CEM vs. CRM
Posted by Jeffrey Henning on Wed, Jul 14, 2010
Want to confuse the average business person? Start talking about CRM (Customer Relationship Management) and Customer Experience Management (CEM). The two acronyms can seem like synonyms, but each tackles a different aspect of the business/customer relationship.
Christopher Meyer and Andre Schwager have prepared a useful table contrasting the two strategies in "Understanding Customer Experience" (Harvard Business Review, February 2007):
| | CEM | CRM |
| What |
Captures and distributes what a customer thinks about a company |
Captures and distributes what a company knows about a customer |
| When |
At points of customer interaction: “touch points” |
After there is a record of a customer interaction |
| How Monitored |
Surveys, targeted studies, observational studies, “voice of customer” research |
Point-of-sales data, market research, web site click-through, automated tracking of sales |
| Who Uses the Information |
Business or functional leaders, in order to create fulfillable expectations and better experiences with products and services |
Customer-facing groups such as sales, marketing, field service, and customer service, in order to drive more efficient and effective execution |
| Relevance to Future Performance |
Leading: Locates places to add offerings in the gap between expectations and experience |
Lagging: Drives cross selling by bundling products in demand with ones that aren’t |
As Peter Gurney writes, “CRM, meet CEM”:
The idea at the center of CRM can be stated in the following way: Every time a company and a customer interact, the company learns something about the customer. By capturing, sharing, analyzing and acting upon this information, companies can better manage individual customer profitability.
CEM's premise is almost the mirror-image. It says that every time a company and a customer interact, the customer learns something about the company. Depending upon what is learned from each experience, customers may alter their behavior in ways that affect their individual profitability. Thus, by managing these experiences, companies can orchestrate more profitable relationships with their customers.
Sandrine Prom Tep has pithily summarized the difference: “CRM comes after the experience, and CEM works hard on anticipating it.” The two approaches are highly complementary and work together to improve an organization’s understanding of its customers.