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.

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