Customer Relationship Management

Let me start with the way I think Customer Experience needs to be measured. The diagram below shows sample takeaways for the company and the customer from key interactions. Every one of these takeaways have a measurable input and a measurable outcome.

To illustrate this with an example, let us take the aspect of increased knowledge from interaction.

The new age organization will need to approach the knowledge measure in the following way.

1.       Knowledge tapped by way of customer interactions and feedback needs to focus on continuous improvement. Efficient customer operations processes and tools will enable reduction of ‘per unit’ knowledge captured. Some of the levers used to achieve this improvement can range from traditional CRM tools all the way to the newer Social media platforms.

2.       As the quantum of knowledge increases, it should feed process improvements and predict outcomes better. The outcome is measured as value (increased cross/up-sell revenue, increased profit, increased customer satisfaction scores etc.)

In this example, let’s introduce a measurable parameter called CEM^K. CEM^K is measured as a function of value generated for the company at the cost of customer interactions. For an outstanding organization, CEM^K should keep increasing continuously.

Similarly, there may be other measures like CEM^P(product), CEM^S(service), CEM^C (customer interaction etc). CEM will then be measured as a weighted function of these.

CEM = (x1*CEM^K)+(x2* CEM^P)+(x3*CEM^S)+(x4* CEM^C). x1, x2, x3 and x4 should be baselined for the industry of operation.

So, now, to cut the long story short, CEM should be defined as the method which gathers customer experience (through product, service or brand interfaces) and converts them to value for your organization at optimized cost. The important thing to note is that the CEM measure should not end with customer satisfaction scores.

Coming to the second part, should the customer experience strategy be seen as a lone ranger? Or is it something that spans the entire product and service approach of your organization? I think the question is already answered by looking it how Customer Experience needs to be measured. The fundamental takeaway from this point is that a Customer Experience Strategy is a colossal change that impacts the very DNA of your organization. Will your company be ready to accept this transformation?