Customer Experience Management
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25-02-2009, 12:09 AM
Customer Experience Management
The customer experience is central to the corporate goals. Delivering a relevant, personalised, and consistent customer experience can, for instance, improve customer satisfaction, across every customer touch-point. Accelerating the delivery of new brands, messages, and promotions to customers enhances market agility. In addition to these, delivering a consistent customer experience across world markets and languages is essential for building a strong global brand.
However, the truth remains that an optimal customer experience is easier to describe than to deliver. This paper discusses the importance of superior customer experience, opportunities to explore and developing a customer experience strategy to win over the customer.
When a customer is participating in KBC-2, through Airtel, he can vouch for his experience from being a customer of Airtel. Watching world cup grand final with Hritik Roshan, gives a better experience of the world cup. So customer experience is the talk of the day. Customer experience can be drawn through expertise and providing better value to the customer. So customer value plays a critical role in shaping the customer experience. In this regard, significant steps have been taken by companies in their endeavor to enhance customer value. This has resulted in tumultuous events where market leaders have suddenly found themselves virtually out of business or struggling for survival. Today new value creators have been reeling the roost in various sectors. For example, the entertainment industry has seen single screen theatres that did roaring business once are now on the brink of shutting down, owing to the enhanced customer value being offered by multiplexes dotting India's urban landscape. So better customer value leads to better customer experience. The customer value includes product value, service value, personnel value and image value. The gap between perceived value and real value can be minimized through the better customer value.
To define more clearly, managing customer experience at every opportunities to build brand equity of the service,which leads to sustainable profitability for the organization is customer experience management (CEM).however we must keep in mind that CEM is not customer relationship management(CRM).The latter in practice is an information driven approach to customer analysis and process automation. CEM focuses on delighting customers at every opportunity and during all interactions,which is online real time and tough. CEM focuses on the value proposition from customer's point of view and includes all interactions at various touch points.
Many customers are actually looking for a pleasant experience with the organization at every touch point at every moment of truth(interaction).Whether a customer is a user of a mobile phone ,hotel service,banking,airline or travel service ,all that , he or she looks for ,is a memorable experience .Since every interaction is unique and important,the customer looks for personalized attention and service in each one of them. Even if one experience wasn't upto his expectation,it puts him or her down and affects the image of organization. Hence ,CEM isn't about providing 90 percent and above good service, experience to customers, and feeling good about it .But, it is about ensuring a six sigma kind of service to customers, to build a good service image among customers and score high on customers experience .
CRM vs. CEM
Who uses the information
Relevance to future perform
Customer Experience Management (CEM)
Captures and distributes what a customer thinks about a company
At points of customer interaction "touch points"
Surveys, targeted studies, observational studies, "vice of customer" research
Business or function al leaders, in order to create fulfillable expectation and better experience with products and services
Leading locates places to add offering in the gaps between expectations & experience
Customer Relationship Management (CRM)
Captures and distributes what a company knows about a customer
After there is a record of a customer interaction
Point-of-sales data, moarket research, website click-through, automated tracking of sales
Customer-facing groups such as sales, marketing, field services and customer service, in order to drive more efficient and effective execution
Logging Drives cross selling by bundling products in demand with ones that aren't
The Importance of Superior Customer Experience
In product marketing, typically 30% of an organisation's resources and spent on providing a good customer experience and 70% goes into marketing the same innovatively. The entire focus is on marketing, to dominate the customers' mind space. However, in services marketing, 70% of a company's resources need to go into creating a great customer experience and the balance should be spent on "marketing the superior experience delivered "among prospects. Once the companies focus is on creating good customer experience, it automatically generates strong referrals, and word of mouth complements the 30% spent on marketing the service. Several studies have shown that repeat purchases have mostly been based on quality of service delivered, commitments honored, product/service quality, continuous innovations and the experience with the product/service. The focus is less, and less on price. Customers value and remember the quality of their interactions with the service providers .The rule is: higher the quality, higher the positive word of mouth and loyalty from the customers .In a survey by CRM Guru, positive and memorable experiences with organizations were found to be the key reason for profit growth.32% of happy customers said they recommended their service provider to a friend or colleague, and 19% said they purchased more products and services from same service provider. The bad news is, negative experiences lead to customer defections and reduced spending on the service .In the same survey, it was found that while 77% attached importance to superior product or service by customers to be loyal with the organization,78% attached importance to high quality interactions with people and systems to be loyal. only 31% linked importance to lowest price or cost of ownership of the service, clearly outlining the importance of managing the customer experience better .Lastly,the survey also outlined how business performance improves with the improvement in customer experience. Higher the customer experience score, higher the business performance growth and vice versa. In India leading companies like Taj Hotels, Airtel,Hutch,Jet Airways,Kingfishers Airlines,ICICI Bank have all succeeded due to their focus on managing the customer experience well with their services and products consistently. Though, they haven't reached the six sigma levels in delivering defect free customer experience.
