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Trend assessment

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  • 1. Trend Assessment: Customer Experience Management and Technology Customer Experience Management and Technology Customers are not an uncommon occurrence in the world of business. In fact, one could say they are always present in any business you run. From retail to accounting, finance to public relations, the driving force behind business is the fact that there is a customer somewhere who you are trying to appease. Part of appeasing that customer is providing a positive experience for them at all times. The process of tracking, overseeing, assessing, and controlling the way a company interacts with a customer is known as customer experience management, also referred to as CXM or CEM. Historical Overview In reality, customer experience management is not a new concept. It has been around as long as business has existed. The idea of wanting to make sure your customer enjoys their experience with you as an organization is a key aspect of business and key to keeping your company afloat. Lengthening your customers’ lifecycles and securing customer loyalty is the goal of any business. Discerning what it is your customers want from your company is the best way to secure their loyalty. Before the advent of customer experience management, customer relationship management was the hot topic of the business world. However, customer relationship management was not enough for the practicality of corporations. Customer relationship management does not cover enough of the customers life cycle to assure their loyalty. The process of managing a relationship comes after the fact of a person buying your brand. The information is gathered after a transaction, tracking what they bought, and “captures and distributes what a company knows about the customer” through market research and “point of sales” data (Zurich). The problem was that it did not take into account what the customer actually thinks of the organization, it only judges what the organization thinks the customer wants from their purchase history. Customer experience management takes out all the guess work from the process of finding out what customers think. It creates “touch points” throughout the entire process of acquisitioning customers (Zurich). These touchpoints vary across the organization, from the physical retail store to web based outlets. Improvements in technology has allowed for the information companies need to be directly gathered from consumers. With the advent of Facebook, Twitter, Yelp or any number of other online mediums customers are given a direct line to the companies they shop from. This direct line opens up a door to a whole new universe of opportunities for the company to not only monitor the customers buying habits, but their actual opinions. It opens up the opportunity to find out directly what they want. As the director of product marketing at RightNow, Andrew Hull, says “Businesses that ignore this and don't look beyond internally focused customer relationship management systems (CRM) to externally focused customer experience solutions (CX) will not survive" (Baker). Regulating the experience of any one customer and using their online
  • 2. Trend Assessment: Customer Experience Management and Technology Customer Experience Management and Technology input to constantly improve your products and brand is the crux of customer experience management. Technology will allow it to keep moving forward and better serve the customer providing what they truly expect from an organization. Case Example1 of CXM in digital marketing The first example of use of technology in customer relationship management is in the case of Sephora. Sephora is a luxury cosmetics retailer founded by by Dominique Mandonnaud in 1970 (Sephora.com). Sephora is renowned for their ability to stay on top of fashion and makeup trends. More recently though, is their ability to take on the world of technology, rivaling many tech innovation companies. Since their break-through strategy of an open-sell environment ( no counters, no high-pressure salespeople, all products available on shelves to test) they have continuously found new ways to improve the buying experience for the customer. From the beginning Sephora revolutionized the luxury cosmetic buying industry. For years when consumers decided they wanted a better quality cosmetic product that they had to endure the scripted selling tactics of a pushy salesperson. An experience many people dreaded. However, this is not the experience that people face in Sephora’s stores. A gentler approach is taken by well trained and knowledgeable associates to answer questions rather than trying to convince them to by the higher priced items. Part of what helps to facilitate this less invasive selling technique is the amount of technology that Sephora employs. In store touch points have been installed to help clients answer questions on their own and get the specific information they need to make their own informed decision. One example of these touch points is the Skin Care I.Q. system installed in the “Sephora’s Favorites” wall. A system that allows a customer to input their specific skin needs and electronically generates a list of products for them to address their problems with. Their mobile app has also been one of the most successfully integrated programs since the smartphone boom. Mobile sales since 2012 are up by one hundred and sixty-seven percent(Hinshaw). Sephora’s savvy use of social media sites has also led to a boom in sales with users of sites like Pinterest, Twitter and Facebook. Numbers taken from a recent case study by Michael Hinshaw show: “Those 600,000 registered Apple Passbook users“spend two times more annually and purchase twice as frequently as the average Sephora customer. Over on Pinterest, Sephora has found “followers [there] spend 15 times more on Sephora.com than Facebook fans. And while most retailers are worried about showrooming, Sephora’s mobile apps have more than 2 million downloads and heavily feature in-store experiences, such as bar code scanning, reviews, personal purchase histories, etc.” What these numbers show is that the use of social media technologies as well as digital marketing has allowed for a better customer experience. This experience is what creates customer loyalty. When customers have a bad experience with a company, seventy percent
