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Customer Experience Management: The Most Misunderstood Business Concept

By Tracey E. Schelmetic
TMCnet Contributor

Can you think of an industry on which major customer-facing companies spend billions of dollars yet nobody really understands that industry – and the problems the industry is supposed to solve are still rife?

Have you guessed yet? It’s customer experience management, a poorly understood concept, even among the businesses that use the solutions. This new information comes from the newly released Beyond Philosophy 2011 Global Customer Experience Management Survey.

The study lays some of the blame in the fact that many companies in the industry use the term “customer experience management” to re-brand projects that have little to do with the customer experience, failure to take account of customers’ emotional viewpoints, limitations in adoption of true CEM and the time it takes to execute a CEM program. In other words, companies talk bit about the customer experience, but take few steps to truly improve it.

“Seventy-eight percent of CE executives were redeployed with no background in the practice. Additionally, customer experience is being used as a buzzword, with many CRM programs being re-branded as CE,” said Steven Walden, senior head of research and consulting, Beyond Philosophy. “Emotions account for more than half the typical customer experience, thus proper CEM must consider emotions in order to deliver any significant value.”

Despite this, says the Beyond Philosophy study, the so-called “big-four” industries – telecom, banking, retail and IT – spend a lot of money and time on customer experience management attempts (these four industries buy 63 percent of the CE solutions on the market.)

Problem is: customer experiences within these industries still stink, with a few exceptions.

Who are these exceptions?

Beyond Philosophy cites three companies for holding up a good customer experience experience: Apple (News - Alert), online retail giant Amazon and online shoe and clothing retailer Zappos.

“Apple has married all the elements of its experience and connected with its customers in a deeply emotional, irrational way,” said Walden, adding, “Amazon put a stake in the ground when it announced it would become the world’s most customer-centric company, and Zappos claims to be a customer service organization that happens to sell shoes.”

“Well-established CRM technologies allow these companies to use the data they collect to deliver a highly-personalized experience,” said Walden. “But there’s something more inherent to the way these leaders deliver the experience; they use the copious data they collect to truly understand customers and their motivations in order to deliver a satisfying experience in a meaningful way.”