I have to admit, that when I first heard about Customer Experience, Customer Experience Management and Experience Economy some three years ago, I did not pay much attention. After all, the world of consulting is famous for inventing terms to stand out in the market.  And I pretty much thought, that those expressions we're just another way of saying the infamous three letter abbreviation "CRM" (Customer Relationship Management").

But about a year ago I decided to dig deeper. Customer Experience Management, I learned, is about mapping, improving and delivering valuable experiences to the customer. And as such is in reality very closely connected to CRM, or even better, your customer strategy. 

In the 1980's SAS former CEO Jan Carlzon coined the term "moments of truth". And if you haven't read the book "Breaking down the Pyramids", I suggest you do. Even if it is some 20 years old, many of the thoughts and principles applied by Mr. Carlzon in the day, are still very much relevant in 2006 and the years to come. And may be a great inspiration to your own work targeted at delivering better customer experiences.

Customer Experience Management defined
As I understand it, Customer Experience Management is concerned with all customer interactions, not just those that lend themselves to automation. And quite importantly, it deals with the customer's perception of value, which has both functional-"Did it do what it was supposed to do?"-and emotional-"Did I enjoy how I was treated?"-components.

CRM proponent Professor Bernd Schmitt goes so far as to say that products can be turned into experiences. I have to agree. In the articles about Nike Plus and Apple Ipod (found elsewhere in this magazine) I believe that the concept is clearly and effectively demonstrated.

The thing is, we are all creatures of experience who love to reflect on, recount, relive and learn from our experiences and do so as a matter of daily effort. What that means is that whether we are falling in love or heading to the store to buy groceries, everything we do shapes us each day.

But there is more than just a sum total set of experiences in the hand played by all human beings. We are not only creatures of self-interest but also creatures of "control your own" self-interest. Note that I did not say, "selfishness." I said "self-interest." Each of us wants to have control of our hopes, dreams and ambitions. Do you know anyone who doesn't?

The business ecosystem
The current business ecosystem is one that has a highly volatile, empowered customer at its center. The (customer) experience is now paramount. The increasingly similar look, feel and content of product and service offerings are no longer value differentiators. In most cases, the only true differentiator in this era is the experience the customer has with your company, good or bad. The more convenient, comfortable, collaborative, transparent and omnipresent the experience, the more likely you are to create an "ambassador". 

In 2006 and beyond, customers demand collaboration in crafting their own experience with their chosen vendors -- whether the company wants it or not. This leads me back to the case about Nike Plus and Apple Ipod. They allow each and every customer to design his own experience.

So in short - the Customer Experience Management is about providing (great, good, above average) customer experience across a multitude of channels and in myriads of customer encounters. The bonus is an increasing group of satisfied, loyal or - even better - ambassadors (highly committed customers who actively refer and promote your business to others). 

And if you think this doesn't apply to your business - think again.

Why not satisfied customers?
But why an ambassador and not just a satisfied or loyal customer? Why make it even more complicated and challenging than it already is? 

The short answer is: Satisfied customers leave companies almost as frequently as dissatisfied customers. A Harvard Business Review study showed that 65 percent to 85 percent of the customers polled were satisfied before they left their vendor. 

Loyal customers, while better to have than satisfied ones, aren't necessarily profitable. They know the system and can manoeuvre through it to optimize their return against the best interests of the company. But advocates provide an extended "sales force" that brings in new customers--a qualitative step-up, indeed. 

The supermarket story
And talking about advocates and referrals, I can not help bring up a personal experience. In fact an unexpected, personal shopping experience, so good, that Føtex - a Danish chain of stores similar to Kmart, ICA - deserve recommendation. 

A couple of weeks ago my pregnant wife and I were shopping for our daughter's birthday. Our trolley was absolutely packed when I loaded an additional 15 large bottles of soda. A young sales person walked by, and apparently he noticed. So he asked me "do you want a case for the sodas - it might be more convenient for you, and you'll be able to fit more into the trolley." Surprised as I were I - of course - accepted realizing how much more convenient that would be. 3 minutes later he was back, and I had a surprising, yet great, experience from a store not known to provide service at all. 

Am I coming back there? Yes, you bet. Am I going to tell other people about this experience? Count on it!

How are CRM and Customer Experience Management related?
In the ideal world, Customer Experience Management should be an integral part of CRM as a business strategy, but that's rarely the case.

Customer Experience Management helps the enterprise see the customer with the "right brain"-concerned with perceptions, feelings and interactions that are harder to quantify but valuable, nonetheless.

Instead of just looking at how valuable the customer is to the enterprise, Customer Experience Management requires an inspection of the enterprise's value to the customer. Rather than recording transactional information like leads, opportunities and average handle times, it maps the experience from the customer point of view. Once again good ol' Danish philosopher Søren Kierkegaard's words about "looking outside in, not inside out" can be put to good use.

In CRM, people are said to be important, but somehow CRM projects are mostly about IT investments that do little to improve the customer experience. 

In my next article I will discuss how CRM and Customer Experience Management are related, and how you might even expand your existing CRM efforts to include Customer Experience Management for the benefit of your organization, and - not to forget - your customers.