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by Dick Bucci, Principal, Pelorus Associates - June 24, 2013

From Customer Service Management to
Customer Experience Management

Customer Experience Management (CEM) is a new paradigm in the way organizations interact with customers and constituents. An important distinction between customer experience management and traditional customer service management is the notion that every interaction with the enterprise at any touch point constitutes an experience. The sum total of these experiences influences the customer’s view of the brand and the company. These experiences can be positive or negative. The resulting predisposition to favor or disfavor the brand has important economic consequences. Customers that have negative views will choose other brands, if that option is open to them. If they cannot readily switch brands (because of barriers) these supposedly “loyal” customers may share their feelings with others – a likelihood made much easier with Internet blogs – and thereby dissuade potential new customers and diminish investments made in communicating the brand promise.

On the other hand, customers that have favorable experiences may become more than loyal – but pro-active advocates of the brand. They will tell others and the word will spread. The result is revenue growth and cost savings from having to replace disaffected former customers.

The reader may question if it is realistic to expect for customer service representatives to “manage” customer experiences. The presumption would seem that customers are pliable and easily manipulated by highly skilled contact center agents. Of course, this is not the case. The customer will always lead the path with communications. The distinction is that the well trained and equipped agent will have the map – and therefore inevitably determine where the journey ends. Less well-equipped customer service agents may take wrong turns or encounter dead-ends. They may simply give up, shuffling the call over to someone else or requiring the customer to start over again with an agent that has a better map.

Figure 1 contrasts the traditional customer service view with the new customer experience view.

Figure 1

Customer Service Management vs. Customer Experience Management

An important goal of CEM of is to migrate callers from users to advocates. It’s viewing each interaction as an opportunity to strengthen brand loyalty and consequently increase or at least sustain revenue and profitability. This means going beyond simply answering questions to proactively offer helpful advice and alert us the caller to new products and services that are well suited to the caller’s requirements.

Making the move to CEM requires a fresh way of thinking about customer interactions and measuring success.

Figure 2

Making The Move to CEM

Principles and Practices

Buy-in to the CEM philosophy

Transitioning from customer service management to customer experience management requires buy-in and leadership from senior management. The CEM discipline is most successful when practiced at all customer touch points. Consumers will communicate with bank tellers or restaurant wait staff far more often then they call or message the contact center. Every interaction, whether personal, phone, email or web, represents an “experience” that can have consequences on future buying behavior.

However, contact center management need not wait for a senior management fiat to craft and execute a CEM strategy. In fact, contact center managers that strongly believe in the principals of CEM can champion the initiative. They will likely find strong allies in marketing management, which is charged with brand building and with the sales organization that will favor sensible efforts that result in revenue growth.

Employee empowerment

All too often, interactions that start out positively turn south when the customer learns that the person at the other end of the line can’t solve his problem. This results in follow-up calls about the same issue which is the prime driver of diminished customer satisfaction. Two important reasons why callbacks occur are”

(1) The CSR does not know the answer and

(2) The CSR knows how to solve the problem but lacks the authority to do so.

There are technology tools that will lead the agent to a successful resolution, even if he or she does not have prior knowledge of these solutions. The latter cause – absence of authority – can be addressed internally. CSR’s and other customer contact people should be able to make modest pre-defined and pre-approved concessions in the interest of maintaining customer loyalty. Examples may be granting free minutes, extending a subscription, or waiving a nettlesome overdraft charge, None of these examples involver a significant cost and may be all it takes to keep a valued customers. Granting customer contact people more discretionary authority also does wonders for employee satisfaction.

Customer differentiation

There is a big difference between customer segmentation and customer differentiation. Segmentation – a decades old marketing nostrum – argues that consumers belong to groups and these groups share common behavioral propensities. Customer differentiation favors a more individualistic view. Only recently have we had the wealth of data to actually understand the unique needs and interests of individuals.

A differentiated experience recognizes that some customers are far more valuable to the enterprise than others and therefore ay warrant some extra effort on the part of customer contact employees.

Metrics that cut to the heart of the customer experience

Traditional, or first generation, call metrics have been around since the invention of the automatic call distributor in the 1970’s. They include service level, answer time, adherence, occupancy, abandonment, queue time and about 100 others.

The main vulnerability of first generation metrics is they speak to processes, rather than outcomes. This leads to management by and for the numbers, even if they bear little or no relationship with the goals of the enterprise. Precious few of these metrics have ever been established to have a verifiable impact on actual customer delight. The metrics summarized in Figure 3 speak more directly to the effects of superior customer experiences

Figure 3

Examples of CEM Metrics

CEM Is not for everyone, but for businesses that sell branded products or services and particularly for service organizations that have few sustainable options for competitive differentiation, CEM is an excellent strategy. By implementing the essential attributes of customer experience management these businesses set themselves apart from less customer-centric organizations. The result is increased brand loyalty, reduced churn, and happier employees.

Dick Bucci
Principal
Pelorus Associates
dbucci@pelorusassoc.com
www.pelorusassoc.com