Why do you need Customer Experience Performance Management?

Why do you need Customer Experience Performance Management?

Many executives are flying blind about their customer relationships. Why? Because their steering wheel is attached to the rearview mirror!

It’s what you know, who you know, and even more important, what you know about who you know, and when you know it!

Exactly when is the so-called “right time”? The right time is in time to do something to affect the outcome!

Time for real-time Customer Experience Performance Management. Performance Management is usually defined company by company, business unit by business unit based on what they are trying to accomplish, or what questions they are trying to answer. But the metrics and key performance indicators that executives use have been limited to transactional data and other lagging indicators, like the System of Record, financial reports, and ERP systems.

IBM and SAP, giants in the System of Record business, are now talking about a System of Engagement, but they haven’t defined a System of Record for the System of Engagement beyond satisfaction, NPS, customer effort, sentiment, text analytics, etc. All of these are lagging indicators.

Executives need a different data set for aggregates and trends. The data set should be based on real-time interactions and a leading indicator for profit and satisfaction instead of lagging indicators like historical profit and satisfaction.

Variable interaction costs they should consider are buried within fixed expenses in their present System of Record. There are major differences in costs to engage high-profit customers versus poor-profit ones. It’s downright criminal to use rough averages where precision is required. Execs should manage to a Cost to Engage, based on the variable costs of real-time interactions. (For more look at our blog on contribution margin.)

Which customers are at risk has been reduced to anecdotal information. No more. Multiple buyer relationships are at play and at risk in high-value B2B. Losing even one key customer relationship is a hard-to-manage risk…after the fact. With our leading indicator, Relationship Value, you can measure and share relationship depth and risk in real-time up and down the line in your organization. (We’ll get into more about our breakthrough metric Relationship Value in a future blog.)

Our leading indicator for profit reveals the vast difference between the behavior of high-profit customers and poor-profit customers. Profitable customers really want a relationship. In high value B2B firms, strong relationships matter to their infrastructure, their supply chain, and their mission critical processes.

The definition of Performance Management needs to change to include answers about customers at play and at risk across the customer lifecycle. To include what really drives business: relationships! Customer relationship development is that underlying process. That’s why Customer Experience Performance Management. It’s useful to define Customer Experience as well.

Thought leaders agree pretty much on the definition of Customer Experience:

“Customer Experience is the sum of all engagements a customer has with you during the customer lifecycle.” Brian Solis, Principal Analyst, Altimeter Group

“The Customer Experience is the sum total of all interactions a person has with a company.” Jeofrey Bean and Sean Van Tyne in their book Customer Experience Revolution.

“Customer Experience is the totality of a customer’s individual interactions with a brand, over time.” Don Peppers, Founding Partner, Peppers & Rogers Group

Peppers expands on their definition:

  • Customer includes both current and prospective customers
  • Individual interactions are those that occur in addressable channels, i.e., non-mass media
  • With a brand: social interactions with others about the brand are not a part of the “Customer Experience”
  • Brand is a proxy for all the selling entities: companies, retailers, dealers, suppliers, e-commerce sites, etc.
  • Over time recognizes the ongoing customer relationship

Pepper’s definition is explicit and in agreement with what our Religence Team believes as well.

Performance Management needs to be updated to the Relationship Age from the Industrial Age! Transactions redefined and expanded to include the Interactions that make up the Customer Experience. Customer Relationship Intelligence (CRI) is an essential part of the engagement record so needed now. To track the Customer Experience, an Operational CRI System transforms BIG Data from across the enterprise into relevant, actionable intelligence about relationships tied to profit. Relying on CRM data or Voice of the Customer approaches is not adequate. Interaction data needs to come from Marketing, Sales, Service, Social Media, Communities, Innovation, Satisfaction, Finance, and ERP and organized by a customer relationship development process! CRI is the Customer Experience Performance Management approach needed now. Why fly blind?

(Watch for a future blog on mapping the Customer Experience and other CRI tools and methods that also contribute to a Relationship Age engagement record.)

“First, let me say that Linda Sharp and her team have taken a very complex problem and have addressed the root cause of why companies are struggling today with outdated strategy and operational tools in dealing with creating value for their customers. The internet and technology in general have created a ‘big data’ component where some companies today still manage customer information in hand-written index cards. Well maybe that is not a fair statement, but many of today’s outdated approaches might as well be that way.

Customer Relationship Intelligence tied to both strategic and operational business components ensures nothing is missed. Companies with this type of information can optimize their business processes based on what will increase value for their customers. What a novel approach. This ties a string between relationship data into operational changes.  The bottom line is just that… ‘revenue enhancement driven from creating customer value.”

Jim Carras, COO for Value Creation Journal and Director with Customer Value Creation International, a global nonprofit organization.


Customer Experience Wisdom: “You cannot manage what you cannot measure.” Opined Management Guru Peter Drucker

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