Just returned from a stint in Portland, Oregon, where, in a late-night TV binge, I encountered a Carl's Junior Commercial that just, well, has to be experienced. It's sick, and I love it.

Moory Christmas (belated) from Live Path. More soon!

Tonight, I'm sitting in the lobby of my hotel in Austin Texas. There are about five large saltwater fish tanks here - in addition a realistic Santa Clause, who is jovially greeting people in the lobby. Gotta say - there's also a really sensational band here serenading people with soft rock and Christmas music. The band is like, Sting meets Jack Johnson meets Santana. OUTSTANDING. This chubby ittle guy above has been keeping watch over my shoulder. I shall call him "Squishy" and he shall be mine...

Have been spending some time recently speaking with C-level executives about customer experience management. Very good stuff - but at the end of the day I feel like someone has "Hoovered" my brain. I've been working so much, I haven't had time to write much.

But hey -- many of you could use a break anyway after my marathon sequence on Customer Experience Management! Speaking of that series, however, -- I've gotten some really good feedback on it. The post on Customer Experience Management vs. User Experience has drawn tremendous attention.

Customer Experience Architects all over the globe seem to be networking much more actively today - engaging in great dialog, information and knowledge sharing. I'm in agreement with my pal, Kyle Coolbroth, there's a great need for us to come together. Connecting with each other - sharing ideas - is a great thing to do. So, if you'd like to join us in our discussions -- please feel free to drop me a note !

For tonight, there's no deep insight - just deep exhaustion. So I'm going to sit here with my bizarre, but fun combination: my fish, Santa, my latte, this great band.... and warm myself with the anticipation of Christmas with friends and family. Maybe tomorrow, I'll be able to think more about how to change the world. :-)

Mark Hurst wrote an interesting post today about an experience he had with an office supply company today.

In his post, he made some assertions about the nature of Customer Customer Service that I didn't quite agree with - although I normally agree with Mark wholeheartedly. He also posed a good questions: Is customer service the same as customer experience?

First things first:

Mark Wrote: “Customer service is the job of front-line workers, servicing customer requests for help - via an 800 number, e-mail, or a retail desk.”

I was surprised that he would make this assertion. This is only true if you're looking at it through a narrow lens.

Many of us understand that Customer Service involves a heckuva lot more than customer-facing. It is not merely the job of front-line workers. Customer Service begins with the policies that govern the management of customer need. These policies are responsible for shaping customer interfacing and service delivery, and work bi-directionally across the supply chain – impacting the suppliers who create and ship goods, as well as the service reps we encounter in any channel.

We talk alot on this weblog about the five components of experience: customers, environments, brand(s), platform (process, policy, people, technology), and interfacing.

While Mark's problem wasn’t a Customer Service environment or interfacing problem (accessing service within the phone channel, or talking to the rep), it was very much a Customer Service brand issue (faulty merchandise) compounded by a Customer Service platform issue (poor return and refund policies).

While Mark is right that a larger cast of characters is responsible for hosing up his customer experience, it doesn't change the nature of his problem. Today's executives are paid to **own** Customer Service. Whether they act like it or not, this makes them stewards of our experience. The way they coordinate service - across the five CEM disciplines - will dictate success.

Nordstrom knows this. Customer Service at Nordstrom is not merely about the people they hire and train – it’s about the holistic customer service experience they offer, from the quality products they offer, the purchasing environments and the policies that govern service delivery and customer satisfaction. Good Customer Service has created the Nordstrom brand.

Customer Service is perhaps the most important component in shaping Customer Experience. But are they the same? Technically, no. However, it's significant to remember that Customer Experience and Customer Service are so strongly, perceptually bound in the minds of customers they can often be equated as the same thing.

...and perception really matters.

I promise, I won't issue another HUGE post for awhile! I mentioned earlier that I got hands on a recent Gartner presentation called "Gartner CRM Scenario: The Current and Future State of Customer Relationship Management." The presentation included several interesting tidbits.

