It's legitimate, although sometimes it's called something else. Aite Group, for example, refers to it as "marketing analytics" and Attensity refers to it as "enterprise social analytics and engagement applications." Essentially, however, it's all pretty much the same.
Empathica-which specializes in CEM solutions-sees this as a trend in which many industries, including banking, are focusing on customers across all touch points in a retail environment.
"Businesses realize that a customer's experience with a brand is essential in the business-consumer relationship," says Gary Edwards, chief customer officer at Empathica. "The challenge in 2013 is the ability to collect feedback through various channels ranging from comment cards to social media, and to successfully use that data to achieve the age-old customer experience goal of personalization."
The idea is not new. It's been known as somehow getting "a single view of the customer," even as the customer exhibits different behaviors through different channels, for the same overall relationship. What is new is how complex and urgent this task has become, due to the proliferation of channels and the increasing pressure to use it to boost revenue in a slow-growth economy.
Which points to what Empathica says are the four major CEM trends predicted for 2013:
• Omnichannel customer feedback, or the collation and correlation of information obtained through QR code scans, text alerts, emails, and other communication channels.
• The importance of unsolicited feedback alongside survey data, or capturing reviews on such media sites as Yelp, TripAdvisor, and the like.
• A new experience focus, or how businesses can find ways to reinforce customer satisfaction when customers demand service quality as much as product quality.
• Big Data personalization, or how to use analytics to transform general customer insights into directed, individualized offerings.
Maybe not so surprisingly, a lot of high-tech vendors have emerged with solutions that claim to address this complexity and produce tangible return on investment. For example:
• Empathica offers "Empathica Local" which it says puts "customer feedback into action and creates a consistent, yet still personalized, experience across business locations."
• Attensity offers "Respond 6.0" to provide "a unified customer listening post where customer requests in social media as well as in emails and other channels are automatically-and intelligently-analyzed, classified, and routed to appropriate departments for response."
• Experian Marketing Services and Research Now joined forces to produce custom research capabilities leveraging online behavior measurement while providing the capability to survey the same individuals. The idea here is "to provide actionable insights such as understanding customers' path to purchase by tying online behaviors to surveys that capture offline activities, influences, motivations, and purchases."
Worthy endeavors all, no doubt, and likely to attract business from bankers looking to invest in tools that will give them some sort of competitive edge. Aite's research bears this out.
"Midsize and large financial institutions striving to make analytical marketing decisions will aggressively develop new data-driven marketing analytics models in 2013," a summary of its report says. "Although overall marketing spending will trend down this year, marketing analytics budgets are poised to increase 3.3% and account for 7.4% of all marketing spend."
Aite also notes that many banks are beginning from a position of weakness. "Customer data and application integration are the biggest challenges that midsize and large financial institutions face in developing and deploying marketing analytical models," says Ron Shevlin, senior analyst at Aite. "This should alter the marketing approaches of consultants and technology firms that tout their statistical skills over their ability to integrate data and applications."
As important as CEM is becoming, however, there's a danger of becoming overly enchanted with the tool, and missing the actual objective of customer loyalty and satisfaction.
Bruce Burdumy, an analyst with IBM, gets at this in a recent banking-related blog titled "How to Turn the Tables on Churn." First, though, he thoroughly embraces the use of advanced analytics as the main tool for this. He begins:
"Do you have a single view of your customer and your data? To understand what is really going on with your customers, and to shift your business accordingly, you need to first have this view that consolidates the right data from multiple sources.
"Once you have this single view of the data, analytics is applied to accurately diagnose why customers are turning over."
More important, though, he implies that the crucial thing is to use the tool to ask basic questions. "Are we experiencing churn because we are losing market share, or volumes are declining, or transaction sizes are declining? Is it our product mix and the structure of our offerings? Is it a combination of some or all of these? And which of these are driving most of our churn?"
He goes on, but the point here is the need to use whatever tool you have intelligently, and not just assume that, because you happen to have a tool, the problem is solved.
Which gets to another point made by The Executive Board, which says in a recent report: "With rising costs and still-sluggish lending growth, the consumer banking industry increasingly sees improving customer experience as critical to maintaining or growing revenue. But in the current economic environment, many banks cannot afford to make large, across-the-board investments in service.
"What these banks don't realize is that, in most interactions, customers simply want the service encounter to be as short and painless as possible."
In other words, the goal of CEM in most cases is to make interactions short and painless. Now there's a concept.
And that leads to this observation on CEM by Greenwich Associates. "Executives looking to establish CEM programs that demonstrate clear return on investment should keep one critical point in mind: Regardless of the metric or measure used, the ultimate success of a program in driving positive change will be determined not by the specific tool employed, but rather by management's success at integrating CEM into the organization."
In yet other words-and these are those of Greenwich Associates paraphrasing itself-"It's not the club that matters; it's the swing."
Sources used in this article include:
- Banks are Losing the Battle for Personal Loans: But Consumers are the Real Victims
- As Zero Commission Trading Apps Grow Up, So Must their Users, Signaling Opportunity for Legacy Brokers
- 5 Fixes for Common AI Challenges
- Prep For Incoming Fraud Ahead of a Potential Upcoming Recession
- A Look at Lending: Trends Expected to Shape Commercial Lending in 2020