What is Client Experience Program Management CXM/CEM?
By: Steven Keith
Tags: Business Strategy, Cx, Customer Service, Customer Success, Customer Experience

What is Client Experience Program Management CXM/CEM?

What is Client Experience Program Management or CXM/CEM? You’re likely hearing this term a lot more frequently these days. This article will help you understand what it is and why it’s important for your firm to begin embracing it.

(We use the terms customer and client interchangeably in this article.)

CX management programs increase revenue, lower costs, engage employees, drive higher satisfaction and loyalty from more ideal clients and make your brand stand out in ways that matter. They enable these benefits consistently and measurably. Why more firms aren’t jumping on this opportunity is a mystery.

Ask any firm executive and she will tell you, driving business outcomes keeps getting more complex and challenging. On the inside, the pandemic’s acceleration of digital transformation has every firm on their toes. On the outside, expanding client access to information and choices, working from home, talent supply and demand, and the shifting winds of competition are enough to make most executives ponder early retirement.

All these challenges culminate at one nexus point for most firms. The willingness of new and existing clients to select and buy their services more predictably and the new normal around talent supply and demand.

Yet, given all the complexity, there aren’t many problems that cannot be solved when there is greater certainty about top- and bottom-line revenue into a culture of willing employees who believe in the mission.

How CX is Changing Your Business

Today, services-based businesses are no longer able to enjoy being first-to-market, having the lowest price, or having the most stellar reputation. That has all changed at the hands of technology-enabled, prospects, clients and employees who have more choices and information than they know what to do with. Not to mention the plummeting average age of employees who are seeking careers much differently than older generations. And, no, it’s not just Gen Z.

So how can your firm take all this into consideration at once and set a new course that ensures your brand can supply all clients and employees with what they demand? We’ve been asking this question and searching for the answer for two decades. The answer, as it turns out, is experience management.

Think about the last time you had a terrific experience as an employee? What happened to spark that moment? Now think about the last time you had a terrific experience as a client. What sparked that moment and how did that affect your likelihood to return?

The high and low points stuck in your memory for a reason. Next time you’re totally sure your service is the best and your clients love it unconditionally, think about that little thought experiment you just did. Now let’s extrapolate.

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If you can agree that experiences are powerful enough to drive client affinity for your service and employee affinity for your firm, how can you drive predictability, manageability and repeatability of affinity-driving experiences that sustain your brand?

How can you drive consistency into the experiences your clients, prospects, partners, employees, recruits, and firm leadership have with your brand?

How do you shift from blind trust or hope to certainty?

You do it with the two sides of experience management:

client experience management or CXM employee engagement programs or EE

Together, these two forces help you optimize and manage your three most critical relationships:

with prospects (the buyer’s experience) with clients (the client experience) with employees (the employee experience)

Get these three right and you’ll drive more ideal client wins, more recurring revenue from loyal clients and sustained employee enthusiasm for what you’ve chosen to focus on.

We say that experience programs help firms become the best version of themselves. It is our mantra for a reason. Why?

When you choose to zero in on learning what makes every firm relationship thrive, and you do the work to understand it thoroughly and act on it, systematically, you’re not just running a business, you’re getting directly to the heart of the human experience — those drives that influence behavior and spur positive talk.

What Is Experience Program Management or CEM/CXM?

Let’s get a few terms of phrase straight, first of all. When you hear “CX” or “Customer Experience” or “Client Experience,” you’re hearing common industry jargon for the unit of satisfaction someone has with a product or service.

When you put the word “management” on the end of it, you’re referring to the company’s acts of tracking, analyzing, overseeing, measuring and responding to those incoming points of data about satisfaction.

You many have also heard or seen “CXM” or “CEM.” These are acronyms for Customer Experience Management or Client Experience Management.

So, what does CXM/CEM mean?

It means a systematic approach firms take to manage units of awareness and satisfaction toward some desired ends — such as revenue, NPS ranking, Client Lifetime Value, Client Satisfaction (CSAT), Client Effort Score (CES), Cross-Sell/Up-sell, Client Churn, Loyalty, and Advocacy. The list of desired outcomes (we call them value-drivers) from CXM is approaching 100 at this point.

How do companies manage CX?

