Think experience management (XM) is simply the latest jargon du jour? Think again. XM provides immediate feedback about how people perceive a company’s brand and products, as well as employee and customer satisfaction.
For CEOs, it’s a powerful tool that promises to bridge the gap between understanding how effectively their company operates and how stakeholders experience key aspects of their company.
Tech giants are betting big on experience management: SAP closed its $8 billion acquisition of Qualtrics on January 23, 2019. Qualtrics claims XM is a $44 billion market, if you add up the separate components that create the category. With an opportunity that big, it’s important to understand what XM is and what it means to customers. Read on for an XM primer.
What Is Experience Management
According to Qualtrics, XM provides immediate feedback and analysis about how four critical parts of their business are faring: customers, products, brand, and employees.
The basic premise is that every human experience matters. Using online surveys, XM solutions give people a voice that can lead to positive business change. But XM from Qualtrics is not just a survey tool that aggregates data; it’s a platform that uses deep learning neural networks, artificial intelligence (AI), and machine learning to provide actionable insights. With this technology in place, organizations can “listen” and respond to customers and employees in a personalized way.
It works like this: Using an experience management platform, organizations can create digital polls that measure stakeholders’ experience with, for example, a new employee stock purchase initiative. But a true XM platform goes beyond data collection to analyze that information so business leaders can identify issues immediately and act quickly. Organizations can create a feedback loop that continually monitors (and uses) people’s perceptions to improve its most important initiatives.
Experience management should not be confused with customer experience (CX). CX solutions are an evolution of customer relationship management (CRM) software and help companies run all their customer-facing interactions, such as ecommerce, sales team engagement, marketing, data protection, and service.
Why Integrated Experience Feedback Matters
As any CEO knows, brand, customers, employees, and products are interconnected. Releasing a faulty product means unhappy customers, strains brand credibility, and negatively impacts employee morale. With a listening approach that spans all these areas, XM platforms can stop snowballing negativity and fix the problem before it translates to lost customers or high employee turnover.
A Forrester study commissioned by Qualtrics said, “Fewer than half of respondents said they were even somewhat satisfied with efforts to provide a consolidated view into all important data.” By breaking down silos across those areas, an XM platform can help proactively identify issues and allocate appropriate resources preventively. Moreover, Forrester found that organizations using an XM platform “experienced benefits of more than $1.1 million over three years versus costs of $148,589, adding up to a net present value (NPV) of more than $1 million and an ROI of 674 percent.”
Experience + Operational Data: The X+O Equation
Data that reflects people’s experience (X-data) tells part of the story, like why a product does or doesn’t succeed in the market. But operational data (O-data) – logistics, supply chain, financing operations, manufacturing – explains what is happening. Married together, the why and what give business leaders a way to keep an ear to ground and bring that data into their business immediately.
For example, two people on the same airplane flight could have completely different experiences. A pulse poll given to passengers right after the flight might reveal an unhappy passenger was hot. Operational data shows they sat near a malfunctioning air jet that was overheating. Experience plus operational insight makes it faster and easier for business leaders to fix that issue, to make sure that air jet gets serviced right away, and to identify which other planes might have that part and schedule proactive maintenance.
Moreover, X plus O data allows for innovation. In the short term, organizations can jump on potential problems and fix them more quickly. But in the long term, they can use that data to innovate at a product and operational level, whether its engineering, HR processes, or how maintenance is scheduled.
The union of SAP with Qualtrics means that 1 billion records of experience data will be combined with operational data from the 77 percent of the world’s transaction that SAP systems help manage. Together, the promise is to make enterprises more intelligent by giving companies better tools to navigate the highs and lows of how their business is experienced by its most important stakeholders.