CEM

The newest acronym to pop up on my radar is CEM (customer experience management). Add it to CSM (customer satisfaction measurement) and CRM (customer retention management) in your repertoire. CEM is born of companies' recent interest in the customer experience and how to manage it, and this interest may foreshadow an era in which businesses focus more closely on what it's like for their customers to transact with them.

At Ipsos Loyalty we've long believed in the importance of studying the customer experience. Our history of employing customer blueprinting (through our Aftermarketing Audit TM service) is all about understanding what it's like to be a customer of an organization. Though it may seem that idiosyncrasies of specific categories and industries would require blueprinting particular to each industry, we've stepped back and found broad phases of the customer's relationship that apply across industries.

We call our map the Ipsos Loyalty Aftermarketing Purchase Cycle TM. It identifies and describes four major stages of a customer's experience with any supplier or company. We created the cycle with the understanding that customers' states of intimacy with an organization evolve over time. As customers' tenures lengthen, their needs and expectations also change. The Aftermarketing Purchase Cycle helps to guide the development of loyalty tactics that are germane to cohorts of customers alike in their length of experience with a business.

This is where so many loyalty programs falter. They are concocted independent of any basic understanding of the customer's experience. By delineating some basic tenure-related needs, the Aftermarketing Purchase Cycle is a normative planning tool for creating more effective loyalty tactics. We've defined the customer's predominant need in each of the four stages.

Here's a brief description of the stages of the model:

I. Commitment Stage: As consumers become customers, they outwardly commit to a brand, product, or service. However, considerable internal questioning or skepticism often accompanies this commitment. The consumer's desire for mental consonance (" I've actually purchased the right product") means their outward appearance of resolve may be deceiving. Some businesses totally overlook both the opportunities and the obligations at this stage. But some organizations do recognize the new buyer's uneasy state. For example, automobile manufacturers painfully aware of buyer's remorse have started offering seven-day test drives, subscription services offer money-back guarantees, and some clubs offer trial memberships.

The fact is, early in their stage of commitment, customers of all businesses and organizations are quite uncertain about the wisdom of the decision they've made and are usually eager for reinforcement. Sales agents, eager to move on to other prospective customers, will all too often disappear. Exacerbating customers' post-purchase uncertainty is the likelihood of friends and associates scrutinizing their purchase. Without structured reinforcement, their explanations defending their selection will be frail; their uneasiness will only become amplified. Two goals are suggested:

• Businesses should revisit new customers showing them they'll remain accessible and available to support customers in the future. We must strive to eliminate the concept of orphaned buyers.
• Customers also require confirmatory information validating their purchase as a wise and thoughtful one. (We call this managing evidence. I'll write about that in the future.)

II. Learning/Evaluation Stage: As customers resign themselves to a brand, product, or service, social psychology tells us they'll continue to seek as much confirmation as possible. Studies show that a preponderance of the readers or viewers of advertisements are actually recent purchasers who are searching for information about their chosen brand to reinforce their brand or product choice. In this stage, the customer is already behaviorally committed to the product or service. The challenge becomes one of earning their emotional commitment as well. In this stage customers are motivated learners: they desire to learn as much about the product or brand as they possibly can; they want to become power users.

Businesses can capitalize on their understanding of this stage by serving as the source of all necessary information, perhaps even offering training. Providing accessible answers to questions (such as FAQs) and following-up with customers to determine their level of comfort in using the product or service are key tactics.

III. Appreciation/Reconciliation Stage: During this, the longest phase of the Aftermarketing Purchase Cycle, customers have accepted their ownership of the product or service and strive to become "power users." In living with their decision, they have accepted all of the benefits and annoyances and inconveniences that come with it. (Remember the last pair of shoes you purchased that looked great but always caused a blister when you wore them?) Too often customers are suffering but simply endure, waiting until the next repurchase opportunity to remedy the situation by switching to another brand, supplier, or company.

Customers at this stage are eager to become masters of the product or service. In this stage they are likely to become very active and invest considerable effort in learning as much as possible about their acquisition. They hope to become a power user, a knowledgeable owner, and a satisfied customer. They want to be shown how to get the greatest benefit from the money they have spent in purchasing the product or service. This too, is where the business stands to gain the most in benefits from stimulating positive word-of-mouth. Satisfied, happy customers will go out of their way to urge others to adopt the product or brand.

IV. Reevaluation: As the lease or service contract approaches its end, or as the customer recognizes their need to replace the now worn out, used up, or obsolete product or brand with a new one, they likely enter into a reevaluation stage. In this phase they will reassess the value they feel they have received from the product or service and their satisfactions with the current brand and organization. They will compare their experiences with what they believe their satisfaction levels might have been with alternatives. Though they look to numerous sources for information at this stage, their own experiences as well as the word-of-mouth information they receive from others become primary influences.

At this stage, businesses should attempt to minimize customers' search efforts, heading-off exploration of competitive options if possible. Since the business should know the value of each customer, the decision on how much energy and resources to expend in retaining each customer should be reasonably straightforward. Because a skilled relationship manager will also have developed a comprehensive customerbase, he will know much more about his customers' needs, uses, and approximate timing for replacement purchase. Depending upon the situation, the knowledge offered by the customerbase may suggest:

• a special promotion to encourage repurchase even before the customer spends any time considering a competitive offering;
• a strategically timed onsite visit to strengthen the relationship; or
• a carefully crafted guide comparing the current brand with competitors' offerings with the intention of influencing an inevitable shopping comparison exercise.

With the likely needs identified, a corporate planner can identify objectives and ultimately appropriate tactics. Without such a planning guideline, the development of tactics is at best a crap shoot. Corporations genuinely concerned with their financial future (that is, the development and retention of their current customers) must manage this experience.