Reference no: EM132831904
Company Case Qualtrics: Managing the Complete Customer Experience
Over the past few decades, the practice of gathering customer feedback data has been changing as new technologies allow marketers to dig deeper. Take customer satisfaction surveys, for example. Today's retail cashiers and hospitality staff commonly promote online surveys to customers, urging their participation with enticing incentives such as gift certificates.
In fact, everywhere customers turn, retailers and brands are emailing, texting, and handing out links to online surveys in hopes that customers will provide them with valuable feedback. What most customers don't know is that few if any of those companies are managing their own surveys. Instead, many marketers turn to a handful of experts to manage their online surveys and how such surveys fit into the bigger picture of their customer intelligence programs.
For companies like Lowe's, Ford, Verizon, 3M, and Disney, that expert is Qualtrics-the leader of the fast-growing online survey business. In fact, more than 8,500 of the world's leading brands trust Qualtrics to power customer data collection, including 75 of the Fortune 100 and 99 of the top 100 business schools. But to characterize Qualtrics' services as "online surveys" is an oversimplification. Ask anyone at Qualtrics what business they're in and they'll say it's all about "experience management."
Pioneering the Online Survey
Today, gathering survey data online seems like no-brainer. But to fully understand what Qualtrics is and does for its clients, you have to go back more than 20 years when online surveys didn't exist. The company's beginnings are a classic example of a tech startup at the turn of the millennium. But instead of a garage in Silicon Valley, Qualtrics started in the basement of a cul-de-sac home in Provo, Utah.
The house belonged to BYU marketing professor Scott Smith. In 1997 he came up with the idea to develop a digital survey engine that would facilitate his own research. Back then, the standard process for collecting survey data was distributing a paper-and-pencil questionnaire in person or through the mail. As such, it was a costly process in terms of both time and money to create a survey, collect responses, and enter the data into a computer. But everything changed when Smith administered his first online survey. "The first survey that we collected online-within 48 hours, our data was in the computer," says Smith, noting that the process would normally have taken months using traditional methods. "All of a sudden, the light clicks on and you're like, this is something wonderful. It's quick, it's easy, it's more accurate."
Smith enlisted his sons, Ryan and Jared, to help develop and launch one of the first online survey services. What started as SurveyPro became Qualtrics in 2002. Initially targeting the academic community, the team soon recognized the potential for online surveys as a marketing research tool. Honing the software over several years, Qualtrics expanded its client base in 2008 to include organizations of all kinds-business and academic, for-profit and non-profit. Before long, the majority of Qualtrics' business was coming from corporations.
From the start, Qualtrics differentiated its offering by making it user-friendly. The goal was to help anyone with a non-tech background quickly and easily create and manage an online survey. With Qualtrics, clients could use simple question-generating tools to draw from various types of questions, including sliding scales with endpoints such as "happy" and "sad" or grades from "A" to "F." An early Qualtrics innovation was heat maps that let respondents click on a particular location in a retail facility, indicating preferences for certain types of product or service experiences, such as the preferred seating in a theater. Users could also choose from numerous types of graphs to summarize results.
From the beginning, Qualtrics employed a cloud-only model, eliminating the need to install software on individual computers. This innovation allowed customers to develop, tweak, and adapt their own custom surveys without asking Qualtrics to do it for them. Along the way, Qualtrics has added features that not only increase the flexibility of survey creation but make it easier to aggregate and analyze collected data. The online do-it-yourself Qualtrics approach not only saves users a great deal of time compared with more traditional methods, it's also considerably cheaper.
Experience Management-the Pioneering Continues
Today, the original basic Qualtrics survey engine has evolved into what the company dubs the Experience Management (XM) Platform-a suite of products that lets clients use a single interface to manage the four core business experiences: customer experience, brand experience, product experience, and employee experience. According to Mike Maughan, head of global insights at Qualtrics, the four core experiences used to be managed separately by corporations, if at all. But the Qualtrics XM platform integrates them and manages them simultaneously, helping companies gain a holistic view of customers and develop accurate customer profiles.
