What is Customer Experience Management (CXM) | Microsoft Dynamics 365 (2023)

CXM is an approach to relationships with customers that goes beyond just marketing tools and software – with the goal of achieving a digital transformation that truly puts customers at the center of the business. A customer experience management mindset prioritizes the orchestration and personalization of the entire end-to-end customer experience and helps do so at scale, on any channel, in real time.

What is the difference between CRM and CXM?

CXM is often confused with customer relationship management, orCRM, due to the similarity that they have in some basic functions. Although there is some overlap, CXM is not simply a rebranding of traditional CRM. CXM takes the next step in customer relationship management. Where CRM is mostly concerned with optimizing the internal processes of a company, CXM offers an even more customer-centric approach in several ways – with new technologies, as well as processes, strategies and customer-centric design.

CXM differs from traditional CRM in the technology itself – with additional benefits and opportunities to build customer relationships. While CRMs collect data through manual or batch entry, a true CXM will enable a real-time flow of data to provide deeper insights into customer preferences and behavior.

The CXM mindset also goes beyond a traditional CRM in its strategy and processes. A company looking to become more customer-centric uses CXM to put processes in place to track, monitor and orchestrate interactions and engagements with customers.

Because CXM is both a set of technologies and a set of processes, and data is not siloed, CXM allows you to deliver a true cross-channel customer experience.

Why is customer experience management important?

Effective customer experience management is more than just good optics or good PR. By centering your customers' experiences and making technology feel more human, you create win-win scenarios for both you and your customers.

Customer experience has become a critical differentiator for all kinds of businesses in the competitive, hyper-connected global market. While the bottom line for a business can be seen in lead generation, conversions or long-term brand loyalty, the customer also comes out a winner with rich, personalized experiences, increased satisfaction and a rewarding relationship with the brand.

Customer experience management helps to:

Gain a deeper understanding of customers

• Provides an improved overview of customer behavior and preferences across all touchpoints.
• Enables more granular segments to provide the highly relevant personalized experiences that customers demand and drive increased conversions.

Promote loyalty and retention

• Delivering personalized experiences and creating seamless customer journeys with advancedmarketing automation software.
• Cultivate deeper, lasting relationships with customers through intelligent service, product recommendations and loyalty incentives.

Maintain a competitive edge

• Improves operational performance to increase customer satisfaction and reduce churn.
• Increases bid win rate and lowers service costs.

Measure the success of initiatives

• Collects and interprets much larger amounts of data – which allows for a more precise overview of the success of your engagement efforts.
• Helps make more informed, customer-centric business decisions.

CXM in the nonprofit world

UNICEF Netherlands engages donors to improve the lives of millions of children

CXM in healthcare

MVP Health Care aligns member support to promote healthy communities

CXM for technology companies

Tech partner ACTUM Digital helps companies consolidate their BI and break down data silos

CXM in the energy sector

French energy leaders are transforming their customer experience to promote a sustainable energy plan

6 Questions to Ask When Evaluating Customer Experience Management Software

Whether you're simply exploring a customer experience management approach or you're researching the right customer data platform (CDP) purchase for your business, here are six key questions to ask about any CXM software, technology or process.

1. Does it enrich customer profiles with real-time data?
   CXM technology should aggregate all data – behavioral, transactional, financial and operational – into one real-time customer profile. A good CXM system pulls in and unifies data access from different places and lets you capture all these data points in real time. The more uniform, real-time and connected your customer profiles are – the deeper, more actionable insights you get.
2. Does it integrate with your current ecosystem?
   Any customer experience management system provider should offer an open and extensible technology platform. The technology platform must support customer experience apps, a single data model, and an open ecosystem that lets you deliver fresh, innovative experiences to your customers and differentiate you from the competition.
3. Does it customize and extend personalization?
   A good CXM system lets you continuously test and optimize personalization in real time. It helps you build exceptional experiences faster and uses the next wave of intelligent software to deliver personalized content at scale.
4. Does it allow you to orchestrate customer journeys across channels?
   CXM software helps you streamline your customer journey and enables you to design, connect, deliver and manage experiences across different channels – from call centers and physical stores to email, social media, web and mobile apps and all the many ways customers interact with your brand.
5. Does it have the intelligent features to help you grow?
   Whether it's making sense of vast amounts of customer data, automating repetitive processes or personalizing buyer experiences and orchestrating customer journeys, real-time, predictive intelligence and machine learning capabilities are the backbone of any CXM approach. Modern AI technologies, like CDPs, are key to helping support your current needs and meet your future customer relationship goals.
6. Does it help you build trust and protect customer privacy?
   Good customer experience management requires you to foster customer trust and protect sensitive information. Look carefully at any CXM technology that offers robust data protection and security capabilities, as well as offering all the help you may need with industry-specific compliance regulations.