The new frontier for successful businesses: ‘Experience management’

Enterprises today are trying to explore the “experience gap”, what people expect, versus what they actually receive, from a brand, says SAP CEO Bill McDermott.

As he points out, frustrated customers will look elsewhere for a better experience.

But SAP, he says, noticed another gap in this space.

SAP already has the richest source of operational or ‘O’ data, but did not have the experience or ‘X’ data.

Combining these allows an enterprise to deliver true personalisation at mass scale, so you can bridge the experience gap, says McDermott.

He says small businesses do this well, but they do it in a small pond of customers. The challenge is for companies operating in a global economy.

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Organisations are disproportionately rewarded when they deliver great experience and absolutely punished when they do not Ryan Smith, Qualtrics

“For the first time in history, experience has become the growth engine for business,” adds Ryan Smith, co-founder and CEO of Qualtrics, the experience data specialist SAP acquired in late 2018.

“Organisations are disproportionately rewarded when they deliver great experience and absolutely punished when they do not,” says Smith.

“The difference between the companies that will win is they understand how 'X' data and 'O'data work together to tell the story of what is happening in an organisation, why it’s happening and how to act in real time to deliver breakthrough business results.”

The two spoke at the opening of the 30th annual Sapphire Now conference in Orlando, Florida, where SAP announced the rollout of 10 new offerings that combine experience data (‘X’ data ) with operational data (‘O’ data’) to measure and improve the four core experiences of business. These are customer, employee, product and brand.

These new offerings - four for customer experience (CX), three for employee experience and three in market research - embed experience data directly into an enterprise’s applications, such as its CRM, ERP or HCM systems, to drive continuous action and improvement.

“The rollout of this system sets a new standard in enterprise software,” says McDermott.

The combination enables organisations to continuously listen to the beliefs, emotions and intentions of customers, employees, suppliers, partners and other stakeholders, he states.

“It is the new frontier for the world’s best-run businesses.”

SAP CEO Bill McDermott and Ryan Smith, co-founder and CEO of Qualtrics, at the 2019 Sapphire Now in Orlando, Florida

“Experience management is the only sustainable competitive advantage,” says Smith.

There is a premium on experience, as it can drive higher prices and repeat purchases.

“Only ‘experience brands’ are surviving,” he says, while newer companies have been set up to fill the “experience” gap of other companies.

These include WeWork, Peloton and Flexiport.

Disruption happens in these gaps and no industry or market is immune, he says.

Yet, he says, most companies are disconnected from their customers’ view of the experience they provide.

He says a recent survey of CEOs, for instance, revealed 80 per cent of the respondents believe they are providing the best experience, but only 8 per cent of their customers believe they are.

“That is a massive gap,” says McDermott. “These gaps lead to customer churns, failed products and unwanted employee attrition.”

McDermott thus advises organisations to determine where their experience or ‘X’ data lives.

“If this data is not connected to the operations of the business, it is hard for companies to close the ‘experience’ gap,” he states.

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Divina Paredes attended the 2019 Sapphire Now conference as a guest of SAP

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Copyright © 2019 IDG Communications, Inc.

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