How do successful brands stand out from the rest of the crowd?

It’s the constant and unending focus on the customer experience.

The customer plays such a crucial role that organizations rely on customer data and analysis to best understand customer behavior and what gets them all the way to the end of the sales funnel.

There’s such a healthy market for customer management and analysis software that they’ve now branched out into two distinctive categories:

  1. Customer Relationship Management (CRM)
  2. Customer Experience Management (CEM)

At first glance, these two seem to be apps of the same category since they both capture and manage customer information. In fact, many businesses still confuse the two, often questioning the importance of CEM when they already use CRM software to capture and analyze customer info.

As you dig deeper into their core functionalities, you’ll soon discover that they’re designed with a different set of goals in mind.

Let’s take a closer look at what Customer Relationship Management and Customer Experience Management are, CRM vs CEM, and how they give businesses valuable customer insight that can lead to more sales and better customer relationships.

What is CRM?

Customer Relationship Management or CRM refers to the different practices, strategies, and guidelines used to manage a company’s customer interactions. The goal is to analyze and make informed decisions that improve the overall customer experience, increase retention, and drive sales into the business.

Moreover, CRM as technology can help businesses engage with customers from every aspect of the customer lifecycle. This enables teams to “interact with clients, anticipate customer needs, recognize customer updates and track performance goals when it comes to sales.”

At the end of the day, CRM brings sales, marketing and customer support together by analyzing customer data. It collects core customer information from various channels (e.g. your business website, email, brick-and-mortar stores) and gives you valuable insight into the sales cycle, how your marketing campaigns and customer acquisition strategies are performing, and other customer interaction metrics. Some of these include the time spent by the customer engaging with your business, the cost of each transaction, the quantity of products/services purchased and so on.

What is CEM?

While CRM focuses on managing customer information, CEM or Customer Experience Management delves deeper into the customer experience to gain insight from their unique perspective.

The goal of CEM is to collect and manage all of this experiential data to further enhance the customer experience and foster loyalty to your company. This involves listening to your customers, analyzing feedback and understanding their viewpoint in order to optimize the customer journey.

When choosing a CEM platform for your business, it should integrate the Voice of the Customer so you can make informed decisions on how to best serve your customers and encourage them to stay true and loyal to your brand.

Why is a Customer Experience Management (CEM) platform important?

CRM software has been around since the 1970s when businesses relied on databases to manage customer information. It replaced the Rolodex! Since then, most businesses start out with a CRM system in place, while CEM continues to be uncharted territory.

But as customers become more aware and in control of the buying experience, understanding their perspective becomes even more crucial when setting yourself apart from your competitors.

CEM allows you to hone in on that perspective, giving you clear insight on what your customers need and what translates to an amazing experience for them. It gives you the edge over businesses that focus solely on CRM data by capturing the Voice of the Customer and using it to build strong, long-term relationships with loyal customers.

What should you invest in—CRM or CEM?

To deliver a positive and meaningful customer experience, we believe you should invest in both CRM and CEM for your business.

As individual tools, CRM and CEM have their own operational strengths that enable you to capture and manage specific types of valuable data.

On one hand, CRM is designed to capture transactional data that can inform your teams about how best to implement future campaigns and business strategies. For example, how many customers made purchases below $10 at your store? How many subscribed to the $9.99/month Starter plan for your SaaS product?

On the other hand, CEM helps you identify how your customers feel and think when engaging with your brand. Going back to the previous example, your customer may be just as delighted with their $10 purchase, and would be more than happy to come back thanks to the positive experience they had with your company. On the flipside, capturing this experiential data enables you to find out which aspect of the brand experience that falls short of expectations, and identify ways to correct these mistakes.

What most don’t realize is the tremendous value and insight you can gain by bringing both CRM and CEM together. Let’s break the $10 example down further to show the concrete comparisons:

CRM alone: “50% of my overall customers purchased below $100.”

CRM + CEM (adding experiential data): “50% of my overall customers who purchased below $100 said they were not greeted at the entrance, and so rated the store experience at an average of 2 out of 5.”

From these statements, you can draw up pretty insightful answers to questions about how your customers think and feel about your brand. By listening to their stories and understanding their perspective, you’ll be able to create strategies that can make a positive impact for your business.

As Einstein once said, “Any fool can know. The point is to understand.” CRM is a great tool to gather data about your customers, but when combined with the benefits of CEM, you’ll be able to make sense of that data and fully understand what your customers consider as a great brand experience.

Understand your customers to understand your business!


Is there anything you’d like to share based on your personal experience of using CRM and CEM systems? Do leave us a comment below!