The four core experiences are evident in the pitch on the company website: "Software to help turn customers into fanatics, products into obsessions, employees into ambassadors, and brands into religions." Qualtrics' XM Platform focuses on breaking down data silos to provide a holistic picture of customer experience across the four different factors. "We all know that how employees act directly impacts the experience customers have," Maughan says, referring to how one aspect of a customer's experience can affect their entire perspective. "A common saying is that disengaged employees are firing your customers."
The single, integrated Qualtrics data analysis platform allows organizations to "bridge the experience gap." To illustrate, consider a 2005 Bain and Company study that revealed that 80 percent of CEOs believed their company was delivering a superior customer experience. However, "when their customers were asked if they felt they were receiving a superior customer experience, only eight percent agreed," notes Maughan. Qualtrics XM narrows this experience gap by measuring stakeholder experiences to establish a baseline, predicting and prioritizing stakeholder needs, initiating a plan of action, and tracking progress in narrowing the gap between the baseline and the need. If used correctly, the XM platform drives continuous experience improvement.
AI Comes to Experience Management
A few years ago, the company introduced Qualtrics iQ as part of the XM platform. This innovative new product uses artificial intelligence (AI) to automatically identify trends, statistically validate key consumer drivers, and identify the appropriate statistical tests that should be used to deliver results. "Qualtrics iQ hunts down experience gaps automatically, predicting what customers want and helping organizations find and address issues before they negatively impact the business," says Webb Stevens, head of product at Qualtrics. "Machine learning helps automate tasks that were previously time consuming or impossible to scale, like analyzing open text feedback or finding key drivers buried in your data."
With XM and innovations such as Qualtrics iQ, Qualtrics clients are seeing real results and strong return on marketing investment. JetBlue chose Qualtrics because it offered total control over all phases of customer experience management. By combining relational data (brand purchase drivers) with transactional data (experience and satisfaction) into a centralized hub, JetBlue was able to easily identify the biggest customer impact areas and immediately execute changes that made a difference.
For example, JetBlue found that the vast majority of passengers didn't care about free bags, instead preferring cheaper ticket prices. Based on the data, JetBlue increased revenue by rolling out different rate structures and pricing options. In Philadelphia, JetBlue was able to trace dissatisfaction to the lack of airport shops and amenities open in the early morning hours. The fix was simple-pass out water, juice, and coffee at the gate. And in another airport, negative customer comments and lower-than-normal satisfaction scores at a particular gate were traced to a defective terminal speaker, making it impossible for waiting passengers to hear gate agent announcements. JetBlue immediately sent an automated alert to the airport maintenance crew. The problem was fixed the same day, and survey responses returned to normal.
Cases of client success using Qualtrics' XM platform are abundant. Recently, Morgan Stanley bestowed its prestigious CTO innovation award on Qualtrics. "We're putting clients first in everything we do, and Qualtrics has become an integral partner in our journey," said Chris Kovel, managing director at the global financial services firm. "Starting out as a satisfaction scoring tool for our institutional clients, we are now leveraging their insights to gauge the perceptions of our external and internal clients across the business, which will ultimately shape and improve our overall performance as a firm."
Today, many companies are competing for a slice of the growing experience management industry. Not the least of these is IBM, which applies its Watson artificial and predictive intelligence capabilities to experience analysis. But Qualtrics argues that IBM's technology is too complex, insisting that its XM software provides predictive intelligence that is more easily consumed by the customer experience masses.
Clients seem to agree. By making market research more comprehensive as well as more accessible, the company has turned a profit and doubled its revenue each year since it made its online survey software available to the public. For years, Qualtrics resisted taking on debt and refused generous offers of investment capital and buyout. That decision proved farsighted. Recently, Qualtrics shocked the world when it was purchased by German software giant SAP for a staggering $8 billion, the goal being to enhance SAP's expertise in operational data with Qualtrics' experience data. In doing so, SAP intends to evolve from a customer relationship management platform into the most powerful and complete experience management company on the planet, going so far as to suggest that its experience management competitors are now nonviable. If this mega-acquisition goes as planned, the new SAP/Qualtrics combination may just fulfill that prediction.
- How does Qualtrics fit in with the big data trend?
- Discuss how Qualtrics's services facilitate the discovery of customer insights.
- Discuss Qualtrics' tools in the context of research approaches.
- What challenges does Qualtrics face in the future?