Software to Manage Customers: CRM vs. CEM
The terms sound interchangeable: customer relationship management (CRM) and customer experience management (CEM). But they really help businesses with two entirely different business processes and small and mid-sized businesses would do well with a technology plan that marries the two.
Though the term has evolved since it first made the scene 25 years ago, CRM now mostly refers to software used to manage and maintain customer records while CEM tools help a business enhance its customer interactions, says Ed Thompson, an analyst at Gartner, the IT research firm based in Stamford, Conn.
Essentially the two types of software solutions are pieces of the same puzzle and should be used together, says Patricia Seybold, who owns the Patricia Seybold Group of Boston, which advises businesses on customer relationship issues.
Easy ways to distinguish CRM from CEM
Confused? Thompson offers an easy way to distinguish between the terms.
'CRM is more inward looking and is mainly used in the sales and marketing department, while CEM is outward looking and touches all departments,' he says.
CRM is generally project based, while CEM is sweeping in its focus.
'CRM might look at acquiring more customers or cross selling to customers or increasing campaign response rates. It has a huge range of different objectives,' Thompson says. 'But CEM is about four things: improving customer satisfaction, improving loyalty, improving advocacy, and living up to brand promise.'
Business owners generally determine the way their customers perceive the company by surveying those customers. Thus, surveys are the chief CEM tool. CRM software, which is now widely available to the small and mid-size business owner, tracks customer interactions via hard data such as how often a salesperson has contacted a customer. Feedback, or company perception, isn't really part of the stored information, Thompson says.
But a business needn't invest in specialized CRM and CEM software, Seybold says. Really all a business needs are set methods for tracking customer experience and customer contacts.
Measuring customer experience
To measure the elusive customer experience, many small businesses turn to third-party companies that develop customer satisfaction and loyalty surveys that objectively measure certain company attributes, Seybold says.
'They help you come up with a set of surveys you can do once a year or whenever someone interacts with you -- whatever you want -- and then you use that information to see where you're falling short, you make improvements, and resurvey at regular intervals,' she says.
But the survey used needn't be expensive, she says. Software like SurveyMonkey allows customers to create and distribute their own surveys.
But before compiling a list of survey questions, Seybold recommends contacting a simple focus group with customers intended to uncover their expectations. This ensures questions are on point and target customer needs. A survey that's off base can't truly measure customer experience, Seybold says.
Take the example of a lawn maintenance service.
'You find customer critical needs this way. Does the grass grow too high before it's mowed? Is the lawn mower too noisy? Do the employees clean up after themselves?' she says. 'Once you understand what's important to customers then you can not just their opinions on those items but ask specifically how tall is your grass before we mow it? Is that too tall for you?'
As for CRM software, a business must shop for software to fit its unique needs. The package needn't be filled with bells and whistles. Seybold has found this to be true at her own small business, her consultancy.
'I've tried four different CRM packages and I've settled for a very basic contact management approach with spreadsheets because for volume of business we do that works fine,' she says.
SIDEBAR: CRM vs. CEM
The differences between CRM and CEM software include the following:
- CRM tracks and manages customer contacts.
- CRM is specific to customer or to a company project.
- CRM software is most often a database-based.
- CEM is generally a sweeping term that refers to gathering customer input the better to change business operations.
- CEM gauges many customers' reaction to the business.
- CEM mainly uses survey software to gather customer input.