One slide in particular caught my eye. Here's a summary of what it said:

Only 41% of senior excutives think their companies deserve customer loyalty

Only 19% have compensation tied to quality of service

Only 24% believe their companies invest in people more than technology

Only 31% agree they have the tools to service and resolve customer problems

76% think customer strategy is more important than it was three years ago

65% state their executives don’t meet with customers frequently

Things that make you go hmmm.


(Note, the Gartner presentation cited statistics from a Strativity Group 2005 Global Customer Experience Management Study.)

I was a bit reticent to take on this topic as the fourth part of this series on Customer Experience Management (CEM) because I think it deals a lot with perception, and the complexities thereof... but here goes:

Many individuals equate CEM with Customer Relationship Management, or “CRM”. I understand why this is the case – and do believe the original intention of CRM was to focus strategically on five components of customer experience - in short:

Customers

Environments

Brand(s)

Platform (systems)

Interfaces

While many CRM initiatives attempt to address the components above, many assume a highly operational, quantitative or technical bias. To illustrate this point, ask any executive to describe the tasks associated with CRM. You'll likely receive answers that align CRM with activities such as:

Establishing/managing a customer management platform

Installing/configuring hardware, software, systems

Enabling use of customer management & response tools

Assessing, consolidating & organizing (cust./sales) data

Operationally connecting & synchronizing channels

Attempting to align internal business process and policies

Translating programs & campaigns into new toolsets

Enabling centralized metrics & analytics capabilities

PERCEPTIONS ABOUT CRM

Perceptions about CRM vary a little, but have been partially created by systems integrators, who have served as active leaders in the development of CRM capabilities. Such firms place a strong emphasis on technology, data management, quantitative analytics and operational alignment. These activities are necessary to lay the groundwork for technology-enabled customer management, and have often overshadowed strategic branding, marketing, program development, interaction design and other tasks.

The operational, quantitative and technical perceptions of CRM are also shaped significantly by historical focus. Over the past several years, CRM efforts have centered on establishing and refining the infrastructures necessary to enable solid customer management. The work has been highly operational in nature, and involves the resolution of complex technology, process and people issues.

REALITIES OF CRM

In the context of establishing infrastructures for customer management, CRM practitioners have fought many important battles. A large number continue to rage today - and focus on removing internal barriers (human, technology, policy, data, process) that can compromise customer experience. Unfortunately, resolving these challenges forces so much attention on getting the corporate “internal house” in order, they often compromise corporate efforts to develop, execute and measure broad, cross-channel, cross-program, customer-centric strategies and plans.

While many practitioners and CRM consultancies specialize in customer management and marketing strategy, much of this work is too narrow in scope and execution. Detailed customer analysis; designing and improving marketing strategies, programs and campaigns; developing analytic models and reporting; supporting tactical execution; and other important tasks often occur as an adjunct to larger, more technical implementations. The engagements are often too quick or too narrow (e.g. within a single or few departments) to impact large-scale customer experience or customer centricity within companies. At times, this work can even be done in a manner that is disengaged from the larger CRM initiative (e.g. disparate strategies created by different parties), creating disconnects that can hamper progress on a number of fronts.

Unfortunately, within many CRM initiatives, comprehensive strategic planning activites are simply incomplete, insufficient, delayed or non-existant. Some key activities include:

Designing the broad picture for customer experience (CE)

Designing integrated programs to support the CE

Aligning programs & campaigns with each other & CE

Developing customer-centric touch management strategy

Defining company-wide, customer-centric, cascading metrics

Failure to engage in comprehensive strategic planning can compromise CRM results and negatively impact return-on-investment. It can also create gaps that negatively impact customers and reinforce a fragmented view of customers. Insufficient strategic planning and alignment can help explain why it is common to find CRM implementations that drive benefits within individual programs and/or departments while larger benefits, remain unrealized. This occurs because plans for narrow execution exist, while a broad, seamless, measurable customer experience strategy is absent. This is somewhat common today, and why some critics believe CRM initiatives miss the mark.

