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G00313888

The Eight Building Blocks of CRM: Customer

Experience
Published: 17 August 2016

Analyst(s): Mick MacComascaigh

Greater focus on personalized customer experiences is now a strategic

imperative for a CRM strategy. CRM project managers and IT leaders
supporting them need to design and deliver superior customer experiences
as a building block of CRM to create a sustainable source of competitive
differentiation.

Key Challenges
■ Any possible holistic and accurate understanding of customers, their individual journeys and
associated dynamics is very often thwarted through fragmentation of both related information
and required responsibilities.
■ Organizations lack the ability to respond agilely to changes in target customer segments, let
alone to changes that are relevant to individual customers and contexts.
■ The complexity of those solutions (necessary to deliver personalized customer experiences) is
increasing at a rate higher than the pace at which most organizations can respond and adapt.

Recommendations
■ Build cross-channel customer experiences that are set up for continuous engagement.
■ Listen to the voice of the customer (VoC) and refine the customer experience iteratively while
managing solution complexity. Ensure a cross-channel feedback system is in place, and
incorporate this feedback into each micro- and macro-iteration.
■ Personalize customer experiences, and identify a comprehensive list of information sources that
will help you do this.

Table of Contents

Introduction............................................................................................................................................ 2

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Analysis.................................................................................................................................................. 3
Build Cross-Channel Customer Experiences That Are Set Up for Continuous Engagement.............. 3
Listen to the Voice of the Customer (VoC) and Refine the Customer Experience Iteratively While
Managing Solution Complexity......................................................................................................... 4
Personalize Customer Experiences, and Identify a Comprehensive List of Information Sources That
Will Help You Do This....................................................................................................................... 5
Gartner Recommended Reading............................................................................................................ 6

List of Figures

Figure 1. The Eight Building Blocks of CRM............................................................................................3

Introduction
The number of touchpoints an organization has with its customers continues to increase. With each
encounter, customers draw positive, negative or indifferent conclusions. These are drawn from their
personal encounters with the organization's products, services and employees or through their
usage of the organization's customer-facing technologies, as well as premises such as shops or
service centers. The customer experience can no longer be avoided if a company wishes to be
competitive and maintain the quality of its brand. Conversely, as the customer experience improves,
customers become more satisfied and loyal, which reduces the costs of servicing customers,
paying compensation and replacing ex-customers, while at the same time increases revenue from
greater cross-purchasing and referral customers. A greater focus on customer experiences has
become a new strategic imperative due to its ability to engage customers and produce results (see
"Customer Experience Is the New Competitive Battlefield" for more details).

Organizations with successful CRM strategies focus on all of the eight building blocks depicted in
Figure 1. Successful CRM strategies ensure that operational enhancements are balanced and
aligned, with a focus on the customer experience.

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Figure 1. The Eight Building Blocks of CRM

Source: Gartner (August 2016)

CRM project managers, and the IT leaders working with them, need to ensure that their teams
design interactions, encounters and communications that will increase customer engagement and
resultant satisfaction. Once designed, every touchpoint that influences the customer — from a field
engineer's mannerisms to the layout and scripting of the company website — needs to be aligned
and optimized for consistent delivery. Companies then need to assess the level of customer
satisfaction, continually refining the experience. All organizations are unique in how they try to
improve the customer experience because there are many ways to measure the customer
experience (see "How to Manage Customer Experience Metrics"). There are also key differences
between customer experience projects and CRM (see "How to Tell the Difference Between
Customer Experience and CRM Projects"). However, what all organizations have in common is the
choice they have between seven types of projects that can be used to improve the customer
experience (for more details, see "Gartner's Seven Types of Customer Experience Projects"). This
paper will focus on the three types of project for which the IT organization is called upon to help the
most.

Analysis
Build Cross-Channel Customer Experiences That Are Set Up for Continuous
Engagement
The challenge of delivering a cross-channel customer experience so that the organization appears
to act as one in the eyes of the customer is nontrivial for all but the smallest organizations due to
silos created by functional departments, geographies and channels.

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There are four ways of connecting those silos: by unifying the user experience across silos,
integrating or standardizing processes across silos, sharing knowledge across silos, or creating a
single view of the customer data across silos.

All of these approaches require more resources to be focused on customer touchpoints. Both
technology and human investment are needed to deliver the intended experience and further
strengthen the organization's reputation. This may mean making a cultural change for frontline staff
who may need training, empowerment and motivation. Or it may mean altering the customer's user
experience to make it consistent across channels (such as web, mobile and call centers) and
departments (such as field services and billing).

Technology investments (such as digital personalization engines, master data management or

knowledge management) can have a significant effect on the cross-channel customer experience.
Customers benefit directly from these technologies and the activities enabled by them. For
example, master data management — particularly when coupled with a digital personalization
engine — can lead to a better online customer experience by indicating an understanding of the
customer and the context of the interaction, typically leading to more online sales, whereas better
knowledge management can increase the number of first-call resolutions. Customer loyalty, brand
recognition and profit can all be increased. Ideally, front-office application investments should focus
on technologies that combine both greater productivity within the organization with significant
contributions to the customer experience in the company's value propositions. Some technology
investments, such as web self-service or digital commerce, can simultaneously decrease costs (by
reducing call volumes) and increase revenue (by improving the quality of the customer experience).

