Customer Experience Management – What It Is and Why It Matters

CEM, CXM, CRM—alphabet soup or meaningful terms? When it comes to creating and retaining customer loyalty, these three-letter acronyms are important. Despite their differences, each centers on the “C”: CUSTOMER. 

Think of CEM, CXM, and CRM like dollar signs. When companies invest in their success, they drive revenue. When absent, consumers take their business elsewhere. 

Understanding how customer experience management (CEM) helps companies compete beyond price and product is key to business success. Thriving organizations recognize CEM as the brand strategy needed for outperforming the competition in a globalized world.

What Is Customer Experience Management?

Customer experience management, referred to as both CEM or CXM, represents the collection of processes used to manage every touchpoint between a consumer and a company. Experience management begins before the purchase of a product or service and continues after the completed sale. The goal of CEM/CXM is building customer retention and brand loyalty. 

A successful customer experience management strategy includes four elements: 

  1. Understanding the customer.
    Getting to know the customer goes beyond the products or services they need. Good customer experience management also looks at the customer’s attitudes, behaviors, and beliefs. CEM searches for insights into the “why” behind the customer’s desires, what they think, and how they interact with the brand.
  1. Mapping the customer’s journey.
    The process of customer journey mapping includes discovering and understanding every interaction the customer has with the brand or organization. Customer touchpoints might include marketing emails, phone calls, online chats, social media, shipment tracking, word-of-mouth recommendations, knowledge articles, surveys, and invoicing. By documenting all customer interactions, companies can analyze how each touchpoint impacts customer loyalty and satisfaction.
  1. Building the customer relationship.
    Now that an organization understands its customers and their journey, the business can begin creating and enhancing interactions that foster a positive brand experience. At a basic level, consumers want to interact with brands that fulfill a physical or emotional need. However, brands that focus on the development of long-term loyalty understand how to meet customer expectations from the first piece of marketing all the way to post-purchase satisfaction.
  1. Capturing and utilizing customer feedback.
    Customer experience requires gathering data on positive and negative brand interactions and implementing management solutions. Customer data delivers valuable insights for continuous improvement. By integrating customer feedback into the CEM/CXM process, an organization can deepen the customer relationship and build a positive perception of the brand by refining customer interactions over time.


While the two acronyms sound similar, they operate differently. Customer relationship management (CRM) focuses on building a business connection with consumers. Think of it as the organization looking outward toward its clients through a telescope. CEM uses the customer’s viewpoint of the business to assess the quality of their experiences. This is more of a look internally through a magnifying glass. 

CRM better supports sales and marketing compared to CEM which spans an entire company. An easy way to think of the difference is that CRM works to understand what a customer looks like to the organization. CEM assesses how the company appears to the customer.

Why Is Customer Experience Management Important?

Brands that manage customer experience well benefit from boosted sales driven through product or service differentiation. They develop loyal brand advocates that serve as an extension of the company’s marketing function. Plus, higher consumer retention means spending up to 25 times less on new customer acquisition costs. 

Consider additional data on the importance of experience management:

  • Research shows that 80% of customers feel the experience a company offers is as important as their products and services (Salesforce).
  • Approximately 82% of consumers stopped doing business with a company because of a bad customer experience (Zendesk).
  • Leading businesses in customer experience enjoy consumers seven times more likely to purchase from the company, eight times more likely to try additional products and services, and 15 times more likely to speak favorably about the business to their network (Qualtrics).
  • Around 90% of U.S. consumers tell their networks about their service experiences—both positive and negative (American Express).
  • Customer experience is not just for big companies. Nearly 85% of small businesses indicate the primary way they earn customers is by word of mouth (Small Business Trends).

Why Does Customer Experience Management Matter?

Customer experience serves as an important brand differentiator that creates a win-win opportunity for both the consumer and business. Customers win by having their needs met through personalized experiences geared toward maximum consumer satisfaction. The customer also benefits from an enriched, rewarding connection with the brand. Companies succeed by generating more qualified leads, converting those prospects into sales, and then retaining the customer by developing lasting brand loyalty. 

Customer experience management offers a strategic focus to help companies:

Achieve a Deeper Understanding of Customers

Customer experience is not one size fits all. The ability to earn and retain customers requires offering relevant, personalized experiences. Segmenting audiences by leveraging unique customer information makes this possible. The more targeted a product or service becomes, the more likely it results in a sale.

Drive Loyalty and Retention

Simply put, customers that feel seen, understood, and valued stick around. Data shows those customers buy more, churn less, and share their positive experiences with other potential leads. By managing the entire customer journey well, organizations can deliver smarter service more effectively and efficiently.

