Customer Experience Management (CXM): The Best-Practice Capabilities of CX Leaders

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As ever-greater numbers of organizations embrace the age of the smart customer, you might expect Customer Experience Management, or CXM, to be a well-understood term. After all, like ‘customer experience,’ it’s used a lot. However — also like customer experience — it describes many things.

So, to avoid confusion and doubt, I’d like to start this article with two definitions:

  • Customer Experience (CX): “How customers perceive their interactions with your company”
  • Customer Experience Management (CXM): “The collection of capabilities and processes used to systematically design, deliver, and react to customer interactions”

This distinction is important for a simple reason: To radically improve your customer experience, you need to radically improve your Customer Experience Management (CXM) capabilities.

Which is why customer experience leaders — defined as the top 20 percent of companies as measured by CX scores, revenue and profitability growth, customer retention, and profit — share a number of customer experience management capabilities in common.

How CX Leaders Lead: CXM Secrets Revealed

Since much of our work over the last 15+ years has been helping organizations enable their customer experience aspirations, we’ve had the pleasure of working with CX leaders in industries ranging from retail to technology, insurance, banking and non-profits.

Though most are organized and go to market in different ways, they have one thing in common: They understand what it takes to positively impact the design and delivery of customer experience. They also understand how design and delivery can be most effectively leveraged together.

After years of observing and assessing these leaders, we codified and summarized the shared attributes and capabilities of the most successful, customer-obsessed organizations. These capabilities — eight in total, with multiple attributes that support them — can help any organization do a better job designing, developing and delivering great customer and employee experiences.

 

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This summary could serve as a roadmap for scaling and systematizing customer experience management (CXM) expertise in any organization.

 

The 8 key customer experience management (CXM) capabilities include:

  • Experience Strategy: Aligned to your brand and business strategies, your experience strategy provides the “north star” for you to deliver on the expectations set by your brand
  • Customer Understanding: Deep insight into customer wants, needs, and perceptions provides the foundation for design and delivery of experiences that meet expectations
  • Experience Design + Innovation: This capability allows you to design products, services and experiences that meet customer needs and differentiate your business
  • Governance: Despite its tedious overtone, governance is critical to effectively prioritize investments, guide delivery and hold the business accountable for improving the end-to-end experience
  • Culture: A customer-centered culture helps align the behavior of your people, and the meaning they attach to those behaviors (e.g. rewards, social cues), around the customer
  • Measurement: Gauging the CX metrics that drive business results is critical to understanding experience delivery and its impact on business performance
  • Technology: Comprehensive tools that enable your organization to understand and distribute knowledge of your customers, and to deliver and support customer experience
  • Processes: The systems your organization develops and enables that support the design, delivery and management of customer knowledge, data and experiences

CXM enables greater customer centricity, and the institutional ability to sense and respond to change more quickly and effectively than the competition.

From the velocity of changing customer expectations to fast-moving market dynamics, the ability to sense and respond to change (customers, employees, partners and competitors to name a few) isn’t just a business philosophy, it’s a survival requirement.

Getting to the stage that this can be done both regularly and systematically — with systems in place to drive ongoing improvement — requires a framework to leverage and a path to follow. That’s the crux of customer experience management.

Mastering these CXM capabilities not only allows organizations to be more customer centric, it also allows them to be more agile and responsive to changing markets and other ever-changing forces. As these capabilities mature, customer experience will further ingrain itself in the cultural DNA of those organizations that prioritize activating CXM.