However, no matter which combination of technologies is used to cross the silos, the real challenge
is to enable a continuous dialogue with the customer.

Action Items: Make technology purchases that improve employee productivity and enhance the
customer experience. Train, empower and motivate employees to deliver an optimum customer
experience. Create a consistent customer experience across all touchpoints and channels.

Listen to the Voice of the Customer (VoC) and Refine the Customer Experience
Iteratively While Managing Solution Complexity
The design and delivery of the customer experience need continual refinement, which can only be
accomplished by getting feedback from the customer. This necessary feedback is often contained
in customer dialogues from various channels and requires the use of multiple, traditionally siloed
technologies that are associated with the capture, storage and analysis of direct, indirect and
inferred customer feedback. Technologies such as social media monitoring, enterprise feedback
management (EFM), speech analytics, text mining and web analytics are integrated to provide a
holistic view of the customer voice. The resultant customer insights are acted upon by
disseminating relevant information to the right person, at the right time and on the right channel.

Most organizations have multiple customer feedback mechanisms, some of which are quite mature,
but these are usually department-oriented and siloed. The most common of these is customer
surveys, with EFM solutions becoming a popular choice due to their sophistication. Departments
are becoming transfixed on capturing and understanding additional customer feedback associated

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with their specific domains — for example, through the use of speech analytics in the contact
center, web analytics on the corporate website and social media monitoring by marketing to capture
any comments their customers made in social settings.

Once gathered, customer feedback needs to be disseminated to decision makers and employees.
Reporting and insight from dashboards are needed at the executive level and for frontline
employees. Information is required at an aggregated level to determine the root causes that aid
longer-term strategic action planning (for example, the identified need to revise web pages that
frequently lead to abandoned shopping carts or to replace the field service scheduling engine based
on the poor customer perception of engineer timeliness). Ideally, the information should be delivered
in real time, or near real time, based on the severity of the issue and the consequences of not
addressing the issue quickly. The more spontaneous output should be able to drive timely
intervention in emerging trends (such as the negative perception of a recently launched marketing
campaign) or an individual customer situation (such as when a customer perceives a gross injustice
was committed against him or her). The timeliness and format of this information will vary widely
based on the employee's role. The format can range from an emailed summary report to the CEO
on a weekly basis, to a daily updated dashboard for a departmental head, or a real-time SMS alert
to an account executive.

Any problem resolution or implemented change must be communicated quickly to customers.

Responding to customers has multiple benefits. When customers realize that the organization
listens to them and acts upon their feedback, the company builds credibility, reinforces positive
images and helps fuel a willingness in customers to provide further information in a landscape
where consumers are often reluctant to share their time and thoughts.

Action Items: Incorporate a continuous feedback loop into as many customer processes as
feasibly logical across the entire customer experience. Gather information in a timely manner, and
circulate it quickly to decision makers and employees. Fix problems as quickly as possible, and
notify customers of the resolution, thanking them for bringing the issue to your attention.

Personalize Customer Experiences, and Identify a Comprehensive List of Information

Sources That Will Help You Do This
A prerequisite of any successful personalized customer interaction is an accurate understanding of
the context of that interaction. While this may be intuitively clear with face-to-face interactions, it is
a standard that needs to be set and attained across all touchpoints with the customer, both digital
and offline. Personalization can take many forms but digital personalization is where most
investment is taking place today (for more details on the different types of personalization, see "Use
Digital Personalization to Enrich the Customer Experience").

To achieve personalized customer interaction, organizations need to take three steps:

1. Identify the level of knowledge and understanding required to adjust interactions to make them
different, depending on the context of the interaction.

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2. Form a list of the sources of information and insights required to establish and improve that
understanding over time.
3. Determine the sequence in which those information sources are incorporated into the overall
CRM solution.

It is not enough that one department in your organization has detailed customer information to aid
personalization if it cannot be used (when relevant) to drive improved engagements over the
channels used by other departments. Designing an optimum personalized customer experience
requires not only using multiple sources — such as surveys, focus groups, business-unit personnel
and consultants — but also understanding competitors and embracing relevant best practices from
other industries.

The next logical step of this approach is to identify how you will source the required information.
Typically, organizations will have some information sources available to them, but will not be able to
tap into these sources in any methodical, operationalized or automatic manner. To this end, it is
critical that you sequence the inclusion of these insights based on the prioritized goals of the CRM
project.

Action Items: Play the role of the customer. Understand what the customer hopes to accomplish
and why. Use personalization to make processes simpler for customers and employees.

Gartner Recommended Reading

Some documents may not be available as part of your current Gartner subscription.

"The Eight Building Blocks of CRM: Overview"

"The Eight Building Blocks of CRM: Vision"

"The Eight Building Blocks of CRM: Strategy"

"The Eight Building Blocks of CRM: Organizational Collaboration"

"The Eight Building Blocks of CRM: Processes"

"The Eight Building Blocks of CRM: Data and Information"

"The Eight Building Blocks of CRM: Technology"

"The Eight Building Blocks of CRM: Metrics"

"Bridge Silos of Customer Engagement, or Risk Killing Your Customer Experience"

"The Gartner Customer Experience Management Maturity Model"

"Gartner's Seven Types of Customer Experience Projects"

"How to Manage Customer Experience Metrics"

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"Customer Experience Is the New Competitive Battlefield"

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