Customer experience management (CXM) — a complete guide

Every business today is facing the challenge of rising customer expectations and attempting to create compelling, personalized experiences at scale that separate their offerings from the pack. Companies must instantly provide the right experience at the right time on the right platform — period. Customer experience management, or CXM, is the solution for meeting customers’ sky-high and constantly growing demands. The worldwide market for customer experience management was valued at approximately $10.65 billion in 2022, with projections indicating a substantial compound annual growth rate (CAGR) of 15.4% between 2023 and 2030. Which is why we’re dedicating this guide to the ins and outs of customer experience management. Keep reading to learn:

• What customer experience management (CXM) is
• The distinction between CXM/CEM and CRM
• Why customer experience management matters
• The challenges of CXM
• Best practices for successful customer experience management
• What you should know about CXM software

What is customer experience management (CXM)

Customer experience management, also known as either CXM or CEM for short, is the practice of strategically managing and improving every interaction a customer has with a company or brand throughout their entire journey. CXM aims to create positive, personalized, and consistent experiences that drive customer satisfaction, loyalty, and advocacy. It involves gathering and analyzing customer feedback, making sure your internal processes are synced and ready to meet customer expectations, as well as using technology and data to fine-tune interactions and make personalization for every customer possible. By prioritizing CXM, companies can foster deeper connections with customers, differentiate themselves from competitors, and drive business growth.

Customer experience management (CXM) is the strategic practice of managing and improving every interaction a customer has with a company or brand throughout their entire journey.

• Get a better understanding of customers.
• Personalize exceptional experiences for everyone.
• Ensure consistency across touchpoints.
• Get customer feedback to see how you’re doing.
• Lean on technology and analytics to help you out.
• Turn customers into brand advocates.
• Gain more customers, keep more customers, make more money.

Now, you may be thinking that CXM sounds awfully familiar. Isn’t customer relationship management — what’s known as CRM — similar? Let's compare these two strategies and see how technology plays a role in each.

The distinction between CXM/CEM and CRM

Customer relationship management (CRM) primarily revolves around managing and maintaining customer relationships, while CXM places the emphasis on delivering exceptional experiences throughout the customer journey.

CRM is all about monitoring and improving specific customer interactions. It focuses on capturing and analyzing customer data, managing sales pipelines, and making sure customers have an easy and well-supported experience. It seeks to nurture relationships, drive sales, and increase customer loyalty. CRM systems are designed to streamline customer information, track sales activities, and enhance customer service.

CXM or CEM is concerned with the overall experience a customer has with a brand. Customer experience management takes a holistic approach, encompassing every touchpoint from initial awareness to post-purchase support. It uses data and technology to understand customer needs, personalize interactions, and simplify processes across various channels to create consistent and memorable experiences. By prioritizing customer satisfaction and loyalty, CXM contributes to long-term business success.

CRM vs. CXM

Why customer experience management matters

In today's competitive market, CXM can serve as a significant differentiator. A well-executed CXM strategy sets a company apart from its competitors by providing unique and hassle-free experiences. Positive customer experiences contribute to brand reputation, which is crucial to attracting new customers and retaining existing ones. Let’s take a closer look at some of the most impactful customer experience management benefits.

Improved customer satisfaction and loyalty

CXM places the customer at the center of business operations, prioritizing their needs and expectations and significantly improving their satisfaction levels. Satisfied customers are more likely to become loyal advocates who not only continue to support the brand but also actively recommend it to others. Positive word-of-mouth and customer referrals can fuel business growth and attract new customers. Forrester research commissioned by Adobe reveals that companies with solid CXM in place see 1.7 to 2.1 times greater year-over-year growth in revenue, customer retention, and customer lifetime value compared to companies that don’t focus on CXM.

Increased customer retention and lifetime value

By consistently delivering positive experiences, companies can encourage repeat purchases, cross-selling, and upselling opportunities. A strong CXM strategy helps reduce customer churn, leading to a stable and profitable customer base with a higher customer lifetime value (CLV) for increased revenue and profitability.

Improved operational efficiency

CXM helps refine internal processes and systems to streamline customer interactions. By mapping and improving the customer journey, companies can identify bottlenecks, eliminate redundancies, and enhance operational efficiency. This leads to smoother operations, reduced costs, and improved resource utilization.

More relevant insights from voice of customer (VoC) data

A CXM strategy should collect and analyze Voice of Customer (VoC) data, which includes customer feedback, preferences, and expectations. By actively listening to customers, businesses can gain valuable insights into their needs, pain points, and preferences and make data-driven decisions, proactively resolve issues, improve upon their products or services, and create experiences that meet customer expectations.

Deeper employee engagement

An effective CXM strategy extends beyond the customer-facing aspects of a business and helps foster a customer-centric culture throughout the organization. Engaged employees who understand the importance of CXM are more likely to deliver exceptional service, take ownership of customer interactions, and enjoy a greater sense of purpose in their jobs. This leads to higher employee satisfaction, reduced turnover rates, and improved overall performance.

Regulatory compliance and risk mitigation

In industries with strict regulations, CXM plays a crucial role in ensuring compliance and mitigating risks. By incorporating customer privacy and security measures into CXM strategies, companies can protect sensitive customer information and mitigate potential legal and reputational risks.

The challenges of CXM

Effective customer experience management (CXM) requires addressing various obstacles that can hinder the delivery of dazzling customer experiences. Here are some commonly encountered CXM challenges.

