BPC, Articles and Glossary

Customer Experience Management Software

Definition: Customer Experience Management is a management philosophy which aims to put the customer’s experience of interacting with the company at the centre of business strategy.

Although its name suggests similarities with Customer Relationship Management (CRM), it is, in fact, quite distinct. Indeed, in many respects, the customer experience management approach emerged from a recognition of the failures of existing customer relationship management strategies. Carefully-conducted business research uncovered the fact that many high-profile customer relationship management implementations, though superficially successful when judged by a number of popular metrics, in fact resulted in lower profitability for the business.  Management often got caught up in the technological aspects of the Customer relationship management project, it appeared, losing sight of the customers who ended up feeling alienated.

The results of this analysis gave rise to some new thinking. The greatest failure of the CRM approach, it was felt, lay in its emphasis on the company’s own goals. A new mode of thinking, one that placed the customer’s experience and aspirations at the heart of all business strategy, was recommended instead. These novel ideas crystallized into the management approach now known as Customer Experience Management.

The philosophy of Customer Experience Management is to see the company as a unified whole, just as the customer sees it. To those inside the company, the research and development department may be quite distinct from the marketing department or the technical service department, but that is not how the customer sees it. Any negative experience the customer has, whether it be undue delays in handling a faulty item, rudeness or ignorance from a telephone operator, or defects in the product itself, all contribute to shaping the perception of the company in the customer’s mind.

It is this perception which Customer Experience Management advocates prize above all. They insist that advertising accounts for only about a quarter of what goes into a customer’s decision to make a purchase. The remainder is made up from deeper-level perceptions built up over longer periods of time and shared by customers with one another. When consumers have an unusually positive experience with a company, they tend to share it with their friends and colleagues, becoming, in effect, advocates for the company. Surveys have shown that even satisfied customers often switch their custom to other companies. For the most part, they regard companies as highly interchangeable service providers. Only unusually positive experiences, going well beyond mere satisfaction, can create deep-seated customer loyalty.

Customer experience management is, in essence, a management  fad, rather than an information technology-based strategy or innovation. Successful implementations of the approach require changes in virtually all aspects of the business. However, a number of customer experience management software solutions have appeared to help support these management goals. These accomplish a variety of things, not all of which are applicable to all companies.

One of the key problems identified by Customer Experience Management gurus is that different parts of an enterprise see the customer in different ways, store data related to their own interactions with the customer in different databases and, generally, do not share enough information with each other for staff to have a clear overview at any point in time of a customer’s previous history with the company. For example, the sales operator taking an order may not know that the customer returned a faulty hard drive the previous week and that the account has generated huge quantities of business over the years. Armed with this knowledge, the smart thing to do to strengthen the relationship might be to offer a 5% discount on the order currently being taken.

Some Customer Experience Management software solutions are therefore aimed at integrating all customer-relevant corporate data and making it available for easy viewing by any personnel involved in dealing with customers directly. Moreover, Customer Experience Management software packages often incorporate routines for predicting customer behaviour in response to a sales pitch based on an automated analysis of all their previous interactions with the company. Some will even suggest the next best approach to make to a customer, simplifying the task for a human operator.

Much Customer Experience Management software is domain-specific, however, aimed at analysing and recording customer behaviour in particular business domains. For example, some of it is designed to operate within a call centre environment. Using the software, all significant details of customer calls may be recorded. Poring over the data later, a manager may be able to spot a trend of something going wrong – customers who bought products from the company have trouble installing them, for example – or an opportunity to increase customer satisfaction.

In the internet age, of course, a great deal of business is transacted over the internet. Indeed, some companies operate exclusively over the World Wide Web. For these companies, website failures can be potentially catastrophic, in extreme cases literally cutting the company off from its revenue stream entirely. Problems may range from web pages simply being inaccessible because of server problems, to the more subtle difficulties which arise from poor website design leading to customer confusion and potential purchasers having difficulty in finding what they want.

Some Customer Experience Management software intended specifically for ecommerce outfits is designed to track whatever potential customers do when visiting a website. By recording every click the customer makes, usability audits can be performed on the website’s design. Do customers consistently find it difficult to get where they want to go? Do they often initiate a transaction and then, for some reason, break off at the fourth screen on which they were asked to enter personal details? Is a certain link almost never clicked on? Do some kinds of advertisement perform better than others? These are the kind of issues that good Customer Experience Management software, which has been specially designed for a website environment, can help bring to light. When an issue is discovered, designers can put the details of the offending page under a microscope and try and work out where the problem is. In the information age, where successful websites drive the profits of entire enterprises, the science of ergonomics must be applied just as much to laying out the design of a top website as to architecting the cockpit of a jumbo jet.