A Guide to Customer Experience Management

Customer experience management is a multitude of processes, strategies, and techniques businesses use to track and oversee every customer interaction throughout the entire customer lifecycle to increase customer satisfaction, loyalty, and advocacy. The main goal of CX management is to improve the customer experience at every stage of the customer journey, from being aware of your brand to becoming a loyal customer. Providing a good customer experience can give your brand a competitive edge.

The customer experience contributes to consumers' perceptions of your brand and, ultimately your bottom line, with 86% of consumers willing to pay more for a great customer experience. Customer experience has become a critical differentiator in today’s hyper-competitive, hyper-connected global marketplace. In fact, 81% of organizations cited customer experience as a competitive differentiator in 2024.

There’s tangible business value in managing the customer experience effectively and optimizing the customer journey. Good customer experience management is essential because it can:

• Boost revenue

• Improve customer loyalty and create brand advocates

• Reduce customer churn

• Boost client satisfaction rate

• Improve customer retention

• Improve customer lifetime value

• Increase brand equity

• Improve crisis management

• Reduce costs of service and marketing

• Improve customer engagement

• Achieve a deeper understanding of customers

• Help maintain a competitive edge

CXM is often confused with customer relationship management (CRM), but these concepts are different. CXM takes the next step in managing customer relationships, while CRM mostly deals with optimizing a business's internal processes. CXM offers a more customer-centric approach with new technologies, processes, and strategies.

CXM vs CRM:

Harnessing the wealth of data provided by a CRM enables businesses to enhance the customer experience. This is where CXM plays a crucial role. By analyzing the data obtained from their CRM, businesses can make informed observations and predictions, allowing them to anticipate their customers' needs proactively.

While investing in customer experience management can yield notable benefits, there are a few challenges to overcome.

To deliver a seamless omnichannel experience to customers, companies need to utilize multiple communication channels, like websites, social media, and brick-and-mortar stores, and ensure all platforms stay on the same page. The idea is that whichever channel customers use, they should get the same experience. When businesses can’t listen to or help customers in the channels they are interacting with, customers can't voice their needs, increasing the likelihood of taking their business to a competitor.

Businesses often face challenges with organizational and channel silos, which hinder information-sharing and collaboration among departments, leading to inefficiencies in customer interactions and fragmented data across sales and service channels. These silos result in missed opportunities, wasted resources, increased customer churn, and suboptimal return on investment. To address these issues, organizations must integrate sales and marketing databases to gain a comprehensive view of customer behavior and deliver seamless experiences throughout the customer journey.

Businesses can struggle to measure the success of their customer experience strategy. A survey done by Oracle states that “57% of respondents report being unsure or not having enough knowledge of what to measure in order to indicate their customer experience strategy is getting better.” Progress is likely to be mirrored in a company’s bottom line, but that’s not the only indicator of an improved, more seamless customer experience. 

Customer loyalty, brand trust, positive brand association, and word-of-mouth referrals are further positive outcomes of CXM investment that can be difficult to track. It’s one thing to commit to improving how your company handles CX, but there’s no way to know if any changes are effective when you’re unable to measure those improvements. Investing in customer service software with customer experience analytics is a solution.

Companies often rely on aging survey-based measurement systems, which have for decades formed the backbone of their customer experience efforts. These systems track CX performance through brand and relationship surveys and even inform strategic business decisions based on feedback. However, leaders now recognize that survey-based measurement systems often fail to meet their companies’ CX needs. 

A Mckinsey & Company survey of CX leaders from US-based companies found that 93% of respondents reported using a survey-based metric (such as Customer Satisfaction Score or Customer Effort Score) as their primary means of measuring CX performance. Still, only 15% of leaders said they were fully satisfied with how their company was measuring CX — and only 6% expressed confidence that their measurement system enables both strategic and tactical decision making. Leaders pointed to low response rates, data lags, ambiguity about performance drivers, and the lack of a clear link to financial value as critical shortcomings.

Though leaders may understand the importance of developing customer experience strategies, they still have to convince the decision-makers of their companies to invest in CX strategies and stay current with technological advancements. Getting leadership to adopt a CXM approach and its associated software is an essential factor in obtaining the resources necessary for a successful CX program. According to Oracle’s earlier survey, “The majority of respondents thought their companies were lagging, and only 13% of those surveyed believed their companies are keeping pace with emerging and changing technologies.”

