What is Customer Experience Management?

Author - Ennova

Understanding and implementing effective customer experience management in your business is key to success. But what is it and why is it important? This and more will be covered in this article.


In this article, you will learn more about the following:

  1. What is customer experience management?
  2. Why is customer experience management important?
  3. What is the difference between CRM and CEM?
  4. Examples of CEM metrics

What is Customer Experience management?

Customer experience management (often called CEM or CXM) is the process of managing all interactions a customer has with your company - the entire customer journey - with the goal of improving overall customer satisfaction, loyalty, and advocacy by meeting or exceeding their expectations, and, thus, establishing a positive perception of your company in their mind.

It involves understanding and managing customer interactions across multiple touchpoints. This can include managing interactions through various channels such as in-store, online, and over the phone, as well as gathering customer feedback and using it to make improvements to products, services, and the overall customer experience.

CEM often involves close collaboration between different departments within your company, such as marketing, sales, and customer service.

Why is Customer Experience management important?

CEM is essential for several reasons:

  1. helps businesses differentiate themselves in a competitive marketplace

    In many industries, products and services are becoming increasingly similar. CEM provides a way for businesses to stand out from the competition by offering superior customer experience.
  2. fosters customer loyalty

    A positive and seamless customer experience promotes customer loyalty. The reason for this is that if a customer has a positive experience with your company, they are more likely to continue doing business with you, thus increasing customer retention. A stronger relation between customers and the company materializes in more customer being willing to invest in increased business over the next 12 months. Read more about the return on investment from having great customer relations here.  
  3. increases customer satisfaction

    CEM is about prioritizing the needs and expectations of customers by focusing on improving every point of contact between the customer and your business. If successful, this will lead to greater customer satisfaction.
  4. Significantly impacts the bottom line

    Happy, loyal customers are more likely to become repeat customers as well as recommend your business to others. This increases customer lifetime value and drives revenue growth. Furthermore, customer retention costs less than acquisition. Thus, effective CEM can impact your company's bottom line significantly. A company that can improve the relationship from a weak relation to a strong relation will on average increase business by 30-50% within a period of two years. Read more about the return on investment from having great customer relations here.  

What is the difference between CRM and CEM?

Customer Relationship Management (CRM) and Customer Experience Management (CEM) are distinct, yet interconnected strategies aimed at improving customer relationships.

CRM primarily manages your company's interactions with current and potential customers, focusing on optimizing internal processes to improve relationships, enhance customer retention, and drive sales growth.

On the other hand, CEM adopts a holistic, customer-centric approach. It manages your customer's entire journey with your business, emphasizing understanding and fulfilling customer needs to boost satisfaction and loyalty.

Strategically, CEM goes beyond CRM by implementing processes that ensure a unified, seamless customer experience across various channels. While CRM is about managing customer relationships, CEM is about elevating the entire customer journey.

Type of Insights Offers quantitative insights through impersonal data analysis, viewing customers in terms of statistics, data, and trends. Delivers qualitative insights by unifying relationship data across the full customer lifecycle, prioritizing customer experiences.
Focus Concentrates on operational business improvements. Prioritizes customer engagement.
Customer Service Approach Enhances customer service through integrations across different channels. Anticipates and responds faster to customer needs, leveraging AI and applied CRM data for real-time enhancement of customer experience.

Examples of CEM metrics

Effectively tracking and analyzing CEM metrics allows you to measure the success of your company's CEM strategies and provides valuable insights for improvements. Examples of useful metrics include:

  1. Net promoter score (NPS)

    This metric measures customer loyalty by asking customers how likely they are to recommend your company's product or service to others. The NPS is calculated by subtracting the percentage of detractors (those who would not recommend your company) from the percentage of promoters (those who would). If the NPS is high, it indicates a healthy level of customer loyalty and satisfaction. Download our guide "All you need to know about the new NPS 3.0" here:

    Net Promoter 3.0 - inspiration from Fred Reichheld

    Or watch our webinar "How to use NPS 3.0 to drive a successful business"

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  2. Customer satisfaction score (CSAT)

    CSAT gauges the short-term happiness of your customers by asking them to rate their satisfaction with your business, product, or service. Typically, CSAT surveys are conducted after specific touchpoints or interactions, such as a purchase or a customer service call, to measure satisfaction at those moments.

    Get to know more about CSAT and why it is important.
  3. Customer Effort score (CES)

    This metric evaluates how easy it is for customers to interact with your product or service, which can impact their overall experience. A lower CES indicates that customers can achieve their goals with less effort, which can lead to higher satisfaction and loyalty.
  4. customer churn rate

    A company's churn rate is the percentage of customers who discontinue their business relationship with your company over a given period. A high churn rate is often a sign of customer dissatisfaction or competitive disadvantages, highlighting the need for improvements in customer experience.

    Read more about how you can reduce your customer churn in a B2B industry.
  5. customer lifetime value (CLV)

    CLV is a key metric that determines the estimated total revenue your business can generate from a single customer throughout your relationship. It can help decide how much your business should invest in retaining existing customers and acquiring new ones.

If you understand and track these metrics, your business will be able to make informed, data-driven decisions that will enhance customer satisfaction and loyalty. However, you should keep in mind that while these metrics are individually important, they should be used collectively to create a holistic overview of your customer experience.


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