Improving Loyalty a Key Objective for 58.6% of Customer Experience Professionals In recent times, customer experience management (CEM) has undergone a series of massive transformations as companies increasingly recognise that there is more to satisfaction than simply providing a good product or service. Faced with highly-penetrated markets, decreased consumer spending and growing internal pressure to cut costs, more and more businesses are shifting their focus from customer acquisition to retention. It is now a widely-accepted principle that measures driving repeat business are invariably cheaper to put in place than programmes to recruit new customers.
With this in mind, CEM professionals are waking up to the fact that, to succeed amid intensifying competition they must build long-term bonds with a loyal customer base. A recent Customer Management ExchangeÂ survey, conducted ahead of the Customer Experience Exchange 2011, revealed that encouraging loyalty was currently a main objective for almost two-thirds of customer experience managers.
The increasing value of customer loyalty As companies in virtually all business segments, in practically every market worldwide, emerge from the most severe economic turbulence in living memory, the value of building customer loyalty has been brought under increased focus. Bruce Temkin, former Forrester Research principal analyst and author of the Temkin Group report titled Customer Experience Correlates to Loyalty explained how the CEM agenda was changing. "Since new customers are harder to come by in an economic downturn, firms need to pay even more attention to building loyalty with their most important customers. If firms lose pace with competitors' customer experience, they may end up attenuating the negative impact of the economic downturn."
Current trends in customer experience management The latest Customer Management ExchangeÂ research, carried out ahead of November's Customer Experience Exchange event, in Berlin, revealed some of the prevailing trends concerning CEM professionals in 2011. Delegates representing virtually all key industries, from retail banking to
telecommunication, IT and healthcare, were involved in the study. When asked to disclose their personal annual customer experience budget, almost three-quarters of respondents admitted to having less than €1 million (£875,000) to spend this year. Perhaps this reflects the recent tendency for marketing expenditure to be revised downwards amid tougher trading conditions. Less than 20 per cent of respondents had budgets of between €1 million and €5 million, while only 3.3 per cent were responsible for spending of more than €20 million.
Customer Management Exchange also examined the economic trends that have had the biggest impact on CEM professionals' role in recent months. Unsurprisingly, the global recession was cited by 39.7 per cent of respondents. Quite interestingly, it was increased customer demands that accounted for the largest proportion of the vote, with 67.2 per cent of delegates choosing this response. Social media was said to have had the biggest impact on the work of 36.2 per cent of CEM professionals, while general advancements in technology were behind most change for 25.9 per cent. Meanwhile, just over ten per cent of participants cited mergers and acquisitions as the recent economic trend that has had the most impact on their role within the organisation. Respondents were then quizzed on their main CEM objectives for the coming six to 12 months.
Customer loyalty emerged as one of the key focus areas, which along with customer satisfaction was cited as a priority by 58.6 per cent. Profit generation was named a main objective by 37.9 per cent of participants, while just over a quarter said their focus would be on productivity. Employee development, restructuring and cost-cutting activities were cited as organisational goals by 25.9, 24.1 and 20.7 per cent respectively. Key areas of investment The recent Customer Management ExchangeÂ survey went on to ask delegates, having considered their main organisational objectives, to reveal the marketing solutions most likely to be targeted for immediate investment. Reflecting the increased industry-wide focus on retention and repeat business, customer loyalty was singled out as an area for investment in the short term by 11 per cent of respondents. Similarly, customer insight and CEM were each earmarked as priorities by ten per cent.
Developing the online customer experience and social media monitoring were the next most popular areas for investment, cited by eight and seven per cent of CEM professionals respectively. Six per cent said their immediate focus
would be on marketing research while an equal number of respondents named data analytics as their organisation's main priority in the year ahead. Looking further down the line, the study results suggest that CEM professionals are likely to change their approach within the next two or three years. When asked to disclose the aspects of marketing most likely to receive investment in the longer term, 14 per cent named customer interaction management as a potential target. Social networking and online communities were also named by 14 per cent of respondents as likely investment areas in the coming two or three years. These were closely followed by CEM and multi-channel integration, which were each named as potential focuses by 11 per cent of participants.
Future aims In concluding its study, Customer Management ExchangeÂ asked delegates to reveal the overall ambition motivating their current plans for investment in customer experience improvement. Almost three-quarters of respondents said they were first and foremost looking to deliver a holistic and integrated customer experience. Exactly half of those surveyed said their main aim was to be able to demonstrate the ROI of customer experience within their organisation.
For 46.6 per cent of CEM professionals taking part in the study, the top reason for investing in their chosen solutions was to drive more profitable customer behaviours. Almost 35 per cent said their priority would be achieving more efficient operations, while the same proportion were focusing on the development of a happier, more engaged and more productive workforce.
The Customer Experience Exchange 2011 will be hosted from 29th November â€“ 1st December in Berlin, Germany. For details, please visit: www.customerexperienceexchange.com, call freephone: 0800 652 2363 or email: firstname.lastname@example.org.