How Customer Relationship Management Differs From Customer Experience Management?

Peter Drucker famously said that the purpose of business is to create and keep a customer. To retain customers, you need to create value, thereby fostering strong relationships and brand loyalty that helps your business thrive. Customer Relationship Management (CRM) and Customer Experience Management (CEM) are strategies that can help you track how well you are servicing and interacting with your customers, but they are nuanced goals and need to be employed at different stages of your business cycle.

What is Customer Relationship Management?

It encompasses all the practices, principles, and guidelines that an organization employs while interacting with its customers. The primary objective of CRM is to increase sales. A sound CRM system ensures that your customers are taken care of, in turn streamlining your sales funnel and ultimately improving profitability.

What is Customer Experience Management?

It encompasses all the endeavors a business undertakes to provide personalized, seamless, and useful experiences to a customer. It is a holistic way of managing customer relationships and emphasizes on improving every interaction a customer has with the business. The objective of CEM is to fulfill all customer expectations and create a positive and long-lasting brand impression on the customers’ minds.

CRM vs CEM: What’s The Difference?

While a CRM strategy outlines ways to maximize revenue by managing customer relationships, a CEM strategy focuses on all customer touchpoints and provides the best user experience, from start to finish. 

In a way, CRM can be thought of as a sales technique while CEM is a customer management strategy. CRM is a mid-funnel function that engages with customers after they have been converted. Your business needs CRM to improve sales deals. 

CEM provides a complete understanding of the customer lifecycle and works to deliver tailor-made and effective experiences to customers at all touchpoints. CEM shifts the focus from the business to the customer. It comes into play right at the decision-making stage. For instance, CEM strategies are employed when a customer visits your business store online or offline, or hears about your brand for the first time. With CEM, you get insights into customer behavior to improve customer interactions across the board and build on the feedback that you receive.

Is CEM Better Than CRM?

Both CRM and CEM primarily help you optimize customer relationships. However, CEM is more experiential while CRM is transactional. CRM helps you track metrics such as how much a customer spends on average per order and what categories of products they purchase. Using this information, you can improve your sales. CEM tracks how good of an experience your customer has while shopping with you, how they like to communicate, whether they are satisfied with the grievance redressal process, and what their concerns are.

Final Word

Customer Relationship Management is important from a business viewpoint since it helps you work towards your bottom line. It may be a transactional strategy, but it is crucial to help your business grow. Customer Experience Management helps you dig deeper and add real value to your customers. A strategic blend of the two can ensure that you have strong relationships with your customers who help your business thrive.

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