Customer Experience Management and its Role in CRM
Most of you probably know that the philosophy behind CRM is to create long-term, loyal customers. The longer a company can retain its customers, the more loyal those customers can become towards the company. Customer retention can be achieved through pricing, product quality and service quality strategies, the latter being the one that impacts customer loyalty the most. According to several studies, about 70% of customers will defect due to poor service quality. Another 20% defect because of pricing or product quality issues.
Customer experience management (CEM) has been tagged by Colin Shaw and John Ivens as the next business tsunami. Why? Because service quality, as it has been traditionally known, will no longer be enough to create customer loyalty. In their book Building Great Customer Experiences, Shaw and Ivens explain that the customer experience is the next competitive battleground. It is easy to compete today on pricing and product quality. Sustainable competitive advantage will come from a company’s ability to create repeated unforgettable experiences for its customers.
So what’s the connection between CEM and CRM? There are many definitions of CRM out there, but all agree that CRM is a philosophy and a business strategy designed to create valuable human interactions and supported by customer intelligence, processes, people and technology. CEM is not a separate philosophy ~ it is an essential component of any successful CRM strategy. A customer experience is made up of interactions between a company and a customer.
Some of the key elements of an unforgettable customer experience are customer-focused processes, customer knowledge, and customer-caring people. In this article, our focus will be on the design and implementation of customer-focused processes as a part of your CRM plan. The business community has realized that successful CRM requires modifications to a company’s sales, marketing, and service processes. Let’s look at how this is normally being done today and how this can be done using CEM principles.
CRM Process Design Today
Process mapping is a technique that most of you have probably heard of and/or use in your quest towards CRM solution implementation. Business process maps are diagrams that describe the series of steps required to achieve a particular outcome. If applied correctly, the process maps are then used to guide the design and development of business and technical requirements when installing CRM software solutions.
In my experience, most companies take a myopic and internal approach towards creating their CRM processes. The focus is primarily on efficiency and productivity improvements. Customers usually find ways of getting around these processes in an effort to get what they need, and never even tell the company. With the pressure to implement the technology solution, company representatives may say “the process has been working fine for years. Why change it ~ let’s just make the necessary changes so it integrates with the CRM software solution.” Working fine but according to whom?
A process can be viewed as follows:
The most important INPUT into the design of a process is the customer. Most processes have probably been around for quite sometime and have never been ‘customerized’ or redesigned from an external perspective. When was the last time you asked the customer to get involved in your process redesign?
Ask yourself these questions:
CRM Process Design Using CEM Principles
A customer experience map is one that represents the stages and steps a customer goes through when interacting with a company throughout the customer lifecycle. These stages can have many interaction or customer touch points ~ a phone conversation, a visit to the website, a personal encounter, the receipt of a mail piece, etc. For example, the bullets below represent encounter or touch points for an airplane flight.
Customer experience blueprinting involves expanding each of the touch points and describing what the customer experience was like. These blueprints help us analyze current experiences and design future ones that link back to an overall CRM strategy by addressing these questions:
Cognitive mapping techniques can also be used to help align the CRM business strategy to the process strategy. Cognitive maps enable people to make the invisible visible. An organizational chart, which creates a picture of the alignment of power and authority, is one form of a cognitive map. Another form is a customer interaction map, or high-level map that depicts the interactions between the stages of the customer lifecycle and the core business processes of the company. It shows the exchanges or inputs/outputs between the customer and the company. It also distinguishes internal processes from those that touch the customer.
I was first introduced to customer interaction maps by a colleague, Dr. Kevin McCormack. We worked with a construction company a few years ago and involved top level executives to built the maps from the top down or outside-in. That gave the company a holistic view of its business and made it possible for everyone to visualize all the interrelationships between customers and functions/departments. Rather than having the company and its departments look at ways to reduce expenses or otherwise improve the bottom line from an internal perspective, we had them use the maps to create a view of how customers interact with them. By understanding these interactions, companies can make their business processes match customer expectations more effectively.
Since companies have to define customer needs and evaluate how those needs are being met—or not—these customer experience techniques place emphasis on obtaining external input from customers as well as input from the departments, about interactions. By involving the customers more, companies can improve their processes and secure the loyalty of their customer base.
Effective CRM initiatives complete the design of experienced-based processes or workflows first, based on customer input ~ needs and expectations. These processes must improve human interactions and create value at all customer touch points. By using cognitive process mapping, customer experience blueprinting, touch point mapping and other techniques, companies can ensure that processes provide unmatched features and create a WOW experience for the customer at every interaction.
Dr. Nancy Rauseo is on the faculty of Florida International University’s College of Business Administration where she teaches marketing. Nancy holds a Bachelor of Science in Industrial Engineering from Purdue University and an M.B.A and Ph.D. from Nova Southeastern University. Prior to her teaching career, she held various senior management positions for over 20 years in the areas of sales, marketing and technology implementation. Dr. Rauseo is also Instructor for FIU’s Professional Certification Program in CRM. For more information, visit: http://business.fiu.edu/epe/crm.cfm
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