girl writing on a blackboard
PHOTO: Nikhita S

We’re in the midst of an evolution in how organizations approach customer-focused programs as more and more of them compete on customer experience. 

Starting in the 1990s and through the mid-2000s, everything was about customer relationship management (CRM). When introduced, these were strategic, board-level programs that intended to identify a common customer across all touchpoints. CRM programs were designed to build loyalty through the promise of a reward such as miles, points or certificates. Net promoter score (NPS) was introduced as the “one number” companies should focus on to measure their customer programs.

Soon after, many CRM efforts that were once strategic turned tactical. CRM became synonymous with sales force automation and the management of sales leads, opportunities and accounts. Membership and loyalty programs become table stakes. But the question remained, did they drive loyalty or make an impact? Grocery store programs, for example, realized the highest levels of diluted value as shoppers could join and still not divulge any personal data.

What a Customer Focus Means Today 

Fast forward to today. Competing on customer experience is the new battleground and customers once again are welcomed to their strategic seat at the boardroom table. But now, companies are faced with a different environment. Customers can easily access information about products, services and companies. Existing companies and new niche players focused on customers can quickly emerge and disrupt entire industries. Competitive advantage is no longer guaranteed through differentiated pricing or product strategies.

So, as customer-minded companies gain ground, it’s more important than ever for companies of all sizes to understand the Customer (with a capital ‘C’): Who they are. What they like. How they buy. Where they interact and transact. Their relationships. Their preferences. Their purchases. The long tail of customer behavior fuels personalization, customer intimacy and longevity. Not only within their own organization — but across companies and the digital spectrum.

Combined, these factors inform customer experience delivery and outcomes. The information about customers that companies hold can be as readily available as information customers can access about companies — if you know where to look and how to manage it.

To organize for customer experience, companies often start with customer centricity or customer engagement. When optimized for customer experience, these two points of view are different sides of the same coin.

Related Article: What Digital Customer Experience Pros Will Focus in 2019

Customer Centricity

Many companies are evolving from being account-centric or product-centric, to being customer-centric. Business processes traditionally organized around product or account, line of business or geography, are shifting to processes that focus on the customer journey across functions, product groups and channels.

This is a cultural shift. With an emphasis on business process, customer centricity is primarily an internally-focused aspect of the customer experience equation.

Putting the customer at the center of the business involves inward reflection, incorporates change management, and requires executive level buy-in and sponsorship. Technology is used to streamline and connect processes across functions, products and geographies with consideration for efficiency and effectiveness.

In other words, customer centricity is built upon the classic three-legged stool of change management: people, process and technology. One important distinction for today’s businesses, however, is that data must be treated and managed as a strategic asset.

Data is the lifeblood of customer-centricity programs. When data is approached as a fourth leg, separate from technology, there’s a certain level of importance assigned to it. The distinct role, value and opportunity of data becomes visible.

Trusted data empowers decision makers in the back office, at the front line, and on executive floors to make the right decisions at the right time about the customer experience. 

Related Article: The Road to Customer-Centricity Lies in Dismantling Data Silos

Customer Engagement

Customer engagement, on the other hand, is externally focused. It is how a company engages outwardly with customers over time and across interactions and transactions, personalization engines, marketing messages, sales conversations, service calls, and so on.  

Understanding how and when a customer wants to engage is critical. Delivering the right message to the right person at the right time has resurfaced as technology enables more precise insights for customer engagement. What becomes critical here is the trust, relevance and context of data that’s used to fuel these decisions.

When all business functions are aligned for customer engagement, it manifests in convenient and consistent experiences for customers, irrespective of the business area, channel or employee the customer is dealing with.

Data is captured across time to understand behavior patterns such as responses to marketing campaigns or channels used for different activities. These patterns then fuel the next best action for companies to take, even if that action is to do nothing. A classic example is holding a marketing message when a billing dispute is ongoing with the customer service team.  

This example highlights the importance of having your customer engagement strategies span across all departments. Customer engagement hubs and corresponding architectures are emerging as ways to automate how data is collected, managed, optimized and analyzed across a company so that everyone sees the same view of a customer. And they allow companies to better adapt to meeting diverse customer needs and ever-increasing customer expectations.

Related Article: Simplicity Is the Future of Customer Engagement

Customer Centricity + Customer Engagement = Customer Experience

On its own, when not coupled with a customer-centric culture or implemented departmentally, customer engagement may deliver only a fraction of the anticipated value. The ultimate goal of a customer-focused organization should be to align both the internal and external processes across the business and at every interaction.

Actionable insights fueled by trusted data empower companies to create a bond with customers that is not only seen, but also felt. When experiences are differentiated; when customers can trust and rely on companies to not disappoint; and when employees are empowered to do what’s right at an individual as well as collective level, that’s when customers demonstrate loyalty.

As you consider your own customer experience strategy for 2019, and whether that’s for customer centricity or customer engagement or both, here’s one piece of advice: don’t overlook an essential element to your success, the data.

Strategic data management allows companies to trust their data and gain visibility into customer wants and needs across the business. Great customer experiences start with great customer data.