Here’s the rub. Most do not — or at least, most do not do it effectively. It’s not because they’re negligent or ignorant to client needs, but because they simply don’t know what they don’t know. In our two decades inside of firms trying to establish systematic CX programs, we’ve learned the number one initial obstacle is actually dead simple.

Most firm executives conflate “service” with “experience.” When they do this they are giving the firm implicit permission to keep believing they are covering all the bases. In actuality, they are only thinking about the act of providing a service without defects — ignoring how the client may feel about their experience with how the service was planned or delivered.

“Experience” and “service” are vastly different concepts but nonetheless, they live as one in well over 90 percent of services-based firms, today.

In other firms, they stop at client feedback collection, believing that is all that is necessary — that the act of feedback collection and problem resolution is all they need to do. This is also far from the truth.

There are dozens of reasons why well-intentioned firm leaders are frustrated by the lack of progress and success of their CX efforts. Betting the farm on feedback solving your problems is where most of these firm’s frustration begins and ends.

What is the Difference between Service and Experience?

Service is an act of delivery originating from the firm, outward.

Experience is an act of receiving a service originating from the client, inward.

When you mix the terms client service with client experience, it’s like mixing the terms “investment” and “dividend.”

Think about it like this: when a plumber is called out to your house to fix a bathroom leak, there are about 45 things or events that happen in that scenario playing itself out.

Of those 45 events, only four or five are a service, the other 40 are experiences. The service is the plumber taking your call, arriving on time, carefully fixing the leak, telling you how/what happened, leaving your house with care, and finally invoicing you. The experiences are how the entire, end-to-end sequence of events (we’ve counted, it’s close to 38) left you feeling, concluding in an idea of whether your plumber was good enough to use again in the future or recommend to a friend.

If your firm’s executives are conflating “service” with “experience,” they’re choosing to limit their control over their client relationships at 10 percent of the possible total.

Firms choosing to adopt and embed CXM, are choosing to take control of as much of the client experience as they can — leaving as little to chance as possible.

Look at the equation below. In the simplest way possible it spells out how experience is managed by firms. The quality of the total client experience is simply a function of product/service quality, price quality, and journey quality.

CXM is the art and science your firm works on to balance this simple equation.

CX Pilots’ Client Experience Quality Formula — “Balancing The CX Equation”

Every firm has services and clients. Every client has experiences with firm services. Every client goes through dozens of interactions across multiple touchpoints with your firm in their client journeys up to and through your service.

These interactions and touchpoints can include, researching (interaction) your firm and other competitors on Google (touchpoint). Finding an online review (interaction) on an online ratings service (touchpoint). Talking to an attorney or CPA or Engineer (interaction) on the phone (touchpoint). Choosing to sign your proposal, LOI, or Services Agreement (interaction) via DocuSign across email (touchpoint).

Every one of these interactions and touchpoints — no matter how seemingly insignificant or small — impacts the client’s awareness and sentiment about your firm, understanding of the value you want them to understand, and their overall connection to your brand. When firms set out to map these experiences, they often inadvertently view their client’s experiences through a very small window and often conflate perspectives. Here is how we like to map it:

Client Experience Management helps your firm ensure that every single interaction and touchpoint are not only from the perspective of the client/prospect and free from friction or inefficiency, but they are carefully designed to represent a consistently positive feeling clients get from their choice to associate with you, every single step of the way.

Interaction Volatility and Why It Matters

Big words for such a simple concept. Interaction volatility is what happens to your client’s total experience in between strings of connected interactions.

For any number of reasons, when a client or prospect’s expectations aren’t met through the firm’s touchpoints and interactions, they experience volatility. It may be something small to the firm but significant to the client.

CXM is what manages volatility out of the prospect or client’s journey. It does this by carefully analyzing the path clients (or prospects) take and makes sure the firm is doing all it can to provide positive experiences from one interaction to the next toward some desired end. This will be different for every client but wide scale CXM can solve for all issues no matter the client or segment they’re in.

This is an important concept in experience management. Left unchecked, it can mean the difference between a person becoming your next client for life or moving over to your competitor with a bad taste in their mouth. In many cases, interaction volatility comes from such minuscule and completely manageable transactions from the way you correspond to an interested prospect via email, to the way you onboard new clients. We see this all the time.

