The CRM is dead, long live the CEM!

Posted on Feb 20, 2009 by in customer experience | 0 comments

customer-experience

“Undermining experience, embellishing experience, rearranging and enlarging experience into a species of mythology.
Roth, Philip

Who said that CEM (Customer Experience Management) was just a marketing trick to rejuvenate all the dusty CRM marketing material by simply replacing an ‘R’ by an ‘E’? Nonsense! But really, what is the big difference? If we remember well, the big slogan of CRM was mainly to increase the customer satisfaction, no? So what is all the fuzz about?

“CRM and CEM are similar in many ways, not least in that they are both difficult to define.”
Peter Gurney, Managing Director of Kinesis

What’s the difference?

cxm

From all the definitions and analysis I have read, I have to admit, this graph is nothing but the best explanation I found so far. The CRM takes a company’s employee perspective and is an application designed for them. The CEM takes a customer perspective and tries to monitor and improve the experience. The CEM therefore incarnates the most extreme customer-centric approach possible.

Now, should it be one or the other? Or is CEM a CRM add-on?

CEM is better, you can throw away your old CRM!

“Do I have a relationship with 17 million people? I don’t think I do.
Do I interact with 17 million people? You bet.
Jim VonDerheide, vice president, CRM Strategies, for Hilton Hotels

The CEM adepts don’t hesitate to say it: CEM is simply better. Instead of focusing on how a company wants to interact with its customers, it focuses on how customers want to interact with the company. It is the ultimate step in acknowledging the old adage: “customer is king”.

Some goes to the point of advising to stop wasting money with CRM because customers don’t want to have any relationship with a company, they simply wants to have a positive experience with the company’s product and brand.

“In CRM, the focus was on the company, its products and transactions. It was an inside-out view. It was the communicated brand. As far as experiences went, they were designed around the communicated brand. As often as not, customer communications didn’t reflect what customers actually experienced at the point of purchase or when using the product. 80 percent of customers surveyed didn’t believe that they would actually receive what is so expensively promised. And 80 percent of them will still be disappointed. In CEM, however, the focus is on customers’ experiences with the real brand, the one that exists in their head as a result of peer recommendations and their own accumulated experience.”
Hill, a principal at the London-based consultancy Soffron Partners

Even if I can agree from a philosophical perspective, in the reality, the CRM records the profiles of customers fixed and historical data, as well as a lot of other information. And whatever the CEM is trying to do, it should try to leverage these data anyway. We need these data and they are currently stored in the CRM. Therefore, from a technical perspective, it is hard to believe the CRM will be replaced by the CEM in the foreseeable future.

CEM is different, take it for the new value it create!

Although it is easy to get emotional and pretend the experience is the only thing that matter for customers, this is not really true. As an example, I am personally a big traveller and do enjoy the privileges coming from my loyalty card with Star Alliance. This is a very traditional CRM approach which gives me different advantages depending on how much I travel with the partner companies and it is all about managing my customer data. The privilege have been defined by standard market analysis, showing how treating customers like me better did have an impact on their loyalty to the airline companies. As a result, I never flight with any other company because of the attractive privileges I get: mission accomplished, and with an old-fashion CRM approach!

But the same companies have a tremendous difficulty to satisfy me with the quality of their online service, as well as with their call center. I can never managed to find the information about how much luggage I am entitled to take with me, I have to re-enter my personal information at 20 different places for no good reasons, I have to re-explained everything every time I call the contact center and every time to a different person.

The only reason I am an active customer of these airlines and not of others is the competitive privileges they give me, and certainly not in the way the provide them to me! Would another loyalty program exist with the same advantages (or even slightly worse ones) but with a much better quality of experience for me, I would not doubt any second to switch to the competition.

Therefore, although I do value the privileges of their CRM program, my loyalty is highly connected to my experience, especially when i have several similarly competitive offers in front of me.

For other types of products, like in my case electronics, I never had any loyalty with any CRM program, because the privileges are simply not attractive enough for me (at least, as an individual, the situation is a little better for corporations). This attitude of mine concerns both the product brand and the distributor brand. I will of course be highly influenced by the brands (especially the one of the product) to build my feeling of quality/price ratios, but this feeling has nothing to do with their CRM, only with the past experience I had with the products of this brand or what I heard from other people.

In such cases, CEM has a tremendously higher value for me than the one of CEM. Interestingly enough, my loyalty will tend to go more to the distributor brand than to the product brand, as I want to have the freedom of choosing between several brands when buying a new piece of electronics, but I don’t want to make the wrong purchase as it will costs me. I will therefore put my trust in the distributor based on my past experience and the one of my peers in of choosing a product recommended by him.

CEM and CRM: a possible conclusion…

In order to finish on a creative note opening the debate instead of trying to settle it, I would like to take a step back on these few last examples related to my own case and come to the conclusion that CRM has an influence on me to engage myself into a long term relationship with the product of a company, while CEM has an impact on my decision taking process. In that logic, CRM would be long-term oriented and CEM short-term oriented.

This statement makes a lot of sense looking at the meaning of the words themselves: a relationship is something you build for the long term while an experience is something which create emotions and possibly drives a decision at a specific moment.

It is clear that CEM would have an influence on CRM as a bad experience at a critical time could injure the relationship of someone with a company forever.

On the other side, CRM can probably overpass CEM if the analytics of the market and the packaging of the products depending on the type of customers generate a perceivable and strong competitive advantage, as customers will intend to buy a product first for what it does for them and after for the way it is brought to them.

This definition, however is discussable, as one could argue that the goal of CEM is to manage and build and long-term positive experience with a brand and to leverage the trust of customers towards the company witch is not short term at all. I could counter-argue that although the overall result is not short term oriented, each separate experience is.

In that logic, we could say that CRM would be based on analytics, while CEM would be mainly driven by emotion. A little like the rational and creative sides of our brain, but maybe this is pushing the debate a little too far…

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