I like to think that at some point in the endless crunching of cross sell data for CRM, the right side of the marketing brain (the emotional side) woke up and said "I wonder what the customers actually think and feel about this?"

When we ask them, they want a great product first and foremost.

But customers define product as the whole experience of dealing with the company, not just the tangible product or service.

The left brain took over again and Customer Experience Management, CEM, was born. Bernd Schmitt published a book of this name in 2003 defining CEM as 'the process of strategically managing a customer's entire experience with a product or company'. This is a good outline; 'Experience Architects' apply the 'discipline, methodology and/or process used to comprehensively manage a customer's cross-channel exposure, interaction and transaction with a company, product, brand or service.'

The early 1990’s gave us CRM, the early 2000’s gave us CEM, though this had its roots in the ‘Moments of Truth’ documented by Jan Carlson of Scandinavian Airlines in 1987.

CEM projects typically involve the detailed mapping of what does/should happen at a ‘customer touch point’ and/or ‘customer moment of truth’ so that positive customer experiences can be institutionalised. Good customer experiences engage the customer emotionally; keep them satisfied and (hopefully) loyal.

The ‘peak – end’ rule is an interesting example of a CEM principle that is applied to process design; it says that customers remember an experience on the basis of the highest/lowest pleasure point and the last. So well designed processes make the peak as good as possible (luxurious airline lounges) and the end memorable (saying goodbye using the passenger’s name as they disembark is how Asian airlines achieve this).

CRM and CEM have the same overall objective; profit through loyalty. Emotionally engaged customers have an additional value for the company, they talk positively about you to their family and friends, potentially becoming your most effective salespeople as they are more trusted than your marketing will ever be.

Illustration: Mapping Moments of Truth for Customers

Vertical axis is a series of discrete service events such as checking in at the airport; peaks are:

1. Frequent Flier recognition,
2. Lounge
3. Condition of aircraft
4. In-flight
5. Timeliness 

Understanding what customers consider a good experience is exactly what CRM data can help you with; not all customers want the same experience. For example, experienced share traders do not want to talk to a broker, inexperienced traders want a human to give them advice. Mix these up and both rate the experience as poor.

CEM acknowledges that for the customer, the definition of “Product” is far wider than the product development managers think as it includes all aspects of their interactions with the company. Product design should not stop at the boundaries of the product. The challenge with this proposition is that the definition of a good experience varies by customer type. Luckily, CRM has been pretty good at identifying customer types, so the 2 should go together.

A focus on managing the customer experience has increased the importance of knowing when your customers are satisfied. We will discuss the current controversy around the TLA for customer satisfaction; NPS (Net Promoter Score) in a future post.