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Customer Experience Management (CEM)

A good definition of CEM comes from Colin Shaw & John Evens in their book

"Building great customer experiences"

"The customer experiences are a blend of a company's physicalperformance and the emotions evoked, intuitively measured againstcustomer expectations across all moments of contacts".

In order to understand this definition let us look at the words in italics.

It is a blend, not one thing or another but blended together. It is about the physicalandvery importantly the emotional. It is measuredintuitivelyby customers against their

expectations.Finally, it is not just when you are in a shop; it is whenever you come into

contact with that organization or its brand acrossall of their moments of contacts.It

goes into the vital details that tell you the truth about an organization.

The customer of today is an evolved person-better informed, well connected and

empowered than before. Also, today there are many competitors in the same category and

different categories at times compete with each other.

e.g. a person having Rs.500/- and time to spare, may spend it on buying a book & read it,

go to a multiplex, purchase a CD & enjoy it at home or go to a restaurant with his friends.

Thus all these offerings from different categories are competing with each other.

As you see in this example, each of the product or service that the person finalizes on the

'Experience', he gets out of reading a book or enjoying at a multiplex is what we are

talking about.

CEM definition above tells us how the physical and emotional aspects are blended to create

this experience.

In the case of a book, for example it can be the book, type of the paper, binding, the cover

page, the layout, reader-friendly approach, the sections and many more could be included

in the physical presentation of the book. Of course, mainly -the content of the book makes

for the physical-intellectual-emotional aspect of the book.

Mainly the content (emotional) and also the presentation (physical) makes the complete

appeal and creates an experience for a customer (reader in this case).

CEM EXPLAINED AND ELABORATED

The firm-centric view is rooted in the belief that firms create value over and above the

inputs, that they add further value through processes and people, and then deliver that to

customers. In this view, the customer is outside the value chain, and is assumed to be

passive-relegated to the role of a 'Consumer'.

That view is not yielding results like before. For one, the customer is far better informed,

connected and empowered than before. Competition has also become more global, more

intense. There is technology and industry convergence. There are new competitions incategories where they would not have otherwise been. Like Apple or Starbucks in music.


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In a boundary-less space with so much competition, what does differentiation mean? New

features and options are not enough. These can be imitated. Due to the fragmentation in the

value chain, all companies have access to global manufacturing capacity. All this begs a

fundamental question: going forward, where will 'value' come from and how companies

will create competitive advantage?

The answer lies in customer experience. So, far, customer experience was the last thing

companies worried about. But as the individual, and not the firm, becomes the center of

gravity in the process of value creation, the firm's role will change. It will have to start with

experience as the basis of value, and help individuals construct an experience that is of

value to them, instead of the classic approach of developing products and services.

Example: Take Apple. The success of its iPod lies in the fact that Apple understood and

focused on the 'User Experience'. Working 'backwards' from there, the company

designed the interface-right down to the scroll wheel-to create a compelling experience

environment at accessing and listening to music. Beside the physically 'cool' design, this

means paying a lot of attention to the underlying software that lets individuals scrollthrough their library quickly, construct playlists on the go, or simply user-defined playlists.

Then, through iTunes, customers have downloaded over 400 million songs, after listening

to a sample of songs. They can escape the tyranny of the CD.

Moreover, at the Apple stores, individuals can download songs through iTunes, and get

answers to question such as "how do I get music into my iPod?" The Apple store is a

learning environment, besides serving as a sales environment. They have what they call a

'Genius bar', a desk where knowledgeable Apple employees encourage customers to ask

questions and experience products and services with their help. Consumers from Apple user

groups also support the learning experience at the store.

Similarly, other companies must move beyond products and services to 'Experience

Environments' that focus on the interactions between customers and their products,

employees and processes. The companies that build a capability to continuously engage

customers through these experience environments and co-create experiences value with

customers will be successful.

