Customer Experience Management

Posted: September 24, 2006 in CRM

I spent part of last week at a user group meeting high in the Rockies, the Right Now Summit.  The term summit is not only figurative it’s literal.  The company is headquartered in Bozeman, MT another high spot on the continent, and it seems to select meeting locations near the tree line to burnish its western image. At that altitude it’s sometimes hard to breathe which produces a perfect environment for being sedentary and listening to new ideas.  In retrospect it might have been a perfect setting.

Right Now has its roots in the on-demand movement but instead of initially focusing on sales and marketing as many early on-demand companies did, it chose to concentrate on service and support.  Today, Right Now is one of the largest on-demand call center solutions.  I say solutions because, more than supplying infrastructure on-demand, the company sports a variety of on-demand software that call center agents use to provide service to their customers. 

In my experience the call center is the most conservative part of the front office, with good reason.  Call centers have been obsessed with efficiency and an elaborate set of accessory solutions has grown up around them to measure and manage most aspects of the operation from how long customers wait in queue to the percentage of problems resolved on the first call, and lots more.  Call centers identify best practice metrics and compare themselves to national averages and look for ways to improve.  Good for them. 

The concentration on efficiency has had its down side though.  Call centers have historically been expensive propositions to get rolling.  There’s a lot of equipment and software to buy and people to train and monitor, so it’s important to maximize call center use to offset the costs.  That efficiency orientation makes the call center a less than fun place to work for many people and efficiency is not usually the first thing that customers think or care about when they have problems. 

On-demand solutions have helped call centers manage many of their costs and operations people have been continually searching for ways the call center can expand its role and possibly generate revenue.  Right Now CEO, Gregg Gianforte saw the need for call centers to expand their roles and focused his company on providing solutions that do more than help companies deal with customer issues quickly.  At last week’s summit the company introduced a lot of new thinking to its customer base focused on the customer experience which I thought was a smart move.

Although Right Now offers a full suite of CRM software solutions, the company did not spend its valuable time with its customers focusing on simply expanding the footprint of solutions in each account.  Instead Right Now continued an ongoing dialog about the customer experience. 

There’s a lot of talk about customer experience management (CEM) in the marketplace today and some people think it should be the successor of CRM.  I am not so sure. Truth be told, CEM is a terrible name suggesting that a subjective experience can be managed is silly and almost bound to fail. The more I look at it the more I think that CRM is trending toward a technology set that enables companies to provide all the ingredients of a positive customer experience.  As the old saying goes you can lead a horse to water but…  In my view the customer experience is more a method or an approach to business and to Right Now’s credit they never suggested that you could actually manage someone else’s experience only that you should try to provide all the inputs.

So, for example, Martha Rogers, who gave a keynote, emphasized that customers are a company’s most precious, basic, and limited resource.  More importantly, she pointed out that the relationship between a vendor and a customer need not equate with a personal relationship.  Instead, the customer relationship needs to be managed from the customer’s perspective so that companies not only do the right things for their customers, but the customers also feel well treated.  From a customer experience perspective, that’s how you build loyalty.

For a long time, CRM vendors and solutions have emphasized capturing data to support internal business processes like rolling up an accurate forecast, the trend today seems to be in the opposite direction—capturing data so that a company can better understand customer needs, likes, and biases.  Knowing that kind of information makes it more likely a company will do the right thing for a customer at the right time and thus enhance loyalty and ultimately gain a larger share of the customer’s business.

Those were the points that Right Now tried to make last week at its user meeting.  To back up the message, the company introduced version 8 of its on-demand solution.  The new version sports a very functional and powerful user interface and an architecture that should enable further additions as the company fleshes out its customer experience vision.

I doubt the conversion to a focus on the customer experience will be immediate in the industry, there is, after all a lot of investment in the status quo.  Nevertheless, the marketplace shows lots of signs that, in the absence of new blockbuster products, companies will increasingly need to rely on their existing customers for growth.  That makes retention and loyalty highly prized and means paying attention to the customer experience will also remain a high priority.

Comments
  1. Liz Roche says:

    On Becoming a C-Business

    I completely agree with you when you say this: “CEM is a terrible name suggesting that a subjective experience can be managed.” For the record, I think about CEO (customer experience optimization) as a sub-set of CRM. The customer “experience” is simply the externalization of an organization’s CRM strategy.

    I think you’re really close with the idea that, “CRM is trending toward a technology set that enables companies to provide all the ingredients of a positive customer experience.” But let me take that one step further.

    Companies known for customer-centricity have one thing in common: the customer has become the business’ primary design point. This business philosophy recognizes the fact that from the customer’s perspective, the economic value is not in individual composite business processes (e.g., customer service) or in a particular technology (e.g., call center) but rather in how they are organized to support a customer’s needs.

    Companies known for great “CRM” (e.g., Best Buy, P&G, Starwood, Lands End) represent a more radical departure from traditional business practices than you may even realize: each one has not only gotten CRM right, it has actually transformed its entire modus operandi to make the customer its nexus. You could say each has become a customer-centered business, or a C-Business for short. Without overstaying my welcome here in this comment, I’ve got more about this on my blog (crmdiva.typepad.com),

    By organizing a C-Business according to ETFS, an organization is then able to quite nimbly bring teams together to serve particular customer segments – for instance all processes related to interacting with “high value” customers. The customer (as expressed by a lifecycle) is at the center of virtually every operation. And isn’t this the whole point of CRM?

So, what did you think?

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