  • 3. Trend Assessment: Customer Experience Management and Technology Customer Experience Management and Technology of them stop buying goods or services from that company and about sixty-four percent make their future purchases from the competition’s stock (Shaw). As success goes it’s hard to find a better example of how to properly use customer experience management technology to it’s fullest. There are some pitfalls to the technology instituted: bugs and general tech failures. But for the most part, majority of Sephora’s customer experience management strategy is running to almost perfection. The one thing that could push it further would be to have far more user submitted content and the inclusion of more high end, cult brands like SugarPill or LimeCrime to the mix of products. The average customer of Sephora is not going to be a world renowned makeup artist, So to have more customer generated tutorials as well as seeing what the average person can do with the products might put more buzz out there as to product reputations. Case Example 2 of CXM in Digital Marketing The second example of customer experience management technology would the all too well known Starbucks. Started in Seattle in 1971 this small time local cafe has expanded into an internationally acclaimed coffee retailer. There are very few people who do not know the name when they hear it and the iconic brand logo can be seen on almost every street corner and strategically placed in every tv or movie. The food industry is built upon the experience of the customer. However it is mostly based around the food. So how does one integrate the experience of eating with technology? And specifically how does Starbucks generate a positive change for customers with technology in a coffee shop? These changes would have to go beyond just brewing a better cup of coffee. While some people might be more apt to pick up on subtle flavors in coffee and tell what the perfect quality is, the average consumer wants one of two things, that extra kick in their morning commute or a sweet and tasty pick me up. Coffee was straightforward and simple, so how did Starbucks engage that customer experience? Like many other companies and organizations Starbucks instituted a mobile app and in the beginning it was merely a tool to help customers find the nearest Starbucks in their area, which almost seems laughable at this point as there is one every few miles(Capgemini Consulting). Soon the mobile app expanded. Payment methods are now available through the app with the ability to upload gift cards into a “digital wallet”, drink recipes and loyalty rewards points drive customers to use the app, offers of music downloads and free drinks are all open to anyone with a mobile app account. But how does that contribute to the in store experience? Ease of payment of course is obvious, but the digital bridges to the physical by one idea. Starbucks patrons don’t see Starbucks as just a coffee shop. The experience they try to engrain into their customers is that of a haven, an escape from their everyday woes, Starbucks is about the human connection (Starbucks Corporate Website).
  • 4. Trend Assessment: Customer Experience Management and Technology Customer Experience Management and Technology They choose to engage customers through social media in order to bring that human connection in to the store for every person. Consumers have the ability to submit innovations for the store through the “ My Starbucks Idea” website(CapGemini Consulting). One such innovation that came about due to user submissions through social media was the “Runners Reward” program that allowed for the managing of taking orders for several drinks and would give a free drink after so many purchases (CapGemini Consulting). Starbucks has several different outlets for customers to reach them in order to provide a better customer experience. They seem to have an excellent way of monitoring these outlets as well with most issues solved relatively quickly. Once change I feel that Starbucks could do to make for a better customer experience is in store tech to be available to customers. Starbucks, instead of retrofitting their stores for technology opted for 2-D digital upgrades ( QR codes and the like) in order to change their environment to a more digital one. This provided a much more cozy and home like environment, however the availability of either computers or tablets for customers to borrow in store would greatly increase the flow of traffic to their online apps. Interview Unfortunately no marketing experts were available in time to perform an in-depth interview one on one. However, several experts have offered similar interviews to other journalists and with their statements I was able to extract answers to the specific questions provided. How does customer experience management technology impact marketing landscape? According to Joe Boughner, a Digital Strategy and Marketing expert from nonlinear Digital there are a few ways that the customer experience management technology impacts the marketing landscape. “Depending on who you ask, Customer Experience Management (CXM) is either the greatest evolution in marketing since the dawn of the web or another overblown pseudo-trend designed to confound the masses. Or, more likely, something in between. Regardless, CXM - the practice of orienting your marketing efforts around the customer's perspective thanks to the emergence of multi-channel marketing platforms with better quality analytics capabilities - is something that any savvy marketer should at least be familiar with.” He goes on to discuss how with CXM a marketer is pushed outside of their “silos” and is forced to look at a holistic view of the marketing landscape rather than just individual tools. When marketters look at everything that is available to them for converting customer loyalty, a better picture of what they need to do and what the need to do it with appears. What specific industries or consumer segments might be impacted?
