Explained: What Is Customer Experience Management ?

With changing times, the definition of business success and strategies have changed. Years back, the customer did not have many choices and the companies were hence, more sales-focused.

However, clocks tickled, time altered and now, with the increased competition, customer experience has emerged as a very essential and serious entity. Customer Experience (CX) is all about but creating happy moments for customers at every interaction that a customer has with your company.

According to customer service statistics by Salesforce -

• 70% of high-buying statistics are based on the joyful emotional experiences of the customers
• And 55% of consumers are ready to pay more if they are treated warmly and happily by the company

Great customer experiences are created by the whole company working in sync rather than just a single department. And this is where Customer Experience Management (CXM or CEM) comes in the limelight.

CXM is the practice of management of customer interactions and helps in creating fantastic experiences for the customers resulting in better customer churn, repeat customer retention, higher revenues, and stronger customer loyalty.

A remarkable customer experience management strategy can be easily created with some essentials in place.

Let’s get going and examine how the essentials of customer experience management can be beneficial for your business.

Customer is the hero — Know your customer well

Steve Jobs said -
“Get closer than ever to your customers. So close that you tell them what they need well before they realize it themselves.”

Great customer experiences can make or break your business. It is imperative that you understand your customers completely for business success.

And this can be done by simply brainstorming the answers to a couple of questions related to your customers -
- Who are they (identifying your customer type)?
- What do they do?
- Why do they /what do they want?
- How do they want it?

Just like “Not all feet are created equal”, similarly one solution is never going to work for all your customers. According to a report by Microsoft, customer service has been elected as an integral entity for brand loyalty by 96% of the customers.

This clearly shows that being in sync with your customers at a personal level can lead to fulfilling customer experiences resulting in long-term loyalty.

One way to know your customers effectively is through customer segmentation or popularly known as market segmentation. It is implemented by dividing the worthy customers into different groups based on their similar needs, preferences, habits, and buying characteristics.

This helps companies focus and target only those customers that are important, thus, saving time and money.

Identify Customer Segments based on needs

Customer segmentation can be done with the help of in-depth research about the potential market and also figuring out consumer behaviors, helping you prepare well for curating better customer experiences.

Customer Segmentations are broadly classified into 4 types -

Geographic
Grouping the customers based on state, region, country, market size, climatic conditions is what comes under Geographic Segmentation.

A popular example of a company that uses Geographic Segmentation effectively for creating excellent customer experiences is McDonald’s. The company has customized menus for different locations in accordance with the customer base in that country or region.

While countries like the USA have beef burgers, McDonald’s has chicken (no beef) and veg burgers both according to the Indian beliefs.

Customer Lifecycle-based
This type of segmentation is done based on the identification of the buying stage of a customer in a customer lifecycle. You can group the customers based on their similar behaviors and target them to make more purchasing decisions.

An example can be — Many customers select and add a product to purchase but abandon them in the cart. Segmenting these customers and offering discounts, deals, and coupons can drift them towards making fast buying decisions.

Demographic
You can easily create customer segments based on factors such as gender, age, education, generation, income, occupation, marital status, etc. And this is what demographic segmentation is.

The most common usage example of this kind of segmentation would be mostly with fashion-oriented brands. These brands create products based on the needs and demands according to the data collected from the customers in accordance with the above-stated factors.

Behavioral
Behavioral segmentation is cloned towards segmenting customers based on their behaviors and actions. Once the customer behavior is identified, that particular customer will be moved into the segment of alike customers making it easy for the company to plan out the engagement and loyalty strategy accordingly.

Starbucks applies behavioral segmentation strategy to target their customers by noticing their daily routines and planning offers so as to make them return every day.

• Customer Interviews
• Market Research

Defining Measurements & Scale

KPIs and VoC are two metrics used to measure the level of CX service that your organization is able to provide to the customers.

Key Performance Indicators or KPIs is a scale or metric selected to examine the performance level of the team against the agreement. KPIs play a major role in mapping the quality of services being provided and its relevance.

