The Ask an Expert blog series is intended to help you answer the most critical questions related to marketing technology, customer data and customer experience (CX) with insights from industry experts. Check out our post on customer experience management below.
Brands now compete more on customer experience than price or product features, making customer experience management an urgent priority for enterprise organizations.
But how do you “manage” something as expansive as customer experience? CX encompasses every interaction between brands and their customers across all channels and touchpoints.
Every time a customer engages with a company to get information, make a purchase, resolve an issue or anything in between, it’s a chance for brands to make (or break) customer experience.
And data shows a customer experience gap, with the majority of brands significantly overestimating their CX performance. In other words, brands are struggling.
Understanding what CX management entails — and how to get it right — has never been more important.
Read on to learn everything you need to know about customer experience management with expert help from ActionIQ’s Head of Product Marketing Ryan Greene.
What is Customer Experience Management?
Simply put, customer experience management is the act of directing which experiences customers have with a brand. It may sound easy enough, but it requires a wide variety of tools, teams and processes.
“Customer experience is what the customer sees,” Greene said. “Customer experience management is everything going on behind the scenes — the audience targeting, the experience orchestration, all the operations and prioritization.”
At any given time, a customer may receive a multitude of different experiences. The goal of customer experience management is to only deliver the one that matters most for that particular customer in that specific moment.
This involves accounting for time and place, as well as contextual information related to what the customer is trying to do. It also demands understanding where that customer is in the buyer’s journey and their history with the brand.
In short, it calls for comprehensive, up-to-date customer data management — and the ability to act on it quickly and at scale.
“It’s impossible to manage experiences manually for every customer, especially if you’re an enterprise organization that has millions of customers who all have many different ways of engaging with your brand,” Greene said. “You have to systematize and automate customer experience management to make it scalable.”
With so many possible customer experiences to navigate — across channels, use cases and more — things can get complicated fast.
“And that’s the management part,” Greene said. “Once you start peeling back the layers, it becomes much more complex and challenging to connect customer experiences. Some teams may spend all day working to create the best email experience possible for marketing purposes, but that’s only one small piece of the puzzle. You also have to think about all the other channels, all the other teams, all the other processes and technologies.”
At its heart, customer experience management is the process of bringing all those components together and optimizing them over time to provide better CX.
Hear why M&T Bank believes the true power of customer data is in how it informs customer experience in the video below:
What Are the 3 Main Components of Customer Experience Management?
You can boil customer experience management down to three main components:
- Knowing where you are today
- Understanding where you need to go tomorrow
- Making sure you have the tools necessary to get there
While there are far more than three elements to consider, starting with these three components can help organizations zero in on what’s most important before embarking on the journey to better CX.
First, brands must get a handle on the current state of their CX journey management.
“You should always start with the customer — their needs and the interactions that will help them fulfill those needs,” Greene said. “Ultimately, you want to give the customer what they need before they even know they need it. That begins by conducting a current state analysis of how customers engage with your brand and the role different interactions play in that.”
Next comes gathering and analyzing customer data to understand customers’ behaviors and preferences — as well as predict them.
“You need data points in order to not just manage customer experiences, but improve them,” Greene said. “You have to bring together those different signals to understand how customers are responding to the experiences they’re receiving today. It’s one thing to have a static idea of who your customers are, but data is what allows you to understand who they may become and how that will change over time.”
Finally comes automated technology, which allows organizations to engage all their customers with the right experiences quickly and seamlessly.
“At the end of the day, to manage customer experiences at scale, there have to be rules in place and systems that decide, out of all the experiences a customer can receive, which one they should get, when they should get it and where they should get it,” Greene said. “Automation is key to delivering those experiences, in real time, thousands or even millions of times a day.”
What is the Main Goal of Customer Experience Management?
The main goal of customer experience management depends on which side of the experience you’re on. For customers, it’s receiving great CX. For brands, it’s driving business value. Luckily for both, these two things are related.
“If you look at it from the customer’s point of view, customer experience management is all about making them happier,” Greene said. “How you measure that is generally through a net promoter score, or NPS. It’s basically a way of asking your customers how satisfied they are with you as a brand. But businesses don’t operate just because they want people to like them. They want to make money, and that’s where customer lifetime value, or CLTV, comes in.”
CLTV is how much profit a customer will drive throughout their relationship with your brand along the different customer journey stages: average order value, order frequency, etc. Generally speaking, the better your customer experience management, the higher your CLTV. (Read about how to increase customer lifetime value.)
“Better NPS means customers will likely be more willing to shop with you more often across different products and at higher frequencies,” Greene said. “They’re less likely to leave your brand for a competitor, which boosts your customer retention, and they’re willing to pay more for your services than your competitors.”
“At this point, you’re competing on customer experience, which is a lot harder for competitors to replicate. So if you have a high net promoter score, that’s going to drive a higher lifetime value,” Greene added.
What Are the 4 Pillars of the Essential Customer Experience?
While no two customers are exactly alike, research shows there are four key pillars to customer experience: trust, convenience, reliability and personalization.
“As part of our CX IQ Index research, we asked consumers what mattered most to them when it came to customer experience,” Greene said. “And based on what they said was very important to CX, we were able to categorize characteristics into different themes.”
Trust was the most business-critical theme. When consumers were asked to rate the importance of different characteristics when interacting with a company, the two highest-performers were related to data security and privacy.
Next came the theme of convenience, which included characteristics such as “is available when I need them.” And then came reliability, which included characteristics such as “listens to me/is responsive” and “has fast resolution of problems.”
And finally came omnichannel personalization, which included characteristics such as “consistent experience across all interactions (online/offline)” and “understands my needs.”
“To deliver the essential customer experience, you have to be able to do it quickly and consistently,” Greene said. “But you also have to ensure it’s tailored to the customer, and that you’re able to deliver personalized, relevant experiences using customer data while maintaining the highest levels of security and privacy.”
To deliver, brands require the right tools for the job. Meeting the rising expectations of modern consumers means maintaining a customer 360 (a 360-degree view of your customer base), quickly segmenting and modeling audiences and easily orchestrating both sophisticated customer journeys and real-time experiences across channels.
That’s why the tools at the center of marketing technology stacks — what’s referred to as the CX Hub — are essential.
What is the Difference Between CX and CRM?
It’s easy to confuse customer experience with customer relationship management, aka CRM, because they’re both powered by customer data. But while the former is focused on activating customer data, the latter is concerned with assembling it.
“CRM is about collecting and managing information about your customers, not activating that information and turning it into better experiences,” Greene said.
CRM was born out of the B2B space, where companies were collecting lots of different profile and account-level data points about the businesses they were selling to. From there, it was adapted into building profiles for all known customers.
But with limited data collection capabilities, CRM still leaves brands with only a partial picture of their customers.
“If you’re not collecting enough of the right data, you don’t actually have a good view of your customers,” Greene said.
Additionally, CRM technology is about collecting and storing data, not taking action on it.
“At the end of the day, collecting information on your customers in a CRM system doesn’t improve customer experience,” Greene said. “You have to be able to put that data in motion. Activating data across different channels, running tests to see how different strategies perform, and then feeding those insights back into your CX solutions to learn and iterate —that’s where the power of customer data is.”
CRM is data at rest. CX is data in motion. And data in motion is what makes customer experience management possible.
Get in touch with our experts to discover how you can upgrade customer experience management using the AIQ CX Hub.
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