Claus Andresen, President & Managing Director of SAP Southeast Asia, believes that the world is now operating in the ‘experience economy’.
“The experience economy basically summarises the key essence that ‘the customer is king’. If our customers had a good experience, they would want to stay with us as a company. They want to buy more. If they have a bad experience, they’re likely to leave us and go somewhere else. The customer experience is the ultimate currency today to make sure that you unlock future potential value,” said Andresen at the recent Asian Innovators Summit 2019.
“The reality is as human beings, we love to talk about our bad experiences. 95% of dissatisfied customers tell others about their bad experience. We want to share it with our friends, our family, and on social media; interestingly enough, our good experiences we are less likely to share, because we want to keep it for ourselves.”
Andresen noted that in the experience economy, it has become easier for people to switch from one provider to another.
“80% of customers have chosen to switch brands due to a poor customer experience. 89% of businesses are expected to compete mainly on customer experience. We want to attach ourselves to brands we like, and we are willing to spend more – up to 56% more. We’re more likely to share our good experiences with our friends and family, and if you get a referral for a good experience from someone you trust, you’re likely to spend 65% more on that brand.”
Unfortunately, Andresen pointed out, there is a mismatch between what customers expect and what they perceive companies to actually deliver to them.
“If you ask around a group of CEOs and senior executives, 80% will testify that they deliver a superior customer experience to their customers. The alarming part is that if you ask the customers, only 8% say that they got a fantastic customer experience. That is what is referred to as the ‘experience gap’; the delta between what we believe we’re delivering to our customers, and the reality of what our customers perceive. We need to address that experience gap as part of this experience economy we live in.”
According to Andresen, this ‘experience gap’ concept can also be applied to the employee experience perspective. “As part of a company, you are exposed to processes, policies, guidelines, good and bad managers – you have an experience. And studies show that employees who have bad experiences have lower productivity. Even worse; they’re more likely to leave the company. Up to $550 billion of productivity is lost because of poor employee experiences.”
He introduced SAP’s solution to the challenge of creating a good experience for both customers and employees.
“We at SAP work with this notion of ‘X’ and ‘O’ data. ‘O’ data is all our operational data, whether that be with respect to finances, procurement, supply chain, HR, Sales, etc. All this information we’re quite good at managing and capture, in order to use in making decisions, and improve our processes and customer experience.
“On the other side, we have the experience data, or the ‘X’ data. This data refer to why something is happening. The emotional data; the sentimental data. What made a customer go back to the shop and buy even more? That experience data is equally critical for you to capture in the entire value chain. If we are able to capture the experience data, and connect it with the operational data, we basically can create an end-to-end value chain.”
In the case of employee experience, Andresen demonstrated that by using SAP’s ‘Success Factor’ HR app on a smartphone, one has access to all the ‘O’ data on one’s employees, including contact details, goals, and the training the employee needs to undergo to further improve. By connecting to SAP’s experience management platform ‘Qualtrics’, one can get real-time information on the ‘X’ data of one’s employee base. In SAP’s case, Andresen further highlights, this shows that 76% of employees in SEA are happy and satisfied.
“SAP has been around for 47 years, servicing around 400,000 customers around the world. We effectively touch around 77% of the world’s transactions, giving us the visibility and knowhow into ‘O’ data around the world.
“And now, we have Qualtrics joining the SAP family a few months ago, which captures 1.8 billion experiential touchpoints and increasing every day. By putting all this together, you can start addressing the issues surrounding the experience gap,” he concluded.