From CRM to CEM : The Importance of Customer Experience Management

In today’s competitive marketplace, managing customer relationships is critical to a company’s profitability and long-term success. To become more customer-focused, sales managers, IT professionals, and marketing executives must understand how to build profitable relationships with each customer and how to make everyday managerial decisions that increase the value of a company by increasing the value of the customer base. The goal is to build long-term relationships with customers and generate increased customer loyalty and higher margins.

Managing customers used to be much simpler.  A business-to-business (B2B) company had a smaller contact database within defined geographic boundaries, and key sales executives often knew many of their customers, or at least their best customers, by name. The Internet has made geographic limitations a thing of the past, and that has created a need for a different management style and marketing practice. If you market to a broader audience as a business-to-consumer (B2C) company, it was certainly more difficult than B2B, but since you controlled the communications flow and content, you still felt in control.

Customers today are in control of your company -- whether you like it or not.

"The Consumer Is In Charge" says Kaiser Permanente CIO

"Consumers and their demands are in charge of business" says Frito-Lay’s senior vice president and chief marketing officer.

“Today, the customer is in charge,” said SrVP for marketing at Wal-Mart Stores, 

Statements like these are being made at almost every marketing meeting today.  In truth, the customer has always been in charge from a purchasing standpoint, but today customers also play a major role in the communications flow and content.

When you think about how to describe the ideal business model, a well-oiled machine with all parts running smoothly and in harmony, maintained by a skilled staff and overseen by competent and passionate management comes to mind.

Unfortunately that model is less and less a reality in today’s digital economy. A modern company, today, is more like riding in a super-fast sports car, with the customer at the wheel.  They are probably driving faster than you are comfortable with, and you are not really sure where they are going. And a host of back-seat drivers are trying to convince them to change directions.

A breakdown in customer loyalty has destabilized the old business model.

Even for a company with reliable products, pricing, and customer service, customer loyalty is no longer a given. With the easy availability of information-sharing and competitive options now available to consumers, you are always in danger of losing a customer to a competitor down the street, or halfway around the world.

In the past, many companies could rely on loyalty out of sheer convenience. If you wanted a bank account, for example, you went to the branch closest to your home or office. Not anymore.  You can bank with somebody in Ohio or Florida as easily as the bank across the street.

Loyalty is now driven by a company's interaction with its customers and how well it delivers on their expectations before, during, and after a purchase. If a customer feels like you did not deliver a service that was expected, they won’t come back and buy from you again. And if they express their dissatisfactions via social media, they may reach hundreds or thousands of potential customers with their complaints.

Customer Relationship Management (CRM) as a concept has been around for a while, but has primarily revolved around using software to solve specific issues.

For many marketers, CRM has become the use of technology and software to solve a particular issue or to increase speed and, hopefully, accuracy of response. Sales force automation programs can develop detailed analyses of sales promotions, automatically track a customer’s account history for repeat or future sales, streamline sales cycles, and measure and score leads.

Today, instead of using a conventional Excel-type spread sheet, many marketers have found that a good CRM lead management program allows your company to better manage leads as well as prospects from the time of initial capture of interest until the sale is closed. For a company to be successful it must manage and take advantage of every sales opportunity that comes its way and CRM software can provide company with a number of important benefits.

Other common CRM software tools help companies stay more competitive by helping them make more accurate forecasts, manage orders more effectively and efficiently by streamlining the process and cutting down on paperwork, and provide more information and insight for cross-selling and up-selling.

But managing customers is more than just improving your customer interaction speed or accuracy. In a world where customer expectations have become customer demands, you must manage the total customer experience, not just a part of it.

Customer Experience Management (CEM) has become today’s marketing requirement, not just this week’s buzzword.

While there is a clear reason to support the concept of CEM, that is still a great deal of confusion about what it really is.  As more agencies and consultancies claim expertise in the area, an understanding of the basic differences relative to CRM becomes necessary.

It is believed that the term “Customer Experience Management” was coined in 2003 by Bernd Schmitt in his bestseller, Customer Experience Management: A Revolutionary Approach to Connecting with Your Customers. Schmitt defined CEM as “the process of strategically managing a customer’s entire experience with a product or company.  It represents the discipline, methodology and/or process used to comprehensively understand and manage a customer’s cross-channel exposure, interaction and transaction with a company, product brand or service.”

CEM starts with a multidimensional understanding of your customer.

This depth of understanding goes well beyond an analysis of demographic data, and must also include cultural, sociological, and behavioral insights.  The more you can define the needs, wants, and expectations of your customers the better able you will be to develop audience segmentation strategies and prioritization of your key prospects.  Customer understanding becomes the primary driver in shaping your business approach.

Cross-channel or multi-channel consistency becomes a critical ingredient in managing the experience.

Your customers don't see the company as a marketing department, a sales force, or a contact center; they see it simply as one brand. One bad experience with one channel reflects on the entire company. Additionally, as customers become more comfortable interacting with your brand across a variety of media -- website, email, phone, etc. -- they become more likely to switch back and forth between channels, even when trying to resolve a single issue. For example, if a customer emails the sales department with an inquiry and follows up with a call to the customer service line, she expects this to be a continuation of one effort, not two separate ones. When answering the call, the company should know about the email. This is not possible unless channels are open and integrated.

