CRM Vs CEM: What’s The Difference?

Customer Experience Management

We’re all familiar with CRM, but there is a newer acronym in the business of dealing with customers, that is set to challenge the tried-and-tested discipline. Customer experience management (CEM) is subtly, but crucially, different from CRM.

Customer experience management (CEM) is the collection of processes a company uses to track, oversee and organise every interaction between a customer and the organisation throughout the customer lifecycle. Sounds like CRM, doesn’t it?

CEM often provides similar functionality as CRM, but also focuses on the customer as a person, rather than simply a faceless client. In many respects CEM:

  • Forces your business to look at itself from the customer’s perspective
  • Forces your business to shape the experience you believe your customers want
  • Is also interested in your customer’s thoughts and emotions

CEM is a reflection of CRM’s approach: Every time a company and a customer interact, the customer learns something about the company. CRM approaches it vice versa. Depending upon what is learned from each experience, customers may alter their behaviour in ways that affect their individual profitability. Thus, by managing these experiences, companies can orchestrate more profitable relationships with their customers.

How CEM Improves CRM

CRM comes after the experience, and CEM works hard on anticipating it. When using some CRM software and methodologies it is often easy to reduce customers to a collection of facts and figures used to calculate future sales opportunities. CEM seeks to add personality into the mix to create a more rounded picture of each client, allowing for better customer service and even more finely targeted insights.

Consumers are statistics. Customers are people. CRM software supports CEM by:

  • Recording business interactions with customers
  • Allowing recording of potential sales opportunities
  • Providing automated pipelines for moving customers through the sales process

Why Bother With Customer Experience Management?

The goal of CEM is to optimise interactions from the customer’s perspective and, as a result, foster customer loyalty. Many businesses assume that acquiring new customers should be of a higher spending priority than nurturing existing contacts. However, the reverse is actually true. Research shows it is 6 to 7 times more costly to acquire a new customer than retain an existing one. But simply tracking communications and sales opportunities is no longer sufficient to create a competitive difference.

Companies that invest 10% or more of their revenue in customer experience have lower attrition rates and higher referral rates and customer satisfaction scores than companies that invest less in customer experience. This startling statistic from Strativity clearly demonstrates the importance of the “experience” in Customer Experience Management. We can expect to see:

  • Companies which adopted experience management techniques early reaping the greatest rewards
  • Early adopters having more experience in shaping customer experiences, gaining a larger competitive advantage in the process
  • Greater brand loyalty for businesses which focus on experience as well as relationships
  • Businesses which stick with conventional CRM software systems losing market share to competitors which choose to use CEM.
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John Cheney

John Cheney is a CRM specialist with with over 18 years of experience in IT, including a decade running companies in Europe and the USA. John is currently CEO at Workbooks, a UK-based company developing Cloud CRM software, and publishing CRM guides and resources.