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The Two Most important things in CEM management

After spending much time and thought into this, I believe I’ve come up with the two most important things that you need to keep in mind for developing and managing great CEM programs.

CEM is a company wide effort

One of the biggest causes of failure, or ineffective CEM programs is that it isn’t implemented throughout the company.  Usually most companies focus on the marketing, sales, customer care, etc departments.  However many of the other people and departments that come into contact with the customer don’t seem to exhibit the same level of CEM enthusiasm as their counterparts.  The result is a dissatisfied customer.  If we map out the exit points, usually it is these places where the customer is most likely to leave the organization.

To illustrate this point, let me discuss a few examples.  Virgin Media, one of the two cable TV operators in the UK seems to be doing a great job when it comes to many of their departments, such as account opening, customer retention, etc.  However the whole company is not in-sync with the philosophies of CEM.  Recently having moved house, I found it very difficult and frustrating to get the house moving team to get everything done properly.  When I wanted to leave the company, the retention team did a good job trying to sort out my problems.  However the technical support and the house moving team provided such a bad experience, and I finally decided to leave the company after 6 years of being with them!

Having worked with, provided training for, done consulting work and researched numerous companies in the last few years, I think this is probably the biggest problem facing companies today.  Some or a few of their departments are working hard to improve CEM, while others are no where near to providing a decent customer experience.  The consequence of this is a loss of customers.

You need to keep customer loyalty in mind

The second most important factor is thinking about customer loyalty.  CEM is one of the biggest tools / factors that lead to customer loyalty.  We all know about the benefits of loyalty, such as: higher profits, lower costs, improved shareholder value, bigger market share, etc.  However, many employees of firms don’t think of this as an important factor.  While the company missions, and the objectives may state that they want to build customer loyalty, their actual policies don’t necessarily correlate with this.

When thinking of customer loyalty, we must also think about the life-time-value of a customer.  Losing a customer means, having lost all the revenue that a customer could potentially provide with us.  To illustrate this point let me discuss another example.

While I can share examples of companies that I have helped I thought it would be best to discuss one where I was a customer.  Usually most people can relate to examples of being a customer.

My baby is nearly two years old now, which makes me a skilled toys assembler.  Anyone whose had kids, will know this, many toys require assembly, and after a couple of years you’ve probably bought enough to give you a new skill to add to your linkedin profile.

I recently purchased a toy at Smits toys.  Took it home and assembled it.  Before my kid had the opportunity to play with it, the thing started to fall apart.  Once he had played with it for 5 the whole things had come to pieces.  So I took it back to Gallions Reach Store in London.

Here is where the problems started.  Both the sales person, (no names Lynda) and the sloppily dressed manager (Raj) doubted my intentions.  They not only refused to refund or exchange a 19.99 toy, but also in the process insulted me and my kid!!!  Wow, I thought to myself.  In the middle of these hard economic times, these guys want to lose their customers, and that too for a mere 19.99 toy.  Now according to them, its not company policy to return toys that have been opened!?  If we analyze their business we see that the lifetime value of a customer would run into the thousands, if not tens of thousands.  These companies are not only selling toys, but also video games and consoles.  If the company policy is correct, then it does not make sense.  Go ahead, lost a customer for a mere 19.99, customer loyalty is not worth it?

While these two are small examples from my own life, there are numerous others that I’ve encountered working with dozens of firms of the last few years.  Companies need to not only to ensure that the whole company is working towards providing great CEM, but also thinking about customer loyalty.

About the 12-step CEM Program

Hi Everyone,

Thanks for the numerous comments on the last blog.  Just a couple of clarifiying points to the last blog.

First, I was asked is this the right order.  Some of you have pointed that perhaps some items should be listed up top.  I think this list gives guidelines, and it needs to be modified according to the organization that you are working in.  For instance, in some organizations it may be easier to get the management to committ to CEM, while in others it may be a bigger challenge.  Hence, someone implementing these steps would modify the list according to their needs.

Second, I was asked about expereince mapping.  Basically an expereince map is a digramitical representation of the stages a customer goes through while interacting with your firm.  For some companies this starts with the advertisement that the customer sees.  Others start with the booking of the service, or the purchase process, etc.  Either way, we are looking for the interaction, and the experince that a customer may have.  More importantly we want to identify the expereince that the should have.  I’ve seen a number of tools which can be used for this purpose, so you don’t have to do it manually.

I hope this clarifies some of the issues raised.  If you would like to discuss these in more detail, you can always email me.

I have an interesting model for creating online customer expereinces, which I hope to share with you in the near future.

WOM still the most powerful tool for a marketer

Word of mouth, or recommendation, is the most powerful tool marketers have in their arsenal for attracting and retaining customers.  Despite this being the most powerful of the tools, it is one of the most overlooked, and hence I thought I would devote this blog to the importance of WOM.

Research indicates that customers are more likely to purchase a brand / product based on recommendation from a trusted source than from any other means.  This includes advertising, PR, online marketing, etc.  Moreover, researchers have found that those people who purchase a product based on recommendation from a trusted source are more likely to become loyal than those that went there as a result of other sources.  Interestingly there is further research which states that more customers are likely to purchase a product based on recommendation than even their own past experience!

My research indicates that emotionally attached customers are the ones that are most likely to recommend a brand, and are the ones that will do it most frequently.

Recommendation is also a free tool for marketers.  Usually you don’t spend money on this.  However some companies have started to realize the importance of recommendation and reward their customers who recommend others with vouchers, discounts, and free gifts.

Social media has enabled our customers to use the power of the web to broaden their scope of friends.  This now allows for our customers to reach a wider number of people, and much faster too.

The only problem with recommendation is that it is not really in the control of marketers, or at least not until now.  Companies need to develop strategies, devote budgets, and create teams that will look after recommendation.  With it being a very powerful tool, we must learn to take advantage of this, and not to let it evolve on its own.  Companies need to devise strategies that will assist their customers in being better at WOM.  Various rewards that are being used by firms is just one way to encourage customers to start recommending the company to others.  However there much more to be done.  Companies that can harness the pwoer

Back from a long break

Hi everyone.  As you can see, I had been away for a while.  Much has been happening since.  Presenting at a number of conferences, consulting work, and a number of other interesting projects.  One of these involves being a director for a non-profit organization called Children Education Society (CES).  CES is involved in providing education to under-privileged children in hot spots around the world.  Some of the work they do is with children from war torn Afghanistan, as well as those that had been affected by the floods in Pakistan.

I’m also now working as a Director for the Center for Innovations in Business & Management Practice.  This organization aims to spread innovatory business and management practices, by bringing together academics and managers.  Their first event attracted people from 20 countries from all over the globe.

I have also been working on a book on Customer Loyalty.  I will be posting more details about this in the future.  Now that I’m back,  I will try be more regular at blogging.  Take care and have a good weekend.

7000 visitors and counting

It appears that my recent trip to the US has made a strong impact on my blog visits.  While the US had overtaken the UK, in terms of visitors, after my recent visit the numbers have shot up.  Visitors from the US now make up more than double the visitors from the UK!  Once again, thanks everyone for visiting the blog and for the comments.  Will try to cover some of the suggested topics.  Do keep the comments coming.

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