- What is customer experience management?
- Why customer experience management is important
- What is a customer experience management strategy?
- Tips for creating a good customer experience strategy
- Techniques to improve customer experience management
- Customer experience management (CXM) vs. customer relationship management (CRM)
- How to manage customer experience metrics
- Customer experience management challenges
- What is customer experience management software?
- Deliver seamless customer experiences with the world’s first purpose-built Unified-CXM
What is customer experience management?
Customer experience management, also known as CXM or CEM, is the set of strategies that brands employ to gauge and improve how customers feel about the brand throughout the customer life cycle.
CXM implements controls to shape the customers’ perception of the brand as they traverse their journey. It also places customers at the organization's heart and prioritizes their satisfaction and loyalty over other organizational goals. One way of improving your brand’s CXM can be through optimizing critical touchpoints for better customer engagement by leveraging insights from voice of customer (VoC) data.
Why customer experience management is important
Customer experience data helps brands understand how customers perceive their products and services and whether those customers will continue doing business with them. Managing customer experience through an effective strategy can break down data silos to create a unified view of the customer, enabling benefits that include:
1. Customer retention
Customers expect a frictionless experience across channels and devices. Brands can use CXM to attract and engage with customers through targeted marketing, proactive support and tailored reward & loyalty programs to improve customer retention rates.
2. Customer loyalty
The more satisfied your customers are, the more likely they will recommend your brand to others. Customer endorsement is often more influential than marketing campaigns, with nearly 80% of customers reporting that product reviews are an important factor in their buying decisions.
3. Customer satisfaction
Slow responses to customer inquiries are among the most significant brand detractors. Customer experience management provides brands a real-time, 360-degree view of their customers’ emotions, behaviors and expectations across touchpoints to deliver a better end-to-end experience.
4. Customer engagement
Customer engagement is how a brand builds customer relationships to increase brand awareness and loyalty. CX management software provides feedback on the best marketing campaigns, content and outreach tactics for fostering customer engagement.
5. Competitive edge
Customer experience management helps brands build stronger competitive advantage. Better operational efficiency reduces churn as more customers enjoy highly relevant, tightly-knit experiences — making them less likely to switch to a competitor.
What is a customer experience management strategy?
Customer experience management strategy is a customer-first approach created to improve interactions between businesses and customers, thereby enhancing customer satisfaction and loyalty. The primary objective of CXM strategy is to create positive customer experiences at every touchpoint throughout the customer journey.
A robust strategy should also involve anticipating customer needs and proactively addressing issues before they arise. For example, a hotel chain might use customer data from social channels and inbound calls to anticipate that a guest prefers extra pillows or a specific type of tea and have those items waiting in the room upon arrival.
Technology plays a critical role in fusing all these touchpoints together to ensure consistency in customer experiences everywhere. A unified customer experience management (Unified-CXM) platform marries customer data from every single point of contact onto one console. This singular, integrated view of the customer can surface user insights that can help you refine your strategy and deliver augmented customer experiences across the board.
Tips for creating a good customer experience strategy
Good customer experiences encourage customers to return. The most important way to provide a good experience is always to keep the customer in mind. There are four crucial steps to creating an effective customer experience strategy:
1. Know your target cohorts
Segmenting your customers based on needs is the first step towards creating an effective customer experience strategy. To begin, it's important to identify what drives and challenges your customers and what they require from your products or services. Customer segmentation can be based on various factors, including geography, company size, behaviors, and needs. However, need-based segmentation is the most insightful as it enables you to define better, more targeted ideal customer experiences.
2. Travel the path your customers take
Businesses must first understand the customer journey and identify pain points that need to be addressed. Design your customer experience management strategy by carefully combing through every stage of the journey — from awareness, consideration and decision to retention and advocacy. Data gathering techniques such as surveys, feedback forms and social media listening can provide valuable insights into customer preferences, behaviors and opinions.
3. Understanding customer preferences and needs
A holistic view of customer journey maps for all key user personas, and real-time customer analytics can help create hyper-personalized experiences. These personalized experiences lead to more strategic product development since you can now create products customers are looking for. You also better understand market trends and can set up tailored messaging and advertising campaigns.
4. Develop a customer-centric vision
This vision statement serves as the gold standard for how a brand operates in a way that puts customers first. Focus on customer support and satisfaction as well as transparency and authenticity as these are what customers are often looking for in a brand.
