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A Journey in CEM Customers Perceive Value Based on Experiences They Receive
Karthikeyan Krishnan
Monday, September 7, 2009

In the extremely competitive telecom sector customer satisfaction is a vital metric of success.Customer Experience Management (CEM) is a crucial aspect for communication service providers (CSP) that aim at achieving this. In the current market scenario, CSPs are dealing with a dynamically changing economy. As of today, we have moved from a product economy to a service economy, and heading towards an ‘experience’ economy, which adds a level of emotion, that was previously missing in a product or a service economy. The complexity of dealing with emotions of a customer increases, given the fact that today’s customers are using multiple channels and complex methods to do business, like IVR, Web, contact center, email, chat, and POS.

Today’s new service offerings are possible from the convergence of not only the wireline and mobile communications sectors, but also from bringing together the communications, computing, media, entertainment, and advertising industries. Still, customer satisfaction remains one of the key differentiators in the battle for market share in a converged services world.

A solution for this problem is not to simply add another system or improve a business process, but to continually monitor what the customers experience.

In this article, we talk in detail about Customer Experience Management (CEM) such as ‘What is CEM?’, ‘Why do we need it?’ and ‘How to successfully implement it?’.

Customer Experience Management (CEM)

CEM is a ‘strategic approach taken by the CSP to augment business processes and integrate a myriad of data sets, software systems, processes, and people to positively impact the subscribers’ experience’.

In order for a business to assess the customer experience (CE), each interaction must be managed across each part of the CSP business throughout the customer life cycle.

Customer Experience Management might be characterized as the next logical generation of Service Quality Monitoring (SQM). CEM truly connects the monitoring and assurance functions of the OSS to business objectives - ultimately leading to enhanced customer satisfaction and a stronger business bottom line.

* CEM assumes that products and services are no longer sufficient to satisfy the customer and elevate the value proposition to the next level of an experience.

* In addition, it promotes an equal relationship between customers with CSP and ongoing dialogue that improves and strengthens quality and length of the relationships.

* Companies that have adapted CEM strategies have placed an emphasis on their system, process, people, and customers as a part of the experience creation and delivery. It is a strategy and not point solution.

Importance of CEM for CSPs

A telco has lot many systems in the world to address Customer Satisfaction from various perspectives. Then why we need CEM? Let’s look into some of the reasons:

* CSPs are investing billions of dollars in capital to provide convergent mobile and fixed broadband services to consumers and businesses but this has not led to improvements in customer loyalty, which is reflected in price concessions and churn in mature segments of their business.

* CSPs may have the most innovative loyalty and retention programs, highly competitive marketing for their products and services; however, the churn rate is increasing.

* CSPs are adding more and more product and service offerings for their customers; and these customers are experiencing and perceiving them through new and emerging touch-points and channels. Managing such a dynamic and complex mix of channels is a nightmare. In many cases subscriber information is scattered throughout different parts of the organization, making it difficult to gain a unified view of the customer. It creates inconsistent customer experiences across channels.

Currently, ARPU is dropping and churn is increasing in the CSP business model. As a result, it is nearly ten times costlier to win a new customer than to retain one.

How do you manage these challenges?

1. A management system that provides you quantifiable metrics to measure results.

2. A scientific approach that clearly explains the relationship between satisfaction, spending behavior, and customer preference or recommended products.

3. A sound and solid management principles to correlate customer experience and CSP brand strategy.

4. And a systematic framework and methodology to design and monitor effective customer experience delivery across multiple channels and touch-points throughout the entire customer lifecycle.

CSP can significantly improve their Return on Investment (ROI) with a well-implemented Customer Experience strategy.

CEM for CSPs, ‘HOW’

CSPs should have a four-step approach, a cyclic model to be successful in CEM. (see fig1)

FAQ: CSPs already have CRM. Does one need CEM? Difference between CRM and CEM

Traditionally, CRM systems have been internal or operational centric; they are about profiling and collecting customer data for marketing and cross selling purposes. Too often, the emphasis has been on the company’s goals and not necessarily what the customer wants.

CRM was born originally to maximize revenues and profits from its loyal customers. With CRM there were very few, if any, listening mechanisms or other aspects of mutual relationships. Most companies simply viewed it as a quick way to increase revenues from existing customers.

CRM can be explained in the following way: Every time the company interacts with the customer, the company learns something new. By capturing, sharing, analyzing, and acting upon this information, companies can better manage individual customer profitability.

Gartner Research says that around $46 billion was spent on CRM systems to help institutions get closer to their customers. 55 percent of all these CRM programs actually drive customers away and dilute earnings, bringing forth this emphasis on customer experience.

CEM, on the other hand, is highly customer-centric and utilizes systems, technologies, and simplified processes to improve the customer’s experience with the company.

CEM is emphasizing the length of the relationship and the treatment of the customer as a journey and not as a destination. In addition CEM places a greater emphasis on every interaction, thus leading to the creation of experience to the delivery of those promised relationships to the desired target customers.

Customer Experience Management is turning the customer experience towards company process and tunes it accordingly. CEM’s premise is almost the mirror image. It says that every time a company and a customer interact, the customer learns something about the company. Depending upon what is learned from each experience, customers may alter their behavior in ways that affect their individual profitability. Thus, by managing these experiences, companies can orchestrate more profitable relationships with their customers.

Customer-Centric Journey: Summary

In today’s competitive communications market efficient customer acquisition and retention is critical; and service providers are locked in a battle for customers and wallet share. In response to the competitive pressure, many service providers are moving from a network-centric to a customer-centric mindset in order to provide excellent customer service, build brand loyalty, and maximize profitability.

Key aspects:

* CEM is a strategy involving Systems, Processes, People, and not a point solution

* CEM is different from CRM

* CEM is a continuous strategy and not one-time implementation

A successful CEM will enable a CSP to conquer the last frontier: positive customer experience is a strategic differentiator.

The author of the article is Karthikeyan Krishnan, Lead Consultant at Collabera.

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