CEM must become an integral part of training at all touchpoints.

With the level of information sharing now available to consumers, what might have been a minor mistake can become a major blunder.  A rude or inattentive waiter, or someone just having a bad day, can ruin a restaurant’s reputation through peer review sites like Yelp and Urbanspoon.  Customers are expecting a great experience at every interaction with a company, and companies that fail to realize this, and establish programs and practices to promote that experience will be left behind.

Many companies say they understand the importance of managing the customer experience, but privately question its value in relation to ROI.

The 2014 Customer Experience ROI study from Watermark Consulting makes a strong case for why every company should make customer experience a major focus.  Their 7-year study of stock market performance of Customer Experience Leaders (top-ten rated public companies in Forrester Research’s 2007-2014 Customer Experience Index studies) shows they outperformed the broader market over that period, generating a total return that was 26 points higher than the S&P 500 index.  Customer Experience Laggards (Bottom-ten companies in Forester studies) actually posted a negative return during this period when the broader market rose sharply.

The Customer Experience Leaders identified in this study have four basic principles they follow to create and maintain a positive customer experience:

1.     They aim for more than just customer satisfaction, they look for brand advocates and loyalty.  Customers that are merely satisfied are less likely to drive business growth through referrals, repeat purchases, and reduced sensitivity to price than brand advocates.

2.    They focus on ways to surprise and delight their customers beyond the basics.  They execute on the basics by minimizing customer frustrations and annoyances, and add something extra to the equation that customers appreciate.

3.    They understand that great experiences are intentional and emotional. They strive to make sure every touchpoint addresses a rational expectation, but also stirs emotions in a positive way.

4.    They recognize and appreciate the link between the customer and employee experience.  It should not come as a surprise to know that happy, engaged employees help create happy, loyal customers.

The competitive opportunity from CEM cannot be denied.  Product innovations can be copied; advances in technology can be easily matched; price differentiation is not sustainable in a world where sourcing is universal and new companies are formed every day.  A company’s ability to deliver an experience that sets it apart in the eyes of its customer is a marketing strategy that you can control, not your competitors.  That’s why companies must move beyond customer relationship management to a broader approach of managing the customer experience.

©2016.  RAINDANCE CONSULTING.  ALL RIGHTS RESERVED.

In today's multi-channel marketing world, branding basics have not changed

Today's digital marketplace has more channels, but smart marketers know that the basics of branding have not changed.  So here is a quick reminder of some of those basics to remember.
1. Building a strong brand identity still starts with knowing three basics - your target, your competition and the benefit(s) you offer that target in relation to your competitors.No matter how complicated or crowded the market is is channels or competitors, this is always the best place to start.  I call it the "positioning triangle", and it is still the best way I have found to understand how to build your brand.  

The first step in building your brand is to know your target audience, who they are and who they think they are.  That's not always the same thing.

Then you must identify who your major competitors are, and the major benefit that audience.  And you  must also know more than the functional benefit of your product or service, but also the emotional benefit your brand delivers.  Understanding and delivering on the emotional value your brand offers is the long term key to success.

2. Building a strong brand identity still means aligning your external messaging with internal awareness and action. An important part of a strong branding strategy is to ensure that your internal audiences are in sync with your external communications. Too many marketers fail to nurture an internal awareness and passion for that external promise. One great example of this are banks who want you to believe they are friendly, but don’t deliver. When was the last time you saw a branch manager rush out of his chair to greet you? Or had a teller stop and smile and ask how you are doing today? Now I am sure that there are some friendly tellers and managers out there, but if your brand strategy is “we’re friendly and we care about you”, then your customer interactions must live up to that claim. All day and every day. If the expectations you create aren’t delivered, you may lose a customer for life.
3. A good branding strategy still addresses these four elements – it is unique; it is believable; it is relevant; and it is true.• Strong brands still must offer something unique or differentiating to their customers.Most business categories have too many choices. Customers need to see you as not merely a good choice, but the best choice to meet their needs. The challenge of a good branding strategy is to find out what makes you unique, and then communicating that difference to your key target audience(s).
• Strong brands must still make claims that are believable to their audiences.Customers should have permission to believe that your brand promise can be met. Today’s consumer is more knowledgeable . . . and more skeptical, than ever. Make sure you can give them enough logical rationale to justify their brand decision, before, during and after the purchase decision.
• Strong brands must still be relevant to be considered.This seems obvious, but this is often missed by marketers who forget to ask these basic questions. Does this really matter to my customers? Is this the most motivating way to present my brand? Being relevant becomes essential in a world with so many choices and opportunities.

• Strong brands still make sure that what they promise to deliver is true.Making an unsupportable claim may get you a one-time sale. But if you don’t live up to that claim, you will probably lose that customer. Plus all of the others they will tell about their bad experience. A Yankelovich study found that, on average, people with a positive experience tell three others, while people who have a bad experience tell eight. With the Internet’s easy access to thousands of potential customers, a bad experience can be devastating.