5. Earn customers’ trust
Resonating emotionally with customers should be a high priority, as research suggests that emotionally invested customers in a brand are three times more likely to return for more. In addition to building customer loyalty, this can also provide brands with cross-selling and up-selling opportunities.
6. Collect and organize customer feedback
Leverage differentiating technology like artificial intelligence (AI) to derive actionable customer insights from surveys and social media mentions. Use this data to measure sentiment and satisfaction from the customer’s perspective and incorporate this information to enhance their experience with your brand.
Techniques to improve customer experience management
Customer experience should be managed through every phase of the customer journey. The following steps are required for properly managing customer experience:
Create personalized content. To increase relevancy and customer engagement, brands should personalize customer-facing content, including emails, websites, and text messages.
Analyze customer sentiment. CX management teams must collect VoC data throughout the entire customer journey to determine where they can make improvements. Simply collecting the data isn’t enough — dedicated teams should understand customer emotions via sentiment analysis techniques.
Create market segments. Market segments are valuable tools for grouping customers with similar needs. Brands should build an engaging, consistent experience for customers by anticipating these needs.
Invest in loyalty programs.Customer loyalty programs deliver special savings and perks to frequent customers. Investing in loyalty programs encourages customers to continue doing business with you instead of leaving for competitors. Effective loyalty programs may also drive upsell and revenue.
Analyze customer touchpoints. To improve customer experience, brands should know where customers are spending their money and when they are most likely to leave for competitors.
Evaluate customer data.Customer experience management teams must use customer analytic tools to work through voice of the customer data to implement improvements based on customer feedback.
Customer experience management (CXM) vs. customer relationship management (CRM)
Customer experience management (CXM) and customer relationship management (CRM) have similarities as they are both used to improve customer relationships. Additionally, both can be used together collaboratively by sharing and integrating data. CRM platforms let you collect and analyze customer data, such as their age, interests, or spending habits. CXM tends to be more qualitative, using CRM data to improve the overall customer experience.
CXM relies heavily on voice of the customer data that assess how customers feel about your company. It involves the entire company, understanding where improvements need to be made in each department to foster brand loyalty and customer satisfaction. CRM, however, focuses heavily on sales and outreach to customers to capture more revenue. Using both CRM and CXM strategies improves the likelihood of customer retention and higher profits.
How to manage customer experience metrics
Customer experience metrics help you gauge how your customers are reacting to your brand and whether they're willing to continue their business with you. Many of these overlap with customer service metrics. The most common metrics include:
1. Net Promoter Score (NPS)
NPS measures customer loyalty. Use a survey to ask customers how likely they are to recommend your brand to others on a scale of 1-10. The higher your customers rate you, the more likely they will promote your brand. Asking why customers provided the score helps you narrow down where problems may be occurring in the customer journey. Manage this customer experience metric by amplifying the strengths your promoters highlight and fixing the gaps that detractors quote as deterrents.
2. Customer Satisfaction (CSAT)
Customer satisfaction scores indicate how satisfied your customers are with your service or product. CSAT scores are measured by creating surveys with predetermined scales for customers to rate their overall experience. Customer satisfaction surveys can provide valuable customer feedback in areas that need improvement. Keep it short and simple to get the best results when creating your survey. Long or complicated surveys will often turn customers away.
3. Customer Effort Score (CES)
Customer effort score reflects how much effort a customer puts into resolving an issue, completing tasks, or speaking with customer support. Brands can ask customers questions at the end of shopping sessions about how difficult it was to place their order or make an exchange. Questions about how well an agent helped them resolve an issue can also be helpful. These questions measure how simple it is for customers to use your services or have their issues resolved. Customers are more likely to return if your services are easy to use.
4. Customer churn rate
Customer churn looks at how many customers you’ve lost over a specific period. It is more expensive and timely to obtain new customers than retain existing ones, so reducing churn should be a high priority.
Once customers have left for competitors, it can be challenging to get them back. Some customers might also encourage others to avoid your brand, depending on why they left. Reduce churn rate by proactively reaching out to customers who may be at risk of leaving. Use customer feedback and data to identify patterns or trends that may indicate a customer is dissatisfied, and offer personalized solutions or incentives to retain their business.
