Companies are under unprecedented pressure to optimize the customer experience. We see evidence of this during the last 18 months in the emergence of the chief customer officer (CCO) role. Companies such as United Airlines, Samsung and Chrysler have all recently announced CCOs as part of their executive suites, and one report indicated that 45 percent of large U.S. firms responding to a survey now have a senior executive responsible for customer experience.1


While many of these companies are collecting tons of data on their customers, CCOs are finding it challenging to access the valuable insights for improving the customer experience that are locked inside. Traditional approaches to processing this data are so tedious and manually intensive that most companies fail to tap its potential.


Consequently, customer experience management (CEM) is emerging as an increasingly important tool. CEM is the practice of actively listening to customers, analyzing what they are saying to make better business decisions and measuring the impact of those decisions to drive organizational performance and loyalty. When powered by text analytics, CEM drives significant, quantifiable benefits across varied areas of the business.


Getting Close to Your Customers


Services - checking accounts, cellphone plans, hotel visits, flights or software as a service offerings - typically involve multiple, often complex interactions. The experience that a customer has with a service differentiates one commoditized offering from another. For example, while consumers might be unaware of the intricacies of their checking account’s features, they likely have very strong feelings about their experiences at drive-through windows, automated teller machines, Internet account management windows, etc., and will choose their banks according to that sentiment.


The shift toward a services-based, knowledge-driven economy makes customer experience an increasingly important differentiator in business. And that makes the ability to accurately measure that sentiment and, in turn, improve customer experience more and more important to market leaders. By putting tools into place that measure customer experience and promote customer intimacy, companies gain the insight needed to tailor products to customer desires and to save investment in unwanted innovations.


Companies can also optimize operational processes. With the ability to accurately and comprehensively monitor sentiment across multiple customer touchpoints, a company might be able to detect issues through Internet discussion forums or periodic satisfaction surveys. Finding and eliminating the problem earlier rather than later - once finally linked to product defects through handling of warranty claims - might save the company substantial dollars and protect its brand reputation.


In addition to product superiority and operational excellence, customer intimacy also drives customer loyalty - an increasingly important factor in marketing effectiveness with the growth of online social media. A McKinsey study showed that mroe than two-thirds of the U.S. economy is heavily influences by word of mouth.2 Companies must stay in close touch with their customers to shape positive experience and drive loyalty.


New Sources of Information


In fact, hearing the voice of the customer has never been so easy. More sources of customer feedback are available to companies than ever before.


Customer relationship management (CRM) systems have been widely deployed, and these usually hold valuable comments from emails, support cases and online conversations between contact centers and customers. Customer surveys have grown up; sophisticated methodologies such as Net Promoter Score (NPS) provide companies more reliable analysis of surveys, and the Internet and email have made distribution cheaper and easier. Meanwhile, more and more companies are turning to their front-line employees for insights into customer sentiment and best practices.


And certainly social media is transforming the way customer feedback is shared and captured. Web forums are soaring in popularity. Customers are airing likes, dislikes, expectations, desires and plans through an exploding array of Web 2.0 forums, including online product reviews, news feeds, wikis and blogs. and, for example, allow consumers to post comments about their travel-related experiences; Wal-Mart Stores Inc., meanwhile, has enabled online shoppers to rate their purchases and shopping experiences at. The amount and importance of consumer-generated content is growing every day.


The Unprecedented Power of Text Analytics


An effective approach to CEM fosters customer intimacy by enabling CCOs to listen to the gamut of ways that customers are speaking about their companies, and the key enabling technology in CEM is text analytics.


Structured data - the checkboxes in surveys, transactional detail and various point-of-sale data - solely influenced business decisions of the past. Companies were completely reliant on data that could be easily represented in the rows and columns of relational databases and spreadsheets.


Text analytics is a recent innovation that enables unstructured, textual customer feedback of every type to be measured and analyzed alongside structured, transactional customer information (purchase histories, demographics, product-feature data, geographic data, etc.) For example, a company that once just acted upon customer comments generated through its call centers can now marry this information with customer comments posted in online consumer forums and blogs, as well as its own internal sales information, to analyze the exact cause as to why sales have increased or decreased during a certain period of time.


