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Customer experience management CXM is a process where companies monitor and organize every interaction between a customer and the company. It covers every aspect of the customer journey- from the initial point of contact to post-purchase follow-up. It’s not just about providing good customer service; it’s about creating a holistic experience that offers customer satisfaction and boosts customer retention.
Experience management and relationship management can be used interchangeably but they are different. So CX leaders must focus on both these metrics such that they see the experience from a granular perspective and from a bird’s eye view.
What is Customer Experience Management (CXM)?
Customer Experience Management (CXM) is the practice of designing and systematically managing customer interactions across multiple channels. This approach increases customer satisfaction, loyalty, and advocacy. Essentially, CXM is all about putting the customer at the centre of your business strategy. It encompasses a series of practices, strategies, and tools aimed at understanding and improving the customer’s journey.
CXM and CRM: What’s the difference?
CRM means customer relationship management. CRM and CXM have distinct focuses and approaches. Both play crucial roles in driving business growth and customer satisfaction with different approaches and goals.
CXM | CRM |
Uses every data from CRM, both qualitative and quantitative to create strategies and offer positive customer experiences. | Manages customer interaction across various channels and touchpoints. It collects metrics and conversation, both qualitative and quantitative. |
It is relationship based. Focuses on long-term customer loyalty and retention metrics. | This is transactional. Focuses on sales, marketing and immediate customer service. |
Evaluates success based on metrics such as customer loyalty and advocacy among their user base. | Success is measured via metrics like sales revenue and customer satisfaction scores. |
It is people-driven and offers personalized memorable experiences on priority | Relies on technology-driven tools like customer journey map, customer experience surveys and BI tools. |
Customer relationship management focuses primarily on managing customer data and interactions while CXM takes a broader view. It looks at the entire journey a customer takes with your brand—from awareness and consideration to purchase and post-purchase stages.
Does my business need CXM or CRM?
The right approach for your business depends on your goals and priorities. If you’re a data-driven company, CRM can be valuable in analyzing customer data and improving efficiency. On the other hand, if building brand loyalty and customer advocacy is your priority, managing experiences becomes critical. You can also combine elements of both CRM and CXM to create a comprehensive customer management strategy.
Core Components of Customer Experience Management
Understanding the core components of CXM is crucial for its effective implementation. These components work in tandem to ensure that the customer experience aligns with customer expectations and business goals.
1. Customer journey mapping:
This involves visualizing the entire process a customer undergoes when interacting with your brand. From the initial contact to long-term engagement, mapping provides valuable insights into customer touchpoints, pain points, and areas for improvement.
2. Customer feedback collection:
Gathering insights directly from customers through surveys, feedback forms, and other mechanisms is essential. This data helps in understanding customer perceptions and identifying gaps in the customer journey. By using feedback collection tools like Merren, Qualaroo, SurveySensum can gather actionable insights to improve customer interactions.
3. Data analytics:
Leveraging data analytics enables businesses to understand and enhance the customer journey. Analytics tools can track customer behavior, identify patterns, and predict future trends.
4. Personalization:
Tailoring experiences to meet individual customer needs can significantly enhance customer satisfaction. Personalization tools allow businesses to offer customized recommendations, offers, and interactions based on customer preferences and behaviour.
Uses of Customer Experience Management
Customer Experience Management (CXM) has versatile applications that touch various aspects of customer interaction and engagement. Here are some key uses of CXM:
- Improving customer service: One of the most direct ways CEM is used is in enhancing customer service. By collecting and analyzing customer feedback, organizations can identify areas where customer service representatives need training and improvement. This can lead to more effective problem resolution and increased customer satisfaction.
- Marketing optimization: Aligning marketing strategies with customer preferences is another crucial application of CXM. By understanding what customers want, businesses can tailor their marketing efforts to be more effective. This involves targeted campaigns, personalized emails, and content that resonates with customer interests.
- Product development: CXM provides valuable insights that can inform product development. By understanding customer needs, preferences, and pain points, businesses can develop products that better meet market demands. This not only improves the product’s acceptance in the market but also increases customer satisfaction.
- Sales enhancement: Personalizing sales approaches based on customer data and preferences can significantly improve closing rates. Sales teams equipped with insights from CEM can tailor their pitches to better meet customer needs, making the sales process more efficient and effective.
