CXM: The X-Factor in Return on Relationship

CXM: The X-Factor in Return on Relationship
By Ted Rubin

Are companies finally starting to get the message about Return on Relationship? A new acronym, RonR, is floating around these days and it seems to exemplify the heart of the issue–paying closer attention to customers.

You’ve undoubtedly heard of CRM (Customer Relationship Management) software, but now there’s buzz going around about CXM, or Customer Experience Management. To me, CXM is a natural offshoot of CRM, not because it’s a replacement of it, but because it’s the next logical step in today’s world, optimizing the customer experience. But what’s the difference between the two?
 

 

A recent article in crmsearch.com gives each term a pretty clear definition:

CRM: Customer Relationship Management is a business strategy directed to understand, anticipate and respond to the needs of an enterprise’s current and potential customers in order to grow the relationship value.

CXM: Customer Experience Management includes both the individual experience in a single transaction as well as the sum of all experiences across all touch points and channels between a customer and a supplier over the duration of their relationship.

The change in terminology reflects a very important factor: the control shift from seller to buyer that has been precipitated by social media. CRM software is designed to collect data about customers, and to automate systems for getting in front of them and communicating with them. CXM takes the concept even further. It’s really a more customer-centric approach to nurturing relationships by finding ways to delight buyers at every touch point.

This is a necessary step, I believe. For too long, CRM adopters have not really used the tools as much for customer relationship nurturing as for exercising control over customer-facing staff and keeping tabs on sales performance. While those things are essential to track, they don’t address the needs and desires of customers and the kind of service they expect to receive. In order to provide the level of service that truly sets us apart, we need to start delivering the kind of data that helps us provide the right things at the right time to enhance customer interactions and make it easier for them (not just easier for us) at every step in the relationship.

We’ve always known that it’s six to seven times more costly to acquire new customers than to keep the ones you already have, yet we’ve consistently paid more attention to new sales numbers than to customer retention. The focus of CXM is to finally focus more on the relationship.

I’m glad that companies are finally starting to recognize that they need to pay more attention to this. There’s even a new C-Suite position of CCO (Chief Customer Officer) charged with handling the customer experience from top to bottom.

My advice, however, is make sure that your new CCO has close ties with your CIO and CMO. The kind of communication required to deliver the ultimate customer experience needs to run across and run through all channels. To be successful, CXM really needs to be an enterprise-wide cultural shift.

My hope is that as CXM matures and more vendors begin to offer these types of solutions, companies take a holistic approach to implementation. Building better customer relationships should be everyone’s primary objective, from sales, to marketing, to customer service, even IT departments.  If that’s the true objective, then CXM truly has a chance to be the X-factor in achieving Return on Relationship.

The article was originally published on TedRubin.com.

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Ted Rubin

Social Marketing Strategist, Keynote Speaker and Brand Evangelist at Ted Rubin
Ted Rubin is a leading Social Marketing Strategist, Keynote Speaker and Brand Evangelist. In March 2009 he started using and evangelizing the term ROR, Return on Relationship, hashtag #RonR. He is also the author of the book by the same name... Return on Relationship. Visit his web site at www.tedrubin.com for more information.
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