Experience Management: The Future of Customer Experience

Customer experience and experience management (XM) are among the most important topics in business today. In this conversation, learn how being customer-centric can help your company win and keep loyal customers.


Sep 05, 2019

How well do you really know your customers, and how confident are you that you are giving them the optimal experience working with your company? Customer experience and experience management (XM) are among the most important topics in business today. An excellent experience can mean the difference between a one-time transaction with a customer and a successful long-term relationship for your business. In this story, learn how being customer-centric can help your company win and keep loyal customers.

Alicia Tillman, Chief Marketing Officer for SAP, explains that most companies are not in touch with their customers the way they should be. In this conversation, Alicia explores experience management as the natural evolution in customer experience. With the acquisition of Qualtrics, SAP brings continuity between what it calls operational data (O data) and experience data (X data). This combination lies at the center of SAP’s customer experience strategy, one that's based on gathering accurate, timely, and relevant data from its customers.


This transcript has been edited for length and clarity.

Michael Krigsman: Customer experience and experience management are among the most important topics in business today, but what is experience management and where is the future of customer experience going? I'm speaking with Alicia Tillman, who is the chief marketing officer at SAP, about the future of customer experience.

Michael Krigsman: As CMO of SAP, tell us what your role includes?

Alicia Tillman: Everything from brand to demand, all of our retention programs, sponsorships, events, our campaigns, so the whole suite of marketing across all of SAP.

What is customer experience?

Alicia Tillman: Customer experience is the future, so let me say that first, now. There is a disconnect between what companies feel that they're delivering in the form of experience and what consumers actually feel like they're receiving. It creates an incredible market opportunity for companies to really think about how they solve the experience gap and how they ultimately win in this experience economy that we're operating in right now.

Michael Krigsman: Why is it so hard to create great customer experiences?

Alicia Tillman: When companies measure customer experience, they look at it in a couple of different ways, but they're quite common. They look at their annual NPS studies, which is net promoter score, that looks at a customer's willingness to recommend you to someone else to use your services. Typically, that is measured once; if you're lucky, maybe twice a year; or you're given customer satisfaction studies once a quarter, twice a quarter.

Oftentimes, though, the way a consumer judges a brand is based on each experience, one experience at a time. They don't look at it over a 12-month period and make a decision as to whether or not they're going to stay with that brand or not. They can have one poor experience against 12 other great experiences, but that one poor experience that doesn't meet their expectations can cause them to move to another brand quite quickly.

Michael Krigsman: I had a lousy night in the hotel. That defines the customer's experience.

Alicia Tillman: Hey, we're in Manhattan, so you might have a bad night in one hotel but, the next time you choose to visit here, you have an array of choices that could better meet your expectations. What's happening is companies need to get better in touch with the feelings of their customers with each and every experience that they have with their brand. How we get access to that data to understand what we like to call the feelings of our customers so that, as you understand how they're feeling about your brand, imagine us being able to anticipate precisely what you need.

When you arrive at your hotel, your room can be set up exactly the way you want it to be. You can have the right pillow you need. You can have your blinds drawn or open depending on if you like light or not. You can have bottled water in your room.

Think of all the things that make or break an experience for you. If we could understand that and then the brand has an ability to shape that experience in advance, it could have you coming back time and time again.

The reality is that companies haven't made the investment to understand those feelings, to anticipate needs, to shape operations appropriately, but now is the time because consumers have an ability to move so quickly. In doing so, it can make or break a company.

Michael Krigsman: Is customer experience about technology, about process, about culture, and how do these pieces fit together?

Alicia Tillman: It's about all of those things. Consumers today don't really buy products. They buy experiences and they buy communities. They buy a sense of belonging. You may associate yourself with a company not because they have the best product but for what that brand stands for and what it allows you to become part of.

All of those things need to work together. What does your brand stand for and how does it make people feel? What is that larger community that you build around your brand that your customers want to be part of? That's number one.

Then what's your promise? What is your brand promise? It's almost, what is that commitment that you're making to the customer?

Then the bigger question is, how do you fulfill on that promise? Getting closer to the customer by understanding how they feel, what their expectations are, so that you can then build out a business model to be able to react to that feedback or use it to anticipate how you may need to reshape your operations. That's the aspect of how it all needs to work together, when the culture of your brand works, it's best understood, it's relevant, and it works hand-in-hand with your ability to understand what your customers are looking for, together then what the technology is you deploy and the process that is built around that. When all of those things can come together, that's when you become being in the business of delivering exceptional customer experiences.

How does customer experience fit in corporate operations?

