Forming Lasting Impressions: Leveraging CXM as a Difference-Maker
CXM, not CRM, is the marketing battleground for the new age.
"Hold on!" you may say. "What's the difference between customer relationship management and customer experience management anyway? Aren't they the same thing?" While it's true that both of these marketing strategies are customer-centric, there is a major distinction between the respective focus of these two methodologies.
Think of it this way: customer relationship management (CRM) focuses on creating connections; customer experience management (CXM) focuses on forming impressions.
Here's an example: you take your car to a local garage for repairs. The mechanic efficiently diagnoses and fixes the problem, you pay the cashier, and you're on your way. You forget about the garage within a day or two. What happened? That garage made a connection with you, but it did not manage to leave a lasting impression.
Now take that same scenario, and imagine that the mechanic not only fixes the problem, but comes out to personally meet you after he's done. He has a friendly and kind disposition. He takes 5 or 10 minutes to explain the process that he used to repair your vehicle, and gives you some helpful pointers on how to avoid the issue in the future. You leave the garage completely satisfied, and in a better frame of mind.
Would you easily forget about that garage now? No, because an impression has been formed in your mind.
CRM systems have, by default, always been focused on the automated side of customer-business interactions: when to send an email, how to follow up on a lead form, which department should handle the current interaction. CXM takes the data accumulated from a CRM platform, and leverages it with one objective in mind: fostering customer loyalty through exceptional experiences.
The Importance of CXM
That all sounds well and good as a theory, but are there hard facts to back it up? Is CXM really a viable marketing strategy in its own right? What's the actual ROI for investing in customer experience management?
If you are feeling a little skeptical, here are some solid, black and white, plain as day statistics that you should consider:
- In 2019, global spending on CXM technologies will total a whopping $508 billion, an increase of 7.9% from 2018.
- According to one study, companies that earn $1 billion on an annual basis, and choose to invest in CXM, can expect to earn an average of $700 million more over the course of the next 3 years.
- Customers are willing to pay between 13% and 18% more than the average price for luxury and indulgence services if they expect to receive a superior experience.
- 73% of buyers cite a great customer experience as the number one factor in their purchasing decisions.
- Acquiring a new customer may cost a business as much as 6 or 7 times more than the cost of retaining a current customer. CXM plays a key role in keeping existing customers within the fold.
The numbers don't lie: CXM is a huge driver for revenue and sustainability. It's no wonder that in one survey 62% of respondents viewed customer experience facilitated via contact centers as a competitive differentiator. Other research suggests that by the end of 2019, over 50% of companies will adjust their investment models to account for innovations in customer experience.
Furthermore, CXM feeds into one of the most crucial (and yet most overlooked) aspects of effective advertising: word of mouth marketing (WOMM).
CXM and WOMM
How effective is word of mouth marketing? Statistics indicate that it is one of the best methods for advertising in existence. For instance:
- Approximately 92% of consumers believe the recommendations of friends and family over all other advertising
- 64% of marketing executives feel that WOMM is the most effective means of advertising; however, only 6% claim to have mastered it
All facts and figures aside, though, it just makes sense that word of mouth marketing yields some of the highest rates of loyal customers. Think about it: which person would you be more inclined to trust? A salesperson that gets paid to promote the company's product, or Grandma Betty, who has baked homemade cookies for you since you were 6 years old? An ad executive that lives in a penthouse 1,000 miles away, or your brother Ben who has bailed you out of one or two tight spots over the years?
The point is, CXM and WOMM dovetail beautifully. It's a simple progression:
- The exceptional service experience provided by your company results in a satisfied customer, and the formation of a long-lasting impression.
- That customer then recounts the experience, and sings your company's praises to family and friends.
- In turn, this results in highly effective word of mouth marketing for your brand (that, incidentally, didn't cost you a dime).
So many executives view customer service and customer support as necessary evils, sunk costs that have to remain in place in order for the organization to stay competitive. However, nothing could be further from the truth! Customer service, along with all other aspects of the business that involve customer interaction, is not a cost, but an opportunity.
It's an opportunity to deliver an unbeatable customer experience.
It's an opportunity to leave an indelible impression on the customer.
It's an opportunity to turn the customer into a brand advocate.
It's an opportunity to initiate completely free word of mouth marketing.
That's the power of CXM. It's the new marketing battleground, and it's here to stay. Don't let the CXM train leave the station before you climb onboard; you won't regret doing so.