• Poor digital experience. In today's digital age, a strong digital experience is paramount. However, organizations may face challenges in delivering user-friendly websites, mobile apps, or digital touchpoints. Issues such as slow-loading pages, complex navigation, or non-responsive designs can result in a subpar digital experience, negatively affecting customer satisfaction.
• Lack of organizational CX goals. Many companies struggle with the absence of clear and well-defined customer experience goals. Without specific CX objectives, it becomes difficult to align strategies and initiatives towards improving customer experiences. This challenge highlights the importance of setting measurable CX goals that are closely tied to overall business objectives — and making sure that all teams and team members are well-versed in these ambitions.
• Suboptimal company culture. Company culture plays a crucial role in delivering exceptional customer experiences. Factors such as insufficient internal communication, inadequate employee engagement, and a lack of empowerment can negatively impact the ability to put the customer front and center and deliver the experiences they demand.
• Lack of data or a focus on quantitative data. Insufficient or ineffective data collection and analysis leaves you short on the insights needed to create and deliver memorable experiences. If your data sits locked away in various departments, teams, and tools, it’s impossible to deliver a true cross-channel customer experience. While you may see a few wins here and there, chances are your customer experiences will feel as disjointed as your data. Likewise, while quantitative data is essential, an exclusive focus on it may overlook valuable qualitative insights. Without a comprehensive understanding of customer preferences, pain points, and behaviors, it becomes challenging to personalize experiences and meet customer expectations effectively.
• Lack of adequate omnichannel and technical support. Customers expect seamless experiences across multiple channels and touchpoints. But without adequate omnichannel support and technical infrastructure, businesses can struggle to provide consistent experiences. This challenge can lead to disjointed customer journeys, frustration, and a negative impact on overall CX.

There’s an answer for every obstacle. Let’s look at some valuable techniques and tips for optimizing CXM strategies that can help your organization successfully navigate these challenges and drive positive customer outcomes.

Best practices for successful customer experience management

A true CXM strategy reacts to customer interactions and meets or even exceeds expectations. The result is conversions, better customer satisfaction, and long-term loyalty. To get there, implement these CXM best practices:

• Determine market segmentation and customer personas. Identify and segment your target market based on common characteristics, preferences, and behaviors. Create detailed customer personas to better understand their needs and expectations.
• Fully map the customer journey and coordinate messaging. Map out the entire customer journey. Coordinate your messaging and content across different touchpoints for a consistent and seamless experience.
• Build up personas with real-time customer data. As customers move through their journeys with your brand, continuously update your customer personas with in-the-moment data updates. Use insights from customer interactions to deliver personalized content and experiences that match their behaviors, preferences, and desires.
• Earn trust by resolving issues and keeping it human. Engage with customers on an emotional level by showing empathy and a deep understanding of their needs. Promptly address and resolve any issues or concerns they may have to build trust and loyalty.
• Collect, organize, and analyze relevant customer data. Gather relevant customer data from various sources and channels. Organize and analyze this data to gain valuable insights into customer behavior, preferences, and satisfaction levels. You can utilize relevant customer experience metrics such as net promoter score (NPS), customer satisfaction (CSAT), and customer effort score (CES) to measure and track customer experience performance. You’ll also want to connect specific data points to revenue generation to demonstrate the impact of customer experience on the bottom line. This could include analyzing customer lifetime value, repeat purchases, or upselling opportunities.
• Automate CX processes. Automate repetitive and manual tasks in your CXM processes to improve efficiency and consistency. Technology tools can help you streamline customer interactions, data analysis, and content delivery.

What you should know about CXM software

CXM platforms are comprehensive software solutions designed to facilitate effective customer experience management. These platforms offer a range of capabilities that help organizations deliver personalized, unforgettable, and friction-free customer experiences.

CXM software allows you to centralize and manage customer data from all your sources and channels so you get a holistic view of each customer. These platforms use advanced analytics and AI technologies to derive real-time insights and identify customer preferences, predict behavior, and optimize content and experiences accordingly. CXM platforms may also offer tools for creating and managing engaging content through dynamic content delivery, A/B testing, and rule-based targeting, so that customers receive only relevant messages at each stage of their journey.

With CXM software, you can interact with customers across multiple channels, including websites, mobile apps, social media, email, and more — and keep the experience consistent throughout. Some CXM software can even facilitate the planning, execution, and automation of targeted marketing campaigns. You can feasibly define customer segments, automate messaging, and track campaign performance for continuous optimization.

When selecting a CXM software solution for your organization, opt for one that can scale with your organization's growth and integrate with your existing tech stack for smooth data flow and a unified customer experience across systems. You’ll want to give precedence to those with the flexibility and customization to adjust workflows, create personalized experiences, and adapt to evolving customer expectations. Choose a platform with a user-friendly interface that simplifies navigation, content creation, and data management. This way your teams can skip any extensive training.

Finally, check that the software provides robust analytics and reporting functionalities that can dish out actionable insights, track key performance indicators (KPIs), and measure the effectiveness of your CXM initiatives.

With a foundational understanding of CXM, its best practices, and the potential of automated CXM approaches, your organization is poised for success. By embracing CXM software that aligns with your needs, you can unlock the power of data-driven personalization, seamless customer experiences, and long-term customer loyalty.

Transforming your organization for CXM success

Companies are grappling with the dual challenge of satisfying increasingly demanding customers while creating engaging and personalized experiences on a large scale. Establishing or optimizing a CXM strategy should be your top priority. The urgency lies in the fact that businesses equipped with CXM tools and processes are three times as likely to significantly exceed their top business goals. With a CXM software solution powering the experiences you create, you set yourself apart from the competition.

Adobe Experience Cloud is an industry-leading solution that fulfills the expectations of effective CXM. It integrates customer profiles that update in real time, continuous intelligence, and an open and extensible architecture to make personalized customer experiences at scale a reality.

See it all come together for yourself. Watch the Adobe Experience Platform overview video or request a demo.