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What's the Difference Between CRM and CEM? A Heck of a

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Lot, Some Say
Posted by Gwynne Young on Jun 26, 2006 2 comments | 5307 reads FREE Weekly Newsletters! Top Posts & Resources

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When Starbucks creates a home away from home for people to meet, drink, be
in Decision Making by Business Professionals."
seen and compute, is it customer relationship management? When video game
companies invite users to modify the games and then sell those modified 0 tweets
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games, are they practicing customer relationship management?
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A lot of people are starting to answer "no" to those questions. Setting aside
the fact that many people use the term CRM synonymously with systems and
Sha re
technology, CRM and CEM are really different beasts, these same business
leaders and management consultants say. P rint

"Do I have a relationship with 17 million people?" asked Jim VonDerheide, vice
president, CRM Strategies, for Hilton Hotels in a conversation I had with him for
a white paper on customer experience management. "I don't think I do," VonDerheide said,
answering his own question. "Do I interact with 17 million people? You bet."

When you're sitting at a Starbucks typing out your business report with a college student
IMing who knows who at a table next to you, Starbucks is not practicing CRM, VonDerheide
says. He believes there's no real relationship with you. The Starbucks people know nothing
about you. But they have created an experience.

Management consultants and gurus Graham

Hill and Paul Greenberg argue that today's
business landscape lends itself to
something different than customer ‘Do I have a relationship with
relationship management. They say that,
17 million people? I don't think Follow CustomerThink
despite some commonality, CRM is not
customer experience management.
I do. ’
The focus of customer relationship
management is the optimization of
transactions and business processes, they
say. Sure, the idea was to manage a relationship with the customer, but the focus was on
the "management," rather than on the customer. With CEM, you focus on the customer. New Syndicated Blogs
What is the customer's reaction to your brand, from advertising and marketing to purchasing Rebelations
to support to the actual service or product? And what is the customer feeling about your A Random Jog
brand the whole way?
Swyft Technology Customer Experience Blog
NuSpark Marketing Strategy Blog
Byproduct
"Relationships with customers were a much talked about, but rarely delivered, byproduct," Strategic Marketing
said Hill, a principal at the London-based consultancy Soffron Partners. "Customers just Marketing Management
didn't want relationships with companies more interested in themselves than in their Customer Service Blog
customers." The Omnipresent Marketing Blog
Service Quality Central
With customer experience management, customers are the focal point. What is the effect on
the customer of your brand? How does the customer feel when interacting with your Think Customer Satisfaction
company? "In CEM," Hill says, "the focus is on all the contacts during the end-to-end
View all syndicated blogs or add your blog now.
experience, not just on transactions. In airlines, the end-to-end experience might be 24
hours. In automotive, it might be five years, or more. This automatically provides an
increased focus on the missing relationship part of CRM." Featured Resources
Customer Service in a Challenging Economy
Hill sees CEM as the next logical step after you've practiced solid CRM. "This doesn't mean
Integrating Structured and Unstructured
that the contacts companies re-engineered in the name of CRM should be tossed aside. It is
Customer Feedback to Improve Customer
critical that the contacts are integrated into the end-to-end experience at the appropriate
Experience
points," He said. "After all, these are the only points where real value is created for the
Driving and Converting the Right Traffic
company and customers."
Customer Experience Management: DNA
CEM, Hill says, is "broader" than CEM. It incorporates "branded communications before CRM Playbook Strategy
really gets going and the product in use long after it has stopped." Creating Content that Sells: A Guide for Demand
Generation
Greenberg thinks the world of commerce has evolved past both CRM and, even CEM. He
believes that there's a new ecosystem, one in which customers have enormous power and
control. "What I used to think was that CEM was a subset of CRM," said Greenberg, who is Disruptive Technologies vs. Customer
president of The 56 Group, LLC. "Now I think that both of them have to be subsumed to Experience: What You Must Do NOW
something I don't even have a name for. My biggest problem is this: You can't manage the to Prepare
customer's experience. You have to come up with the tools to help them manage their own
experience." Powered by disruptive technologies, these

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11/10/2010 What's the Difference Between CRM a…
outside forces will increasingly impact your
He goes on to call CRM and CEM "broken old business logic that says the company is still pre- customer touchpoints. Here's what you need
eminent." In Greenberg's mind, the customer must be preeminent. to know, and what you should be doing now.

"A lot of these companies have millions of customers. There's no way they're going to
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individually interact," said Greenberg. "It's almost impossible."

But you can react to the customer and put in place techniques to figure out what the
customer wants.

One of Greenberg's favorite examples is the video game world, where game makers have
opened up source code to users (known as members of the "mod" community for the
"modifications" they make in the games) and have embraced the altered games to great
success.

Even in the traditional CRM technology world, you see what he means, with SAP's Developer
Network of enterprise collaboration. "You've got this massive network of minds that can
collaborate on solving problems and creating innovation," Greenberg said.

Samsung, too, engages customers in designing its products, according to Greenberg. And
Procter & Gamble has a network of 600,000 "moms" called Vocalpoint, where P&G taps into
what the moms think and feel about products. In exchange for easy access to products and
samples "before your friends," women give feedback on entertainment, fashion, music, food
and beauty.

"In CRM, the focus was on the company, its products and transactions. It was an inside-out
view. It was the communicated brand," Hill said. "As far as experiences went, they were
designed around the communicated brand. As often as not, customer communications didn't
reflect what customers actually experienced at the point of purchase or when using the
product."

Hill cites research that he says showed 80 percent of customers surveyed didn't believe that
they would actually receive what is so expensively promised. "And 80 percent of them will
still be disappointed," he said. In CEM, however, the focus is on customers' experiences with
the real brand—"the one that exists in their head as a result of peer recommendations and
their own accumulated experience," Hill said.

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Gwynne Young

Gwynne Young is a former newspaper writer, columnist and copy editor who has
managed online content for several companies, including Pets.com and Gartner. She has
a master's degree in journalism from Northwestern University’s Medill School of
Journalism.

About Gwynne Young | Follow on:

C ategories: Leadership C ustomer Analytics C ustomer Experience C ustomer Loyalty C ustomer

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2 comments »

Prof Perry
Jun 15, 2007 - 19:47

Interesting Contrast

The question is not CRM vs CEM...there are clearly some examples of CEM that
are unrelated to CRM, as in the Starbucks case where the customer is not known
to Starbucks.
....However, can you effectively plan and implement CRM without thoroughly
understanding CEM? If CRM is truly about mutually satisfying relationships
between buyers and sellers, one would think not.

reply

maxim ivashkov
Jan 31, 2010 - 10:18

Very interesting trend

In my view CEM tackles the knowledge and potential of the customers by certain
structures/processes. I believe that introduction of NPS was the first step to that.
However, intuitively some companies using active clients/promoters already for a
longer time. Like Lego rewards successful design with a percentage of sales.
Really interesting trend /branch within marketing, I follow it with a huge interest.

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11/10/2010 What's the Difference Between CRM a…
Maxim Ivashkov

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Featured Resources
Customer Service in a Challenging Economy
Integrating Structured and Unstructured Customer Feedback to Improve Customer
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Driving and Converting the Right Traffic
Customer Experience Management: DNA Playbook Strategy
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