Customer Experience Management (CXM): Differentiator Between Successful and Unsuccessful Businesses 

Customer Experience Management Platform

The interconnected global marketplace that we live in is experiencing a revolution that has been termed the ‘Customer Experience Movement.’  Businesses around the globe are now tweaking their strategies to be a part of that movement. This blog will talk about the basics of Customer Experience Management and how it can positively impact any business. 

It is evident from a lot of case studies that customer experience will be one of the most significant differentiators between performing and non-performing businesses. 

Understanding the buzz around CXM !

Let us first understand the impact that CXM creates. 

One of the major goals of effective customer experience management is to create positive impressions of your brand or company with customers in order to generate loyalty, and, in turn, long-term profits.  

Great customer experiences are achieved by effectively listening to the voice of your customers and transforming their feedback into action.  

Within this crash course in customer experience management, we will define and underline its importance, outline basic strategies and difficulties, and go through the best available tools. 

Customer experience management, aka CXM or CEM, is the exercise of improving customers’ overall experience with a business.  

CXM takes a bird’s eye view of the entire interaction between customer & business and prioritizes the impression of your company that they leave with over any individual sale. Positive impressions can generate brand loyalty, curb customer churn, and inspire customers to vocally advocate your product. 

Commonly abbreviated as both CXM and CEM, customer experience management is closely related to customer relationship management (CRM) but differs in its goal.  

CXM, as we’ve established, seeks to boost customer satisfaction and in turn loyalty, whereas CRM seeks solely to increase sales by using customer data to inform sales teams.  

Quantifying customer experience in order to form CXM strategy is possible through customer satisfaction metrics such as your NPS score.  

NPS scores, among other customer experience (CX) metrics, gauge customer loyalty through 1-10 satisfaction surveys and open-ended written response data, which can be analyzed to improve your business at key touchpoints.  

Let’s go over why your team should make an effective CXM strategy a priority. 

Why is Customer Experience Management Crucial?

Bluntly put, businesses understand why they need a positive brand impression, however, often misunderstand how their customers actually feel about their brand. 

This is known as the ‘Customer Experience Gap’, and it means that there is a ton of room to grow for many companies when it comes to realizing a successful CXM Approach.  

However, things are changing as businesses are realizing what impact a better customer experience can have on the overall wallet share. 

However, in the race to better CX, many businesses may have to come to terms with where they actually stand, as plateauing or declining customer experience scores were the norm for the majority of brands – 81% of CX scores stagnated, and 5% declined in previous years. 

Now, customer experience is not only set to be the number one brand differentiator from 2021 on but positive CX has been shown to be the largest influence on customer loyalty, which has proven to be the leading factor in driving long-term profits.  

Here is some data to highlight the importance of positive Customer Experience Management:  

  • Customer Loyalty: It is true that “Loyalty Pays…”, positive CXM will grow your number of loyal customers and effectively improve your bottom line, with studies indicating that a 5% increase in customer retention can result in a 25-75% increase in profit. 
     
  • Increased Spending: As per American Express, almost 86% of customers are ready to pay more for a positive experience. Moreover, customers who receive a great customer experience are willing to spend from 13 to 18 percent more on average.  
     
  • Customer Retention: CXM improvement should never get out of your focus as you can only keep the customers you already have if you continue to ensure their experience with your business, be it customer service, returns, or new transactions, continues to be positive.  

Do you know? 
1 in 3 customers will leave a brand they love after just one bad experience. 

Results of Positive Customer Experience 

For these reasons, a great CXM approach can easily take any business to greater heights. But fear not, CXM is getting easier due to recent advances in SaaS-based software along with AI data analysis that helps you gain even deeper customer insights.  

Some Starting Points for Your CXM Strategy

A strong CXM strategy is important because it considers each and every time customers come into contact with your business. Managing customer experience can seem challenging, however; this doesn’t need to be the case. 

Efficient CXM Strategies aim at improving the customer journey through the following 4 techniques: 

  • Customer Segmentation 
  • Personalizing Experience and Fostering Emotional Connection  
  • Omnichannel Communication Consistency  
  • Enhancing and Actualizing Customer Feedback  

Let’s go through each of these and uncover what a holistic CXM strategy might look like for your company.  

Customer Segmentation

Picking up the concept of the customer experience gap – we can’t enhance our CX unless we understand our customers better. We can begin the understanding process by ‘segmenting’, aka grouping, our customers by age, spending habits, etc., and determining the greatest needs of each group.  

Segmenting your customers by cohort enables you to have a holistic view of their problem points along with their journey to prevent churn and improve CX going forward.  

However, while grouping customers by ‘pain’ or ‘problem’ points in their journey helps improve your UX or product, we can push our segmentation strategy further by creating a unique and personalized ‘customer profile’ for each customer.  

A smart CXM approach then utilizes these customer profiles to fragment more cohorts based on this demographic data (our profile categories: age, location, etc.) 

These demographic cohorts can then further be distributed further with the help of advanced AI analysis to inform future strategy per cohort, making your products the best they can be for each group of customers.  

Personalizing Experience and Fostering Emotional Connection

Emotionally invested customers will be advocates for your brand but getting customers to buy in takes a personalized approach to each customer.  

To create an accurate ‘customer profile’ (see above on segmentation) – you need to analyze your customers’ demographic data and the context in which they function. The following are some examples: 

Are they corporate buyers?  

Buying for their home?  

Buying as a luxury? Etc. 

The aim is to know about your customer so you can mold their journey and have a made-and-ready customer persona that can support customer service and other customer-facing teams if an issue arises.  

The goal of all personalization is to foster an emotional connection between your brand and customers, which you can calculate by analyzing brand sentiment (also known as brand health). Emotionally invested customers tend to remain loyal and even promote your product unprompted – and who doesn’t like free advertising? It’s a win-win for both the business and the customer.  

Omnichannel Communication Consistency

A CXM approach is only as good as the internal communication of the teams providing it. 

With multiple teams receiving customer data, the problem of inter-departmental silos always exists.  It becomes important to store all customer interactions in one place and make it accessible across various teams to guide future personalization. 

While doing so, focusing and synchronizing the different aspects of customer data so that your teams can effectively communicate with each other is key.  

With every team using the same terms and understanding each other’s goals and contributions, you will be able to offer a unified brand persona for every customer. And, most importantly, offer a consistent omnichannel experience, no matter how your customers get in touch with you. 

Enhancing and Actualizing Customer Feedback

As they say, listening is key to any relationship, and improving how you listen to your customer feedback is key to productive Customer Experience Management. 

Listening to customer feedback needs attention to feedback coming from multiple sources and analyzing that feedback for improving future results.  

Many companies will have to adopt a comprehensive overhaul of their VoC (Voice of Customer) programs aiming to implement a much more effective ‘listening approach.’ 

Automating your customer feedback system with intuitive tools can quickly bring your feedback listening up to speed.  

Final Words

Hopefully, this blog was able to help you better understand the concept of customer experience management. As observed globally, CXM is rising to the forefront of most business strategies. In the coming years, the importance of CXM for keeping brands afloat cannot be understated. 

CXM might seem like a complex topic, but it is easy to think of it as the process of making sure that every customer-facing part of your business is offering a pleasant experience so that customers always feel cared for and important. 

Want to see how FCI can improve customer experience management? Schedule a free demo today. 

For more information, write to us: info@fci-ccm.com