Loyalty + CRM = CEM: The Key to Creating Optimized Customer Experiences

Jan 28, 2013

The average person may not know it, but profound changes are working their way into the customer experiences they encounter across all verticals – changes that stand to make 2013 a breakout year. So why are customers and many marketing professionals left in the dark? That’s because of where the changes are taking place.

In the last few years we’ve witnessed a proliferation of marketing channels and touch points. We’ve also seen the term “Big Data” become a commonly used term. But what we haven’t seen is a similar ramp-up in customer engagement management styles to better organize and act on the personal data generated from these channels. Only through the convergence of existing CRM systems, omnichannel loyalty programs and omnichannel loyalty technology will this new customer experience fully emerge. Earlier this week, I met with Joe Easley, Kobie Marketing’s Director of Global Product Strategy, to discuss the new customer experience management and how its benefits are only beginning to be realized.

Q: What is CEM and how does it relate to CRM and Loyalty?

 A: CEM is , or should be, an enterprise management style that is the outgrowth of effectively merging existing CRM software and analytics with a company’s loyalty program. Placing this related but different data under one roof helps mitigate internal siloing of information and promotes a more granular understanding of the customer. Done right, CEM can track and act on a host of consumer behaviors and metrics (derived or otherwise) in real time. Some of those metrics include: shopping habits, purchase location, loyalty-program tier status, travel preferences, frequently visited destinations, average purchase prices, types of purchases made and, sometimes, customer gender.

Q: Why is it important?  Why now?  

A: The last few years have witnessed two things. First is rapid channel proliferation – mobile web, apps, smartphones, tablets, email, social media, etc. – and the convergence of those channels into single “mega channels:” a Skype-enabled TV, a print ad augmented by augmented reality, a functioning QR code made out of Lego bricks, a digital sign that sends an opt-in push notification, streaming live terrestrial radio over the web, etc.

While channel overlap has given marketers more engagement opportunities, it’s also made the marketing and loyalty landscape more confusing. Correcting that overload starts at the top – with customer management styles. CRM was the old and CEM is the new – so new that, according to a recent study, only 7% of North American companies have a clear understanding of CEM’s potential. Tech-savvy, brand-fickle and connection-eager consumers increasingly demand these criteria be met, otherwise their business and their loyalty will be lost.

Q: What does it look like in practice? 

A: The CRM/CEM/loyalty hybrid is still under development. Even at Kobie Marketing.  The Kobie Alchemy platform, featuring our advanced marketing and planning (AMP) capability is a new platform extension  that seeks to achieve that customer management and loyalty union. More generally, the convergence of CRM/CEM/loyalty is like the big tent of a circus – it’s the one-stop shop where all customer data aggregation occurs, being able to set-up and execute “targeting” (broadcast promotions) and “listening” (give x points when she does y behavior) campaigns occur.  Also, tying AMP all together, are the analytic components to help determine what’s working, not working what to do next. A fractured customer view is replaced by a seamless management system where both transactions and experiences can be seen in real time by the brand in question and the customer. This is the kind of transparency that drives consumer loyalty beyond the loyalty program.

Q: Who has already converged their loyalty, CRM, CEM strategy? 

A: Since CRM/CEM/Loyalty is still in the design phase, converged management styles can only be inferred from successful omnichannel tactics. Sephora and its partner Lithium come to mind. Lithium’s “social software” created Sephora’s impressive consumer brand engagement. Their goal, according to Lithium’s website, is encapsulated by the following statement:  “Winning brands are tearing down the corporate walls and building communities of passionate, engaged, loyal customers that drive business value because they ‘belong’ to the company and are invested in its success.” Sephora was also an early adopter of Passbook and in September 2012 saw 87,000 Passbook downloads in the week after the app’s launch.

Q: What benefits will companies receive from converging? 

A:At Kobie we often speak of capturing the most accurate customer picture possible. But imagine all of your customer intelligence, loyalty program-based and otherwise, is stashed away in two large books in two libraries at opposite ends of town.  Pretty archaic. That’s the reality unfolding within many corporate structures. Departments are siloed, information is fragmented and real-time actionable processes are delayed or inaccurate relative to what customers want. Downstream errors increase and customer satisfaction is jeopardized.

Convergence brings this data into a single warehouse, putting the entire customer playbook in manager’s hands, both from the CRM and CEM perspective. And by including loyalty in the mix, even more data can be fed into both. Specific to Kobie, AMP strikes a fine balance wherein the loyalty software management system is automatic yet robust enough to allow a measure of in-house DIY brand freedom. But it still allows for third-party assistance when more customer information is required or when outside creative help is sought in drafting even more experience-driven rewards. Lastly, convergence reduces the number of enterprise management software systems, increasing operational simplicity.

But this is just the beginning. Customers and brands eager to learn more about the convergence of CRM, loyalty and CEM will get their chance in our upcoming whitepaper on what we’re calling, The Great Convergence.

In other words, a new customer experience for 2013 is emerging, rapidly