In perhaps one of the most egregious examples yet one that cost one firm an $11 million opportunity, we learned the prospect was turned off by the inconsistent email signatures from his correspondence with three firm representatives followed by one firm executive’s delayed email which included a misspelling of the prospect’s long Indian first name. In a post loss interview we learned he said, “I need to feel I am putting my project in the hands of someone who understands the concept of urgency and flawlessness. This firm didn’t show me that.”

Customer Insights are the Currency of your CXM

Well-managed client experiences always start with insights. Insights come in many forms. Most firms gain client insights from surveys, interviews, focus groups, and even client journey maps. In every case, creating experiences you want your prospects and clients to talk about begins with knowing who your stakeholders are well-beyond the standard NPS question (How likely are you to refer us to a friend or colleague?)

Client experience management programs should be designed to optimize the insights your firm gathers from new prospective clients, existing clients and former clients.

To be competitively effective, your firm needs to understand insights better than anyone else capable of supplying the service you deliver. This means knowing how cultivated insights tell you who the clients are as people and decision-makers, what they desire, their values, why they want what you deliver, what they dislike, what they’re like on social media, how they’ve interacted with you in the past, etc.

Ultimately, you need to structure your firm’s insights gathering machinery to capture and use data to bend the odds of exceptional experience in your favor — which requires data you can turn into actionable insights affecting the experiences they have with your firm.

CXM, when applied properly helps your firm mine, distill and refine data into these actionable insights that can be readily applied to experience delivery from any person at any point in your firm. The end result is a systematic insights mining operation that makes employees successful in assuring their clients feel heard, understood and appreciated, which are all the critical ingredients in crafting lifelong loyalty (internally and externally).

What is Customer Retention and Why Does it Matter?

It seems silly to even right this down because it’s like saying, “don’t forget to breathe!” But we have to say it anyway. Client retention is what keeps you in business.

Retaining clients is important because you have paid X to gain a client and Y to keep them, so why should you repay X for another replacement client when all the firm had to do was better manage the experience the client had in the first place.

Client churn (how many clients you keep over time) costs firms a lot. Here are some jaw-dropping stats:

It costs five times as much to attract a new client than to keep an existing one

to attract a new client than to keep an existing one Most firms focus 4X more on client acquisition than client retention

Cross-sell/up-sell probability: firms are generally 65% more probable to sell service to an existing client vs. 5–11% probability of selling to a new prospect

CXM can effectively decrease firm marketing costs by 44%, accelerate time to value by 38% making your firm significantly more profitable

CXM is purpose-built to manage deeper client retention into your firm. As you retain clients, you develop intimacy (in a professional manner, hopefully) while your client develops affinity.

This is how trust is made. In trusting client relationships, you create the opportunity to enrich the insights you gather from those clients, which in turn, allows you to serve them in accordance with their shifting expectations.

CXM also helps your firm understand specific client sentiments and behaviors that preserve client relationships over time. The more you know why clients stick with your firm over competitors, the quicker you can apply that learning to other relationships. This is what lies at the heart of CXM’s value to your firm.

It’s a virtuous circle that your firm can manage for pennies on the dollar while paying you back incredible dividends in the short-, mid- and long-term.

What You Need to Know About Customer Loyalty

Customer or client loyalty is earned through trust, it never just happens because you’re good. Trust is earned through consistent patterns that demonstrate you provide precisely what a client needs, when they need it and how they want it.

Trust is also created when clients feel great for having worked with you and using your service — even if your firm charges more than your client’s alternative choices. In fact, 86% of buyers are willing to pay more for a great client experience. If your firm and its services make the client feel good about their affinity for your firm, you very likely will have a client for life.

The other thing you need to know about client loyalty is that there aren’t many clients who’ll go out of their way to tell you they aren’t very satisfied. This means when there are significant gaps in perception between what you think you provide and what the client actually feels you provide, you’re not likely to see it. We call this loyalty blindness, and we diagnose firms with it frequently.

One in 26 clients complain when the services they pay for aren’t up to par — the other 25 say nothing. What this tells you is that you are very likely going to operate on assumptions in the absence of client-articulated issues — who wouldn’t? Well, people investing in CXM, as a matter of fact.

CXM is capable of unearthing unarticulated issues with clients through interaction management and outreach. If you knew 92% of your clients were less than perfectly satisfied and you had an opportunity to find out why, wouldn’t you?

