I was speaking at a Customer Experience conference recently and was asked by one of the delegates “So what comes after CEM?” We have grown up on a diet of ‘TLA’s’ (Three Letter Acronyms) first being exhorted to embrace TQM, then BPR, through CRM, CMR and now CEM, so it seems perfectly reasonable to ask about the NBT (Next Big Thing!). But to do so runs the risk that CEM will follow a path of being a fad rather than a sustainable route to achieving competitive advantage and customer growth.

In this series of articles, we share some of the lessons we have learned in working with organisations world-wide to implement CEM successfully. We do this in the hope that we can encourage executives in some of the newer markets to implement best practice and for their US and UK colleagues to focus on what we already know about CEM rather than look for the next silver bullet.

3. Focusing on your most strategically important customers

The starting point for our work is collecting customer data to inform the definition of a promise and design the new experience. The most frequent client response to this suggestion is “We already have lots of customer data and research so you don’t need to bother”. In reality, whilst organisations undertake customer research and collect mountains of data, relatively few know who their most profitable (not largest) customers are. The fact is that a few customers will typically represent the significant proportion of your profit and these are the ones to focus improvement efforts on.

For example Harrah’s, the US-based entertainment and gaming company, found that 82 percent of its profits came from just 26 percent of its customers and yet it only enjoyed 36 percent of their spend. However, when these customers were very satisfied their average spend with Harrah’s increased by 24 percent. By focusing on this target segment, Harrah’s was able to fine-tune its offer to create greater value for these profitable customers. In the following year, revenues increased by 17 percent. [1]

This would seem to be an area where companies in Poland too feel on strong ground because over 75 percent of executives agreed with the statement ‘We have identified our most profitable customers’. However, only 52 percent feel that they are clear about how these customers rate their experience on the things that are most important to them.

[1] Diamonds in the data mine. Gary Loveman Harvard Business Review 2003.

(to be continued in Part 4) 

Shaun Smith veti CX Masterclass –koulutuksen ja isännöi CX VIP-brunssin tammikuussa Helsingissä. Voit käydä tutustumassa tapahtuman tunnelmiin osoitteessa www.cxmasterclass.fi. 

Shaun Smith on kirjoittanut asiakkuuskokemusten johtamisesta viisi best seller -kirjaa, joita pidetään alan perusteoksina. Hänen käytännön kokemuksensa ulottuu yli 30 vuoden ajalta organisaatioihin ympäri Eurooppaa, Aasiaa ja Yhdysvaltoja. Smith on työskennellyt erilaisissa CX-hankkeissa maailman johtavien brändien tukena auttaen suunnittelemaan, kehittämään ja toteuttamaan erottuvia asiakaskokemuksia. Hän on muokannut johdon ajattelua taktisista asiakaspalveluun liittyvistä päätöksistä laajempaan ja strategisempaan asiakkuuskokemuksen johtamiseen.

”The experience you deliver to your customers every day, through every transaction, direct and indirect,  either builds value for your brand or destroys it.”
– Shaun Smith, Founder, Smith+co