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Customer Experience Management – A Guide To What, Why, And How Of CEM
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Customer Experience Management – A Guide To What, Why, And How Of CEM

June 16, 2020

What is Customer Experience Management (CEM)?

Customer experience management (CEM) is described by Gartner as “the practice of designing and reacting to customer interactions. That to meet or exceed their expectations, leading to greater customer satisfaction, loyalty and advocacy”. This concept requires companies to track, analyze and optimize all physical and digital key points of customer experience. Companies use a combination of analytics, software, data, and AI to manage all customer interactions. And predict future outcomes that ultimately enable them to create valuable content tailored specifically for their customers.

Why is CEM important?

CEM has become an integral factor of success for every truly customer-centric company. The objective of CEM is to enhance customer loyalty and reduce churn rates, which essentially impacts a company’s bottom line. According to a report by Forrester, top-performing consumer brands experience a direct correlation between good CEM practices and rising stock. The report revealed that the top 20% of brands are on Forrester’s Customer Experience Index. That had higher stock price growth and higher total returns compared to the companies at the bottom 20%.

The significance of CEM has risen primarily due to higher customer expectations. This means businesses needs for businesses to offer their customers experience-based differentiation to remain competitive. Consumers no longer base their loyalty on price or commodity, but on the experience offered by the brand. In fact, 86% of consumers are willing to pay more for a great customer experience. This shift in consumer behavior means that companies can’t only rely on the quality of the products and services to win and retain customers. A report by Temkin Group found that investing in CEM initiatives can potentially double a companies revenue within a 36 months period.

The benefits of CEM are-
To increase customer loyalty and brand advocacy through valuable customer interactions.
Reduce churn rates and invariably lower cost.
It helps to improve a brand’s cross-selling and upselling campaigns.
Increase brand preference through differentiated experience.

How to create a Customer Experience strategy?

In Customer Experience Management, there are 4 clusters of customers’ emotions that either build or destroy brand value. They are- Destroying cluster, Attention Cluster, Recommendation Cluster, and Advocacy Cluster.

Brand advocacy comes at the top of the pyramid and it is a by-product of high customer satisfaction. For companies to create brand advocates, it requires initiatives from the top management. Successful CEM strategies require cross-department collaboration and brand alignment that work seamlessly to deliver exceptional customer experience and convert buyers into brand advocates.

A basic CEM model that is mostly followed by organizations involves the following steps:

Customer assessment and segmentation


The start of any business strategy always begins with an in-depth understanding of the target market. It is important to understand what the customers’ requirements are, what drives their purchasing behavior, their pain points, and their product/service expectations. Based on these customer insights, there needs to be further segmentation of them into groups so that the company can deliver more personalized and valuable experiences. These groups can be based either on firmographics(also known as firm demographics), purchasing behavior (what, when and where they buy), or buying needs(what they want, what are the drivers, and what motivates them).

Mapping customer journeys


This step is the construction of a detailed customer journey map for every segment. This approach allows organizations to understand each segment’s brand experience from the initial engagement to the terminal engagement. Customer journey maps help organizations to gain insights into common pain points, maximizing customer satisfaction and direct revenue to the most effective development priorities.

Identifying and developing the desired brand experience


The ideal customer experience is based on the customer journey map. This step compares the customer personas to real-life customer experience. Understanding the customer journey map helps organizations to align their customer experience initiatives with greater efficiency and effectiveness. Once the desired brand experience is determined for each customer segment, this program will be repeated for each and every customer to ensure that a streamlined and superior experience is delivered each time.

Structuring the customer touchpoints


Customer touchpoints are a brand’s point of contact with the customer. Identifying and structuring all customer touchpoints ensures that the service delivered is streamlined and seamless across all these points. These touchpoints are platforms for organizations to build long-term relationships.

Measuring and analyzing customer feedback


The last step of this process is to measure the performance of the CEM strategies by documenting customer feedback through surveys, polls, and customer outreach. These methods help companies to mention both ROI and customer satisfaction. Companies must act on customer feedback to improve their overall brand experience.

Final Thoughts

The companies that take customer experience seriously are more likely to see better gains than those that don’t. Now the consumers have the power and they can choose from an overwhelming array of options, but only those with exceptional customer experience would be able to attract and build greater customer loyalty. At Alkye, we offer Customer Experience service to help businesses to develop more customer-centric strategies.

BrandBrand experienceCEMcustomerCustomer Experience ManagementCustomer loyaltyCXM