Five Winning strategies Cost reduction-(IKEA, Southwest Airlines, Wal-Mart, Enterprise, Rent-a-car)

Improved customer experience -(starbucks, Harley Davidson)

Innovative business model -(Barnes & Noble, Charles Schwab, FedEx, Sony)

Improved product quality -(P &G, Toyota)

Niching-(Progressive Insurance, Tetra)

COMMITMENT BY BOTH TOP MANAGEMENT AND THE TEAM

CEM appreciates the fact that with every interaction, regardless of the channel or the nature

of the interaction, the customer learns something about the company.

A customer will only repurchase product or service from the company if the previous

experience was good. Customers generally like to revisit the store or website that treats

them as individuals; not as a number or a code.


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The decision to implement CEM in your organization will depend mainly on two factors: Is your top management committed to it?

Is your organization 'people-ready' to take up CEM challenges?

A good trekker will tell you how life gets difficult as you climb higher on the mountain.

The same applies to an organization-life gets tougher as you go up the ladder. But then, likea trekker in business also, you have a wider (& perhaps better) view when you are at the

top.

This better vision should also get you a better picture of changing customer needs and

expectation. The top management has to be convinced and then commit itself to CEM.

Only top management's commitment will not be sufficient, but you will need to check if

your organization is 'People ready' to take up CEM as a culture.

Example:

You are an industrial product company and wish to implement CEM. A simple question to

ask yourself is:- How closer is my R&D team to the customer?

How many times does my R&D person go for trials/installation of the new

product developed?

What will be the score of 'Application Knowledge' test for my R&D engineers?

Was the recent set of products developed and conceived in a lab or on the field?Who conceived them?

CEM is not an individual's job or an individual department job. It is a group activity, a

continued responsibility.

Suppose you have had a great evening by a pool side restaurant with your close friends.You have been served select drinks & chosen food. It is now time for the bill. You request

for the bill. It takes a lot of time to get you the bill. You get impatient and follow up with

the captain. He explains that there is some technical snag in the computer. You finally walk

down to the counter and learn that their computer always has a problem.

Your sweet experience of a pretty evening has got a sour ending.

Reason: Technical department.

It is important that the local customer view is given to your Back-office staff. Unless you

do that and create a sense of importance to customers in every department of the company,

it is difficult to create real CEM.

KEEPING CUSTOMER'S EMOTIONAL NEEDS AT THE CORE

Product does satisfy physiological or emotional needs and services take care of

physiological needs remember that typical smell of new car, feel of the driving wheel

leather jacket, thud of the door and even the logo on the front- all are part of the product

and all have great emotional value. You can feel the entire newness of a car through various

senses.

And a simple service of cleaning of the wash room area creates a good physiological feel in

a restaurant.


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We can thus say that product and services both satisfy the physiological needs of a

customer.

Buck Rogers (Ex-VP-Marketing) at IBM once said "People buy emotionally & justify

it with logic." Since emotions play a very important role in creating an experience, it has

to be handled and tackled with great care.

Here is an interesting example by John Ivens.

One of our clients, Neil, related a story to me of a problem with one of his accounts. One of

his company's customers, for the purpose of this story, Nigel was constantly contacting the

call centre and reporting minor faults, exaggerating their impact and importance, causing

Neil a great deal of work in investigating the problem. This had gone on for some nine

months, and was eventually spotted by one of the customer service agents. Neil and the

agent decided to broach the subject at the next service review meeting. Nigel was very

defensive, and in fact took exception to the suggestion that these reports were

inappropriate. He was visibly upset that the subject had been raised.

Over the next two months, this became contentious issue between the two companies. Neil

started to count the cost of these inappropriate fault reports. The account team was trying to

sell a new system into another part of the account, and this dispute had started to impinge

on the sale. They decided to try them softly, softly approach, and the account manager

invited Nigel for a drink one evening. During the evening, Nigel revealed that a year ago, in

another company, he had nearly been fired as he had failed to act on a fault fast enough.

The whole system crashed, causing a great deal of important data to be lost, as it turned out

that the backup system had not worked properly as well. Nigel had not been a popular man.

