What Is Customer Experience Management?

However, CXM also requires understanding — knowing who the customer is, decoding their customer journeys and the ability to understand data from the customer’s perspective and analyze it to create actionable insights. This blend of skills, strategy and disciplines is the reason why building cross-functional teams with responsibility for customer success is CXM best practice — 64% of large organizations considered as experience leaders attribute much of their success to having a coordinated program involving expertise across the business.

Customer experience management — often abbreviated to CXM — is about actively and consistently steering an organization’s customer experience strategy so that it continuously aligns with evolving customer needs and expectations in a way that increases customer engagement and satisfaction, with the ultimate goal of driving brand loyalty.

As such, it’s an approach to building and maintaining a customer base for long-term success that is equal parts art and science. Customer experience management requires the right choice and application of tools and technology and the ability to collect data and align with metrics.

Customer Relationship Management (CRM) vs. Customer Experience Management (CXM)

A customer relationship management (CRM) system is a repository for customer contact and interaction information and, over time, can be used to build up a picture of a customer’s history and preferences. It also captures information regarding sale leads and can be used for accelerating internal processes. As its name suggests, it is a powerful tool for building relationships with the customer base. However, it is focused primarily on the business, rather than the customer. It facilitates internal processes, and its utility is only as good as the information it can capture and hold.

While both CRM and CXM serve to strengthen the customer relationship, that’s where the similarities end. Customer experience management is a discipline and a strategy supported by a platform of systems and tools focused on capturing and understanding customer experience (CX) across every touch point and along each customer journey.

CRM captures past history, and CXM is focused on the future. When adopted as part of a wider digital transformation, customer experience management not only brings an organization closer to its customers, it can help the business get into the minds of their customers, being able to identify potential issues before they become real customer frustrations and identify and evolve CX delivery in line with changing customer behaviors and emerging trends.

Customer Experience Management and Business Performance

The positive impact on business performance that can be realized from building stronger customer relationships through CXM should be clear.

By taking a proactive approach to the end-to-end customer experience, organizations are better able to identify and deliver on customer needs and expectations. It ensures a consistent experience across touch points and throughout each customer journey, from onboarding to ongoing post-purchase support — all of which fosters customer loyalty and minimizes attrition.

Businesses considered as customer experience management leaders experience a 1.6x increase in customer lifetime value and a 1.7x improvement in customer retention rates as projects come to fruition. And because a customer experience management system is fueled by data and driven by teams that encompass skills across the entirety of the organization, it generates new levels of insight that can be used to drive everything from better products and services to greater customer lifetime value while lowering the cost to serve.

For 63% of organizations that have identified the link between CX and customer loyalty, they have also found that being able to combine data, teams and customer understanding is the key to delivering the types of innovative experiences that strengthen customer relationships. Read more what is cx customer experience.

How to Improve Customer Experience

Customer experience management targets the key aspects that, when optimized, improve CX, starting with a greater understanding of the consumer behavior and traits that drive business towards an organization’s brand.

Because CXM makes it simple to merge customer and operational data, with the right combination of tools and expertise, it becomes easy to identify the needs and expectations existing customers have in common. Feeding these findings into marketing strategies makes them more focused and effective, while the insights that come from customer interactions enables an organization to improve the initial touch points at the top of the sales funnel that can move a consumer from discovery to consideration.

The purview of these tools can then be expanded to analyze existing end-to-end customer journeys and single out steps on the path to purchase (and beyond) that require attention and potential improvement. Again, it’s the combination and operationalization of different data sources that makes it possible for customer experience management to deliver in this respect. This lack of understanding and, as a result, inability to deliver CX in line with expectations could be impacting revenues by up to 20%.

An Omnichannel View

The next aspect of improving CX is being able to achieve an omnichannel view of each customer. Through CXM, every interaction across all channels can be tracked and captured and fed back into operations. And, crucially, the information generated stays connected to that customer.

So, for instance, if a customer begins a customer journey on a website, then engages with a chatbot and finishes by using online chat to engage with a live agent, the data related at each stage moves with that customer. It means that rather than simply tracking negative interactions — issue resolutions and complaints — CXM allows an organization to connect and engage with every customer, understand their preferences and begin to develop a personalized CX. Nine-in-10 of the world’s best performing businesses attribute their long-term growth to being able to anticipate and deliver on customer needs along each customer journey.