Marketing Programs and Customer Experience Management

Bear with me on this one. At the risk of seeming pedantic, I want to discuss the difference between the purchase process and the customer life cycle.

The purchase process is a sequence of events, such as awareness, trial and repurchase. The customer life cycle is a set of states, such as new customer, active customer, and lapsed customer. One describes concrete activities, such as going to a store or making a payment; the other describes artificial constructs such as customer segments or relationship types. Customer Experience Management deals with the purchase process, while traditional marketing deals with the customer life cycle. In short, they are very different.

This is why it’s wrong to consider Customer Experience Management as just another term for marketing. You cannot directly map purchase process categories onto the customer life cycle. In fact, they are orthogonal: customers in (almost) any stage of the life cycle can participate in (almost) any part of the purchase process. For example, new, active and lapsed customers all could call for technical support on a previously purchased product. Each customer is part of a different segment and each should be treated differently to optimize long-term value, yet they are all performing the same purchase process activity.

This has important practical implications. One is that operational excellence is not enough: companies must also differentiate among their customers during operational contacts so each customer can be treated appropriately. This means that operational systems and processes must identify customers, determine and execute the right treatments, and track results to allow continuous improvement. It also means that the treatments themselves, such as, say, a retention program, must be deliverable across different channels and contact types. And it means that marketing plans, which are typically organized around programs and customer segments, must integrate both outbound and operational contacts to ensure optimal use of resources.

The Customer Experience Matrix, being based in Customer Experience Management, is organized around purchase process stages. (Just to refresh your memory, the Matrix has two dimensions: process stages across the top and channels down the side. Each cell in the Matrix represents an interaction.) But Client X Client has always recognized the importance of life cycle stages. We usually express this by describing different versions of the Matrix for different customer segments. Each version has its own business rules, financial values and process flows.

In formal terms, however, the Customer Experience Matrix incorporates life cycle stages by defining a set of potential objectives for each interaction. These objectives, such as providing information or expanding the customer relationship, can be mapped precisely to the objectives that marketers assign to customers based on their stage in the customer life cycle. Treatments can be scored against those objectives and matched to customers by comparing the treatment objectives with customer life cycle objectives. In theory, this allows a system to select treatments without an intervening layer of customer segments. In practice, most companies will still use segments to simplify matters.

Maybe this all still seems pedantic, and if so I apologize. But I’ve been trying for some time to articulate the relationship between marketing programs and Customer Experience Management. Now that I’ve finally managed to do it, I’m eager to share.