Maximizing customer satisfaction, loyalty and value requires that we have an in-depth understanding of how customers experience our products and services. Defining and optimizing this customer experience cycle can be a practical means of identifying and prioritizing each of the opportunities you have to develop relationships with your customers.

Developing a customer experience cycle involves the following six steps:

Step 1: Customer Understanding. All CRM initiatives, infrastructure and processes should be driven from an understanding of your customers. Most organizations need to gain a much deeper understanding of who their customers really are. Detailed customer profiling, segmentation and segment analysis will help you answer questions such as:

  • What are their characteristics? Their preferences?
  • What is the history of your relationship with them? How do they interact with you?
  • What are their purchase and related spending patterns? What is their current and potential value to your organization?
  • What needs are you currently fulfilling? What needs aren't you fulfilling?
  • Why did your customers choose you over your competitors? How do your customers differ from your competitors' customers?
  • What are their overall satisfaction levels with various aspects of your organization and offerings?
  • Based on these factors, what are the unique segments of customers? Which segments are most important to your organization today and tomorrow?

Answers to these essential issues need to drive all of your CRM efforts.
Step 2: Customer Purchase Cycle. Step 2 involves defining the overarching purchase cycle of each segment of your customers, including:

  • The stages of the purchase cycle. For low involvement products, this may equate to three to four simple stages such as awareness, information gathering or research, decision making, purchase and consumption. For high-involvement products, such as technology, there may be six to eight stages.
  • The length of each stage.
  • The complexity of each stage.
  • The indicators of when a customer is in each stage.
  • The frequency at which a customer repeats this cycle.
  • The level of current resources directed at each stage.

All of these factors vary tremendously by product category (e.g., consider the differing purchase cycle for buying an auto versus packaged goods) and by customer segment characteristics.

Figure 1: Customer Experience Cycle

Step 3: Customer Needs. The third step involves expanding segment intelligence by identifying customer needs at each stage of their purchase cycle. Each segment may have different needs and may have an entirely different purchase cycle.

Note that these needs may relate to an individual's characteristics and interests, unique purchase drivers, specific purchasing situations and channels or desired channels for information. It is important to understand these needs in the context of the customer's purchase cycle and their related interactions with your organization.

Step 4: Customer Interaction Opportunities. The fourth step in the process involves defining inbound and outbound opportunities for customer interaction, across all channels and media, at each stage of the purchase cycle. A comprehensive audit of current interactions can provide a baseline measure of current activity. The key, however, is in identifying untapped interaction opportunities that are driven by customer behavior over time. For example, a customer may contact customer support three times within a month or a customer may fail to renew a policy or subscription.

Step 5: Customer Experience Scenarios. This next step involves "building out" each of the high-priority interaction opportunities.

  • What should happen when a customer calls customer service three times within a month?
  • What should happen when a customer doesn't renew a policy or subscription and becomes inactive?
  • What should happen when a customer receives an initial sales visit?
  • What should happen when a customer attends a training seminar?
  • Where is the data required to support the experience we want?

Of course, the answers to these questions will vary based on segment-specific behaviors and needs as well as the customers' unique purchase cycles. Itemizing the activity around each of your high-priority opportunities will drive data, systems and business process requirements as well as resources, staffing and infrastructure investments.
Step 6: Implementation and Measurement. The final step in this process is to act on these findings.

  • Develop systems and processes to better support and optimize the high-priority opportunities.
  • Modify overall contact strategies and communications based on your understanding of customer needs across their purchase cycle.
  • Measure the impact of each of these efforts and the cumulative impact of customer experience-based CRM on customer satisfaction and value.

This customer-centric approach to CRM planning ensures that your investments and initiatives are directly tied to measurable improvements.

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