A recent study by PwC found that one in three consumers will walk away from a brand they love after just one negative experience. At the same time, 54% of respondents said that the customer experience at most companies needs to improve.
So although the customer experience has repeatedly proven to be critical to every company’s success, improving it remains a major challenge. In response, many organizations have begun rolling out a new function called customer experience management (CXM).
What is customer experience management?
Customer experience management (CXM) is the process of designing and optimizing customer interactions to meet or exceed customer expectations.
What this actually looks like will vary by company, but the goal of CXM is always to increase customer satisfaction, loyalty, and brand advocacy while cutting costs.
This is a fairly high-level overview of customer experience management, but there are multiple facets of a solid CXM strategy.
In this article, we’ll take a closer look at what customer experience management is, as well as how companies of all sizes can optimize it to keep consumers happy and loyal to their brands.
The basic mechanics of customer experience management
Molly Galletto of NG Data explained some of the basics of customer experience management in an extensive overview. Galletto says that companies can start thinking more strategically about the customer experience using the following tactics:
- Gathering feedback through customer surveys. Companies should continuously source and capture feedback through surveys and customer satisfaction polls and outreach.
- Share insights across the entire organization. The results from customer surveys are relevant to multiple teams. Galletto argues that it’s important that each department receives these insights in a timely fashion so that each one can take relevant action.
- Optimize the customer experience based on feedback. Of course, once the organization has gathered enough data, it’s time to apply those learnings to the customer experience. Galletto adds that this process is a critical component of customer experience management. “Companies must continually evaluate their customer experience in order to improve upon it,” she adds.
Sounds simple, right? Although the basics of customer experience management are easy to understand, there are some serious challenges to getting it right.
Before we talk about how to optimize your customer experience, let’s take a closer look at some of the most common pitfalls in CXM.
The challenges of customer experience management
In 2018, Econsultancy partnered with Epsilon to host a series of roundtable discussions on the future of customer experience. In particular, they were interested in learning more about the most common challenges behind optimizing the customer experience.
Based on their conversation, here are some of the most common pitfalls that a customer experience manager might encounter:
- Outdated data collection. Econsultancy’s Jeff Rajeck reports that while most brands collect data through “give and take” tactics, roundtable participants agreed that this needs to evolve. “Marketers need to be much more selective regarding what data they really need to serve the consumer,” Rajeck continues. “They should ensure that any data collected is to help deliver what the consumer needs, instead of what messaging to blast at them.”
- Regulations and restrictions around CX. In some regions such as Hong Kong, roundtable participants agreed that regulations and restrictions make it more challenging to optimize the customer experience. Even when companies are aware of customer pain points, these restrictions often prevent marketing teams from making meaningful changes to their customer experience management strategies.
- A lack of buy-in on the importance of CX. Even though a variety of studies have proven the impact of a positive (and negative) customer experience, Epsilon’s panelists agreed that there’s still a lack of buy-in from teams outside of sales and marketing. “One attendee pointed out that this challenge may be caused by the fact that marketers tend to make business cases for new initiatives instead of gauging whether management really understands what they are asking for,” Rajeck adds.
Some of these challenges might seem insurmountable, especially when you consider some of the legal challenges we discussed earlier.
But even with these bottlenecks, there are still a few things that you can do to understand the holes in your customer experience management strategy and optimize it for everyone involved. Let’s take a closer look at a few ways that leading organizations have done just that.
Optimizing your customer experience management strategy
Experts agree on a few tactics for understanding your customers and optimizing their experience. You can run customer surveys, update user manuals, and even ask customers for feedback in the middle of a support call.
But recently, we’ve seen some organizations think outside the box to optimize their customer experience management strategy. Here are a few tactics that stand out.
Improve the Employee Experience
Wait, aren’t we talking about how to improve the customer experience? Of course. But according to research by the Harvard Business Review, improving your customer experience management strategy starts with ensuring that your employees are also happy.
Analysts at HBR looked into the correlation between Glassdoor ratings and the American Customer Satisfaction Index (ACSI), which records the opinions of 300,000 U.S. customers on products and services. “We looked at 293 large employers spanning 13 industries, including their average overall Glassdoor rating (on a scale of one to five) and ACSI score (on a scale of zero to 100) annually from 2008 to 2018,” the researchers added. “Using a standard panel model, we estimated the impact of the former on the latter, after carefully controlling for employer, year, and industry.”
What did they find? As little as a one-star improvement in a Glassdoor rating leads to a 1.3 out of 100 improvement in customer satisfaction scores. “Even if our study shows happier employees are just a predictor of customer success and not the main cause, that is still a useful indicator,” the researchers conclude.
The takeaway here is simple. If your Customer Satisfaction Scores (CSAT) aren’t where you hoped they would be, take another look at the morale internally across your organization. If you find that unhappy employees are ultimately delivering a negative experience, identify two to three reasons your staff is frustrated at work. Then, start by remedying the “easiest” issue on that list. As HBR’s research proves, even the slightest improvement in employee satisfaction can impact the customer experience.
Check out our article on employee satisfaction to learn more.
(Re)focus on the Customer
Business leaders often get caught up in the tactical aspects of the customer experience. It’s easy to overanalyze details such as when you send a customer survey, how long you wait to collect data, and which tools you use to analyze and implement that data. According to analysts at Bain and Company, this is a common mistake that leads brands to forget about the most important part of the customer experience: the customer.
“Most company planning systems are broken, and they remain that way because most leaders just work around them,” Bain’s analysts argue. “The resulting inefficiency and noise become a competitive disadvantage as they push the company further and further away from its focus on the customer.”
That’s not to say optimizing your customer experience management strategy is easy. After all, we just reviewed three daunting challenges that could hinder even the most experienced business leaders. But when it comes to creating a strategy that consistently delights your consumers, knowing your customers is key.
Boston Consulting Group agrees with Bain’s assertion, adding that, “Our research has shown that brands with high levels of advocacy significantly outperform companies with low advocacy. The average difference between the top-line growth of the highest- and lowest-scoring brands was 27 percentage points.”
We’re not suggesting that the process by which you collect customer feedback isn’t important. But don’t get too caught up in the details of the process, especially if you’re ignoring what your customers are telling you to improve upon.
Although the adage “the customer is king” has prevailed for decades, not much has changed in that time. For many brands, the customer experience is often the first (and last) opportunity they have to make a positive impression on current and potential buyers.
Without a sound strategy in place, it won’t be long until your competition provides a more seamless experience and wins your desired business away from you.
But while creating and optimizing a customer experience management strategy is challenging, it can be done by refocusing on what matters: your customer.
And when you have a deep understanding of what your customer wants, it’s much easier to create a strategy to delight them at each step of the buyer’s journey and keep them loyal to your brand over the long haul.
Want to know what else we have to say about customer experience? Check out: An Article on CX That Actually Makes Sense.
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