Seven Trends to Watch in Customer Experience Management

Philip Moscoso on digital innovation in CEM at IESE Munich

06/05/2015 Munich

Philip Moscoso
There are seven emerging trends shaping the future of CEM – Philip Moscoso talks customer loyalty at IESE Munich / Photo: Javier Arias

How much has customer experience management (CEM) changed over the years?

Not as much as you might think, according to Philip Moscoso. Although there are a number of interesting new trends emerging in the way companies are meeting expectations, and building customer loyalty.

IESE Prof. Moscoso was speaking at a Continuous Education session for alumni and friends hosted by the IESE Munich campus this week.

"Much of what was important in the past in customer management is still important today," he said.

Customer experience management has been with us in one form or another since the 1940s. From early quality initiatives and relationship management tools to the loyalty programs of the 90s and today’s focus on experience, some concepts remain unchanged.

Though there are seven interesting new trends worth watching, he said.

Seven Trends Shaping CEM

The first trend to watch for is the use of smart customer data such as online tracking tools, said Moscoso. This is being driven by traditionally poor use of information such as recurring advertisements – these generate negative customer experience and feedback, he said.

Data is also being used to make predictions about customer behavior. Moscoso pointed to Netflix, which leverages user assessments of viewed content to provide targeted recommendations to its customers.

A third trend is omni-channeling, which is the deployment of different platforms to sell to customers. Although this comes with challenges in terms of crediting sales and making returns, said Moscoso. "If a customer buys something online but returns it to a physical store when there’s a problem, the transaction has to be fairly processed internally," he said.

We’re also seeing a trending away from contact centers and towards customer relation hubs. Moscoso gave the example of automatically generated text messages – although here he felt that more development is needed to improve the quality of communication.

A fifth trend is the mapping of customer journeys, which trace the various processes that connect the customer with the company and the product. A key piece of this, said Moscoso, is tracking emotions as well as actions.

Co-creation with the customer is another emerging trend to keep on radar, said Moscoso. This is the space where customer service becomes interactive with the customer playing a significant and proactive role in his or her own experience. Moscoso pointed to the example of car sharing, which uses mechanisms – such as punctual car rerturns – to control customer behavior.

Finally there is the trend toward fewer employees but deeper employee engagement with customers. "Here firms need to determine what is considered a good solution and what is not. Mistakes are made along the way and you have to learn from them," added Moscoso.

"All of these trends are interrelated," he said. "They can be viewed individually, but in the end they do impact each other."

The Human Touch

Making customer experience management work in practice depends on putting a solid strategic framework in place, said Moscoso. And this involves having a sound grasp of who, what, how, when and where, he said.

"You have to find out who you want as customers, and who you don’t. And then you have to find out what that target customer wants," he explained. "Beyond that, maintaining a spirit of continuous improvement within your company is also a necessary element for CEM to work."

Moscoso closed the discussion by underscoring a key concept: When CEM is delivered well it can be a powerful tool for building competitive advantage.

We still have some way to go in terms of understanding how the customer thinks, he said. And in spite of the innovations in technology and digital that are shaping advances in CEM, the human touch remains key.

"In the end, employees and their behavior towards the customer remain a very critical aspect. Just the way it’s always been."