Is customer experience management (CXM) the new customer relationship management (CRM)? These terms share the same first and last words, but hopefully not the same fate. In many ways, CRM put the cart before the horse, presuming a relationship without considering the customer’s intent or needs.

Lou Carbone

Lou Carbone, Experience Engineering

In order to develop and maintain a relationship with customers, companies have to first shift to a customer-centric focus that creates consistently relevant experiences through continuous dialogue and application of insights gleaned, says Lou Carbone, founder and chief experience officer of Experience Engineering, an experience management firm that helps companies define, build, and implement customer experience programs.

The author of the bestseller, “Clued In: How to Keep Customers Coming Back Again & Again,” Carbone has worked with Avis, LaQuinta Inns, McDonalds, United Airlines, and other leading brands to help them better understand the connection between customers’ emotions and perceptions and their reasoning processes to create more relevant interactions.

We talked to Carbone during last month’s Cornell Hospitality Research Summit to get his perspective on how travel and hospitality firms can do a better job of hitting the personalization mark with today’s more demanding consumer.

Q: What information should travel and hospitality firms use to personalize their online customers’ experiences?

LC: I think it’s whatever I, the customer, want them to use. … So the first thing is to seek permission in some way.

I think [relevance] is about how we use information. If we fully develop an insight that we gleaned—say,  we notice a customer buying baby diapers—how transparent are we with that information and how we learned it? We’re just at the beginning [of this data-driven approach to marketing and service] … with everyone talking about Big Data. We’re data crazy in this country, and I fear businesses will end up doing useless connections, that we’ll end up becoming nuisances going forward instead of asking ourselves how do we begin to develop relationships where the things consumers  want us to know about them will enhance their experiences.

Using data well is also about not making assumptions. For example, I stayed at one hotel and asked for Amstel Light one time. Now the refrigerator is stocked with Amstel Light whenever I return because there’s not enough intelligence,  there’s not enough communication [about my ongoing needs]. Customer experience is really about dialogue and your not totally making inferences, if you will. There are things that I may not know that I want, but you can help by suggesting and listening. But making assumptions almost offends me, like seeing the refrigerator with Amstel Light. There are opportunities to create dialogue rather than almost secretly making assumptions about customers.

Q: Does this sensitivity to customer intent live in the data?

LC: It can. I think that we’ll become more and more intelligent about what to interpret from data, I hope. But what happens is with the commercialization of data—just as it did with CRM—everybody’s out selling stuff without thinking it through, and [the promise of relevance] fizzles and dies.

So I don’t know where Big Data will end up, and I really don’t know where all of these pieces will fit. But I do know that if you’re not thinking it through from the customer’s  perspective, you can’t go on. If you’re thinking only company-out, in terms of what’s the benefit for your company, forget about it. You’ll be on a path of destruction over time. It’s how the CRM folks thought sending people birthday cards was the big thing when that’s not what customer experience is about. It’s not about data points; it’s about the insight.

Q: How can companies move from a product- or brand-centric mentality to a customer-centric approach?

LC: It’s a way of doing business. When you realize that the effect you have on someone’s life and how you cause them to feel is the value they derive from the interaction, it is powerful.

A company that uses data to such a degree right now, that I’m aware of, is Apple. You can go into an Apple store, make a purchase on your cell phone, and walk out the door. No security tags, no nothing. You saw IBM advertising this concept years ago, featuring a guy walking out of a store in a trench coat. But Apple has done it in such a subtle way that we’re not even aware that they know we’re in their store and … have scanned something as we walk through the door. It’s an invisible system. It isn’t out there, so that we’re aware that, “Oh my God, Apple knows whether I’ve picked something up,” and so on.

Apple is doing this to enhance the shopping experience and what it means to the customer. They’re always mindful of the impact on the customer versus the typical overriding need of businesses to cross-sell shoppers while they’re on-site. You know, it’s the “We can sell them tickets to SeaWorld while they’re staying in our hotel. We could sell them tires when they buy a car,” approach.

But there’s a big difference between useful and meaningful. And I think a great customer experience is about what’s meaningful to [the individual]. There’s so much noise. We face so much more noise than we ever did before that the ability to filter out what’s not meaningful is going to become critical going forward.

Drawing the Air on a Whiteboard image courtesy of Shutterstock.