Opportunities and challenges
However, along with this tremendous growth comes the challenge to the service industry to live upto the growing demands of customers, who are continuously benchmarking one experience with another and expecting improved services in every area. Their also becoming list tolerant to delays and failures in service, and expect every service provider to deliver world class experience in every interaction. This growing demand for service excellence also gives an opportunity to every service provider to emerge as leaders in their chosen field .To date, few companies have optimised this entire create-to-publish customer experience process. The lack of an enterprise-wide strategic approach undermines the very objectives that executives are seeking to achieve, resulting in some important issues or shortcomings. The first of these being decreased customer satisfaction. Inaccurate, out-of-date, or incomplete customer information prevents people from understanding companies and their products, and can drive customers away. The second issue is sluggish market execution. Labour-intensive manual processes require months-long lead times to roll out brand changes, new products, and new campaigns, delaying launches and weakening competitive advantage. The next in the line is brand dilution. Without the capability for centralised control, brands and messages become distorted as they are altered for the requirements of different touch-points and diverse global markets. At the same time, another penalty is incurred, because customer experience inefficiencies increase the cost of each customer interaction. This can damage the bottom line.
Developing a Customer Experience Strategy
To develop a customer experience strategy, we must first find out what the customers really want from the service during their interactions with the service provider? It is called "customer specifications for service" on the service expected. But in our enthusiasm ,"we should not over specify''.Most customers look for a pleasant experience (quick service with minimum hassles or procedures) with the service providers and not a "wow" experience every time. Understanding this thin difference is critical in order to avoid over specifying and incurring high cost to provide "unnecessary"experience to customers.
One of the telecom service providers has provided in their showrooms several mobile related services including one of customers taking their photographs instantly and downloading in their mobile phones and printing them. Though there are always customers waiting for their turn at the showrooms to meet the customer relationship executives, rarely do any of them use the service, since all that they are looking for at a mobile showroom is quick connection or quick resolution to their problems. They have no time to spend on all these "over specified" services. Though these over specified services improve the ambience of the showroom, they don't service the real purpose the customers are looking for, from these facilities.
It is a good idea to map the customer expectations with service provider at all the touch points through one-on-one interviews. These interviews will enable companies to understand "what is really important from the customers' point of view" and what to focus onto improve the customer experience at the "moments of truth "or interactions. Once the mapping of all the expectations is done ,then the current service standard has to be compared with the expectations, to arrive at the service gap and then redesign the customer experience to be delivered.
The technology differentiator
Technology serves as the key differentiator for most service proviers, as it enables superior customer experience, to be in telecom, banking, airline or health service .however, an organisation's ability to use technology effectively to serve customers depends mainly on the technology readiness of its customers and employees. Technology per se doesn't excite any one. Only when the technology translates into customer's and employee's benefits, it is adopted by them easily. Both employees and customers are ready to embrace new technologies if they help to achieve their objectives easily and provide an excellent experience.
Top management support
The financial success of an organization today depends on how many satisfied and delighted customer it has. One of the important functions of CEOs or functional heads in organizations is to receive, analyse and solve customer complaints and track the customer satisfaction scores by obtaining feedback regularly from customers .This is a critical role and the same can't be delegated to lower levels.
Customer feedback and complaints provide ample opportunity to understand the areas of improvement the organization needs. The CEO and functional heads must be receptive to customer feedback and complaints and give at least a quarter of their time to go through and use them to fix the organizational issues. The culture of customers resolving their complaints by escalating to media or to the top management can avoid if the top management shows regular involvement in managing the customer experiences.
Once the top management shows personal involvement and commitment to the customer experience,employees also demonstrate similar or better commitment to the customers. Top management can't depend on e-mails and lectures to make employees aware of the importance of customers, but must "walk the talk" by personally involving in providing good customer experience.
Finally, the bottom line is to recognize that if you want to build customer loyalty through good customer experience with the organization,it is not enough that you have a good service, a good product,good technology and a good advertising campaign, but you need to have a every part of your operations, fine-tune to deliver memorable experience to the customer every time they interact. That is the ultimate test of customer experience management.
In order to drive organisational growth today's C-level executives are working towards increasing customer satisfaction, improving market agility, and strengthening their brands across global markets. Till recently these executives used Customer Relationship Management (CRM) systems to optimise sales transaction processes, but now their challenges are greater. To reach their goals, executives today are finding that they must go beyond CRM to create and optimise a comprehensive customer experience strategy. It is essential to think of the customer experience as the collection of all interactions a customer has with a company, its products, and its partners, across all customer touch-points (the channels for customer interaction, such as mobile devices, contact centres, e-mail, Web sites, flyers, and retail stores). This experience has to be managed across all geographies, and throughout all stages of the customer lifecycle, from attracting customers through fulfilment to retention
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