The Walldorf giant goes on the attack

If the company has its way, SAP's headquarters in Walldorf, Germany, will be the starting point for a CXM revolution. It will be interesting to see how the market reacts.

Whoever is reading this has probably come into direct or indirect contact with SAP several times in their lives. The company's technology is simply omnipresent. Accounting, controlling, sales, purchasing, production, warehousing and human resources cannot do without the programs that the billion-dollar company from the small German town of Walldorf has been writing and selling all over the world since 1972.

However, there was already a "Gallic village" that SAP had surrounded from all sides, but which for various reasons was not really an issue for a long time. We are talking about the area of customer experience management (CXM), i.e. tools that go beyond traditional customer relationship management (CRM) and help marketers to offer their customers better experiences at all touchpoints. For a long time, the pioneer in this field was Adobe, which is ten years younger and still defends its pole position. But the battle for the favor of marketeers is also getting tougher in Switzerland: SAP is on the attack both on the product side and in communication.

CRM or CXM?

To understand what this means, you need to understand the differences between CRM and CXM. A CRM tool usually contains functionalities for sales, customer service and possibly marketing. However, these areas are often poorly integrated - meaning that they do not "communicate" with each other automatically, which can cause problems. A CXM approach such as that of the SAP Customer Experience Suite aims to link the silos in the company: if marketing initiates a campaign, for example, sales is automatically informed of this thanks to the integrated modules.

Acquisitions and realignment

Signs of the path SAP wants to take have been visible for a while: Products such as Hybris or SAP Hybris, the SAP S/4HANA Public Marketing Cloud or SAP C4C were symptoms of how the company was paving its way into the CXM sector. Added to this were acquisitions such as Gigya, Callidus Cloud, Coresystems and Qualtrics, which enabled SAP to acquire a great deal of expertise in one fell swoop.

Two days of CXM spectacle

After all these products were combined and expanded in May 2018 under the aforementioned name SAP Customer Experience Suite, the software company's communication is now following suit. The message is clear: "You can no longer ignore us when it comes to customer experience management." This recently became clear at a veritable CXM spectacle, to which the company invited selected customers, analysts and press representatives to Munich in November. Over the course of two days, the assembled audience of experts not only had the opportunity to take an exclusive look at SAP's laboratories and get to know the start-ups that SAP supports, but the company also presented the philosophy behind its current efforts.

The start-ups

First of all, it must seem remarkable to an outside observer how many resources - be they financial or internal know-how - SAP is currently deploying to support start-ups. The company maintains so-called SAP.iO Foundry Spaces around the world, where young entrepreneurs from different countries work together.

At SAP.iO Foundry Munich, it is easy to see that almost all of the start-ups represented there are dedicated to improving the customer experience. The French company Dotaki, for example, has developed a system that classifies online shoppers into emotional or rational buyer types in real time. Based on this, e-commerce retailers can personalize their sites, display different offers or change their imagery.

Another example: The company presize.ai has developed a body scan technology optimized for cell phones that helps people choose the perfect dress size when shopping online. This should increase retailers' sales while drastically reducing returns. Or the start-up ViewAr, which is picking up on the current trend of augmented reality (AR) and experimenting with how AR can be used to digitally enhance analog shopping experiences.

The customers

Bold beginnings on the one hand, established players on the other: the customers that SAP is presenting in Munich as references for its CXM capabilities are certainly impressive. The fact that the energy drink Red Bull, for example, whose entire marketing is now defined more by experiences and events than by the actual product, relies on the SAP Customer Experience Suite speaks for the practical applicability of the system, which is still young in this form.

The holistic approach

So what distinguishes SAP's offering from other CXM tools (as there are currently many)? Marcel Brun, who is responsible for business development in the area of CXM in Switzerland, has a clear answer: "If you make a promise to the customer, you should also keep this promise to make the customer happy. We connect the demand chain with the supply chain. Only SAP can offer this holistic approach." It will be interesting to see how the market reacts to this challenge.

MK Marketing&Communication in conversation with Marcel Brun, Business Development Manager in the SAP Customer Experience division, about the future of customer experience management.

MK: Customer experience management is currently "en vogue" - how long has SAP been working on this topic in depth?

Marcel Brun: SAP has been offering CRM applications for around 20 years and supports many well-known companies in this process. In May 2018, we launched the SAP Customer Experience Suite SAP C/4HANA. This suite combines modular cloud solutions based on the latest technology in the areas of marketing, sales and service and was specially designed for the new customer era. The acquisition of Qualtrics, the leader in experience management, in fall 2018 rounds off the offering and now brings experience data into play alongside operational data. Since then, we have been offering our customers comprehensive customer experience management from a single source.

Why are you at SAP so convinced that CXM is the future?

Companies' products and services are becoming more interchangeable and differentiation is increasingly based on the experience that customers have with a company or brand. In short, we are now living in an experience economy. Today's customer is connected - new channels and touchpoints appear on the horizon every day and delivering seamless customer experiences across multiple channels is becoming more challenging than ever. For many companies, customer experience is the top priority on the management agenda in order to be and remain competitive in the experience economy.

What distinguishes the customer experience approach practiced by SAP from that of its competitors?

In order to offer the customer a holistic customer experience, you need a 360-degree view of the customer and correspondingly integrated processes and tools. If you make a promise to the customer, you should keep that promise to make the customer happy. Simply put, we connect the demand chain and the supply chain.

At the same time, it's also about understanding the customer and anticipating what they want in the future, isn't it?

Yes, nowadays it is not only important what happens - for example, when a customer places a product in the shopping cart but does not submit an order - but also why something happens. Perhaps the abandonment was because the customer wanted to use a voucher code but the entry didn't work! If you collect and analyze such data, you can derive intelligent actions and, in this case, interact directly, support the customer and thus increase the conversion rate.

What do you personally consider to be successful customer experience management?

In short: offering customer experiences at the relevant touchpoints in the customer journey that meet the needs and expectations of the customer.
Always surpass customers and make them "fans" of a company or brand.

What will be the biggest challenges in the area of customer experience over the next five years?

In many companies, departments such as marketing, sales and service are organized in separate silos with their own processes and tools. Some of these are not coordinated and integrated with each other. Furthermore, customer data and interactions are kept in separate data silos. These conditions make a holistic customer experience virtually impossible. In addition, many companies today mainly have operational data from transactional systems at their disposal for market development. However, experience data is also needed to make customers happy in a holistic way. The aim is to collect experience data at the various touchpoints and channels, combine it with operational data and derive intelligent actions to fully satisfy the customer and exceed their expectations.