Transcript of a discussion on discerning customer preferences to best fulfill customer wants and needs and inform digital business imperatives.
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Dana Gardner: Hi, this is Dana Gardner, Principal Analyst at Interarbor Solutions, and you’re listening to BriefingsDirect.
Stay with us now as we hear from a customer experience (CX) management expert at SAP on the latest ways that discerning customers’ preferences informs digital business imperatives.
To learn more about the business of best fulfilling customer wants and needs, please join me now in welcoming Lisa Bianco, Global Vice President, Experience Management and Advocacy at SAP Procurement Solutions. Welcome, Lisa.
Lisa Bianco: Hey, Dana, thank you so much for having me join such an incredible program. I am so happy to be here.
Gardner: Let’s look back and get some context. What was the catalyst about five years ago that led you there at SAP Procurement to invest in a team devoted specifically to CX innovation?
Bianco: As a business-to-business (B2B) organization, we recognized that B2B was changing and it was starting to look and feel more like business-to-consumer (B2C). The days of leaders dictating the solutions and products that their end users were going to be leveraging for day-to-day business stuff -- like procurement or finance – we found we were competing with what an end-user’s experience would be with the products or applications they use in their personal life.
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But then business leaders were competing with rogue employees using tools like Amazon.com versus SAP Ariba’s solution for procurement to buy things for their businesses. And so with that maverick spend, companies weren’t having the same insights that they needed to make decisions. So, we knew that we had to ensure that that end-user experience at work replicated what they might feel at home. It reflected that shift in persona from a decision-maker to that of a user.
Gardner: Whether it’s B2B or B2C, there tends to be a group of people out there who are really good at productivity and will find ways to improve things if you only take the chance to listen and follow their lead, right?
Bianco: That’s exactly right.
Gardner: And what was it about B2B in the business environment that was plowing new ground when it came to listening rather than just coming up with a list of requirements, baking it into the software, and throwing it over the wall?
Leaders listen to customer experience
Bianco: The truth is, better listening to B2B resulted in a centralized shift for leaders. All of a sudden, a chief procurement officer (CPO) who made a decision on a procurement solution, or a chief information officer (CIO) who made a decision on an enterprise resource planning (ERP) solution, they were beginning to get flak from cross-functional leaders who were end-users and couldn’t actually do their functions.
In B2B we found that we had to start understanding the feelings of employees and the feelings of our customers. And that’s not really what you do in B2B, right? Marketing and branding at SAP now said that the future of business has feelings. And that’s a shock. I can’t tell you how many times I have talked to leaders who say, “I want to switch the word empathy in our mission statement because that’s not strong leadership in B2B.”
The truth is we had to shift. Society was shifting to that place and understanding that feelings allow us to understand the experiences because experiences were that of people. We can only make so many decisions based on our operational data.
But the truth is we had to shift. Society was shifting to that place and understanding that feelings allow us to understand the experiences because the experiences were that of people. We can only make so many decisions based on our operational data, right? You really have to understand the why.
We did have to carve out a new path, and it’s something we still do to this day. Many B2B companies haven’t evolved to an experience management program, because it’s tough. It’s really hard.
Gardner: If we can’t just follow the clicks, and we can’t discern feelings from the raw data, we need to do something more. What do we do? How do we understand why people feel good or bad about what they are doing?
Bianco: We get over that hurdle by having a corporate strategy that puts the customer at the center of all we do. I like to think of it as having a customer-centric decision-making platform. That’s not to say it’s a product. It’s really a shift in mindset that says, “We believe we will be a successful company if our customers’ feelings are positive, if their experiences are great.”
If you look at the disruptors such as Airbnb or Amazon, they prioritize CX over their own objectives as a business and their own business success, things like net-new software sales or renewal targets. They focus on the experiences that their customers have throughout their lifecycle.
Gardner: Right. And when you shift the thinking in the age of social media -- and people can share what their impressions are -- that becomes a channel and a marketing opportunity in itself. People aren’t in a bubble. They are able to say and even demonstrate in real time what their likes are, what their dislikes are, and that’s obvious to many other people around them.
Customer feedback ecosystem
Bianco: Dana, you are pointing out risk. And it’s so true. And this year, the disrupter that COVID-19 has created is a tectonic shift in our digitalization of customer feedback. And now, via social media and Twitter, if you are not at the forefront of understanding what your customers’ feelings are -- and what they may or may not say -- and you are not doing that in a proactive way, you run the risk of it playing out socially in a public forum. And the longer that goes unattended to, you start to lose trust.
