Updated: April 30, 2009

What is CEM?

EM is short for Customer Experience Management — the younger, more focused cousin of CRM (customer relationship management) . CEM is a term that was coined in marketing circles after the dot-com crash, when many companies found their CRM strategies floundering. So in many ways CEM began as marketing hype, but it has since gained ground as a valid strategy to improve customer loyalty . A series of solutions are now marketed under the name CEM rather than CRM.

So how does CEM differ from CRM?

Whereas CRM focuses on managing and automating all aspects of the customer relationship, CEM specifically pinpoints the customer experience. CEM focuses on integrating customer interaction points into a single experience, whether in the call center or on a Web site, and it strives to make the experience better for the user — simpler and more user-friendly, for example.

CEM can also take CRM initiatives a step further — by segmenting customers and tailoring your strategy to their differing needs.

What types of experiences does a CEM solution help manage?

CEM strategies target user experience across many points of contact, whether at the call center or on the Web.

In the call center, CEM solutions can focus on forming 360-degree views of customers so that an agent has all the information he or she could possibly need to help customers. It can also be used to elicit feedback from customers about their experiences calling in. Email or call surveys can help an organization hear its customers' suggestions for improvement or learn about their frustrations with the system.

CEM strategies can also be implemented in other places, such as a Web site. They can track a customer's browsing activities on a company product page, analyze the customer's needs and get feedback via a survey when the customer completes a purchase.

Finally, CEM can provide Web sites to act as points of reference for a customer, such as allowing the customer to log in and check a placed order and its shipping status.

Does satisfying a customer really increase my ROI (return on investment) ?

Many companies dislike solutions that target the customer experience. They see them as a set of processes that take a lot of work or time and only benefit the customer.

However, satisfying customers is how companies earn their bread and butter. Satisfied customers can do two great things to help you out. First, they will buy more from you, either for themselves or as gifts for others. Second, and just as important, happy customers can be your best marketing ally. Loyal customers will tell other people how great you are, and you don't even have to pay them — you just have to keep them satisfied enough to keep spreading the word. That costs a lot less than launching a new direct-mail campaign, and it earns you a better payoff.

But what if some customers just aren't worth it?

It's true — not all customers are always right. Whether they are a pain and a drain on your support staff or they're just not going to be back to make another sale, you need to know which customers you should be going the extra mile to serve, and which you should let walk away.

Customer experience solutions can't make that decision for you, but they may give you some valuable insight. By analyzing your customers' demographics, previous purchases and where they fit in your segmentation, you can be better prepared to make those key decisions.

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