Today's multi-channel, digital world has changed how we go to market.  But, it has not changed those basics of how to build a brand.  Whatever you do with your brand, remember this: Brands that thrive reflect their core culture and unique character, solve relevant needs, and provide a consistent experience for their customers.

Good luck with your branding development. I hope these thoughts help you along the way!

THE EIGHT DUMBEST MISTAKES AGENCIES MAKE IN NEW BUSINESS

For over 30 years, I’ve been directly involved in new business development for advertising
agencies on a national, regional and local level. So I’ve learned a few “tricks of the trade”
over the years, and along the way have led teams that won over $200 million in new billings.

At the same time, I’ve learned that there is no magic, one-size-fits-all answer to winning
new business.  There are a lot more than eight major mistakes in the new business world, but I’ve broken it down into the eight most common and correctable mistakes agencies make in planning and prospecting.

1. They don’t start by identifying their agency’s strengths and weaknesses.
Too many agencies waste a lot of time, effort and resources chasing business that they have little to no chance of winning. There are a lot of good agencies out there, and they all look alike to a certain degree to prospects. So marketers often look for reasons to eliminate you from the review, not include you. If you don’t have the right experience, the right personnel, the right location, the right reputation, or whatever they think they want from an agency, then you are wasting your time, effort and resources.

2. They don’t have a positioning strategy that will separate them in the prospect’s mind.
There are too many agencies out there fighting for the same prospect’s attention. And most agencies have dropped all of their size criteria to chase just about everything on the planet. So if your agency doesn’t stand for something, you’re toast. And in today's marketplace, you must own a niche, or even a niche within a niche, to be considered.

3. They don’t develop a realistic target prospect list.
The two most obvious barriers that prospects use to eliminate an agency from
consideration are size and experience. Size becomes an easy reason to say no. Most
prospects don’t want to be the largest, but they want to be important enough to feel like
they will get top management attention. They don’t want the agency to be dependent on
their income in case they want to make a change. And they certainly don’t want to be the smallest for fear of being treated as a second-class citizen. Geography used to be another major elimination factor, but in today’s world of instant communication and Internet data transfer, it’s not as important as it used to be.

4. They don’t have top management buy-in to make the necessary investment to be
successful.
Unless your most senior management agrees to fund and participate in an aggressive new
business program, your chances for success go down dramatically. Please notice that I said
fund and participate. If you don’t invest dollars in a new business program, you’re facing an uphill battle. But a dumb mistake that many agencies make is that the most senior executive(s) are not an active part of the new business development program. Clients want to feel that they are getting the most experienced to work on their business. And they want to feel important enough to warrant more than a token effort from the boss.

5. They rely on over-the-transom prospecting instead of developing and executing a
proactive, awareness-building new business effort.
The mega-agencies and the creative powerhouses can rely on prospects to call them. But for most agencies, if you don’t have a good, proactive prospecting effort, you will be unable to sustain growth (or grow beyond your local sphere of influence). There are a lot of ways to run a new business program, but the most important is simply to gain awareness among the prospects that you exist.

6. They don’t have a well-rehearsed, professional presentation team.
Too many agencies make the mistake of taking the department head (or even worse
whoever is available at the time) and putting them on the new business pitch. If your
presenters have a major defect in their presentation style, or content, or simply their
personality they will doom the agency to failure in the pitch. How many times has an agency brought a department head to a new business pitch, only to have that person give a terrible presentation?

7. They don’t have a social media strategy to stay top-of-mind with clients and prospects..
Many agencies talk a good game when discussing the need for a social media strategy that keeps a company top-of-mind in the industry, but then have an agency blog or Twitter account that has a year-old post as the latest entry. If you tout the value of any marketing tool to a client, and don't take advantage of that tool, then you risk coming across to a prospect as either lazy, dumb, or worst of all, full of b.s.  None of those will win business.

8. They don’t understand that unless you have a relationship with a prospect, your
chances of success go down dramatically.
Client’s don’t want to make a risky decision. So most will tend to make the safe decision, whether it is the best one or not. When I look back over the years at all of new business pitches I have made, the one constant when I didn’t succeed was when we had no real relationship with the prospect prior to the pitch. Sometimes the agency reputation and/or category experience got us through the RFP and into the finals, but if we didn’t have some personal or professional bond established at some level, we didn’t win the business.
You win new business before the pitch, not during the pitch. That means you should be meeting with the prospect, talking with the prospect, sharing ideas with the prospect, building a relationship with the prospect before the pitch. People hire people they know and trust before they hire people that may not be in sync with their thinking.

There are a lot of other mistakes that agencies make on a regular basis. So I will simply leave you with this thought. At this very moment, you can bet that some other agency is trying to build a relationship with one or more of your clients. And if you are like most agencies, 25-30% of your business will leave after two years, no matter how good you think the work is that you are doing for them.

So new business is not only important, it is vital for your continued growth as an agency.
Do you really want to keep making the same dumb mistakes in your new business  program?