An omnichannel customer journey consists of key interactions over multiple touch points between customers or prospects and a company from the point of sale to the entire customer lifecycle. However, many businesses struggle with managing a large amount of data and have no way to combine it for accurate analysis.

Privacy and security concerns also complicate consolidating data into a single customer profile. Additionally, qualitative customer data such as social media engagement or phone conversations can be particularly challenging to account for. Without understanding the complete customer journey and specific touchpoints, there’s a risk of overlooking inaccurate or conflicting data.

A customer experience strategy defines the actionable plans to deliver a positive, meaningful experience across all these interactions. CX strategies should be both forward-looking and have an actionable level of detail. A CX strategy must serve as a road map to actualize, deliver, and measure progress toward the customer-centric goals of the business. Here are some techniques to effectively manage the customer experience:

Understanding how customers feel about a product, brand, or service is a key asset to a successful customer experience. To deliver an amazing customer experience, businesses must know their customers better than ever before.

This requires creating and maintaining complete customer profiles that help better understand and measure the customers' journeys at every touch point across multiple channels. A customer journey map outlines all the opportunities, pain points, and interactions businesses use to guide CX improvements. By documenting customer pain points, attributes, and characteristics, companies can deliver a superior customer service experience before they ever request help. Plus, businesses can predict issues before they arise, provide effective self-help resources, and better align with customer needs if they reach out to the service team.

Friction points can occur anywhere in the customer lifecycle — marketing, purchase process, shipping and logistics, product or service issues, returns and exchanges, billing, online user experience, and more. Managing CX means identifying and quantifying friction points in the customer journey, determining the root causes of those friction points, and resolving the problems at their origins. 

CX teams should also collect voice of the customer data throughout the entire journey to identify where to improve experiences. It's not enough to simply have that data; brands should understand customer emotions through customer sentiment analysis tools and techniques. Once businesses understand what touchpoints and interactions they want to measure and improve, creating a system is the next step. This is where most companies turn to customer experience software. Customer experience platforms are tools for companies to measure, report, analyze, and take action on customer feedback.

Businesses can optimize the customer journey by really listening to their customers. Once a business has a deeper understanding of its customers, it can get an enhanced view of customer behaviors and preferences across all touchpoints. This allows for more detailed segments to provide highly relevant personalized experiences that customers demand. Cultivating deeper, lasting relationships with customers through intelligent customer service management drives loyalty, retention, and conversions.

For effective consumer experience management, businesses should invest in customer experience software and tools. It helps businesses manage and measure their entire organization’s interactions with customers, both current and potential. This technology acts as a record of interactions across all your customer-facing touchpoints, but not every customer experience management software is the same.

You’ll want to ensure the software can:

• Aggregate all sources of customer contact and feedback

• Support customer service teams in providing omnichannel support

• Classify each customer interaction with a taxonomy unique to your business

• Visualize data down to the individual interaction in one application

• Provide automation and self-service tools to solve simple tasks, freeing up your CX team for more strategic ones

• Democratize access to data and insights across the organization

• Manage all inbound and outbound calls through contact center software

• Leverage cutting-edge machine learning to refine identification continuously

• Include data security and be GDPR, CCPA, and Australian Privacy Act 1988 compliant

Khoros Service is an all-in-one digital contact center solution with AI-powered self-service, omnichannel workflows, unified analytics highlighting customer journey insights, and more. Our solution helps brands deliver an always-on customer experience across any channel.

Khoros is the most comprehensive solution for a unified, actionable view of the customer journey to create world-class customer experiences. Our digital customer service software supports direct customer interactions while providing invaluable customer journey insights through our unified analytics feature. Whether your focus is on online communities or social media, our solutions are designed to elevate the customer experience.

Our new automation command center also incorporates self-service capabilities and automation into every customer interaction, so you’ll be equipped to deliver an exceptional customer experience at every stage of the customer lifecycle.

To learn more about how Khoros can help you improve the customer experience, schedule a demo today.