Customer experience management: How to make the customer experience a competitive advantage

Everyone’s talking about customer experience management. Applied correctly, it can give SMEs a decisive competitive advantage. We show you how SME customer experience management can be put into practice.

The latest findings show that consumers today are less loyal to brands than they were a few years ago. For SMEs, that means: Either you retain customers through attractive offers. Or you generate greater customer loyalty by investing your resources in a targeted manner to make the customer experience with your company’s products and services as positive as possible.

But how can SMEs create a successful customer experience and transform their customers into brand ambassadors? 

This is exactly where customer experience management comes in.

What is customer experience management?

Customer experience management (CXM) is about integrating the customer perspective into the company and systematically focusing on their needs. 

Dirk Weissbrich, Head Customer Experience & Interactions at AXA explains: “Good CXM ensures that there is a common understanding within the company of what the biggest problems are from the customer’s perspective. Very good CXM doesn’t stop there, but rather clarifies which of these problems should be addressed, how they should be tackled, and when. Excellent CXM goes a step further to show where hidden costs may occur if the company does not respond to these problems.”

It should be noted here that the customer experience often starts earlier than your intuition would lead you to believe. “The customer experience of a flight does not start when you board the plane. Instead, it starts when you book the flight at home. The journey to the airport, the ease with which it is possible to find parking, and how smoothly check-in goes are also important factors.”

Why do companies need CXM?

A high level of market and customer focus is a key success factor for every company. After all, customer satisfaction has a direct impact on sales: “Unhappy customers lead to at least double the cancellation rates of satisfied customers,” explains Dirk Weissbrich. 

Especially if the advertising budget of an SME is rather small, it is all the more important to invest in customer retention and recommendations. And for that to work, the customer experience must be positive.

Customer experience management in six steps

SMEs that enjoy over the long term often engage in customer experience management without being aware of it. This might take the shape of regular discussions with their customers, for example. 

Take a new look at CXM. You can start with the following steps:

Step 1: Put yourself in your customers' shoes

“A pragmatic approach that every SME can implement immediately is to ask yourself: What are the five biggest issues and tasks that we as an SME can solve for our customers?,” explains Dirk Weissbrich. You should then play the role of the customer for these five “customer jobs” and note what works and what is not yet ideal. 

Step 2: Conduct customer interviews

In the next step, it is important to get customer feedback. “Talk with your customers, listen to them. Talk about the problems that you identified when navigating the customer journey and ask for ideas on how to improve,” advises Dirk Weissbrich. 

Has the customer just recently experienced a problem? All the better, as this will result in more concrete input and add greater substance. Feedback discussions with customers who have terminated their relationship with you or lodged complaints are also very informative.

Step 3: Analyze the results

This step is all about analyzing the interviews. Dirk Weissbrich explains: “A results report helps to summarize the most important findings from the interviews. Where is there a need to optimize and which processes don’t yet run smoothly?”

Then it is crucial to prioritize the answers within the company. “Analyze the most important touch points. Focus on those that have a high volume and are relevant for your customers. Set your priorities in these areas to achieve the greatest impact,” recommends Dirk Weissbrich.

Step 4: Define a strategy

Define what you want to achieve, by when, and how. In doing so, you should make conflicting goals transparent and bring about decisions. 

Dirk Weissbrich shares the following insight: “In my experience, it makes sense to conduct a mix of customer and market analysis, while also maintaining open dialog with the other areas of the company. After all, the strategy must be pursued by everyone. For this reason, it is vital to involve the key internal stakeholders early on in the process.”

Step 5: Develop solutions

Concrete solutions shouldn’t be developed behind closed doors. Instead, a "customer-centric" approach should be adopted. That means “visualizing solutions or even developing prototypes of solutions, testing them with customers, and then repeating this in development. Here, the motto ‘Show me, don’t tell me’ applies,” adds Dirk Weissbrich.

It is therefore important during the implementation stage that you quickly address your customers and check whether the corresponding solutions adequately cover their needs. It is ultimately about repetition until the solution is perfected.

Step 6: Measure the effect of CXM

After successful implementation, you should measure the long-term impact of the solutions developed. As a rule, it is only appropriate to consider professional survey and reporting software if your company's customer base exceeds a certain number. This is because companies with fewer than one thousand customers would often be better served to seek personal discussions with their customers. 

Small SMEs, on the other hand, are better off using an integrated approach for obtaining customer feedback. “For example, by asking their inhouse sales, customer support, or sales team to report what they hear from their regular contact with customers,” says Dirk Weissbrich.