The Difference between CRM and CEM
By Allan Pulga
It seems that with the proliferation of CEM (Customer Experience Management) technology as opposed to the traditional approach of CRM (Customer Relationship Management), the lines of understanding between them have become blurred.
Last June, Gwynne Young, managing editor for CRMGuru.com, set out to define those lines more clearly. Practices that were once considered CRM initiatives – such as Starbucks building cozy home-like cafes or video game companies inviting users to brainstorm for new game concepts – are now called CEM strategies by many, she writes.
“Setting aside the fact that many people use the term CRM synonymously with systems and technology, CRM and CEM are really different beasts, these same business leaders and management consultants say,” adds Young.
“Do I have a relationship with 17 million people?” asked Jim VonDerheide, vice-president, CRM Strategies, for Hilton Hotels in a conversation with Young. “I don’t think so. Do I interact with 17 million people? You bet.”
VonDerheide said that Starbucks’ comfortable café surroundings are not CRM-oriented. “He believes there is no relationship with you. The Starbucks people know nothing about you. But they have created an experience,” Young explains.
Management consultants Graham Hill and Paul Greenberg told Young that CRM is the optimization of transaction and business processes. Its focus is on the “management,” whereas CEM’s focus in on the customer: the customer’s reaction to your brand, from advertising, to marketing, to purchasing, to support, to the actual service or product.
“In CEM, the focus is on all the contacts during the end-to-end experience, not just on transactions,” said Hill. “In airlines, the end-to-end experience might be 24 hours. In automotive, it might be five years or more. This automatically provides an increased focus on the missing relationship part of CRM.”
Hill regards CEM as the next logical step after you’ve practiced solid CRM, writes Young. Greenberg goes one further: “(CRM and CEM) are broken business logic that says the company is still pre-eminent.” In this day and age, he added, the customer must be pre-eminent.
Whatever your focus – be it on process management, on the customer experience (or even inversely: the customer focusing on your company) – CRM and CEM are distinctive ways of understanding the relationship/interaction at hand. How you use this interplay to your advantage is up to you.