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The Relationship Between CRM and CEM

The Relationship Between CRM and CEM

The Relationship Between CRM and CEM

7/26/2006
By Donna Fluss
ICCM Newsline

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CRM and CEM are two similar acronyms that are vying for prominence in the contact center world, but they really represent two very different concepts.

Customer relationship management (CRM) is an enterprise-wide business strategy that should drive all company decisions that impact customers. Customer experience management (CEM) is a more focused customer contact strategy that “extends and leverages information gathered in the contact center to enterprise decision makers, senior management and sales and marketing organizations. This information can be used to increase revenue, improve customer satisfaction and loyalty, identify trends and customer concerns, and improve risk management,” according to Focusing Your Organization on Customer Satisfaction, DMG Consulting, Nov. 1, 2002.

Both CRM and CEM employ technology to enhance the customer experience. CEM first appeared on the scene in 2000, introduced by quality management/recording vendors who viewed it as a set of tools and applications to improve contact center quality and satisfaction. But CEM is not really all about technology. Rather, it is an essential component of a company’s CRM strategy and often uses technology to help a company achieve its goals. CRM drives how companies interact with and realize revenue from customers. It impacts all customer-facing departments and activities. All business decisions must be reviewed in light of achieving an enterprise’s CRM goals.

Both CRM and CEM, as their names imply, focus on managing customers. But this begs the question: Do customers really want to be managed? Customers like to do business when they want, where they want, how they want and the way they want. Any customer management strategy must take this into account. Companies must use an approach that does not conflict with customer wants and needs.

Enterprises implement various processes and systems, such as self-service applications, in the name of helping customers and improving their experience. Too often, however, these applications are essentially cost-saving solutions for companies. A properly implemented self-service application should be driven as much by its benefits for customers as by the cost reductions that it can yield.

Anticipating customer needs is a critical element of CEM. CEM forces a company to examine business decisions that directly impact customers from the customers’ frame of reference. No matter how much a company promotes a new system, it will only be used if its benefits are aligned with customer requirements. Cost-saving applications that give customers what they want and need will be adopted and used, yielding benefits in customer satisfaction and loyalty, as well as the desired cost reductions for companies.

A successful business plan should focus on a CRM strategy that incorporates CEM. What this means is that companies should concentrate on using CRM to provide an outstanding customer experience, instead of trying to manage customers. Improving the customer experience should be one of the fundamental goals of all enterprises, public and private. This goal can be achieved only by thoroughly understanding and anticipating customers’ needs and wants in order to profitably deliver desired products and services.

Companies have invested billions of dollars in technologies that collect customer information—data warehouses, data marts, business intelligence applications, reporting and analytical initiatives—but the timeliness of this data remains a challenge. Despite great improvements in these systems, much of the information that they yield still arrives too late to be very helpful. These applications are improving rapidly and offer hope for the future, if properly implemented and accompanied by process changes.

The contact center is the focal point for customer interactions with the enterprise. Customers share their wants and needs openly with customer service agents. When CEM was introduced in 2000, there were few tools available to leverage the wealth of data contained in customer interactions. But today, there are speech analytics solutions that enable companies to capture, structure and analyze the data contained in customer conversations and enable action in near-real time. In the next 12 to 24 months, speech analytics will be enhanced to address all kinds of unstructured data and allow companies to respond to customer needs in real time.

With real-time access to the rich store of data contained in customer conversations, speech analytics facilitate both CRM and CEM goals. These applications enable companies to anticipate customers’ needs, avoid nonproductive interactions and provide outstanding service. When customers are “wowed” on a consistent basis, they are likely to buy more and be more loyal. This benefits the corporate bottom line while significantly enhancing the customer experience.

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