Long Live the Experience Economy

Despite the extraordinary events of 2020, the experience economy is alive and well, says Cameron Beveridge, regional director for Southern Africa at SAP. But Beveridge says that it has undergone dramatic changes that business leaders must take note of if they hope to recover fully from the challenges brought by the widespread disruption.

This is following the SAPPHIRE Now global event, where SAP leaders, customers and partners shared progress on how they are helping the world run better.

Until recently, investment into experience economy technologies, products and services was at an all-time high. While 2020’s events have certainly put a hold on some of that investment, they’ve also highlighted the importance of building great experiences not only for customers but for employees and partners too.

One study predicts that customer experience will overtake price and product as the key brand differentiator by the end of this year. Gartner believes we’re already there;  according to the firm, more than two-thirds of all companies now compete primarily on the basis of customer experience.

However, too often companies leave gaps in their experience economy strategies that undermine their success. Getting it wrong can be costly; nearly a third of customers in one study said they would leave a brand after a single bad experience.

According to Beveridge, organisations typically have experience gaps in three key areas. These are the digital gap, the employee gap and the perception gap.

The digital gap

Sudden lockdown measures implemented in countries around the world have emphasised the importance of e-commerce; this was seen as bricks-and-mortar retailers scrambled to get essential protective equipment in place and implement policies to enforce necessary social distancing protocols.

Even before the pandemic, nearly two-thirds of customers in one study said their experience on a website or app is an important factor in how willing they’d be to recommend a brand.

And yet, so many still get it wrong: web research indicates that 94% of mobile web visitors that add to the cart do not complete a purchase.

Companies can address this by collecting data from digital channels and mining that data for insights that can be applied to improve the response to customer demands.

The employee gap

One outcome of this year’s disruptive events is that the world of work has changed irrevocably. With many office workers finding they are just as — or even more — effective working from home than commuting to the office, employers are having to rethink their employee engagement and workforce strategies.

Building a great employee experience is critical in light of our current situation. According to one study, only 53% of global employees are engaged in their work.

However, at companies where an employee feedback programme is in place, the average engagement is 59% against 42% at companies with no feedback programme.

The emergence of powerful human capital management tools can help organisations stay on the pulse of their workforce even when that workforce is not physically at the office.

By using data sourced directly from employees, the organisation is far better able to turn feedback into action, driving engagement and retention.

The perception gap

Too many organisations believe the experience they offer is better than customers think it is. One study found 80% of CEOs believed they were delivering a superior experience, but only 8% of customers agreed.

This experience gap gives decision-makers incorrect assumptions over their products and services that undermine efforts to improve.

Traditionally, companies would rely mostly on operational data, such as financials, profitability and inventory to make decisions over the performance of the company.

Newly created tools now enable business leaders to measure the experience data, which provides essential insights into customer satisfaction, social media sentiment, net promotor score and purchase intent.

Integrating the two sets of data through a business technology platform that also supports new tools such as AI and machine learning can transform how companies respond to customer needs in real-time.

It’s also a major step toward building an intelligent enterprise — one that can seamlessly connect business operations with customer experiences. And it will ensure you don’t get blindsided by gaps in your experience economy strategy again.

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