Organizations across industries are competing to win the trust and loyalty of customers. Understanding customers has become a priority. Several software solutions that record and analyze customer data are available. They fall into two main categories – Customer Relationship Management (CRM) and Customer Experience Management (CEM). CEM and CRM have very little in common, apart from the fact that both are tools used to capture customer data. CRM is about optimizing transactions and business processes. CEM attempts to ensure that the customer has a positive experience during every interaction with the company. Although CRM talks about managing the customer relationship, the focus here is on ‘managing’. But, with CEM, the focus is on the customer.
Customer Relationship Management (CRM)
CRM is the set of strategies, practices, and technologies to analyze and manage customer data throughout the customer journey. The aim is to improve customer relations, retention, and profitability. A CRM software analyzes customer data and helps integrate sales, marketing, and customer service. It helps maximize revenue by managing customer relationships better.
A couple of examples of how a CRM software can be used would help paint a clearer picture:
- A branch manager of a telecom company could use the CRM software to understand what products or services the customer is using. He can then use this data to sell a new product to the customer.
- A sales agent can use it to manage his leads, set follow up meetings and interactions and track his sales pipeline.
Customer Experience Management (CEM)
The aim of CEM is to ensure that the customer has a differentiated and varied experience at every touch point. CEM attempts to study customer feedback, to better manage his experience with the company. Customers today are quite informed and demanding. Their opinions need to be weighed in while forming business strategies. Considering how competitive today’s market is, brands cannot survive by turning a blind eye to customer feedback.
In the same situations discussed above,
- A branch manager would use a CEM software, to study customer feedback based on the experience they had at the branch, online or during a service call. The manager would be able to understand what they are doing right and where they fall short in pleasing the customer. It would also show him customers who are likely to churn. The manager could also use the software, to connect with unhappy customers and resolve issues.
- A sales agent could use the CEM software to understand preferences of a prospect, based on his past interactions. These interactions could be through any channel. He could use the software to suggest personalized plans that suit customer needs.
CEM – for managing customer experience
While a CRM software captures transactional data, a CEM software helps the business understand how the customer ‘feels’. For instance, a CRM software can get the number of customers who spend Rs 200 or more. But, it would give no sign of the satisfaction levels of a customer. A customer might have spent a large amount of money, but may not be happy with the experience. A CEM software would help in identifying where the brand failed in satisfying the customer so that it can be rectified immediately.
CRM is a great tool to have, as it helps gather information on customers. Yet, it sees customers only as numbers or statistics. Only by investing in a CEM software can an organization get a complete view of its customers.