Customer Experience Management vs.

CRM
Are they the same thing? This article describes the similarities and differences between Customer Experience Management and Customer Relationship Management. While the two require similar skills, the terms are often used interchangeably, which is a mistake.
LinkCitationEmailPrint FavoriteCollect this page As the fourth part of this series on Customer Experience Management (CEM</a>) deals a lot with perception, and the complexities thereof... making this a slightly difficult topic to tackle. Many individuals equate CEM with Customer Relationship Management, or CRM. While the two are closely aligned and experts tend to agree that Most experts would agree that the original intention of CRM was to focus strategically on the core five components of customer experience, that is:

Customers Environments Brand(s) Platform (systems) Interfaces

However, while many CRM initiatives attempt to address the components above, many assume a highly operational, quantitative or technical bias. To illustrate this point, ask any executive to describe the tasks associated with CRM. You'll likely receive answers that align CRM with activities such as:

Establishing/managing a customer management platform Installing/configuring hardware, software, systems Enabling use of customer management & response tools Assessing, consolidating & organizing (cust./sales) data Operationally connecting & synchronizing channels Attempting to align internal business process and policies Translating programs & campaigns into new toolsets Enabling centralized metrics & analytics capabilities

Perceptions of CRM

Perceptions about CRM vary a little, but have been partially created by systems integrators, who have served as active leaders in the development of CRM capabilities. Such firms place a strong emphasis on technology, data management, quantitative analytics and operational alignment. These activities are necessary to lay the groundwork for technology-enabled customer management, and have often overshadowed strategic branding, marketing, program development, interaction design and other tasks. The operational, quantitative and technical perceptions of CRM are also shaped significantly by historical focus. Over the past several years, CRM efforts have centered on establishing and refining the infrastructures necessary to enable solid customer management. The work has been highly operational in nature, and involves the resolution of complex technology, process and people issues. Realities of CRM In the context of establishing infrastructures for customer management, CRM practitioners have fought many important battles. A large number continue to rage today - and focus on removing internal barriers (human, technology, policy, data, process) that can compromise customer experience. Unfortunately, resolving these challenges forces so much attention on getting the corporate internal house in order, they often compromise corporate efforts to develop, execute and measure broad, cross-channel, cross-program, customer-centric strategies and plans. While many practitioners and CRM consultancies specialize in customer management and marketing strategy, much of this work is too narrow in scope and execution. Detailed customer analysis; designing and improving marketing strategies, programs and campaigns; developing analytic models and reporting; supporting tactical execution; and other important tasks often occur as an adjunct to larger, more technical implementations. The engagements are often too quick or too narrow (e.g. within a single or few departments) to impact large-scale customer experience or customer centricity within companies. At times, this work can even be done in a manner that is disengaged from the larger CRM initiative (e.g. disparate strategies created by different parties), creating disconnects that can hamper progress on a number of fronts. Unfortunately, within many CRM initiatives, comprehensive strategic planning activites are simply incomplete, insufficient, delayed or non-existant. Some key activities include:

o o o o o

Designing the broad picture for customer experience (CE) Designing integrated programs to support the CE Aligning programs & campaigns with each other & CE Developing customer-centric touch management strategy Defining company-wide, customer-centric, cascading metrics

Failure to engage in comprehensive strategic planning can compromise CRM results and negatively impact return-on-investment. It can also create gaps that negatively impact customers and reinforce a fragmented view of customers. Insufficient strategic planning and alignment can help explain why it is common to find CRM implementations that drive benefits within