Why is Customer Experience Management Important?

Have you heard the phrase; “the customer experience is the new battlefield”? Yes, it was written for retail/consumer B2C but it applies to B2B and services-based businesses as well. By 2022, two thirds of services-based businesses will compete primarily on the basis of client experience. This stat is up from roughly 30% in over the past decade. What this means is that your client will be attracted to the service providers they feel can offer the best overall experience.

Service quality is subjectively defined by the client — not by the firm.

What you know to be a superior service, better employees, better overall project outcome in AEC, better matter management Legal, better tax and audit services in CPA industry, better member services in Credit Unions and so on, may not be perceived as better by those paying for your service.

The client journey experience is one area where your firm can establish a clear head start.

We have come to learn that the journeys clients experience with your firm determines whether your firm will see growing client lifetime value from lengthy relationships or constantly patching a leaky boat, so to speak, by perpetually spending new money to cultivate new replacement clients.

As client choices expand, their preferences and behaviors change and more information about potentially better experiences from competing firms begins to proliferate. Firms must be far more attentive and more adaptive than they once were. They need to be able to build learning relationships, where both the client and firm are willing to further educate themselves about the value they can give and get to move from merely satisfied to loyal.

You cannot do this at scale without a Client Experience Management program.

What Does CXM Look Like?

Modern CXM looks like a firm initiative because there are phases, stages and steps involved to ensure the right sized program is placed into your firm in the form and shape that it needs to be. Different parts and pieces of any CXM program will vary depending on the firm’s existing infrastructure, unique needs and culture. For instance, not every CXM program we help set up is the same because some firms have incumbent tech like Voice of Client (VOC) software running surveys and pumping out insights, while others do not. Some firms have thousands of employees in vastly different roles, some of whom require specific front-line training, others do not. Some firms want to focus exclusively on existing client relationships to control churn, others may be interested in a broader-spectrum approach to CXM that factors in the earlier stages of the prospective client’s journey.

In the most generic sense, CXM programs are typically structured as follows:

How Much Will CXM Cost the Firm?

This will vary quite a bit. It will depend on what you want to accomplish. Most firms we work with start somewhere in the middle stages of CXM such as mapping and later realize they haven’t laid the proper foundation to make the outcomes of mapping as productive as they could have otherwise been.

Many consultants will only engage if your firm signs a Letter of Intent to adopt a comprehensive CX transformation which can cost well north of several million dollars. Other consultants may enter at any stage and undercharge without guarantee of outcomes. In some lucky cases, you will find CX consultants able to plug in where and when you need to deliver precisely what you know you require — which is how we structure our engagements with services-based firms.

If your services-based firm has approximately 500 employees and between $50 million and $100 million in annual revenue, you should expect to pay around 1.5% of annual revenue on a managed client experience program. For a $50- $100 million dollar firm that’s roughly $750,000 to $1.5 million to accomplish all nine stages in the CXM program graphic above. However, as mentioned above, not all firms adopt all nine CXM stages and all have varying technologies, teams and processes to integrate so these figures should be used only as loose guides.

A good rule of thumb for forecasting CXM set-up and firm-wide deployment costs is to multiply the number of employees you have by $1875. If you have 50 employees, you can very likely stand up a fully functioning CXM program for about $90,000. If you have 1,000 employees, it will be closer to $1.8 million.

Important note: we do not base CXM program pricing on number of employees — we’re simply sharing patterns which, over time, have revealed a loose correlation between firm size and CXM program costs.

How long to CXM programs take to implement?

How long does it typically take for a CX consultant to help your firm accomplish a comprehensive CXM program? This also depends on many factors. Our average across nearly 50 CXM transformation programs to help an average sized firm is 425 days or 14–15 months. The mitigating factors with respect to timing are often the speed and efficiency of change within your firm. We have worked with firms which have set out to accomplish a full CXM integration within one year and succeeded. We have also executed the same sized program for a similar sized firm which took nearly two full years due to poorly mitigated internal politics.

Hopefully this information will be helpful to you as you plan for, reach out to, and ultimately engage a CX or customer experience specialist to support and guide you in the right direction.

This article (in slightly different form) appeared on CX Pilots’ blog. It has been written by Steven Keith, the founder of CX Pilots, a services experience firm purpose built to support CX leaders inside Professional Services firms.