Customer Experience Management:
What It Is And Why It Matters

Customer experience is defined as your customers’ perceptions – both conscious and subconscious – of their relationship with your brand resulting from all their interactions with your brand during the customer life cycle.

As for customer experience management, Gartner sums it up pretty well in its definition: “the practice of designing and reacting to customer interactions to meet or exceed customer expectations and, thus, increase customer satisfaction, loyalty and advocacy.”

Customer experience management is about more than serving your online customers. It’s about more than knowing where customers shop and what brand of dog food they buy. It's about knowing your customers so completely that you can create and deliver personalized experiences that will entice them to not only remain loyal to you, but also to evangelize to others about you – and that’s the most valuable form of advertising there is.

Gaining this depth of knowledge about customers isn't something that just happens. It comes from extracting customer insight from all touch points and channels across your entire organization. It's about harnessing mountains of customer data from online channels and beyond, and extracting valuable insight from that data with speed and precision.

Why customer experience management is important

The concept of customer experience may sound idealistic or touchy-feely, but anyone who dismisses it as such is woefully out of touch. In fact, customer experience has become a critical differentiator in today’s hyper-competitive, hyper-connected global marketplace. There’s tangible business value in managing the customer experience effectively. Good customer experience management can:

Strengthen brand preference through differentiated experiences.
Boost revenue with incremental sales from existing customers and new sales from word of mouth.
Improve customer loyalty (and create advocates) through valued and memorable customer interactions.
Lower costs by reducing customer churn.

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Challenges marketers face

Creating consistent brand experiences across channels. While customers may be willing to accept different service levels from different channels, they expect your brand value proposition to remain consistent. But channel proliferation makes it difficult to ensure such consistency across all channels.
Integrating channel and brand experiences. An integrated channel experience is highly desirable, but hard to achieve. Technology, legacy processes and organizational territorialism can all be barriers.
Consolidating data into a single view of the customer. Having a single view of the customer across interactions, channels, products and time would facilitate creating unified, coordinated customer communications. Departmental silos, fragmented data and inconsistent processes make this challenge seem insurmountable.

Three steps to getting customer experience management right

So many things can affect the customer experience, how do you know where to start? Here are three steps to successful customer experience management:

Create and maintain complete customer profiles.
Personalize all customer interactions.
Get the right information to the right place at the right time – every time.

Create and maintain complete customer profiles

To deliver a stellar customer experience, you have to know your customer better than ever before. That means creating and maintaining complete customer profiles that help you understand and measure your customers' journeys at every touch point across multiple channels. The more you know your customers, the more effective you’ll be at delivering relevant offers to them. The more relevant your offers are, the closer the relationship between your business and your customer becomes – driving metrics like loyalty and retention.

Historically, companies have used structured data – e.g., demographic, transactional and log data – to construct customer profiles. Today, you must include emerging types of data – social media, video, RFID, sensor, geolocation, etc. – tied together with cross-channel coordination. And add contact, response and transactional history interspersed throughout the customer life cycle, as well as customer value, profitability, behavioral analysis and propensity scores.

By analyzing traditional, structured data in conjunction with newer types of data, you can:

Learn how to improve the customer experience at specific touch points.
Understand what your customers want and expect you to do for them.
Make better decisions faster.

Make it personal

Once you have a thorough understanding of the customer, you can use that knowledge to personalize every interaction. Remember to not only focus on the customer, but also on the context in which the customer operates. Your data can help you maintain that focus, particularly if you continue to enrich existing (core) data with new sources. By adding context to your customer focus, you can deliver relevant, insightful offers, recommendations, advice and service actions when a customer is most receptive.

Remember that customers have more presence, power and choice than ever before. If you don’t provide a personal, relevant, timely and insightful message, you will alienate them immediately. But if you do, you will drive brand loyalty.

Right message, right place, right time – every time

To deliver the most value at each customer touch point – and improve the customer experience – you need to map analytics to specific stages in the customer life cycle so you can deliver the right message to the right place at the right time. Each life cycle stage is important – from initial consideration, to active evaluation, to the moment of purchase and even to the post-purchase experience. Each stage is an opportunity to improve the customer experience. And each stage is an opportunity to gain more insight that you can feed back into your marketing processes to draw from the next time.

Customer Experience Management:
What It Is And Why It Matters