Customer Engagement or CRM? Why not Both…

It is rectangular in shape, measuring 8.5 cms by 5.4 cms, resistant to bending, made of plastic, referred to as ID-1 in ISO; and resides smugly amongst others of its type in your wallet. It’s the loyalty card issued by a retail store – mostly by one of the newer ones falling under the ‘organized retail’ class. This small piece of plastic is at the center of the marketer’s CRM – customer relationship management efforts. Issued to you after having collected your details, this card is supposed to create inseparable bonds between you and the store. And the ease with which you can get one, it should not be surprising that a family would be in possession of such cards by the dozens. Have these cards really generated loyalty? I don’t know. What got me intrigued into the matter was another piece of apparent jargon – Customer engagement. What if it was just a fancy ‘flavor of the month’ word? What if it wasn’t? That got me digging. And some good stuff was unearthed.

Let’s revisit the store. The primary benefit of ‘swiping’ your card at the purchase counter is that you earn ‘points’ which are redeemable, the redeemed item delivering the value in turn for shopping at the store because you have the card of that store. Yes, the store does send me a message on my birthday and offers me an “additional” 5% discount on my anniversary. But to think that I would be overwhelmed by this offer is perhaps taking things too far. Come on, need recognition doesn’t commence because of a discount. The card is a sales promotion effort, and the objective is sales. Period.

This is CRM – a database enabled model of deploying technology to collect information of all interactions with the customers. It manages and automates the sales pipeline and store interactions of the customers. Enhanced customer satisfaction is aimed through higher levels of service.

The store calls again. So the fact is, despite having a dozen ‘loyalty program cards’, my heart does not yearn for any particular store when I need to go shopping. But imagine this: the store identifies that I have never purchased trousers from there, and sends me an SMS aimed at lowering my barriers of purchasing trousers from its store? Would I not be inclined to hit this store before others?

Welcome to CEM – Customer Engagement Management; defined by Gartner as “the practice of designing and reacting to customer interactions to meet or exceed customer expectations and, thus, increase customer satisfaction, loyalty, and advocacy. It is a strategy that requires process change and many technologies to accomplish.”

Simply  put, it focuses on developing detailed insights into the customer’s behavior by observing the customer across all touch points, and then, responding to the customer across the same touch point. The core value driving the concept should be empathy – a sincere understanding of the customer to ease her problems and provide valuable solutions. The process of engaging the customer should be delightful, rewarding and gratifying for the customer.

Where CRM focuses on managing the interactions for aiding sales and service, customer engagement is more proactive in its purpose. CEM should be:

  1. Present at all touch points
  2. observe the customer’s behavior
  3. learn by collating and analyzing data from numerous touch points
  4. use this information to communicate and deliver timely solutions


Customer Engagement

The takeaway? The most cherished of goals – Loyalty. Repeat patronage, recommendations, favorable attitudes – all of these yield a superior customer lifetime value for the marketer.

Thus, the question is not whether to have CRM or CEM. You actually don’t have an option. You shall need CRM to increase sales productivity and efficiency, and customer engagement to enhance your relations with the customer. Customer engagement presupposes your presence across multiple media and non-media touch points. You shall need to invest in good, very good data analytics. Don’t forget the human touch though, for it shall be crucial in making sense of the patterns revealed by data analytics.

One can complement the other in providing superior and delightful customer experience. So, ek se bhale do (two are better than one).

Good Luck and Keep Engaging !

I am Ravi Vaidya, a management educator by profession. This is where I intend to be myself, where I can ‘I’deate.


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