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What Is Customer Experience Management (CXM/CEM)?

According to the latest Zendesk CX Trends 2022 report, 64% of business leaders say customer service positively impacts their company’s growth. 60% say it improves customer retention. These two stats should give you an idea why customer experience management is so important for your business.

With the right approach to customer experience management, you can:

  • Grow your business
  • Increase customer satisfaction
  • Gather valuable customer data
  • Optimize everything marketing and sales-related in your company

Read on to see what CXM is and the key concepts it encompasses.

What is customer experience management?

Customer experience management (frequently referred to as CEM or CXM) is a set of all the tools and procedures your company implements to track, analyze, and optimize every single interaction between the company and its customers. CXM is vital throughout the entire customer lifecycle, from the very first interaction to becoming a loyal customer.

Of course, CXM is not a lonely island; it should be integrated with other customer-related elements in your company, especially the customer journey, but more about that in a moment.

Why is customer experience management important?

For 56% of companies surveyed by Zendesk, driving better customer experiences is their number one priority for the coming year. This seems reasonable; after all, customer interactions build your company’s image and reputation. Over 80% of customers say a positive customer service experience makes them more likely to make another purchase.

The better you are at meeting customer expectations and answering their needs, the more stable and profitable your company is. But that’s just the beginning—the list of perks is much longer.

Customer loyalty

More than 60% of customers say they now have higher customer service standards. This means achieving customer satisfaction is more difficult than it was just a few years ago. But when you attain this goal and surpass your customers’ expectations, you win their loyalty. Be in no doubt; customers won’t easily let go of a trustworthy and customer-centric company. And it goes without saying that customer retention is cheaper and more effective for your business than customer acquisition.

Revenue

Market research, as well as hundreds of companies across the globe, confirm that customer experience management has a positive impact on the company’s revenue. Customers will simply spend more money with your company when they see that you:

  • Offer preferred communication options (e.g., social media or chat)
  • Value customer feedback and implement necessary corrections
  • Provide advanced solutions such as personalized experiences
  • Optimize all the customer touchpoints to provide exceptional service throughout the entire customer journey

Reputation and word of mouth (WOM)

Good customer experience management leads to positive online reviews. Satisfied customers are more eager to recommend your business to other internet users, as well as their friends and families. In fact, word of mouth is one of the best ways of acquiring new customers. Forbes even reports that, on average, WOM is responsible for 13% of all sales worldwide!

But, sure enough, you won’t benefit from it unless you take care of customer interactions and deliver a great customer experience.

Related Read: Discover 10 Great Customer Service Examples & Tips that will help you get better reviews.

CXM vs. CRM

Add these to your list of businessy acronyms! CXM standing for customer experience management and CRM standing for customer relationship management. What’s the actual difference between the two? We can generally say CRM is a part of a broader approach known as CXM/CEM.

CRM is concentrated almost exclusively on sales and outreach to both current and potential customers to grow the customer base and increase the company’s revenue. CXM, on the other hand, is not sales-focused. It’s a holistic approach aiming at delivering the best customer experiences throughout the customer journey.

Of course, both these strategies are all about growing your business, but they deal with this task in two very different ways.

Related Read: Learn the difference between Customer Experience vs User Experience.

Challenges of customer experience management

As we mentioned earlier, customer expectations are continually growing. There are more and more challenges and obstacles on the way to fulfilling these expectations. There are four crucial elements to mention here.

Commitment

Customer engagement should be your top priority. If you don’t devote enough effort and resources to it, your overall CX will suffer. Again, this is a global problem:

customer engagement report screenshot

How can you avoid this scenario?

  • Train and educate your customer support team so that they have a deeper understanding of what good customer experience management actually means.
  • Optimize all of your customer-related processes, and make sure everything is convenient and fully functional from the buyer’s perspective.
  • Use available tools and apps to gather customer insights and feedback. The more customer experience data you have, the better. As a start, you can use NPS (net promoter score) surveys to understand what customers like and dislike about your company.
  • Adopt automation tools so that you don’t find yourself swamped doing mundane and repetitive tasks while the more pressing and strategic problems remain unsolved.
  • Continually track all the relevant customer-related metrics (e.g., CSAT, customer churn, and customer retention rate) and set reasonable KPIs for your customer-facing touch points.

Resources

Customer experience management takes time, effort, and some financial resources as well. If your company’s procedures and customer-facing solutions are outdated, it's due time to think about the digital transformation of your business. Concentrate on solutions and technologies that can give your CX a boost. Here, automation and personalization are essential. They make a real difference, and it doesn’t take much time to see the results of implementation.

If you can afford that, you can go one step further and think about AI-powered solutions (e.g., based on machine learning). These tools will give you additional insights you can use to build brand loyalty.

Customer experience strategy

Brand experience cannot be improved overnight. You need a well-thought-out strategy that takes all the relevant elements into account. Take the omnichannel model, for example. This one thing requires implementing new communication channels into your business and integrating all of them together. And that's just one face of CXM!

