Page 209 - DMGT308_CUSTOMER_RELATIONSHIP_MANAGEMENT

Customer Relationship Management

Notes 8.2 Customer Experience Management

Nearly 25 years ago, Jan Carlzon engineered a turnaround at Scandinavian Airlines by improving
“moments of truth” in passenger interactions with the airline. Since then, relationship marketing
and Customer Relationship Management (CRM) have been mostly concerned with how to
market to customers and get value from them, often with IT-based strategies. But largely forgotten
was the insight that Carlzon understood intuitively. Customers perceive value based on the
experiences they receive.

These days, it seems the phrase “customer experience” is on the lips of every marketer and
business consultant. And really, it’s not a moment too soon. All too often, we’ve seen executives
pay lip service to the customer while gearing their business to short-term payoffs. But in this age
of customers empowered with global shopping carts, that won’t cut it. Colin Shaw, founding
partner of Beyond Philosophy, and John Ivens argue that customer experiences are critically
important. “We are witnessing the first ripples of a fast approaching new wave of change,
breaking upon the shore of a new business differentiator,” they write in their 2002 book Building
Great Customer Experiences (Palgrave MacMillan).

Think about your own behaviour. While using Starbucks as your remote office, you sip on a tall
latte and catch up on email. When you travel, you rent your car from Enterprise Rent-A-Car and
stay at Marriott hotels—brands that fulfil their promise to you. When you get a free weekend,
you head for the open road on your Harley. You listen to music on your iPod. You buy DVDs,
kids’ toys, clothes, electronics and, oh yes, books at Amazon.com.
These firms know the secret to building loyalty and growing your business. Why? Because they
make a connection with customers that transcends the basic functional value they offer.
Unfortunately, such stellar experiences are not the norm. In CRMGuru’s research, only 22 percent
of customers agreed that companies “currently provide an excellent customer experience” in
major industries like banking, air travel and electronics. The silver lining, though, is that
companies that excel can build a more sustainable competitive edge based on an emotional
bond.
But what is the “customer experience” and how can you tap into it? What is Customer Experience
Management and how does it relate to Customer Relationship Management? And why are so
few businesses focusing on the customer experience, let alone managing it well?
In this unit, we’ll discuss the customer experience from the point of view of the customer, based
on CRMGuru research conducted in April 2006. In the unit, we’ll analyze CEM from the enterprise
perspective, and highlight performance gaps and methodologies to improve customer
experiences while driving loyal and profitable relationships.
Consider what customers had to say in our recent research. Some key findings include the
following:

 In earning their loyalty, customers rate their quality of interactions with an organization
as equally important to the quality of the goods or services purchased.

 Off-shoring and IVR initiatives, popular methods to cut the cost of customer interactions,
have not improved customer experiences for more than 90 percent of research respondents.
 In contrast, investing in employee training and Internet-based sales and support has
generally had a more positive effect, improving customer experiences more than a third
of the time.

 Post-sales service/support activities are the most likely to generate a “memorable”
experience, either positive or negative, because of the strong emotions that often result in
problem situations.

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