individual programs and/or departments while larger benefits, remain unrealized. This occurs because plans for narrow execution exist, while a broad, seamless, measurable customer experience strategy is absent. This is somewhat common today, and why some critics believe CRM initiatives miss the mark. The future of CRM Our progress-to-date may be a natural outcome of CRM (and corporate) evolution. Even so, the mounting dissatisfaction with strategic outcomes is a key driver in the growth of the CEM movement. A proliferation of books and articles on the topic can now be found. Customer experience has become a hot topic in industry publications, and on weblogs like this one. Gartner's Q4 2005 report states that four of the top 10 CRM topics include: Building and managing customer loyalty; creating a single view of the customer; creating a customer centric enterprise; and managing/improving customer experience.* These trends continue into 2008, as business intelligence and content mining initiatives, which help companies improve customer listening and better measure customer experience, have also hit the corporate radar en masse. Traditionally, CRM has had a largely "inside out" focus, which is highly operations- centric. However today, the need for more customer-centric focus is unquestionably present. In many companies today, an increased demand for strategic support in the areas of customer strategy, planning and execution is mounting. Gartner predicts that, in 2006, the number of organizations with "single view of the customer" projects will actually double.* The development of broad, strategic plans for customer management, cross-channel integrated marketing and customer experience requires skills and knowledge that are often lacking in organizations today. This is especially true with regard to marketing organizations.**Recent studies </a>reveal that, while CEOs view the CMO and marketing organizations as critical to bottom-line growth, many CMOs feel their organizations are underperforming, and lack the organizational credibility necessary to influence strategic transformation. Gartner also reports that one of the top, C-level enterprise-wide concerns today is that skill gaps will impede growth.* To build new core competencies, create more customer-centric strategies and transform businesses, it's necessary to teach business owners how to manage customers and market differently. The scope of work goes well beyond the strategy work that occurs within the marketing organization. It must begin with the development of high-level strategies that drive a coordinated, cohesive cross-organizational approach to managing customers. Because of the broad scope of need, analysts seem to agree that outsourcing will play a critical role in augmenting missing strategic skill sets, and helping companies develop more comprehensive plans that drive marketing, customer management and customer-centricity to the next level.* This creates a window of opportunity for consultancies, and has driven, in part, the use of new terminology and business approaches --> and the rise in popularity of CEM. CRM VS.CEM The terms CRM and CEM are used inconsistently within the industry. Initially, this was prevalent even within the analyst arena, where term use seems varies slightly. Forrester

Research initially separated CEM as a unique discipline that is distinct from, but related to CRM. Gartner leveraged CEM as a skill set or practice within CRM. Regardless of the interpretation and subsequent evolution of these views, the analysts do seem to define CEM in a consistent manner - and one that is consistent with the definitions in this article series. In short, CEM practitioners attempt to address emerging market needs directly, while circumventing current perceptual biases of CRM. CRM practitioners have traditionally assumed an "inside out", or operationally centric approach to customer management and strategy. CEM practitioners distinguish themselves by assuming an "outside in, or highly customer centric work approach. CEM strategy focuses heavily on conducting detailed customer (demographic, behavioral, ethnographic, profitability, etc.) and environmental (market, channels, competition) exploration and analysis. This analysis is used to design broad, detailed, integrated experience strategies that answer customer needs and market opportunity. These strategies are accompanied by detailed plans comprised of multiple, integrated programs and campaigns. CEM strategies and plans are used as the drivers that shape product and service offerings, refine and align customer interfaces and conform the operational platform (people, process, technology) for experience delivery, management and measurement - across channels, and over time. Proponents of CEM assert their approaches can help remedy many of the issues created by operationally focused CRM implementations. CEM practitioners argue their methodologies enable business stakeholders to effectively conceive, own and manage next-generation customer experiences, executing them across channels effectively with CRM tools. CEM evangelists promote the work has having a transformative impact on companies, asserting the customercentric alignment and planning will naturally help focus business effort and drive operational alignment. Whether it's for marketing reasons - or to draw a real distinction in executional approach, everyone seems to be jumping on the CEM band wagon today. This includes the systems integrators, who are developing solution sets (and entire practices) dedicated solely to CEM. A growing number of agencies and consulting firms are claiming expertise in CEM. As a case-inpoint, try a keyword search on Google to see what you get... Are CEM and CRM the Same? Some CRM practitioners dismiss CEM claims as a glossy repositioning of traditional CRM methodologies. Others argue CEM methodologies differ greatly from CRM. Individuals with a philosophical bent may argue that CEM is a "next generation" term that symbolizes a focus shift in CRM. Individual positions will vary, shaped by personal perspective, approach, scope of knowledge, area of experience and objectives. In this author's opinion, it doesnt really matter what side you land on. I am supporter of CRM and a proponent of CEM. I believe strongly in the "outside in" approach described in this article, because it helps mould the organization around customer need more effectively. Using CEM as an umbrella term to describe this approach, and circumvent undesirable perceptions of CRM can be a smart move, depending on your audience. However, when I can help it, I really try not to

get caught up in the overuse of buzz words and industry acronyms. I'd rather speak to the needs of my client and how best to meet them in more natural terms. Looking back, many of us "old timers" have been trying to get executives to support robust customer experience strategy within CRM engagements for years. Sadly, we've suffered from narrowed scope, limited resources, and we've watched as the lion's share of corporate investment has been allocated to costly technology implementations and operational work. Whether you agree or disagree with the perceptions of CRM or the assertions about CEM there's good news: Support for broad strategy and integrated customer experience planning is growing; Operational environments are maturing; Organizations are becoming more open to customer-centric transformation. Now matter how you spin the work, helping businesses transform, and comprehensively align to manage, measure and improve customer experience is the right thing to do. We may indeed be better positioned to do this today than ever before. If we do our work right, drive corporate success <em>and </em>make life better for customers.