Why is Customer Experience Management Important?
Implementing an effective Customer Experience Management strategy offers numerous advantages for businesses. Here is why CXM is important:
1. Encourages customer satisfaction and brand advocacy
The main aim of CXM is to understand user needs and fulfill it. So happy customers are more likely to become repeat buyers. This becomes a positive cycle for a brand creating a brand advocate in the process. Ecommerce giant Amazon, does an exceptional work of creating personalized shopping experience for its global user base. Hence people always return for more.
2. Increases revenue growth
When it comes to brand advocates, they are more than willing to try new brand offerings. This becomes easier for the same companies to create upselling and cross selling opportunities. Happy customers that buy more and often bring more revenue growth.
3. Better brand reputation
Brand reputation needs careful monitoring in the age of social media. For omnichannel platforms, brands need to take care of online conversation and grievances. Using CXM protocols, companies can capture pain points and turn them into positive experiences. Apple used its NPS survey to turn detractors into promoters thus generating their revenue by $25 million.
4. Reduces cost leakage
Systematic tools and processes can help capture high friction points automatically. When you address issues promptly without lag, people are more likely to offer better scores in customer feedback surveys. Businesses reduce customer service burdens, freeing up resources for other areas. An efficient chatbot system, for example, can answer frequently asked questions and improve customer satisfaction while reducing support workload.
5. Increases employee satisfaction
A company focused on customer experience often sees higher employee morale. This is because employees feel valued and enjoy interacting with satisfied customers. Reduced turnover and increased employee loyalty follow. Apple Inc offers commendable employee support which in turn translates to better sales.
6. Strategic decisions for innovation
CXM generates insights into a plethora of buying patterns and preferences. So businesses can refine their offerings and strategies. For example, Netflix conducts A/B testing and uses this data to curate a viewer’s feed. This ensures they have higher engagement and analyses these patterns. Understanding customer pain points encourages businesses to innovate and improve. Technological brands such as Samsung and Apple rely on innovation to upgrade their product variations and offerings.
Challenges Of Customer Experience Management
Customer experience goes beyond tools and techniques. It captures the entire ecosystem that encompasses marketing, sales and other departments that customers might encounter. Here are some challenges:
1. Lack of data collection methods
Outdated data collection methods can make you miss critical data from various sources. This means if you only rely on emails to collect feedback, you can miss out on other omnichannel platforms. It is impossible to improve on something when we do not know what is wrong in the first place. Lack of comprehensive data can be a limiting factor for especially new CX professionals when an organisation works with outdated methods.
Tips for improvement: Opt for omnichannel platforms like Merren that offer seamless feedback capabilities via WhatsApp and Facebook messenger.
2. Lack of personalization
Loyal customers can feel left out when companies no longer take the extra mile to personalise experiences. Personalization and humanzing efforts are known to retain more customers and encourage people to build a long-lasting trust in the brand. However, 42% of companies feel that they are unable to adapt to experience and deliver experiences that are unique to every customer.
Tips for improvement: Offer personlized support based on customer transaction, past history and survey rewards post feedback. Alternatively, thanking the customers for their feedback can make them feel valued.
Best Practices for Better Customer Experience Management
1. Optimize customer journey with data
Map the entire customer journey to identify key touchpoints and potential friction points. A clear journey map aligns with customer needs. It reduces frustration points and improves overall satisfaction. Use tools like journey mapping software to analyze website navigation or customer support interactions.
2. Personalize customer interactions
Personalization must be a crucial part of CX strategy. Use data from the CX dashboard and tailor communications and strategies that cater to a specific target audience. Curate marketing practices for better product recommendations such that it adds to a user’s experience. Personalization makes customers feel understood.
3. Leverage AI and technology
Using artificial intelligence to streamline processes can help you make refined CX strategies without any cognitive stress. For example, chatbots, AI analytics, and automation can provide round-the-clock support and predict customer needs. Beauty brands leverage AI to cater to their target consumers. Sephora’s chatbot provides beauty tips, while AI in e-commerce suggests complementary products
4. Seek feedback and implement changes
There are two kinds of feedback- solicited and unsolicited. Solicited feedback can be in the form of requested customer feedback on satisfaction metrics. Unsolicited feedback mostly features on third party websites (Google pages, Amazon, Yelp etc). Listening and implementing feedback shows that brands care about their user base.