To come up with a useful strategy:

  1. Analyze customer data (use customer profiles and buyer personas) as well as the customer journey and see what elements along the way are important (spoiler alert: All of them are).
  2. Think about how each one of them can be improved or accelerated for the benefit of your customers.
  3. Improve everything you can step-by-step, and always keep your customer's perspective front-of-mind.

Now let’s talk a bit more about that last part.

Customer experience management best practices

stages of customer engagement Infographic

Your CXM strategy should revolve around several fundamental elements to help you understand and fulfill customer needs.

Only 22% of companies surveyed by Zendesk believe their customer service is “extremely strong”. There is always room for improvement!

Customer journey mapping and customer personas

You need to understand your customers if you want to provide top-notch CX. That’s why it all starts with creating customer personas—in other words, fictional representations or archetypes of your customers. How can you create a relevant buyer persona for your business?

And what about the customer journey? In general, the customer journey depicts what happens before, during, and after the purchasing process in your company. It is comprised of all the touch points and stages each potential customer has to go through. Customer journeys are frequently presented in the form of a workflow referred to as a customer journey map.

Ideally, all of your company’s procedures and workflows should be tailored to the customer journey in your business, and to make this possible, you need a team.

Assemble a CX team

Customer experience is a term that encompasses far more than just customer service. It’s all the experiences related to your brand and company, starting with the website and finishing with the product quality. That’s why you need to create a team composed of specialists from many departments (e.g., sales, customer service, IT, marketing, quality assurance, and logistics) to grasp the big picture and take a look at your customer experience strategy from many perspectives.

Each department in your company has its unique view of customers, their expectations, challenges, and complaints. Only together can they come up with the comprehensive customer information you need to measurably improve CX.

Concentrate on things that make a real difference

I get it, we're in a recession—not every company has the resources to do everything for everyone all the time. If you need to focus on the highest-impact stuff, and nothing else, start with:

  • Automation of repetitive tasks: This way, you will be able to focus on the most important aspects of customer experience management.
  • Personalization of customer touchpoints: Product recommendations, customer portal, website, web/mobile app - all these things need to be personalized.
  • Customization and adjustment: Never rest on your laurels; CXM is a never-ending process. Evaluate your processes, your team’s performance, and the tools you use, at least from time to time.
  • Elimination of potential pain points: Even if the overall experience is positive, one badly designed touchpoint or procedure can ruin it. Ensure there are no weak spots in how your company works.

Training

Each person in your company having contact with customers needs to be trained. Without adequate training, good customer experience is a roll of the dice. Create and execute a custom-made training program for your company. It should include such elements as:

  • Good customer service practices
  • Communication guidelines and standards
  • Dealing with difficult/unhappy customers
  • Product knowledge
  • Soft skills

Of course, not every training module and workshop needs to be done during business hours. You can decide to organize some of them in the form of a webinar, which gives you a lot of flexibility, especially if your team is spread around the country or even the world.

Employee experience

Customer experience management starts with your employees. Think of each and every one of them as your brand’s ambassadors. Would they be willing to recommend your company to others? Don't make the mistake of brushing this off—the employee experience can make or break the potential of your business to attract and retain top talent. To find out where your company stands, conduct anonymous (and I mean truly anonymous!) surveys to see what can be improved concerning the way your organization treats its employees.

If there are areas that require your attention and significantly impact the employee experience, don’t hesitate to deal with them as quickly as possible. Unhappy employees can’t help you get happy customers.

Interestingly, Zendesk also asked about employee experience in their study. As it happens, there is still a lot to do; less than 20% of surveyed customer service agents were fully satisfied with their work and training:

employee experience trends report screenshot
Yikes, that's dismal. Source


According to this study, employees need:

  • Manageable workloads
  • More training
  • Better performance metrics
  • Clear career development opportunities
  • More respect

The last point is particularly alarming; as much as 38% of respondents say that the customer service team is not treated as well as others in the organization. Don't let this happen on your watch! The effects, aside from being ethically gross, will invariably come back to bite you where the sun don't shine.

Customer experience management tools

Taking care of your company’s CXM takes not just time and work but also tools that streamline your efforts. Our team has reviewed countless software tools and have narrowed down the top ten best customer experience management tools to take your CXM game to the next level.

Well, this has been an experience.

While customer experience management is a broad discipline full of intricacies, this overview has hopefully given you a basic understanding of the concepts you need to know. I encourage you to dig deeper and see how to use it to grow your business across multiple channels and audiences.

And if you do, don’t forget to subscribe to our newsletter for weekly curated content for CX professionals!

By Hannah Clark

Hannah Clark is the Editor of The CX Lead. Her goal is to bring together a community of CX professionals to learn, interact, and voice their own opinions on this ever-evolving industry.

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