Digitization & Customer Experience Management - White Paper PDF

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Summary

A white paper regarding the influence of the digital world, including AI, on customer relations and experiences, particularly within the hospitality industry. Written for the class of Customer Experience Management delivered by Ms C Tabone....

Description

UG6056 – CUSTOMER EXPERIENCE MANAGEMENT Discuss the Impacts of Digitization and Artificial Intelligence (AI) in the Future of Maintaining Customer Relationships and developing Experiences.

Ema-Sinead Zammit

Ema-Sinead Zammit B.IHM (3rd Year-3rd Sem)

UG6056 – Customer Experience Management

Table of Contents Introduction ......................................................................................... 2 CRM: A technology-based solution...................................................... 3 Case Study: Cloud CRM .............................................................. 6 Digitizing Customer Experiences ........................................................ 7 Digitization of CRM and Customer Experience Today: Research Analysis ................................................................................................ 9 Conclusion ......................................................................................... 10 References……………………………………………………………………………...11

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Ema-Sinead Zammit B.IHM (3rd Year-3rd Sem)

UG6056 – Customer Experience Management

Introduction

It is a measurable fact supported by evidence that he advent of AI and digital advancements has proven responsible for altering and broadening the concepts of traditional management theories, thus altering the management-employee relationship. For instance, Elton Mayo’s ‘Human Relations Theory’ proposes questions on how to improve human productivity; his variables included light, duration of breaks, duration of working hours etc. Finally, he found that giving your subordinates attention and a voice in the decision-making process resulted in improved performance. With AI in the picture, repetitive processes and 'dirty work' is simplified and taken care of, leaving managers with a lot more time to focus and develop the human talent in the business. (Dhanrajani, 2019) AI and modern technologies are changing the way management manage their subordinates, while also creating new revenue streams that could potentially

offer

new

job

opportunities

for

middle

and

top

management positions. (Dhanrajani, 2019) It may be said that the same

alterations

have

affected

the

business-customer

(B2C)

relationship.

The scale of impact that Artificial Intelligence (AI) is having on businesses and the way they are governed is multidimentional and also a catalyst for paradigm changes in customer relationships and experiences alike. With the ever increasing relevance of customer relationship

management

(CRM)

–

as

businesses

religiously

emphasize their need on ‘spurting a long-term relationship’ - (Juneja, 2

Ema-Sinead Zammit B.IHM (3rd Year-3rd Sem)

UG6056 – Customer Experience Management

2015), with their customers – the digitization of maintaining customer relationships is a success story which has yet to be acknowledged.

CRM: A technology-based solution

CRM is broadly defined as “the process of understanding, collecting

and managing all of the information [related to a customer] in a business environment” - (Sharma, 2017)

Nowadays, CRM is often a highly digital process in small businesses and large corporations alike. CRM software plays a vital role in helping the business engage with its customers and enhancing the customer experience. (Sharma, 2017) The system acts as a collection of consumer data, thus providing a platform for businesses to interact with, and satisfy their customers effectively while providing superior value for the company and the customer. (Juneja, 2015) It is a strategy which permeates the entire business with the goal to assist in customer retention through loyalty and ultimately drive sales. The design of a CRM system allows for it to handle customer information across various touchpoints, such as the company website,

email,

social

media

etc.,

while

recording

customer

interactions to help the management understand trends and track performance.

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Ema-Sinead Zammit B.IHM (3rd Year-3rd Sem)

UG6056 – Customer Experience Management

Today, we are living a fast-paced lifestyle and have ever-rising standards, expectations and feelings of being owed to by the companies we give our hard-earned money to. (Pine & Gilmore, 1998) This is especially true for the younger generations who have grown up with the internet at the tips of their fingers – they are more ‘savvy’ in the way they expect to be treated when spending their money. (Grogan, 2018)

“They are less inclined to trust companies and expect to be marketed to in a certain way” – Grogan, 2018