5. Ensure user-friendly multichannel touchpoints
Design websites and mobile apps for intuitive navigation, accessibility, and seamless interactions. This also goes beyond collecting their feedback post-purchase or after a call from a support staff helpline. Make sure that your users can reach out to you easily be it via website, phone applications or on social media channels. People do not want another friction point when registering grievances. A strong digital presence encourages people to stay loyal to the brand.
6. Create emotional connections beyond data
Train teams to humanize interactions through empathy and personalized communication. Emotional engagement strengthens customer loyalty and encourages positive word-of-mouth recommendations. While chatbots can offer technical solutions, a human representative can be trained to view problems from a humanized point-of-view. This is important when your customer base includes senior citizens or people who are less tech savvy.
7. Offer transparent communications and expectations
Clearly communicate service timelines and manage customer expectations such that you do not over promise and under-deliver. Managing expectations and prevent dissatisfaction such that brands can garner more customer satisfaction for days.
Customer Experience Management Software: features to look out for
For effective experience management, the right tool can offer comprehensive features. Here are some of the important features to look for in a CXM tool
- Feedback collections abilities: ensure that a CXM tool can offer a multichannel method of collecting customer feedback. You can gather feedback in a timely manner. Software like Merren offers a multichannel method of collecting feedback, both qualitative and quantitative. You can create pre-designed surveys for WhatsApp, Facebook messenger, chatbots or dynamic email.
- Automation: Enable CX professionals to work hands-free without manual intervention. Make sure you can create automated surveys, automated analysing of data-real time and consistent customer engagement. This saves time and manages workflows.
- Analytics and reporting: Ensure that the right tool can offer advanced analytic features that can help you track interaction across channels and timelines. You can filter these responses based on filters, sentiments and user behaviour.
- AI and CRM integrations: AI integrations are the future. You can assess data in real time and get a synopsis of feedback surveys at a glance. Additionally, variety of integration allows for a more cohesive and efficient workflow, enhancing overall customer experience.
- Unified CX dashboard: A unified CX dashboard can help all stakeholders view data across various channels. The right tool can help you view data-sets across demographics, timelines – collectively and individually.
- Competitive pricing: Consider CXM tools with competitive pricing options that can help you optimize and scale your business. You can also opt for flexible pricing based on budget and resources. Make sure that you access models that meet your CXM efforts and needs.
The Role of Artificial Intelligence in CXM
AI plays a transformative role in experience management. AI can leverage advanced analytics, automation, and real-time processing to enhance personalization, streamline operations, and improve customer satisfaction. It focuses on hyper-personalized experiences and analyze customer data (buying patterns, online preferences and long-term purchase behaviour).
Companies using AI for personalization have reported up to a 20% increase in sales. Predictive analytics powered by AI helps organizations anticipate customer needs, identify churn risks, and seize upselling opportunities. Automation, particularly in customer support through AI-driven chatbots and virtual assistants, has accelerated service efficiency. It has resolved 80% of standard customer queries, offering 24/7 availability and reducing costs.
Furthermore, AI analyzes unstructured data, such as reviews and social media, to extract actionable insights and supporting sentiment analysis. Real-time capabilities allow businesses to dynamically adjust interactions and marketing strategies, enhancing customer engagement. Tools like predictive heatmaps, sentiment analysis models, and dynamic pricing powered by AI optimize the customer journey and drive satisfaction. Additionally, AI can process complex and large amounts of data and offer proactive solutions. This integration has been widely recognized across industries of ecommerce, retail, FMCG, banking and healthcare.
Conclusion
Customer Experience Management is crucial for businesses aiming to thrive in today’s competitive landscape. By understanding and implementing CXM, organizations can significantly enhance customer satisfaction, loyalty, and overall success.
Effective CXM involves a comprehensive approach that includes customer journey mapping, feedback collection, data analytics, and personalization. Utilizing the right tools and following a structured implementation plan can make a significant difference in how customers perceive and interact with your brand.
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