When you start to lose trust, it is so much harder to fix than understanding in the lifecycle of a customer the problems that they face, fixing those and making that a priority.
Gardner: Why is this specifically important in procurement? Is there something about procurement, supply chain, and buying that this experience focus is important? Or does it cut across all functions in business?
Bianco: It’s across all functions in business. However, if you look at procurement in the world today, it incorporates a vast ecosystem. It’s one of those functions in business that includes buyers and suppliers. It includes logistics, and it’s complex. It is one of the core areas of a business. When that is disrupted it can have drastic effects on your business.
We saw that in spades this year. It affects your supply chain, where you can have alternative opportunities to regain your momentum after a disruption. It affects your workforce and all of the tools and materials necessary for your company to function when it shifts and moves home. And so with that, we look from SAP’s perspective at these personas that navigate through a multitude of products in your organization. And in procurement, because that ecosystem is there for our customers, understanding the experience of all of those parties allows for customers to make better decisions.
A really good example is one of the world’s largest consulting firms. They took 500,000 employees in offices around the world and found that they had to immediately put them in their homes. They had to make sure they had the products they needed, like computers, green screens, or leisure wear.
They learned what looks good enough on a virtual Zoom meeting. Procurement had to understand what their employees needed within a week’s time so that they didn’t lose revenue deploying the services that their customers had purchased and rely on them for.
Understanding that lifecycle really helps companies, especially now. Seeing the recent disruption made them able to understand exactly what they need to do and quickly make decisions to make experiences better to get their business back on track.
Gardner: Well, this is also the year or era of moving toward automation and using data and analytics more, even employing bots and robotic process automation (RPA). Is there something about that tack in our industry now that can be brought to CX management? Is there a synergy between not just doing this manually, but looking to automation and finding new insights using new tools?
Automate customer journeys
Bianco: It’s a really great insight into the future of understanding the experiences of a customer. A couple of things come to mind. As you look at operational data, we have all recognized the importance of having operational data; so usage data, seeing where the clicks are throughout your product. Really documenting customer journey maps.
If you automate the way you get feedback you don't just have operational data; you need to get that feelings to come through with experience data ... to help drive to where automation needs to happen.
But if you automate the way you get feedback you don’t just have operational data; you need to get the feelings to come through with experience data. And that experience data can help drive where automation needs to happen. You can then embed that kind of feedback-loop-process in typical survey-type tools or embed them right into your systems.
And so that helps you understand some areas where we can remove steps from in the process, especially as many companies look to procurement to create automation. And so the more we can understand where we have those repetitive flows and we can automate, the better.
Gardner: Is that what you mean by listening inside of the product or does that include other things, too?
Bianco: It includes other things. As you may know, SAP purchased a company called Qualtrics. They are experts in experience management, and we have been able to move from and evolve from traditional net promoter score (NPS) surveys into looking at micro moments to get customer feedback as they are doing a function. We have embedded certain moments inside of our product that allow us to capture feedback in real time.
Gardner: Lisa, a little earlier you alluded that there are elements of what happens in the B2C world as individual consumers and what we can then learn and take into the B2B world. Is there anything top of mind for you that you have experienced as a consumer that you said, “Aha, I want to be able to do that or bring that type of experience and insight to my B2B world?”
Customer service is king in B2B
Bianco: Yes, you know what happened to me just this week as a matter of fact? There is a show on TV right now about chess. With all of us being at home, many of us are consuming copious amounts of content. And I went and ordered a chess set, it came, it was beautiful, it was from Wayfair, and one of the pieces was broken.
I snapped a little picture of the piece that had broken and they had an amazing app that allowed me to say, “Look, I don’t need you to replace the whole thing, it’s just this one little piece, and if you can just send me that, that would be great.”
And they are like, “You know what? Don’t worry about sending it back. We are just going to send you a whole new set.” It was like a $100 set. So I now have two sets because they were gracious enough to see that I didn’t have a great experience. They didn’t want me to deal with sending it back. They immediately sent me the product that I wanted.
I am, like, where is that in B2B? Where is that in the complex area of procurement that I find myself? How can we get that same experience for our customers when something goes wrong?
When I began this program, we would try to figure out what is that chess set. Other organizations use garlic knots, like at pizza restaurants. While you and your kids wait 25 minutes for the pizza to be made, a lot of pizza shops offer garlic knots to make you happy so the wait doesn’t seem so long. What is that equivalent for B2B?
It’s hard. What we learned early on, and I am so grateful for, is that in B2B many end users and customers know how difficult it is to make some of their experiences better, because it’s complex. They have a lot of empathy for companies trying to go down such a path, in this case, for procurement.