VoC is a method with which you can identify what the customers have to say about your service or product. Companies use the VoC to figure out the expectations, needs, preferences, and requirements of the customer. This is applied to identify the gap between the expectations of the customers and the experiences they had with the company.

Both KPI and VoCs are your measurement friends giving insights at various touchpoints in the customer lifecycle kicking you hard if you are not performing well.

This is how good friends are, right?

Prominent KPIs

With the help of Key Performance Indicators, you can measure the actual performance you are delivering to the customers versus the goals you have set.

• Net Promoter Score (NPS)

NPS helps in measuring the customer loyalty score and the willingness of a customer to recommend your company to friends and family.

The NPS index ranges from -100 to 100. It is a transparent window helping you clearly examine how loyal your customer is to you and whether you delivered customer experience in the right way.

• Customer Effort Score (CES)

CES is a scale that helps in determining the effort the customer has to put in while interacting with the company to fulfill a specific task. There are various touchpoints where CES can be calculated.

Common examples could be — the customers interacting with the — customer service expert to resolve an issue, getting an answer to a question, getting a piece of service information, etc.

• Customer Satisfaction Score (CSAT)

CSAT is the metric used to measure how satisfied your customer is with your service or product. It is an indicator helping you determine whether your services were exceptional that created a great customer experience or whether you need to work more on improvisation for great customer satisaction.

Capture VoC (Voice Of Customer)

Following are some of the most common VoC techniques -

Short Feedback Form
A mandatory factor greatly helpful towards recognizing the Voice of Customer is with the help of feedback forms. These forms provide wonderful insights into customer behaviors and help drawing conclusions.

Just remember — Keep the feedback forms short and questions to-the-point. Try keeping multiple choices for your answers instead of having the customers write them down. This will ease the customer experiences with even your feedback forms.

On-site Live Chat
According to a report by Forrester, approximately 44 percent of online shoppers believe that live chat is the best feature that eCommerce websites have. Live chats help you collect real-time feedback from customers and provide better assistance, resulting in enhanced customer experience.

Online Reviews
Positive online reviews play a major part in attracting new customers to your business. Customers usually hesitate or sometimes even hate to buy from businesses with negative online reviews.

Online reviews are hence, an important parameter that helps in identifying the VoC to great extent. This helps in figuring out what your customers think about you and where more efforts are required.

Quick Surveys
Creating online surveys and asking customers to participate in them is yet another popular method to gather the Voice of Customers. You can use different types of survey formats such as the multiple-choice based, textbox based, drop-down surveys, etc.

Once we are done with all the measurements, we will now need to identify the factors creating roadblocks in wonderful customer experiences.

Customer Gaps

What your customers expect and what they perceive can sometimes be far fetched?

And the gap between both entities is what is called a customer gap. This gap is surely not favorable and must be filled in as soon as possible.

Customer Expectations are built on the basis of your brand image, advertisements, online reviews, etc. While Customer Perceptions are built on the basis of the customer’s interaction with your service or product. And when the customer did not experience what is expected, a gap is created.

These gaps are, however, not created instantly but happen to pile up over time when certain things are done wrong.

So, what leads to creating a gap?

Answer to why?

“If you don’t care, your customer never will.” — Marlene Blaszczyk

The most important and factual reason that creates a gap is companies don’t focus on what the customer really wants. Customers today have become very intelligent, more demanding but less patient due to diverse solutions available to them. They are not ready to settle for anything less and when these expectations are not met, a gap is created naturally.

Many other reasons could be -

• Inefficiency in understanding customer expectations
• Not adhering to commitments
• Failure in interpreting the expectations of the customers in a professional manner
• Not sticking to delivering the quality of service as promised
• A huge difference in expectations versus customer perceptions of a brand, service or product
• Unable to address customer problems repeatedly in a timely manner

Target the Gaps by applying Pareto (80:20)

Filling customer gaps to provide delightful customer experience is not that difficult to achieve. You can help the help of the Pareto principle to improve experiences for your customers and make them loyal.