Therefore, the efficient nature of the CRM system creates a pleasant experience for the customer which significantly helps in building a strong, long-term relation between the customer and the business. (Pine & Gilmore, 1998) This is an imperative step required for a smoothe transition to an ‘experience economy’, similar to one described by Pine and Gilmore. This is a progressive ideology which suggests that price and quantity of material goods are inferior to quality and emotion of abstract encounters for the contemporary consumers, specifically of middle- and upper-class individuals. It is a move by which the contemporary consumer seeks fullfilling and memorable experiences over physical possessions. One might visualize this as an advancement towards what Maslow calls: selfactualization, and what traditional sociologists would call: a step higher on the ladder of social stratification - by which materialism is

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Ema-Sinead Zammit B.IHM (3rd Year-3rd Sem)

UG6056 – Customer Experience Management

a stigmatizing characteristic of the lower classes and experience is a status symbol of the elite.

Apart from maintaining customer relationships, especially with the more contemporary consumer which utilizes many touchpoints (social media, website, email, etc.), the digitization of CRM has also been proven useful in gaining new customers. (Juneja, 2015) It is called an ‘Opportunity of Business’ when the CRM software identifies an individual as a lead for their products or services. When this happens, the lead’s information (i.e. demographics, interests, age, location, etc.) is accessed by the sales and marketing team which follow up and work their magic of converting the lead into a customer. However, for the customer relations system to continually maintain and attract new customers, it must be geared to deliver superior value. Its maintenance will likely involve IT infrastructure costs, upgrades and license fees. The solution to this is a technological phenominon within itself – big data and the cloud. Cloud-based CRM offers remote hosting of customer data, by which a CRM system becomes a service used rather than a product owned. (Juneja, 2015) This

option

is

particularly

ideal

for

small

businesses

and

establishments with limited space and funds, but is infact a solution used by all sorts of businesses.

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Ema-Sinead Zammit B.IHM (3rd Year-3rd Sem)

UG6056 – Customer Experience Management

Case Study – Cloud CRM:

Peter Grogan, customer success manager at Storm Technology explains that the cloud has made CRM tools more scalable and flexible compared to older versions of digital CRM systems. (Grogan, 2018) Storm is Microsoft partner that offers CRM implementation packages and other tech solutions for businesses to adapt to the fastpaced changing times. Storm believes in the importance of a business getting a holistic view of their customer. In fact, they are investing in research about new technologies, particularly AI and the Internet of Things (IoT), which are believed to bring businesses and their customers closer together. ________________________________

By investing in digital solutions to maintain customer relationships, businesses are benefiting from the linking of sales and marketing activities. Thus, considerably reducing the amount of manual labour and processes needed prior to such technological advancements. Additionally,

CRM

digital

solutions

also

contribute

to

data

warehousing – data mining of the consumer database, and is accessible for analysis and use by management and other relevant stakeholders. In more primative CRM systems, data collection was manual and thus, extremely time-consuming and tedious. Hence, in the

long-run,

the

automation

and

integration

gained

from

implementing digital CRM solutions increases productivity and synergy between business processes.

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Ema-Sinead Zammit B.IHM (3rd Year-3rd Sem)

UG6056 – Customer Experience Management

Digitizing Customer Experience

With the rise of e-commerce and a pandemic in the equation, gone are

the

days

when

individuals

would

visit

brick-and-mortar

businesses to browse and spend their money. Despite this, overall experience remains highly important for the customer and business alike. In fact, a study carried out in 2017 by Oracle proves that, while only 49% of managers believed that a bad customer experience is capable of breaking off customer loyalty, an overwhelming 89% of customers have changed service providers solely due to a poor customer experience. (Oracle.com, 2017) This shocking statistic should act as a wake-up call for all businesses that provide a service or sell a product.

