Customer Experience Management
Customer experience management is the process of analyzing and refining your company’s interactions with customers in order to improve their perception of your brand.
Running a successful business isn’t just about creating products that serve your customers’ needs. You also need to maintain a positive brand reputation to inspire their loyalty and endorsement.
Achieving this goes beyond simply meeting their requirements. You need to cultivate a strong customer experience. When you execute a customer experience management strategy well, it tells your prospective buyers about how you care for your customers.
In this article, we explore what customer experience management is, explain its importance to your business, and show you how to build a good strategy.
Table of contents
- What is Customer Experience Management?
- Why is Customer Experience Management Important?
- How Do You Develop a Customer Experience Management Strategy?
- Customer Experience Management: Crafting the Happy Customer
What is Customer Experience Management?
“Customer experience” is the sum of your customers’ perceptions of your brand. It’s the result of their interactions with your company throughout their journey. The customer experience begins as soon as they are aware of your brand and continues while they use your products and services.
Customer experience management, also known as CEM or CXM, is the process of gathering data and insights about your customer experience. Then, your team uses these insights to improve their experience. The goal of customer experience management is to make every customer happy with your overall brand—not just your product.
Why is Customer Experience Management Important?
Today, CEM is a vital part of your brand’s success, because a positive customer experience provides unique benefits that can’t be secured with quality products alone, like:
Improved Customer Retention
Improving the customer experience leads to more satisfied, loyal customers. This increases customer retention, which comes with a wide variety of its own benefits. One of the most oft-cited statistics surrounding retention is that increasing it by just 5% can improve revenue by anywhere between 25 and 95%.
Creating more loyal customers also reduces voluntary churn rate. Since it can cost up to 500% more to acquire a new customer than it does to keep an existing one, improving loyalty is huge. This can be a boon for SaaS companies, for whom customer acquisition cost is an important figure in tracking profits.
Word of Mouth Endorsements
Loyal customers are 4x more likely to refer a product to their friends. This doesn’t just give you the benefit of “free marketing.” When surveyed, 92% of customers said they trust earned media, such as word of mouth, far more than any other kind of advertising.
Greater Customer Spend
Finally, a well-run CEM strategy leads to a vastly larger customer spend. We’re not talking about small numbers here. Studies show that customers who have a great customer experience will spend 140% more than customers with a worse experience.
How Do You Develop a Customer Experience Management Strategy?
Building a strong customer experience isn’t a one-off task, but an ongoing plan that is integrated into your business goals.
Here’s how to craft a successful CEM strategy:
1. Develop Your Vision For the Customer Experience
Before you begin, you need to define what makes a great customer experience. You then need to create this vision in a way that everyone in your company can understand. By doing this, it becomes easier for everyone to embed it in their work.
To get started, first assess your customers’ needs and pain points. And we mean this not just in the product space, but in regards to their experiences, as well. You can use your customer persona to help you understand their current experience and pain points, so you can find ways to improve upon or solve them to improve CX in the future.
You also need to set particular objectives that can be tracked as a measure of customer experience. Some metrics you can monitor are:
- Greater customer engagement on social channels
- More product reviews with higher ratings
- Higher customer retention rates
2. Scope Out the Ideal Customer Journey
Your customer journey represents every point of interaction between your customers and your business. Each of these touchpoints has an effect on your customer experience. A large part of customer experience management, therefore, involves knowing how this journey works.
To do this, you should create a customer journey map that starts with the very first stage of awareness. Follow it to the different phases where their usage begins and ends.
3. Build Out the Ideal Customer Journey
Because the customer journey represents your customers’ experiences, you want to develop an ideal vision of it where they’re always happy, at every stage of interaction with your brand.
After your mapping exercise, identify any weak points that may need some work. Then, think about how you can improve those touchpoints in a way that’ll keep them coming back.
4. Build An Emotionally Affective Brand Experience
Customers aren’t just rational actors looking for the best deal. They’re people with feelings and sentiments. You need to be aligned with their feelings to capture their loyalty and trust in your brand.
To make that happen, you need to know what attitudes and “promises” are going to inspire them to keep going with you. Some examples of emotions that you can identify and target include:
- Engagement: People like to feel that they’re being listened to. Demonstrating that your business listens to and applies feedback can help with this.
- Security: Showing that your product is reliable and doesn’t go down unexpectedly will encourage customers to stay onboard.
- Uniqueness: By giving your customers an experience that’s tailored to their needs, you can inspire them to feel that you care for them as a person and not a number. This is especially important for niche products.
5. Measure Everything
This is where the data-driven aspect of CEM comes from. Use your customer analytics data and track your KPI measurements to ensure that you know your customers and that your actions are producing identifiable results.
While numbers are easier to understand and analyze, don’t underestimate the power of qualitative data. Surveys and focus groups offer a place for discussion and feedback that help you vastly improve your CEM strategy and your product, too.
Customer Experience Management: Crafting the Happy Customer
The best customer isn’t just one who loves your product—they love your brand, too. That’s why customer experience management is so valuable to any business. Use all these tips to identify where you interact with your customers and how to improve these interactions. Having a CEM strategy can earn you more loyal customers and all the benefits they bring.