Alicia Tillman: Let me give you an example. I'm going to use an airline example, and I'm going to relate it to the business that we are in here at SAP. SAP, for the past 47 years, has been in the business of helping companies run at their best operationally. If you think about the business we're in, we operate in supply chain, in procurement, in human capital management, in travel and expense, software and reporting, just as a few examples.

Think about all of those products and capabilities that I just mentioned. They're very operational in nature. If you think about an airline, you need parts to be able to build an airplane. You need labor to be able to staff and fly an airplane. You need procurement to be able to source all of the amenities and all of the things that make up that. That is the business that SAP has been in, which is, how to operationally ensure that airplane gets from point A to point B as quickly as possible.

In a lot of ways, operationally, the plane getting me from point A to point B and all of those things that go into making that happen--booking my travel, expensing my travel, making sure there are the right parts to actually have a plane that operates, staff to fly and control the airplane--that's almost become table stakes in a lot of ways, so I expect that. I expect to get on a plane and have it take off and land when it says it will.

What I was just talking about is sort of the operational aspects of your business. Think now about the true experiential aspects of your business. I want to be able to shape my experience based on the quality of my food, the pitch of my seat, how friendly or unfriendly the flight attendant was for me, things that really make up my experience and really make it truly, at the end of the day, what I am deciding on in terms of whether or not I'm going to fly on this airline again.

What is operational data (O data)  for SAP?

We now have this opportunity to really wrap our hands around being better in touch with that consumer on those things that are considered experiential level circumstances that, in the past, we haven't been as in touch with as brands. Now, at SAP, we call that operational data, now getting combined with experiential data, to create this new category which we call experience management because, if you can onboard the insights from the consumer in terms of how they're feeling about the experience and use that to reshape the cleanliness of the plane, how well your flight attendant is operating while you're in service, or the speed of the plane, all of those operational aspects. If you can get feedback on that each and every time, it allows you to run a better operation so that, end-to-end, you're delivering exceptional experiences for your customers.

Michael Krigsman: How is this different from the idea of customer experience historically?

Alicia Tillman: I think the biggest difference is increased access to how your customers are feeling. There are so many different methods in which you can obtain that information. You have surveying technology. You have social sentiment, so what are people saying out in the social and the digital forums? There are so many different mechanisms that exist today of which your consumers are out there sharing their feedback about your product and about your brand.

Now, we have this ability to look across all of those data sources and that's the part that's new. In a lot of ways, as it relates to truly being in touch with the consumer, you oftentimes had to engage in, let's take focus groups as an example. I want to bring a new product into the market, so let me pull together a focus group of five customers that represent these different beliefs, wants, and needs. Let me focus group them for the next six to eight weeks to understand how they feel and how they can help shape my product. Well, that is not necessarily tied to a particular experience.

Imagine you just flew on an airplane and you had 300 passengers on an airplane. There were some challenges but, based on who you are as a person, you may think this is a challenge. Another person may have a different challenge. Imagine being able to be in touch each and every time with everyone who flew on that plane in a matter of minutes. You can look at their social media feeds and see what people are saying about your airline, as an example, on social. You have the ability to automatically survey them and to be able to see what they're thinking, what they're feeling, what they thought about that experience.

It's just unprecedented now levels of access to data, which is what I think is one of the fundamental differences that we have like many of the other evolutions as it relates to access to data that we've been through. I think access to data at the customer experience level is growing exponentially. Putting the technology in place to be able to capture that and then derive the insights from it so that you can now take that and use it to fuel your operation, that's what I think are some of the fundamental differences that we're seeing today.

Michael Krigsman: The foundation then is being able to capture various types of data at the time that the operations of the business are being delivered.

Alicia Tillman: Correct. Oftentimes, customer satisfaction surveys or net promoter surveys are not necessarily tied to a particular experience. It's, once a quarter I'm going to send you out now--

Michael Krigsman: It's a broad brushstroke, yeah.

Alicia Tillman: -- your three-month survey about how you thought about your service. Well, a lot of times people take these surveys. If you're anything like me, I sit there and I'm like, "Hmm. When was the last time I experienced this brand? I can't really recall the things that I liked or disliked about it."

In some cases, the end result may have been I'm actually not a customer of that brand anymore. It's so far removed now from when that experience happened that it challenges these now what are becoming antiquated methods of measuring satisfaction and loyalty, I should say, of your customers.

It's more evolved. It's more agile. It's more aligned to an experience itself so that you can truly do something meaningful to now shape the operations of your business as a result of it.

What is experience management with SAP Qualtrics?

Alicia Tillman: There's a tremendous experience gap that exists between what companies believe that they're delivering in the form of customer service and what the consumers actually believe that they're receiving on the other end. It's actually created a $40 billion addressable market. If we think about the money that it takes to build a grand and to deliver an experience with a customer and the amount of money that you're losing when you turn customers as a result of a poor customer experience, the addressable market size is incredible.

