The old rules of business were ruled by what GE originally dubbed TQM or Total Quality Management. Leading companies would win or lose based off of their ability to deliver a quality product seamlessly and consistently. This, in their view, would drive customer loyalty and assure a category or market leadership position. Today, and for the past decade actually, we have rapidly left that notion behind in lieu of the age of TEM, or Total Experience Management. As commodification has been rampant across industry sectors, with offerings by price point becoming increasingly difficult to differentiate, winning experiences have become paramount, and the ability to emotionally engage has become the Holy Grail, whether you are selling apples or automobiles.
This significant paradigm shift has not only led to an economy predicated on engagement and experience, it has paved the way for an era of marketing driven not just by naked creativity, but perhaps even more importantly, strategic use of data to create sharpened brand intelligence. With that in mind, I thought it would be great to speak with Alicia Tillman, CMO of SAP, as she pushes the company forward as a leader in experience management and helps other leading brands understand why this type of thinking is vital to any company’s future. Below is a recap of our conversation:
Billee Howard: You’ve been in your current role at SAP now for twenty months. Can you talk to me about the current period of data transformation and how you view it and are responding to it at SAP?
Alicia Tillman: It is something we focus on every day. We’ve gone from this era of data access, to now intelligence that becomes derived from that data. We’ve evolved from the era where companies looked at how to achieve access to data to now how you drive intelligence derived from the data. I believe that this is creating both a period of immense reflection and education. The focus for us has been on understanding how do we apply this notion of intelligent data to perform certain tasks that humans have been focused on so that we can really hone in more on things that are going to really transform companies; things such as new revenue streams.
I really believe that this increased capacity to think more strategically and build greater business models is the most important take away from the period we are living in today. I think it’s both a beautiful time, but one that can be daunting as well. If you’re not super clear on how this use of intelligent data, whether it be through things such as machine learning or artificial intelligence, can be applied to your business in a way that allows you to open up the capacity to do more, then you’re really missing the big picture.
Howard: Can you talk about how that relates to your vision for where your you want to take SAP, particularly through the lens of being a top ten brand and leader in Experience Management?
Tillman: We live an intelligent world where data is at the forefront of fueling everything for us. We also we live in an experience economy where your product has to become the experience. Today, winning is about creating memorable experiences. Our vision is to create and own a new category called Experience Management (XM). XM is combining experiential data with operational data to enable our ability to win in the experience economy. We believe that this new segment is something all companies need to embrace because business today is won or lost based on the quality of the experience you provide .
When you look at the type of data which is really reflective of the operational components of your business, like your supply chain, your labor and the application of all the technical components needed to operate your business, it can really show the overall health of your operations. Through our acquisition of Qualtrics earlier this year, we’re now able to obtain data and insights related to a customer’s experience with our brand and our product. This is what we refer to as X data. It looks at the overall feelings and sentiment of your buyers when they interact with you. When you combine the two together, you have this beautifully comprehensive view of both the health of your operations, as well as the health of the experience that you’re delivering to your customer. This enables you to better shape brands based on the true feelings of your customers.
Howard: When I was researching my first book, WE-Commerce, I actually said that we were moving from an age of TQM (total quality management) to the age TEM (total experience management), so I agree with that. Amazing that was seven years ago. With that in mind, how has that significantly impacted the need to focus on the WHY if you will as opposed to the WHAT, since that’s obviously so critical to experience today?
Tillman: It’s very important to focus on the why and sometimes that doesn’t always happen. We have a huge “experience gap” currently in the marketplace. Eighty percent of CEOs believe their company provides superior customer service, yet only eight percent of customers agree with that. So, there’s a tremendous gap today that exists between what companies believe and what the reality is of the experiences that they are delivering. This is what’s creating this chasm. We live in an experience economy where your business is truly shaped by the quality of your experience. As companies, we need to be delivering exceptional, memorable experiences each and every time. The question becomes, how do you go about doing that? This is where we believe that the evolution of data and the intelligence that you gain from data makes all the difference. Our focus is on how can you really put it all to the most effective use.
We now have this unprecedented opportunity to harness intelligence and shape it into an experience. While everything has evolved so significantly through the years, marketing has always been a practice of both art and science. This is because you need the data to be able to make informed decisions around your business on behalf of the customer, but it’s also an art form because you have to practice a balanced approach that is empathetic. That’s so important because every decision cannot be based on data. There also has to be a healthy dose of constant empathy. This goes hand-in-hand with an understanding of the changing dynamics of the marketplace and the changing needs of the customer. Empathy needs to be a big part of your decision making as you work to build exceptional experiences for your customers.
Howard: Sure. Something that I focus on extensively is using emotional intelligence to go beyond sentiment analysis. Understanding how people are really feeling, with an eye on doing exactly what you just said, which is infusing empathy into everything. With that in mind, I’d love to know your thoughts on the need for improved eQ and how it all ladders up to the bigger WHY, or brand purpose.
Tillman: I think that emotional intelligence is something that needs to continue to grow within businesses. We live in a very human-centric world. Even though technology is evolving, it will enable our ability to perform. It will replace some of your basic tasks, but it will certainly not replace our ability to drive strategy. It will also not replace human emotion, and certainly as a marketer, just like this year and last year when I had my first full year in this role, you want to ensure that every strategy created speaks in human language that is relevant and approachable. Regardless of who we are, we all experience the same feelings. We all experience the same emotion and we have to be able to appeal to that regardless if we’re selling procurement software or human capital management software. Everything has to appeal to the feelings of a human being. That’s how you sell, how you attract customers and it’s certainly how you keep them for life.
Another thing that’s been such a big part of us as a brand, and has been for forty seven years, is our commitment to our vision and the purpose that we were founded on, which is to help the world run better and improve people’s lives. I believe a big part of emotional intelligence is recognizing, as a company, the place we have in this world. When you’re as large as we are, there is an inherent obligation that comes with that to bring voice to people who may not have the ability to achieve the scale that we have to create change in the world. That’s something that has always been a part of our brand story and our purpose. It’s something that’s authentically SAP and something that we’re very very proud of.
Howard: That’s awesome and very well said. As we move forward, people will have to choose to want to share their data so that they can opt into a brand experience and in order for them to want to be able to do that, brands have to be able to build trust. I’m curious as to your thoughts on that evolution taking place and how that might shape the future of experience?
Tillman: It’s so fascinating. I know you and your business study and practice this stuff all the time, but it really is such an interesting time, because we live in this period where we’re coming through GDPR and so there are many brands that have made consumers feel they have violated their security and their trust through the use of their data over the past twelve to eighteen months. It’s a fascinating world when you think about privacy of data and how much violation has occurred. Then, you look at the fact that we live in this experience economy and the gap in experience is at an all-time high, in terms of what customers expect, and the irony is that in order for one to change on the experience side, it’s vital that we get access to that data.
Data privacy has always been a key hallmark of the SAP brand in terms of how we operate. We have worked extremely hard because we know that data is the fuel enabling us to drive success with our customers. If we can’t have that trust, then it’s going to be very difficult to win in the experience economy, so I think it has to be priority number one. To your point, you’ve got to build that trust, because if you don’t have it, you won’t get access to the data that’s necessary to enable you to shape experiences. The two have to work hand-in-hand. There’s a long road ahead for some brands, but I think others know it, and are responding to it as we speak. How that all plays out, will determine a brand’s ability to either or lose in today’s experience economy.