  • 5. Trend Assessment: Customer Experience Management and Technology Customer Experience Management and Technology Most experts agree that any and all industries can benefit from CXM. Everywhere from food services to banking can be impacted by the experience a customer has with an organization. The purpose of CXM is to generate loyalty and convert one time customers into long time time loyalists(Hayes). The technology allows all segments of customers to benefit as well. A specific instance of an industry that could be impacted by CXM would be the Swiss banking industry. A recent study shows that Swiss banks are lacking three basic components for customers, skilled workers, access to alternative service channels (ie. online banking), and lack of access to local branches(Wheeler). How does CXM change moving forward? From research, I have found that moving forward, the changes in CXM are going to reflect changes in social media. Social Media has been a big proprietor of customer experience management and increasing the turnover of customers to loyalists. In large corporations the most used medium for social media was Linked in with eighty-eight percent of Inc. 500 companies using it(Zinck). However, the most potentially profitable of all social media sites was determined to be Twitter, a site corporations might over-look due to it being more popular amongst younger generations. What will be needed to stay ahead of the curve? According to Chuck Schaeffer, the CEO Vantive Media, “Companies that succeed in delivering consistently positive customer experiences will enjoy increased referrals, loyalty, advocacy, customer share, repeat business, top line revenues and vocal advocates promoting the brand in online and offline channels. Companies that sit the sidelines will become the source for their forward looking competitors to secure net new market share.” CXM is necessary for all industries and using social media and advancing technology will help these companies stay ahead of their competitors. Those that do not adopt emerging technology for marketing purposes will be left in the dust.
  • 6. Trend Assessment: Customer Experience Management and Technology Customer Experience Management and Technology Resources ● Baker, Pam. "The Transition From CRM to Customer Experience Management." From CRM to Customer Experience Management (CEM). N.p., n.d. Web. 21 Mar. 2014. <http://www.crmsearch.com/customer-experience-management.php>. ● Boughner, Joe. "nonlinear digest: Customer Experience Management (CXM)." Customer Experience Management (CXM): nonlinear digest. N.p., n.d. Web. 5 Apr. 2014. <http://www.nonlinearcreations.com/Digital/how-we-think/articles/2014/01/nonlinear- digest-Customer-Experience-Management-CXM.aspx>. ● "CapGemini Starbucks Digital Customer Expereience." CapGemini. N.p., n.d. Web. 28 Mar. 2014. <http://www.capgemini.com/resource-file-access/resource/pdf/starbucks-23- 04.pdf>. ● Hayes, Bob. "Customer Experience Management Defined." Business Over Broadway. N.p., n.d. Web. 5 Apr. 2014. <http://businessoverbroadway.com/customer-experience- management>. ● Hinshaw, MIchael. "A Digital Customer Experience Case Study: Sephora's Supremacy." MCorp Consulting A Digital Customer Experience Case Study Sephoras Supremacy Comments. N.p., 30 May 2013. Web. 22 Mar. 2014. <http://mcorpconsulting.com/blog/a- digital-customer-experience-case-study-sephoras-supremacy/>. ● Meyer, Christopher, and Andre Schwager. "Understanding Customer Experience." Harvard Business Review 1 Feb. 2007: n. pag. Harvard Business Review. Web. 21 Mar. 2014. ● Schaeffer, Chuck. "Why CXM will replace CRM." Why CXM will replace CRM. N.p., n.d. Web. 5 Apr. 2014. <http://www.crmsearch.com/crm-to-cxm.php>. ● Shaw, Colin. "New Statistics: Customer Experience & Loyalty." New Statistics: Customer Experience & Loyalty. N.p., n.d. Web. 21 Mar. 2014.
  • 7. Trend Assessment: Customer Experience Management and Technology Customer Experience Management and Technology <https://www.linkedin.com/today/post/article/20121029135410-284615-new-statistics- customer-experience-loyalty>. ● "Shop Makeup, Fragrance, Skincare & More Beauty | Sephora." Sephora. N.p., n.d. Web. 22 Apr. 2014. <http://www.sephora.com/>. ● "Starbucks Coffee Company." Starbucks Coffee Company. N.p., n.d. Web. 30 Mar. 2014. <http://www.starbucks.com/>. ● Wheeler, Mac. "Swiss Research Shows Banking Industry Needs CXM." Voice of the Customer Customer Experience Big Data Blog. N.p., n.d. Web. 5 Apr. 2014. <http://www.customercentric.info/swiss-research-shows-banking-industry-needs-cxm/> ● Zinck, Barb. "CIOs Bank on the Cloud, How Social Affects Your Business." InsideCXM. N.p., n.d. Web. 5 Apr. 2014. <http://www.insidecxm.com/cios-bank-cloud-social-affects- business/>.

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