Why CX System vs. CRM System?
The market of customer management software is comprised of two different categories:
- Customer Relationship Management (CRM);
- Customer Experience Management (CX).
At first sight, those two categories seem to be quite the same, as they capture and manage information about customers. Many companies still confuse those two categories and often doubt the importance of CEM, if they already use CRM software for recording and analysis of the information about customers.
Only 21% of CEOs globally believe that investment in customers is a No. 1 priority. Statistics also reveal that whereas 80% of CEOs think that their company offers exceptional customer experience, only 8% of the customers agree with this opinion.
When you attend deeper into the main functionalities of particular solutions, you will soon find out that they are different. Let us have a closer look at what Customer Relationship Management (CRM) and Customer Experience Management (CX) mean, and how those two solutions provide valuable information about the customers to the companies, which can contribute to increased sales and better relationships with the customers.
What is CRM?
Customer Relationship Management or CRM relates to various procedures, strategies, and regulations used for handling the company interactions with the customers. The target is to analyze and adopt informed decisions, which will increase the overall satisfaction of the customer, increase the degree of retention, and direct sales into the business.
Besides that, CRM technology can help companies interact with the customers in all aspects of their life cycle. They are allowing teams to communicate with the clients, to anticipate their needs, to identify the changes at the customers, and to follow the performance targets regarding sales activity.
CRM interconnects sales, marketing, and customer support using analysis of customer data. It collects necessary information regarding the customers from various channels (e.g., from your company website, e-mail, brick-and-mortar stores, etc.) and offers you valuable information regarding the sales cycle, performance of marketing campaigns, and strategies of acquiring customers, and other metrics of interactions with the customers. Some parameters include the time which the customer spends in communication with your company, the costs of each interaction, the number of purchased products or services, etc.
What is CX?
Whereas the CRM system focuses on the management of information about customers, CX, or Customer Experience Management drills down deeper into customers’ experience, to get an overview of their unique perspective. The CX system aims to collect and manage all those data regarding expertise, to further improve the customer experience and strengthen loyalty to your company. Like listening to your customers, analysis of their feedback, and understanding their viewpoint, to optimize the customer’s path.
Why is the CX platform important? CRM system exists approximately from the ’70s of the 20th century; at that time, the companies, when managing the information about customers, placed reliance on databases. Since then, most of the companies start with the CRM system introduced, whereas CX remains an unmapped territory.
As the customers become more and more aware of the customer experience and gain control over it, understanding their perspective becomes even more critical when you are growing different from your competition. CX allows you to improve yourself in this perspective and will present you with a clear overview of what your customers need and what a fantastic experience means for them. It gives you an advantage in comparison with the companies focusing merely on CX data by capturing the voice of the customer and utilizing it for building strong and long-term relationships with loyal customers.
Today’s customer is educated and compares his experience not with your competition, but with brands such as Amazon, Gant, Google, etc. The customer experience reaches beyond frontiers and languages.
Should I invest in CRM or CX?
We believe that for the sake of reaching a positive and meaningful customer experience, for your business, you should invest primarily into CX, which has inherently integrated the CRM functionalities.
On the one hand, CRM is designed to capture the transaction data, which can inform your teams about the ways how to preferably implement future campaigns and business strategies. For example, how many of your customers have made purchasing transactions in your store under 22 EUR.
On the other hand, CX helps you with the identification of the way your customers feel and think about interaction with your brand. Coming back to the previous example, your customer can be pleased likewise at a 22 EUR purchase, and he would be more than happy to go back thanks to the positive experience he enjoyed with your company. On the other hand, capturing those data regarding expertise allows you to find out which aspect of knowledge does not fulfill the expectations and to identify possible ways of remedy.
Roman Kucak, Partner