. First and foremost the customers need you being available their way and you reliably and accurately providing them, initially with accurate and reliable information, then with what they really want. There is nearly no chance of impressing or wowing customers at this level. Failing at this level, however, creates negative experiences and frustrations. Think “Your call is important to us – due to an exceedingly high call volume …” or different company representatives giving different answers to the same question., or a dress not being available in the right size in one store with the associate not being able or willing to look up whether it is available in another store.

First, meet the needs!

From then on make it easy and joyful for your customers.

The secret sauce lies in finding the right way. What is easy and joyful for the customers? The easiest way to find out is usually asking them, even in times that are as digital as ours.

But does it pay?

Improving Customer Experience Is Good For Business

It does.

Meeting expectations provides the customer with a confirmation, a positive reinforcement. Consistently meeting expectations then leads to various positive results for the business, starting from a higher customer satisfaction, the chance of repeat purchases and leading to an improved and positive attitude towards the brand, ultimately creating a loyal customer who does not return because of a discount but because of being convinced of getting the best value.

Improving Customer Experience

This is also confirmed in a number of studies that tie a focus on customer experience to tangible, measurable business outcomes.

Focusing on a good customer experience through delivering the outcomes that a customer desires in an efficient and – for the customer – joyful way pays off for the business. Don’t look at yourself but at the customer and reap the benefits.