Maintain a Competitive Edge

Good customer experience equals good business. A customer experience focus improves a company’s overall operational performance. The practice is effective in driving down bottom-line costs. Businesses that increase customer satisfaction show a strong correlation to improved sales. In fact, data shows companies delivering a better customer experience generate up to 8% more revenue than their peers. More revenue with less costs—now that’s a sound investment.

Measure the Success of Initiatives

Experience management helps companies make better decisions. Customer experience data provides unique insight into consumer behaviors, thoughts, and emotions. The information enhances buying decision visibility. Once companies understand more about how their consumers operate, they can tailor the experience to drive up customer engagement.

How to Create a Good Customer Experience

Think of good customer experience as six sequential steps—more an escalator than a staircase—that leads to loyal customers. Companies develop a successful customer experience strategy by:

  1. Creating a clear CX vision. Think forward and ask, “In an ideal world, our customers would think/feel __________ about our company.” Work backward from the answer to develop an initiative capable of reaching that vision. The design should include alignment with existing business goals, executive support (beyond just the chief customer officer), clear metrics, and company-wide accountability. 
  2. Knowing the customer. Go deeper than basic demographic and sales data to understand their needs, feelings, and behaviors. The smarter a company is about its buyers, the better it can create customer experiences that meet or exceed expectations. This also makes customer segmentation possible because different people have diverse needs and customer journeys. 
  3. Building a connection. Customers frequently make purchases, especially repeat buys, based on the emotional connection they feel with a brand. The best brands evoke a positive feeling in people. Think of how brands like The Walt Disney Company, Nike, and Chanel make you feel and the images that come to mind. No wonder companies spend billions annually to maintain and build their brands—they represent a relationship with the customer.
  4. Soliciting communication. The best way for assessing the customer experience is by asking the customer base what they think. Identifying valuable perceptions and feelings about the experience becomes possible when you capture customer feedback. This can happen at any point along the customer journey. Soliciting customer feedback makes CEM efforts measurable for ongoing monitoring and refinement. Remember to gather employee feedback as part of the process too. 
  5. Developing the team. Customer experience is not the job of a specific department, but of the entire company. Offer ongoing professional development on ways all groups within the company can make a difference. Align e(X)perience data and (O)perational data so everyone understands how they contribute to the vision established in step 1.
  6. Measuring the ROI. It’s time to celebrate the wins. Show the impact of CX efforts on larger business, operational, or financial goals. Making new and existing customers happy is important, but showing how satisfied customers impact sales, profit margins, and production often speaks louder inside an organization.

Three Steps to Getting Customer Experience Management Right

CEM requires constant refinement because consumers continuously evolve. Delivering a great customer experience begins with three key actions:

Create and Maintain Complete Customer Profiles

Organizations assume they know their customer. Companies managing customer experience actually do. Use the customer data to your advantage to create profiles or personas. Start by conducting an analysis of demographic and transactional customer data. Then gather additional insights by capturing customer sentiment through social media. Analyze call center conversations. Review customer satisfaction survey feedback. Look at website clicks. Find location patterns. Examine product quality statistics. Check out marketing automation reports. The possibilities are endless. Customer insights generate a wealth of actionable information about every experience across the customer’s journey.

The more a company knows its customers, the better it becomes at:

  • Developing relevant product and service offerings
  • Implementing software solutions and digital tools effective for improving customer experiences
  • Understanding customer expectations in real time and delivering value accordingly
  • Refining the customer experience to improve retention and loyalty
  • Making better business decisions

Make It Personal

Personalization is powerful. In fact, more than 90% of consumers across various research studies indicate they want personalized experiences that impact their buying decisions. The human brain processes more than 34 GB of data each day. Brands that personalize every interaction have a better chance of standing out. Use customer experience data to deliver relevant product or service offerings, make helpful consumer recommendations, and provide valuable advice. The more the customer feels a touch point is “just for me,” the more likely he or she is to positively engage.

Right Message, Right Place, Right Time—Every Time

Timing is everything. Consider how often auto dealerships contact you regarding a vehicle you no longer own. A post-sale how-to video on waxing your new skis is not as helping during the offseason. famously sends flowers when they learn of an autoship subscriber’s pet passing away. Sending the right message at the right time can diminish or drive brand loyalty.

To understand where a consumer is within the customer lifecycle, ask questions like:

  • What do they need from the brand?
  • What do they know about the brand?
  • Are they actively evaluating options?
  • Are they ready to make a purchase?
  • What will they need post-purchase to remain loyal?

Discovering the answers to each question provides valuable insights for improving the customer experience. Integrate the answers into the sales and marketing process to deliver a timely message that resonates with the customer.

Make Every Experience Matter

At Walker, we believe everyone deserves an amazing experience. We are a Qualtrics-certified full-service Experience Management (XM) firm. Our team of experts provides technology implementation, end-to-end managed services, and expert strategic consulting so you can deliver best-in-class experiences to your customers.