Monday, July 21, 2014

CRM vs CEM: Two Sides of One Coin

While most people reading this will be familiar with the acronym ‘CRM’ (Customer Relationship Management), others may not be as familiar with CEM (Customer Experience Management). In my reading of CRM articles, CEM is getting increased coverage, with some authors going as far as suggesting it will replace CRM, so I thought I would write a blog exploring the two.

What is CRM?

For a discussion on what is CRM, check out my blog article from five years ago, covering precisely this. The article stands up quite well, I think. In essence, there is the philosophy of CRM (delighting customers by anticipating their needs) and the technology of CRM (the systems to capture the customer needs to assist in employing the CRM philosophy).

What is CEM?

Also called ‘CX’ (Customer Experience) is the management of the experiences a customer has with a vendor. The marketing folk refer to this as ‘Service Design’. As with many things in life, if CEM is done well it is imperceptible; if it is done poorly, it can be torturous. 

A good example is ordering pizza online (or, at least, my experience of it). You select the deal you want, pick the pizzas and pay. A short time later a meal arrives at the door. Simple, effective and precisely what I need, when I need it.

In terms of CEM horror stories, this is one I came across recently about a poor guy trying to disconnect his Comcast cable service (internet service).

It is painful to listen to but is a great example of a poor customer experience.

The Commonalities of CRM and CEM

Previously in conversations I often referred to CRM and CEM as one in the same but they are not (thank you David Berry, the most philosophical of the CRM MVPs, for the conversations that made me examine this position). CRM and CEM are designed to achieve the same outcome, to align the products and services to the needs of the customer and ensuring the business interaction is as smooth and consistent as possible, they just go about it in different ways.

In the case of CRM, this is done by

  • encouraging transparency and consistency in customer interactions
  • capturing feedback from customers to assist in improving processes
  • centralising information so all parts of the business have a full picture of the customer and their needs

In the case of CEM, the exercise involves mapping the customer touch-points (how they interact with a vendor) and then ensuring these are aligned to the customer’s expectations and the values of the vendor.

In our Comcast example above, our hapless customer wonders if the service agent has a series of questions they must get answers from in order to proceed i.e. a CRM system. However, while the CRM system may capture some elements of this disastrous interaction for future improvement, it is the CEM which lets Comcast down. It is clear, while the service agent is all for trying to retain the customer, they are failing to give the customer what they want i.e. disconnection. The interaction is all about Comcast and nothing about the customer.

This customer will never go back to Comcast after this interaction, whereas if the service agent had simply recorded the non-answers and marked a flag in the CRM system for a follow-up in a few months time, all parties would be satisfied. If Comcast had emphasized a customer-focus, rather than a retention focus and mapped the scenario of a frustrated customer and the appropriate way to deal with them i.e. listening with respect, this PR disaster would never have happened.

The Differences of CRM and CEM

The key difference, as I see it, is the focus. In the case of CRM systems, the focus is on ensuring the user can perform the interaction as efficiently as possible and capture the key information needed to ensure the business can be managed effectively. The idea is, if the user can do their job efficiently and effectively, they will have time to give the customer the attention they need and the information on hand to make the interaction delightful.

The focus for CEM is not the user, but the customer. CEM ensures the experience for the customer is efficient and effective. While long waits on the phone to talk to a customer representative may be inevitable, given the resources available, an alternative is to offer the customer a call back service or encourage them to check an online FAQ while waiting. This is an example of improved CEM.

What Can Help Customers Most? CRM or CEM?

Accenture conducts an annual Global Consumer Pulse Survey. The latest survey (2013) has some insights on what frustrates customers globally with customer services:

  • 65% of customers were extremely frustrated contacting a company multiple times for the same reason
  • 62% of customers were extremely frustrated being on-hold for a long time when contacting a company
  • 60% of customers were extremely frustrated dealing with employees who were unfriendly or impolite
  • 58% of customers were extremely frustrated having a company deliver something different than they promise up front
  • 55% of customers were extremely frustrated having to repeat the same information to multiple employees of the company or through multiple channels
  • 52% of customers were extremely frustrated with dealing with employees or self-help sites/system that cannot answer their questions

and for marketing/sales practices:

  • 60% of customers were extremely frustrated having a company promise one thing but deliver another
  • 54% of customers were extremely frustrated with realizing that a company cannot be trusted on how to use personal information provided to them

In terms of which can help most, the CRM system or CEM, it is a bit of a mixed bag. A better designed CRM system can help with:

  • Automated escalation and notification processes to ensure a customer does not need to contact a company multiple times for the same reason
  • Ensuring a customer’s information is readily available so a customer does not have to repeat themselves
  • Ensuring personal information is secure and only appropriate information is shared within the organisation and outside of it

CEM can help with:

  • Ensuring there are options other than being on-hold
  • Ensuring service agents are respectful and actually listen
  • Aligning brand promise to service delivery
  • Ensuring, if a question cannot be answered, there are options to escalate so that it can

This shows it is not CRM or CEM but CRM and CEM. Both work together to ensure an optimal outcome for customers.

Conclusions

While the terms ‘CEM’ and ‘CX’ are relatively new (going off Wikipedia, about ten years), the idea of Service Design is much older (about 30 years) and, of course, as an ad hoc activity, older still. Similarly, the idea of ‘database management’, as it was called in the eighties or CRM as we know it today has been around formally for a few decades but as a practice for much longer.

Both aim to make the interaction of customer and vendor as smooth and as pleasant as possible with CRM systems focussing on managing the process from the employee’s side and with CEM managing the process from the customer’s side. Both are necessary for the best experience and a failure of one cannot compensate for the other.

As interactions channels go online and become social, the CRM technology will extend and overlap with the traditional domain of CEM. A good example of this is a customer portal. Often this is a technical extension of the CRM system but the experience of that portal is pure CEM.

My prediction is, as these areas overlap more and more, they will combine to become a uniform discipline, complementing each other, rather than one taking over the other. CRM is not dead and CEM is not a re-badging exercise; they are distinct pillars supporting a common goal and CEM is definitely something CRM consultants will need to consider in the future.

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