This event had caused him to leave his previous company. Clearly, this had scarred his

memory. He obviously never wanted this situation to repeat itself, and therefore had

become very nervous with the slightest problem that occurred, and escalated its way before

it was necessary. This had resulted in the many calls to the service centre, engineers being

dispatched when they were not needed, and managers even being called out over weekends.

The account manager managed to convince Nigel that he understood hisproblems, and an the call at face value, at a action plan was put in placeto reassure Nigel that the problems were being dealt with quickly:win/win all round.

So what was the problem here? Quite simply, the service centre had not understood the real

motivator, the underlying problem. They had only dealt with the call at face value, at aphysical level, not an emotional level. As it turned out, there are a number of things that

Neil could have done to reassure Nigel of the robust nature of the system. He could have

offered shared monitoring systems to build his confidence, and therefore reduce the level of

call outs. But, he hadn't understood the underlying issue. Nigel was therefore driven or

motivated to over-compensate to ensure he did not make the same mistake twice.

CUSTOMER DEFINED PRODUCT/SERVICE STANDARD

It is clearly established by now that knowing customer requirements, priorities &

expectation levels can be both effective and efficient.

The precise measurement of customer needs and expectations is a must. It is important to


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thus look at a customer priorities and customer defined standards.

THE PEOPLE FACTOR

In all services and most of the products, people play a very vital role. 'People' here means

the employees involved in the entire process of an offering.

The experience normally happens between the company's offering and the customers' and

to a great extent, people form a major part of this offering.

Example:

A pure service like a consultancy or teaching will totally depend on the people who are

providing the service.

A Hybrid offering which offers the product food and allied service e.g. like restaurant

will also have substantial dependence on its employees to create a right kind of experience.

A product like Car or a machine will also have Sales people who play a crucial role in

helping you to take the decision of product A versus Product B.

Thus, the importance of people involved in the company's offering is immense. Selecting

the right people then becomes extremely important, whichever industry you belong to.

Let us look at factors to be considered while selecting the right people in order to create the

right experience. Select the right candidates.

Train them on technical and functional aspects.

Empower them.

Support them with the right technology tools.

Let them understand the importance of 'Emotional Intelligence'.

Out of the factors mentioned above, selecting the right candidates, giving them the right

tools and training and motivating them is easily understandable and can be managed.

In order to create a right kind of CEM, it is important to understand the difference between

the technical and functional aspects of Customer care. 'Technical is the 'What' and

Functional is the 'How' of an offering. Technical is the core product or the service being

delivered and functional is the method or the mode in which it is delivered.

Example: A Dentist offering a root canal. Technical aspect is her expertise in performing it,

while functional is how she puts the client at case while she is at the job. It could be

through soothing music, proper lights, the quality of equipments, pre-job briefing and

explanation, a smile and many other things. Thus a combination of the entire gamut of

technical and functional aspects of a service makes for a great experience.

Emotional Intelligence is defined by Daniel Goldman as:

"Emotional Intelligence refers to the capacity for recognizing our own feelingsand those of others, for motivating ourselves, and for managing emotions wellin ourselves and in our relationships."


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Emotional Intelligence falls into five categories: Self awareness- Knowing one's emotions

Self regulation-Managing emotions

Empathy-Recognizing emotions in others Motivation-Motivating oneself

Social skills-Handling relationships

It is very important to have your team members with excellent technical and functional

skills and also a good score on emotional intelligence.

CEM is thus an event that helps a customer cherish those moments of maybe a dinner in a

restaurant, a kitchen appliance, a family trip made memorable or the dentist as explained

above. Every business/profession has this unique advantage of ensuring that the people

factor just works towards creating the right experience. As explained above, it is important

to note here that the customer is a participant in this process of experience delivery and nota mere recipient. Also, the experience created has to be driven back from the farther end.

This means a happy trip is designed backwards from the end results and all the necessary

ingredients put in at the right juncture. People form a vital element in this process.


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