Customer experience optimization: the new CEO

As an organization considers how best to implement CRM using the customer as the design point, it becomes clear that, though not all customers will be treated the same, each customer’s experience must be optimized (where “optimized” does not necessarily mean “maximized”). This concept, called “customer experience optimization,” or CEO, presents a means to implement business and technology strategies appropriate to particular customer segments — essentially augmenting customer treatment patterns with the notion of the customer’s experience .

However, there is an intrinsic duality within CEO that parallels the duality impounded in CRM itself: Are we implementing customer experience optimization because we want to improve how customers feel about us (external view), or are we doing this because we want to improve our revenue and ultimately our profitability (internal view)? Indeed, this duality is a balancing act between two CEOs — the external value delivered to the customer (customer experience optimization) and the internal value realized (customer equity optimization).

As it turns out, organizations that do not consider both perspectives will fail to fully realize the promise of CRM. Indeed, there are 10 business imperatives to achieving CEO.

Imperative 1: Create Persistent Customer and Segment Profiles Organizations must have a structured approach to consistently collecting accurate customer information as input into their customer profiles and segmentation strategies. The data collected must reach beyond traditional transactional and demographic information to include information about all interactions whether or not there was a resulting sale. Predictive techniques can be applied to enhance declarative rules in determining which offers to make to which customers and segments. Technology solutions must enable creation of the panoramic view of the customer across time and business lines.

Imperative 2: Apply Segment-Specific CRM Treatments to Life-Cycle Scenarios Companies cannot afford to under (or over) invest on customers, and thus CRM treatments must be aligned to customer segments based on the segment’s value to the organization (see Delta 2800). Not simply for marketing, such segment-specific CRM treatments apply to all customer life-cycle scenario execution. Technology solutions must be adaptable to be used in different contexts and to adjust to changes in the customer base and in the marketplace.

Imperative 3: Recognize Customers Across All Touch Points Treatments across all channels must be consistent and must result in strategic value to the business (e.g., cross-channel integration). Technology solutions must be consistent to enable the corporate memory to be effective across all parts of the business.

Imperative 4: Ensure Vertical Industry Process Support Treatment requirements vary by industry and must be designed around customer processes within that industry. Technology solutions must be contextual within the industry and business model of the enterprise, including data models and business processes. Imperative 5: Embed Analytics Into the Business Processes Predictive and declarative analytics (in as distinct from pure transactional reporting) must be embedded into the DNA of business process and then deployed through the operational environment. Technology solutions must enable this tight coupling of operational and analytical processes so that knowledge and experience can be deployed into the business, independent of people and systems.

Imperative 6: Personalize the Experience, the Offer, and the Product The ubiquitous notion of “one to one” marketing does not obviate segment-based approaches if personalization is applied to participants within the segments. Also called “mass customization” (or indeed “mass personalization”), technology solutions must be tailorable so that customers perceive an individualized treatment that is meant explicitly and uniquely for them – even if the treatment is meant for a number of individuals just like them.

Imperative 7: Create and Manage the Customer Portfolio The customer portfolio has two dimensions: 1) the complete collection of customers; and 2) the treatments (e.g., offers, experiences) to be applied to each of those customers. Ultimately, an organization must optimize the portfolio itself rather than (necessarily) maximizing each individual customer interaction. Technology solutions must provide the necessary tools for appropriate allocation of resources to maintain the balance between customer equity and customer experience commensurate with value of the customer to the organization.

Imperative 8: Establish Management Discipline and Accountability In the age of regulatory compliance imperatives and a focus on overall organization risk, there must be executive visibility via tight linkage to business strategy/objectives. Technology solutions must be coherent so that accountability is maintained, even through various perspectives and business structures.

Imperative 9: Establish Learning and Knowledge Management Organizations must have the ability to learn and adapt as customer treatments change by putting in place a process to systematize continuous refinement (closed loop) and self-learning. Technology solutions must be learning-oriented so that improvements can be looped back into the decision process.

Imperative 10: Create an Integrated Value Chain The business ecosystem and the constituents that support customer experiences must come together to create a seamless customer experience. Technology solutions must be extensible to enable partnering across organizations.

-Several technology strategies are required to optimize customer experiences:

-Analytics to drive relevance and personalization into the value proposition and anticipate the next likely customer need or action (with the assumption that the data is clean and accurate)

-Event-driven customer communication processes triggered by customer act, condition, or rule

-Capability to do automated multistep communications executed over multiple channels to cultivate meaningful dialogs with customers

-Consistent individual customer recognition and treatment across channels

The customer experience, at every interaction, affects future revenue and profit. Customer experience optimization ensures that such customer experiences across channels and marketing media reinforce the organization’s basic brand value proposition and differentiate its business. To achieve CEO, organizations must determine the appropriate level of investment in customer experiences versus potential equity improvement, and must ensure that they have the technology capabilities to optimize customer experiences and relationships with their business.

Bottom Line: Customer experience optimization and customer equity optimization are opposite sides of the same coin. Organizations must implement 10 imperatives to create an optimized customer portfolio.

Business Impact: Profitable customer relationships require a balance between the optimization of customer equity and customer experience. Not all customers can be treated the same.

Would you recommend this article?


Thanks for taking the time to let us know what you think of this article!
We'd love to hear your opinion about this or any other story you read in our publication.

Jim Love, Chief Content Officer, IT World Canada

Featured Download

Featured Articles

ADaPT connects employers with highly skilled young workers

Help wanted. That’s what many tech companies across Canada are saying, and research shows...

Unlocking Transformation: IoT and Generative AI Powered by Cloud

Amidst economic fluctuations and disruptive forces, Canadian businesses are steering through uncharted waters. To...

Related Tech News

Tech Jobs

Our experienced team of journalists and bloggers bring you engaging in-depth interviews, videos and content targeted to IT professionals and line-of-business executives.

Tech Companies Hiring Right Now