Text analytics leverages natural language processing technologies that allow computers to interpret sentences and paragraphs from the rapidly expanding volumes of unstructured content (said to be more than 85 percent of all the information available to companies, according to an Aberdeen Group report).3 Mineable presentations and reports are automatically generated from text.


With CEM powered by text analytics, companies for the first time can quantify the true voice of the customer. Companies can now tap previously unreachable business intelligence, discover trends, illuminate issues and gain the elusive, longsought-after, 360-degree view of customer desires, emotions and future behaviors. General business users - not just IT “power” users - can access all of their customer data through a single analytical interface for instant and ongoing analysis via traditional, familiar business tools and techniques.


Putting CEM to Work


Innovative leaders across a growing array of industries - airlines, consumer packaged goods, entertainment, financial/insurance services, healthcare, hospitality, investigation, marketing services, pharmaceutical/life sciences, retail and technology - are already using CEM powered by text analytics:


  • A hospitality company used text analytics to better understand the financial impact of its adoption of a new policy. With an automated capability for processing and analyzing customer survey responses, the company learned that the policy change generally produced a positive impact on customer sentiment. It was found that more hotel guests agreed with the switch and that those hotel-goers were also more enthusiastic.
  • CEM and text analytics can reduce a company’s reliance on manual coding of internally generated customer-interaction data. A worldwide food-service retailer went from manually processing only a small percentage of millions of verbatims from 800 call centers and other listening posts to processing far more of the data in real time for enhanced sentiment detection and reporting.
  • A successful software company is using text analytics to glean useful business intelligence from 100 percent of data captured from more than 2 million unstructured data points. Various operational groups across the company access reports tailored to their particular needs, and the system allows for real-time tracking and trending of issues as feedback is received. Before implementing a sophisticated approach to CEM, the company hired two part-time employees to read verbatims, and they would typically get through only about 3 percent of them.
  • Clear connections between marketing programs and their impact on customer sentiment can be drawn with text analytics. A market research firm can track a sentiment indicator over the course of a marketing campaign to keep apprised of fluctuations in customer attitudes with regard to a brand. The firm can monitor for the gulfs between how brand managers hope customers experience the brand and how customers characterize their actual experiences with the product. Such analysis can enable tweaks to be made during the campaign to make it more effective.
  • Another company used insights automatically gleaned from emails and call center conversations via text analytics to identify its newest, fastest-growing and toughest-to-resolve issues, then made it easier for customers to resolve issues on their own via more cost-effective, self-service access on the company’s Web site.

With market leaders becoming more comfortable and creative with these new capabilities, the applications of CEM powered by text analytics are growing more diverse every day.


Still, at many companies today, the potential of CEM remains untapped.


These companies might subject a sliver of qualitative, experiential data to manual processing, one document at a time. But the problems with this approach are numerous; manual processing is time-consuming, labor intensive and error prone. Plus, it’s inflexible - not given to quick recoding of categories for answering ad hoc questions that crop up during analysis or pursuing root cause of problems with incremental, drill-down questions.


The unfortunate truth is that many companies are concluding that manual processing of unstructured information extends so little value to their customers, provides so little competitive advantage and recaptures so few unnecessary operational expenditures that they do no analysis of unstructured information whatsoever. CEM is stripped of its potential.


When powered by a complete text analytics capability, however, CEM can drive dramatic, quantifiable benefits across diverse business areas. And the results experienced by a widening array of early-adopter market leaders are proof.




  1. Bruce Temkin. "Obstacles to Customer Success." Customer Experience, February 2008.
  2. Renee Dye. "The Buzz on Buzz." Harvard Business Review, January 2001.
  3. David Hatch. "The Opportunity for Integration of Unstructured Information: Customer Size Matters." Aberdeen Group, July 2007.

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