In short, customer experience is described as "the process of

strategically managing a customer's entire experience with a product or company" - (Schmitt, 2003)

It is a strategy that focuses the operations and processes of a business around the needs of the individual customer and involves strategy, integration of technology and orchestrating business models and brand management. An important aspect of customer experience is understanding the expectation of the customer and the value of the customer’s perceived sentiment, to deliver what is promised and avoid any

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Ema-Sinead Zammit B.IHM (3rd Year-3rd Sem)

UG6056 – Customer Experience Management

unpleasant surprises. (Schmitt, 2003) This sheds light on the importance of the content and messages that is being marketed to the consumers – the business should be transparent, honest and not over-promise. (Goodman, 2014) Customer experience processes are being designed according to customer journey maps. A customer journey map is a digital illustration that specifies the touch-points of a service that the customer comes into contact with, and the emotions experienced during the customer journey. The customer journey map has become a significant tool for marketers and service designers to understand the weak-points, vulnerabilities and successes within the customer journey of each customer. To understand this better, below is an example of a customer journey map that covers the good and bad experiences three customers have with a travel agency. (Sharma, 2017)

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Ema-Sinead Zammit B.IHM (3rd Year-3rd Sem)

UG6056 – Customer Experience Management

Digitization of CRM and Customer Experience Today: Research Analysis

In his master’s dissertation, Tanuj Sharma confirmed that CRM systems and customer experiences that are not digitized are quickly becoming outdated. However, this is an overwhelming change for some employees, especially those which work in non-IT heavy departments, leaving organisations to slowly (but surely) explore the capabalities of digitizing customer relations and experiences. One must consider the added cost of training employees in the implementation process. Despite this, the results of the study showed that management are quite confident with the new and promising system; trusting that it will not only facilitate and engage with customers, but even add value to their business. In terms of AI, the study has shown that organisations do have a roadmap to utilize AI in their system for managing customer relations and developing experiences, however they are not currently being implemented. It was found that the biggest challenge for these businesses is getting the employees who work in non-IT departments to adapt to this change, as they are usually the people who are skeptical of the benefits and capabilities of AI. Management must also note that when a business evolves, for example, by adding more features to a service, the CRM system must also evolve to support the new version of the business. This is something that management of certain businesses were ignoring, according to the interviewer. Although nowadays the progress of implementing digitization of CRM and Customer Experiences is slow and the results seem hazy, it 9

Ema-Sinead Zammit B.IHM (3rd Year-3rd Sem)

UG6056 – Customer Experience Management

seems to be the future of the business to customer relationship and marketing.

Conclusion

To conclude, infusing

AI, cloud computing

and other digital

phenomena in the business-customer relationship actually facilitates productivity and performance for the business. While actually making the organization more human centric. Dhanrajani (2019) believes that, in the future, organisational goals will be reached by humans and AI working together. AI will be responsible for administrative work, allowing for human talent to have more time and energy to put into compassionate interactions, judgement driven work and into unleashing human creativity. Additionally, the customer experience is being further developed and improved by customer journey maps and developments in service design to satisfy the many demands and expectations of the contemporary consumer. Despite this, it is important that AI and digitalization is considered in management theories and models, and that our leaders understand how to navigate their business and employees into what seems to be the future of customer loyalty and retention.

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Ema-Sinead Zammit B.IHM (3rd Year-3rd Sem)

UG6056 – Customer Experience Management

References Dhanrajani, S., 2019. Forbes.com. [Online] [Accessed 30 March 2021]. Goodman, J., 2014. Customer Experience 3.0: High Profit Strategies in the Age of Techno Service. New York: American Management Association. Grogan, P., 2018. Customer relations strategies must limber up to survive the digital age.. Sunday Business Post, Issue 07912617. Juneja, P., 2015. Benefits, Challenges, and Future of Customer Relationship Management, New Dehli: ManagementStudyGuide.com. Juneja, P., 2015. CRM Software and its Importance, New Delhi: ManagementStudyGuide.com. Oracle.com, 2017. Insights on Succeeding in the Customer Experience Era. [Online] Available at: http://www.oracle.com/us/corporate/features/cxsurvey/cx-survey-overview-1900458.html [Accessed 10 April 2021]. Pine, J. B. & Gilmore, J. H., 1998. Welcome to the Experience Economy. In: Harvard Business Review. Boston: Harvard Business School Publishing Corporation, pp. 97-105. Schmitt, B. H., 2003. Customer Experience Management: A

Revolutionary Approach to Connecting with you Customers. 1st ed. New Jersey: John Wiley & Sons, Inc.. Sharma, T., 2017. Internet helping CRM to enhance customer

experience. Helsinki: Haaga-Helia, University of Applied Sciences.

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