That is a big part of, when we think about the brand of SAP and what we help to enable, especially with the recent acquisition of Qualtrics earlier this year, Qualtrics helps to now bring us these new layers of data as well as technology to get better in touch with our customers with each and every experience. Not only we can change the experience in the future when we hear from them, but we can also anticipate and change things from happening before they do.

Imagine if you knew that a customer was about to leave your brand in advance of it actually happening. Imagine if you knew that an employee was so unhappy with you that was out looking for a new role. Imagine if you could understand that feedback more frequently so that you could prevent those things from happening.

Building truly what is an intelligent enterprise of today, this new realm of experience management, which we call it, so that they can ultimately win in the experience economy. It matters. It matters so much in terms of how brands really need to think about how they win in today's marketplace.

Michael Krigsman: In terms of the speed and the timing that companies can use to collect this data and then respond, any thoughts on that?

Alicia Tillman: Yes. Let me give you an example. Yamaha is a company that's in the business of creating musical instruments. They were about to introduce a new keyboard to the market. As the product team was building out the features and functions associated with this new keyboard, they couldn't decide internally where they wanted to place some of the knobs and sliders associated with this keyboard. They were unsure.

Competitively, they had to get to market very fast, but the typical methods were failing them. They didn't have time to engage in a focus group and they were also not in alignment internally on being in touch truly with where they wanted to place these capabilities on the keyboard. It matters. If you're a keyboardist, it truly matters where you put the controls on the keyboard.

What they decided to do is send out a survey to over a thousand customers. They created it very quickly. They said, "Hey, here is the problem. Here is what we're thinking. We're unclear as to where we want to put these features on our new keyboard. What do you think?" In a matter of hours, they had nearly all responses back and it very clearly helped them understand precisely where they wanted to develop this.

Now, back 10 years, 15 years ago, that would have taken them months to get in touch with the customer. Now, because of technology we have and an extreme ability to do the analysis related to the feedback that you get once you administer these technical capabilities to understand the feedback, it allows you to get to market the way you need to. Not so much even the speed of it, but the relevancy of it. They're now creating products that are truly going to land successfully than what they had the ability to get access to in the past.

That's just one example, but there are countless examples that exist out there of how, if you really focus on deploying these new, modern methods that technology can enable to understand truly what the needs are of your customers, you have the ability to build more effective products that are going to meet the needs of your customers.

Michael Krigsman: It's not just about speed, but relevance is a crucial aspect.

Alicia Tillman: More so than ever, it's choice. A lot of times consumers are saying, "Okay, well, if this brand doesn't meet my expectation, no big deal because there's like five others that I can go to." Consumers are very fickle with their brands but, naturally, you can understand why. We are all consumers and we can certainly count ourselves how often we've been disappointed with a service experience and then have made a decision quite quickly to move to another brand the next day.

If you want to compete and you want to build a brand experience that is relevant, the greatest way to do that is to really engage more with your consumers. How can technology help to enable that because speed is always going to be an issue? Here is a beautiful way in which the two can work together so that it becomes a win/win for both the consumer as well as for the brand.

Are there differences between business-to-consumer (B2C) and business-to-business (B2B) in experience management?

Alicia Tillman: My favorite question. I'm going to say no, there shouldn't be. Regardless of the job title you have within a company, I still want to be spoken to like a human being. I have feelings. I have emotions. I have wants. I have needs. If marketing speaks to me in nothing but corporate jargon, that's going to create a trust issue that I have with the brand when you're not speaking their language. Then I'm also going to question the value of whether or not that brand is right for me.

That's how I would describe where the opportunity is. It's in storytelling and it's also in who you're targeting when you actually deliver that story to the marketplace because, for us, we may be pure B2B but, I can tell you, everyone is an influencer into decision making. Even our children [laughter] who are making comments about brands and their cool factor and whether or not they're doing good in the world, those opinions matter in the decision-making process.

We're going more mass market and we're human in the way we tell our story. They both need to work hand-in-hand and that's why I think the lines between B2B and consumers are becoming blurred.

How should organizations plan for customer experience?

Alicia Tillman: Learn the needs and desires of your customers upfront, but then also measure the effectiveness of the experience that you're providing each and every time. Deploy the technology, understand what it's telling you, the insights that you gather from your consumer, and use it to shape both not only how you market, but how you develop the operations of your brand overall to meet and anticipate the needs of your consumers.

Michael Krigsman: Alicia Tillman, thank you so much.

Alicia Tillman: Thank you, Michael.

Published Date: Sep 05, 2019

Author: Michael Krigsman

Episode ID: 618