Why CXM Is the Next Step in Customer Interaction

Experts explain the difference between customer relationship management (CRM) and customer experience management (CXM) and describe how--and why--you need to create a positive customer experience.

By Jennifer Lonoff Schiff
Wed, June 13, 2012

CIO — As if we didn't have enough abbreviations and acronyms, along comes CXM (or customer experience management). But what exactly is CXM and what makes it different from CRM? Why should organizations be embracing CXM? And what type of organization benefits most?

CIO.com asked customer experience experts and executives to explain and provide suggestions on how companies can get the most out of CXM.

"When CRM came of age in the late 1980s and early 1990s, the focus was on improving internal processes to better support customers, reducing cost and increasing satisfaction—with a heavy emphasis on reducing cost," says Marchai Bruchey, chief marketing officer at Thunderhead, a provider of customer communications management services. "It was an inside-out view of how to manage a relationship with customers."

CXM, on the other hand, takes an "outside-in" approach.

"CXM is proactive, even anticipatory," notes Peter Flynn, vice president of worldwide customer service with Stratus Technologies, an uptime service provider. "CXM proactively initiates contact, delivers content, preemptively solves problems and understands customer preferences, often before the customer requests it or knows they need it."

In addition, "CXM seeks to address the experience customers have with companies over time, with the aim of making each interaction a positive one, so that there is a cumulative effect on satisfaction and on loyalty," says Richard Vermillion, CEO of Fulcrum, a company specializing in marketing technology and analytics.

Why should organizations be embracing CXM and what types of organizations benefit most?

"Any organization that cares about delivering value to its customers should care about CXM," says Kurt Carlson, associate professor of marketing at Georgetown University's McDonough School of Business. "Organizations that will benefit most are those that operate in spaces where consumers have a lot of choice and where switching costs are low."

Similarly, "enterprises that thrive on strong customer relationships and want to empower their business users to make the most of every customer touch point throughout each state of the customer life cycle will benefit by embracing CXM," according to Neal Gottsacker, vice president of product marketing and R&D at HP Exstream. "Considering it costs six to seven times more to gain a new customer than to keep an existing one ... enterprises that deliver context-aware customer experiences in the preferred delivery channel—such as the Web, SMS, mobile apps and email—will find increased customer satisfaction and retention, improved response rates and higher revenues."

How to Improve Your Company's CXM

Define success. "Make it clear how a successful CXM will be measured," says Christine M. Ricci, chief communications officer and chief marketing officer, at B. E. Smith, a health-care leadership solutions firm. "This will help move the organization away from emotional decisions and more toward rational [ones]."

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