The Experience Economy
Experiences are becoming just as, if not more, important than products and services. Businesses need to be able to better understand their customer’s expectations in order to create more desirable customer journeys. The quality of the experience plays a big role in purchasing decisions. All things being equal in a product category, the better experience tends to win. The experience economy isn’t a new phenomenon, but businesses are just now starting to utilize it and understand the competitive advantage it gives them.
In November of 2018, SAP announced its plan to acquire Qualtrics, and in January of 2019, they finalized the acquisition. What is the benefit of SAP acquiring Qualtrics? Qualtrics is the global pioneer in the experience management (XM) software category, which allows organizations to excel in the experience economy that exists today. With the combination of SAP and Qualtrics, Qualtrics XM services are able to provide data and insights to inform how a business creates their online and offline experiences. This is done by combining experience data (X-data) and operational data (O-data), which will help organizations better understand how to deliver unique customer experiences.
What is Qualtrics?
Qualtrics is an experience management platform that focuses on collecting, organizing, and understanding data related to customers, products, brands, and employees. Qualtrics XM’s goal is to help companies predict and identify opportunities for experience improvements through monitoring every interaction people have with a company.
Qualtrics offers a variety of different XM products but puts a lot of emphasis on four main areas—customer, product, brand, and employee—each with its own unique set of tools that businesses can utilize to improve their overall business experience.
Here’s a list of a few Qualtrics Products and what they offer:
Customer Experience (CX)
- Net Promoter Score (NPS) – measure, analyze, and improve NPS
- Voice of the Customer (VoC) – understand the emotions and sentiments that drive customers’ actions with multi-channel feedback to identify and prioritize what customers want most
Product Experience (PX)
- Pricing Research – consolidate pricing research on one platform and easy to program surveys
- Market Segmentation – build a study, create target groups, and analyze results
- Concept Testing – understand concept effectiveness, identify strengths and weaknesses, and align concept ideas with your brand
Brand Experience (BX)
- Brand Tracking – track data points from market trends, to competitor analysis, or brand awareness
- Ad Testing – test ads with a sample of your target audience
Employee Experience (BX)
- Employee Engagement – uncover insights managers and leaders need to close experience gaps
- 360° Feedback – survey builder which gives instant feedback and real-time reports
- Employee Pulse – frequently, quickly, and easily measure employee experience and organizational health
Qualtrics takes it to the next level when it comes to heightening your business’s ability to create better experiences. Qualtrics offers the tools necessary to compile data that will help businesses bridge the gap between themselves and their customers.
What is Experience Management?
Having data at your fingertips is one thing, but knowing how to properly utilize it is a whole other undertaking. Typically, businesses rely heavily on O-data, which only provides you with hard facts, such as cost, accounting, and sales. This type of data only supplies you with what has happened, not why it has happened. This is where X-data becomes valuable. X-data allows you to understand the thoughts and emotions of customers, the key things you need to understand the customer journey. SAP and Qualtrics have combined their individual strengths, (SAP and O-data, Qualtrics and X-data) to create an experience management platform to help companies identify touchpoints and close experience gaps, making for a more seamless customer journey.
How Can XM Benefit My Business?
There is often a discrepancy between how you perceive customers feel about your products and services and how they actually do feel. Shifting into a mindset that focuses on the overall experience (shopping, brand, customer, etc.) is one way to start closing the gap. There is a lot more that impacts a business than just the expenses and revenue. All stakeholders have an impact on the organization and its overall performance.
According to SAPs 4 Traits of Experience Economy Masters, companies like Uber and Airbnb have already been doing this. They run on intelligent systems designed to collect and analyze both operational and consumer data. For example, on the Uber app, customers are able to rate their drivers, and on the opposite end of this, drivers are able to rate the customers they pick up. This is also a feature with Airbnb, guests are able to rate their hosts and their accommodations, while hosts are able to rate the guests that stay in their houses. Through collecting reviews on drivers, hosts, passengers, or guests, these companies are able to generate value by delivering experiences that benefit both ends of the transaction. For example, with these dual ratings, Uber can help determine which drivers should be retained and rewarded, and which riders might be prioritized during surges in demand.
A survey conducted by SAP stated that 67% of companies are “on the path to connecting not just traditional operations data and metrics but also data about the emotions, attitudes, and behaviors of a much larger group of stakeholders – that is, experiential data – to improve business performance”. There are plenty of companies that would like to start combining X and O data but are just slow to start migrating towards it.
Many businesses have yet to fully embrace the experience economy and the benefits that XM can have on an organization. XM can help identify the experience gaps in the customer journey which helps companies gain a greater understanding of what their customers really want and need. Together, SAP and Qualtrics offer an XM platform that could enable a new level of organizational perceptiveness and help improve your business’s overall performance.