The Pareto principle is popularly known as the 80/20 rule. It says that 80 % of problems can be easily resolved with 20% fixes. Here’s how Pareto Analysis can be done-

1. Identifying and Listing problems
   Gather all the information such as client and team member feedback, helpdesk logs, customer service gathered data, customer survey information, etc — anything and everything that could help you figure out the problems.
2. Identification of each Problem’s Root Cause
   Analyze the data thoroughly and figure out the root cause of each problem.
3. Give scores to the problems
   Based on their occurrence, score the problems. For example, if a customer service ineffectiveness has 30 complaints, then score it 30. You can also use other methods as preferable.
4. Group similar problems together
   Problems with similar root causes can be grouped to find the major root cause. Also, scores for every problem with a similar cause can be added for simplicity and for generating more value.
   Example — the problems — “Not attending customer calls” and “Impolite behavior towards the customer” comes under a similar group of “Lack of Training of Customer Service Staff”. Hence scores for each problem can be added and grouped under the single cause — “Lack of Training of Customer Service Staff”. This will make it easy to identify the major root cause.
5. Tack appropriate Action
   Plot a Pareto chart with all the data and figure out the highest-scoring problem. Once it’s fixed, you will see things improving drastically.

Operationalization — Convert customer view into functional(view)

Operationalizing customer experience is the right step towards creating astonishing customer experiences and making your customers your lifetime business partners.

1. Create a long-term vision
   While it is important to focus on the present, it is also essential to plan for a vision that everyone in the company can adhere to for the long-term. This will help set the operations in an exact pattern to meet the vision.
2. Focus on Customer Journey maps
   Creating apt customer journey maps can help scale the results, fill the customer gaps, and enhance the customer experience. Sketch out the map and define the role of every department in the stages of the customer journey. These maps can then be used to plan functionalities to address and fulfill customer needs.
3. Adapt and align KPIs according to the Customer Journey Maps
   Create better customer impressions by placing KPIs in accordance with the designed journey map to optimize customer experience and increase customer loyalty.

And operationalization is incomplete when there is no governance in place.

Governance

Customer experience governance is not a prominently discussed topic when the customer experience management arena is explored. Governance here means a certain set of procedures and policies implemented to govern the whole experience so that it is delivered positively.

Manage the whole Customer Experience across different functions

Improving the customer experience is not just the responsibility of the CX team but of every department, working in sync. Imperative as it is, a CX Infrastructure is the key to having the governance in place.

Implementing and managing the governance procedures as a single entity across the departments of the organizations can help create an environment where there is nothing but people talking and working for a delightful customer impression at every touchpoint.

And this is what your ultimate goal is!!!

Set functional guardrails

Getting the governance right to improve CX takes a lot of effort. The brand vision should be clear, the technical elements must be included, the communication channels must be intact and the service must be exceptional. With all the functional guardrails in place, you can do hit the bull’s eye perfectly to meet your organization’s goal -

1. Become a CX star with a well-planned strategy
2. Remove roadblocks immediately
3. Align functional matrix with overall CX matrix
4. Let everyone in the organization know — what are the gaps?
5. Do what is essential first
6. Assign roles and set procedures
7. Define Success Metrics
8. Establish better communication channels

Articulate every process in the company with a single goal of serving the customer the best. Train employees and make them aware of how the organization can work as a single entity. Also, make them understand how their work should be aligned towards creating delightful customer experience even if they do not interact with the customer directly.

Create an ecosystem where there is nothing but happiness for your customers because happy and loyal customers are the real marketers of your brand.

At last -
“I’ve learned that people will forget what you said, people will forget what you did, but people will never forget how you made them feel.” — Maya Angeloux

Make your customers feel worthy and see the magic happen.

Customer Experiences are not created overnight but take time to build. This is why you need to add a personal touch at the critical touchpoints of each and every interaction with the customers.

This customer experience management guide has tried to cover all that could be in a single packet. You can use it as an effective reference while trying to solve any CX management problems to get a clear insight into finding the best solution.

Hope you find this helpful.

Happy Reading until the next time we meet :)