5. Customer retention rate (CRR)
Customer retention rate measures how many customers a brand retains over time. High retention rates rely heavily on quality customer experience and customer service. Increasing your retention rate can be achieved by providing customers with positive and consistent experiences. Boost CRR by providing ongoing personalized customer education and support that aligns with their goals and needs—this could be through training sessions and an exhaustive knowledge base. Long-term customer retention demonstrates that your brand has built trust and loyalty with its customers.
6. Customer Lifetime Value (CLV)
Customer lifetime value measures how much money customers are likely to spend throughout their relationship with your brand. Historic purchase information can calculate how much future revenue you can expect from current customers. CLV shows how valuable your offerings are to your customers, making it an excellent metric for customer experience. As your company meets customer needs, your CLV will rise.
Manage this customer experience metric by creating upselling opportunities for your existing customers to help them achieve their goals better. Tap into the power of fostering a robust self-reliant community which helps users engage and belong to like-minded people.
Customer experience management challenges
As with every marketing strategy, CX management has its challenges. The most common ones include:
Lack of voice of customer data. It is difficult to measure customer experience when you lack data. It can be impossible to know customers’ true feelings with too little data. Brands also can't fix customer experience issues they aren't aware of.
Poor digital experience. When brands can’t listen to or assist customers in the channels they interact with, customers can’t communicate their needs. Customers are more likely to switch to a competitor when they don’t feel heard.
Disregarding qualitative data. Brands should analyze Individual comments on surveys to gain a deeper understanding of issues with customer experience. In addition, qualitative data can lead to new ideas for improving the overall customer experience.
Inefficient internal communication. Collecting and analyzing data can’t help if it is not communicated efficiently to the appropriate people, such as marketing teams, stakeholders, or leadership.
What is customer experience management software?
A customer experience management system is a solution that empowers you to curate, manage and enhance the overall experience you deliver to customers—using a holistic, 360-degree view of their interactions on multiple channels, throughout their customer journey.
Finding a platform with the right capabilities will help you automate your processes and make better business decisions that vastly improve your customer experience. Below are some important features you should look for in a CXM solution.
1. Marketing automation
Marketing automation allows your company to grow more efficiently and effectively. It helps you increase your market reach, save time on routine tasks, generate leads, and increase customer conversion.
2. Analytic and insight tools
Analytic and insight tools give you a better understanding of your data. Collecting data is only useful when you can gain further insight to help you determine what changes can be made for a better customer experience.
3. Workflow management
A workflow management system enables the set-up, implementation, and monitoring of certain tasks. It helps you save time by streamlining routine processes.
4. Customer service and contact center
You may find yourself facing challenges or having questions while setting up and running your new platform. Find a customer experience management platform with a contact center and customer service department to answer any questions you have.
5. Data storage and management
Good customer experience management platforms organize all your data in one place, with real-time updates that can be shared across various departments.
6. Omnichannel capabilities
Your website, social media profile, mobile apps, or even physical locations can become listening posts with the right software. These feedback channels can then be stored in one centralized location, giving you an overview you can refer to whenever needed.
7. CRM integration
Integrating CRM data gives you a better picture of the customer experience and how it’s impacting your company. This information helps you make better decisions to improve the customer experience.
Deliver seamless customer experiences with the world’s first purpose-built Unified-CXM
The next step in CXM is establishing a unified customer experience or Unified-CXM. Customers expect one voice, one experience — and that experience defines a company’s brand. But, there’s a bigger problem for most brands: silos. Silos represent disconnected teams, tools, customer data, and experiences.
But there’s a way to deliver a unified customer experience at scale — a unified customer experience management platform (Unified-CXM).
With Sprinklr, the world’s first purpose-built Unified-CXM platform, any organization can connect its brain to its body. The result is a smooth, personalized flow for customers, from awareness and engagement to purchase, delivery of customer care, and advocacy.
Build a 360-degree panoramic view of the customer by unifying data from every touchpoint in the user journey.
Curate personalized experiences across 30+ channels — chat, voice and social.
Tap into the voice of the customer with social listening to reveal deeper insights about what they love, what they don’t — and what the future holds.
Enable cross-collaboration within teams and empower your agents with state-of-the-art Sprinklr AI to enhance care quality and in turn improve your CX.
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