THE FUTURE...

Our progress-to-date may be a natural outcome of CRM (and corporate) evolution. Even so, the mounting dissatisfaction with strategic outcomes is a key driver in the growth of the CEM movement. A proliferation of books and articles on the topic can now be found. Customer experience has become a hot topic in industry publications, and on weblogs like this one. Gartner's Q4 2005 report states that four of the top 10 CRM topics include: Building and managing customer loyalty; creating a single view of the customer; creating a customer centric enterprise; and managing/improving customer experience.*

Traditionally, CRM has had a largely "inside out" focus, which is highly operations- centric. However today, the need for more customer-centric focus is unquestionably present. In many companies today, an increased demand for strategic support in the areas of customer strategy, planning and execution is mounting. Gartner predicts that, in 2006, the number of organizations with "single view of the customer" projects will actually double.*

The development of broad, strategic plans for customer management, cross-channel integrated marketing and customer experience requires skills and knowledge that are often lacking in organizations today. This is especially true with regard to marketing organizations. **Recent studies reveal that, while CEOs view the CMO and marketing organizations as critical to bottom-line growth, many CMOs feel their organizations are underperforming, and lack the organizational credibility necessary to influence strategic transformation. Gartner also reports that one of the top, C-level enterprise-wide concerns today is that “skill gaps will impede growth.”*

To build new core competencies, create more customer-centric strategies and transform businesses, it's necessary to teach business owners how to manage customers and market differently. The scope of work goes well beyond the strategy work that occurs within the marketing organization. It must begin with the development of high-level strategies that drive a coordinated, cohesive organizational approach to managing customers.

Because of the broad scope of need, analysts seem to agree that outsourcing will play a critical role in augmenting missing strategic skill sets, and helping companies develop more comprehensive plans that drive marketing, customer management and customer-centricity to the next level.* This creates a window of opportunity for consultancies, and has driven, in part, the use of new terminology and business approaches --> and the rise in popularity of CEM.

CRM VS.CEM

The terms CRM and CEM are used inconsistently within the industry. This is prevalent even within the analyst arena, where term use seems varies slightly. Forrester Research seems to separate CEM as a unique discipline that is distinct from, but related to CRM. Gartner seems to leverage CEM as a skill set or practice within CRM. Regardless of the interpretation, however, the analysts do seem to be defining CEM in a consistent manner - and one that is consistent with the definitions in this article series.

In short, CEM practitioners attempt to address emerging market needs directly, while circumventing current perceptual biases of CRM. CRM practitioners have traditionally assumed an "inside out", or operationally centric approach to customer management and strategy. CEM practitioners distinguish themselves by assuming an "outside in”, or highly customer centric work approach.

CEM strategy focuses heavily on conducting detailed customer (demographic, behavioral, ethnographic, profitability, etc.) and environmental (market, channels, competition) exploration and analysis. This analysis is used to design broad, detailed, integrated experience strategies that answer customer needs and market opportunity. These strategies are accompanied by detailed plans comprised of multiple, integrated programs and campaigns. CEM strategies and plans are used as the drivers that shape product and service offerings refine and align customer interfaces and conform the operational platform (people, process, technology) for experience delivery, management and measurement - across channels, and over time.

Proponents of CEM assert their approaches can help remedy many of the issues created by operationally focused CRM implementations. CEM practitioners argue their methodologies enable business stakeholders effectively conceive, own and manage next-generation customer experiences, executing them across channels effectively with CRM tools. CEM evangelists promote the work has having a transformative impact on companies, asserting the customer-centric alignment and planning will naturally help focus business effort and drive operational alignment.

Whether it's for marketing reasons - or to draw a real distinction in executional approach, everyone seems to be jumping on the CEM band wagon today. This includes the systems integrators, who are developing solution sets (and entire practices) dedicated solely to CEM. A growing number of agencies and consulting firms are claiming expertise in CEM. As a case-in-point, try a keyword search on Google to see what you get...

ARE CEM and CRM THE SAME?

Some CRM practitioners dismiss CEM claims as a glossy repositioning of traditional CRM methodologies. Others argue CEM methodologies differ greatly from CRM. Individuals with a philosophical bent may argue that CEM is a "next generation" term that symbolizes a focus shift in CRM. Individual positions will vary, shaped by personal perspective, approach, scope of knowledge, area of experience and objectives.

In my opinion, it doesn’t really matter what term you choose. I’m a supporter of CRM and a proponent of CEM. I believe strongly in the "outside in" approach described in this article, because it helps mould the organization around customer need more effectively. Using CEM as an umbrella term to describe this approach, and circumvent undesirable perceptions of CRM can be a smart move, depending on your audience.

However, when I can help it, I really try not to get caught up in the overuse of buzz words and industry acronyms. I'd rather speak to the needs of my client and how best to meet them in natural terms.

Lookin' back, many of us "old timers" have been trying to get executives to support robust customer experience strategy within CRM engagements for years. Sadly, we've suffered from narrowed scope, limited resources, and we've watched as the lion's share of corporate investment has been allocated to costly technology implementations and operational work.

Whether you agree or disagree with the perceptions of CRM or the assertions about CEM - there's good news: Support for broad strategy and integrated customer experience planning is growing; Operational environments are maturing; Organizations are becoming more open to customer-centric transformation. Now matter how you spin the work, helping businesses transform, and comprehensively align to manage, measure and improve customer experience is the right thing to do. We may indeed be better positioned to do this today than ever before. If we do our work right, drive corporate success and make life better for customers. Cool.



(SOURCES: Note: Linkable resources are done so in context. *Gartner 2006 State of CRM Presentation; 2005. **B2B Magazine Study: Study: "Marketing execs still lack boardroom clout"; November 2005. Forrester Research (various articles and article summaries); Wikipedia; About.com; CRM Magazine; Thanks also to Amelia Fox and Ann Duncan for listening and “brain hockey”!)

A short interlude to our series on Customer Experience Management...

(Cue the muzak, Joe!)

Just saw this article in BtoB Magazine, "Chief Marketing Officers Lack Clout". The article highlights a recent CMO Council study, targeted at senior-level marketing executives at IBM Corp., Intel Corp. and Xerox Corp., other high-tech companies. The study encompassed 400 executive responses. Here are the major highlights:

Top marketing executives admit that their group’s performance is not up to snuff, leading to a lack of influence within the corporate hierarchy

Only 10% of respondents to the CMO Council survey said their marketing groups are “highly influential and strategic” within the company.

Less than half said their teams are “well regarded and respected,” even though two-thirds of CEOs polled in a separate survey by Chief Executive magazine said their marketing groups are “mission critical” for creating top-line growth.

Donvovan Neal-May, of the CMO Council, is quoted in the article as saying “This study confirms marketers need to move from a tactical orientation to a more analytic and strategic approach that will enable them to realign marketing initiatives with the overall corporate mission.”

Okay, for any of you who have spent time trying to help marketers in medium to gigantic companies today, this doesn't come as a shock. But as a CMO, how ashamed would you be to see this news spread around?

What I'd like to know is what the CMO Council thinks becoming more strategic and analytical really means! After all, most marketers believe they're strategic and analytical already.

...And why would the Council, dedicated to support the efficacy, role and function of CMOs, launch survey results in a manner that could reinforce (or further damage) the already shaky positions of these executives? I can certainly think of a stronger position to take! Why not explain why this is occuring? Why not follow up with a recommended action plan or set of recommendations.? I can certainly think of a few ideas...

STOOPID!

Beyond this, I've pointed out before, really great relationship marketing and customer-centric management is an outcome of a customer-centric company. This certainly isn't just a CMO or marketing issue. However, if CMOs today are unable to get in and make some better headway in transforming marketing and the rest of the enterprise ... they may just see heads rolling!