But with that, what their garlic knot is, what their free product or chess set is, is when we tell them that their voice matters. It’s when we receive their feedback, understand their experience against our operational data, and let them know that we have the resources and budget to take action on their feedback and to make it better.
Either we show them that we have made it better or we tell them, “We hear what you are saying, but that doesn’t fit into our future.” You have to be able to have that complete feedback loop, otherwise you alienate your customer. They don’t want to feel like you are asking for their feedback but not doing anything with it.
And so that’s one of the most important things we learned here. That’s the thing that I witnessed from a B2C perspective and tried to replicate in B2B.
Gardner: Lisa, I’m sensing that there is an opportunity for the CX management function to become very important for overall digital business transformation. The way that Wayfair was able to help you with the chess set required integration, cooperation, and coordination between what were probably previously siloed parts of their organization.
That means the helpdesk, the ordering and delivering, exception management capabilities, and getting sign-off on doing this sort of thing. It had to mean breaking down those silos -- both in process, data, and function. And that integration is often part of an all-important digital transformation journey.
So are you finding that people like yourself, who are spearheading the experience management for your customers, are in a catbird seat of identifying where silos, breakdowns, and gaps exist in the B2B supplier organizations?
Feedback fuels cross-training
Bianco: Absolutely. Here is what I have learned: I am going to focus on cloud, especially in companies that are either cloud companies or had been an on-premises company and are migrating to being a cloud company. SAP Ariba did this over the last 20 years. It has migrated from on-premises to cloud, so we have a great DNA understanding of that. SAP is out doing the same thing; many companies are.
And what’s important to realize, at least from my perspective -- it was an “Aha” moment -- is that there is a tendency in the B2C world leadership to say, “Look, I am looking at all this data and feedback around customers. Can’t we just go fix this particular customer issue, and they are going to be happy?”
Most of the issues our customers were facing were systemic. There was consistent feedback about something that wasn't working. We had to recognize that these systemic issues needed to be solved by a cross-functional group of people.
What we found in the B2B data was that most of the issues our customers were facing were systemic. It was broad strokes of consistent feedback about something that wasn’t working. We had to recognize that these systemic issues needed to be solved by a cross-functional group of people.
That’s really hard because so many folks have their own budgets, and they lead only a particular function. To think about how they might fix something more broadly took our organization quite a bit of time to wrap our heads around. Because now you need a center of excellence, a governance model that says that CX is at the forefront, and that you are going to have accountability in the business to act on that feedback and those actions. And you are going to compose a cross-functional, multilevel team to get it done.
It was funny early on, in our receiving feedback that customer support is a problem. Support was the problem. The support function was awful. I remember the head of support was like, “Oh, my gosh. I am going to get fired. I just hate my job. I don’t know what to do.”
When you look at the root cause you find that quality is a root-cause issue, but quality wasn’t just in one or another product -- it was across many products. That broader quality issue led to how we enabled our support teams to understand how to better support those products. That quality issue also impacted how we went to market and we showed the features and functions of the product.
We developed a team called the Top X Organization that aggregated cross-functional folks, held them accountable to a standard of a better outcome experience for our customers, and then led a program to hit certain milestones to transform that experience. But all that is a heavy lift for many companies.
Gardner: That’s fascinating. So, your CX advocates -- by having that cross-functional perspective by nature -- became advocates for better processes and higher quality at the organization level. They are not just advocating for the customer; they are actually advocating for the betterment of the business. Are you finding that and where do you find the people that can best do that?
Responsibility of active listening
Bianco: It’s not an easy task, it’s for few and far between. Again, it takes a corporate strategy. Dana, when you asked me the question earlier on, “What was the catalyst that brought you here?” I oftentimes chuckle. There isn’t a leader on the planet who isn’t going to have someone come to them, like I did at the time, and say, “Hey, I think we should listen to our customers.” Who wouldn’t want to do that? Everyone wants to do that. It sounds like a really good idea.
But, Dana, it’s about active listening. If you watch movies, there is often a scene where there is a husband and wife getting therapy. And the therapist says, “Hey, did you hear what she said?” or, “Did you hear what he said?” And the therapist has them repeat it back. Your marriage or a struggle you have with relationships is never going to get better just by going and sitting on the couch and talking to the therapist. It requires each of you to decide internally that you want this to be better, and that you are going to make the changes necessary to move that relationship forward.
It’s not dissimilar to the desire to have a CX organization, right? Everyone thinks it’s a great idea to show in their org chart that they have a leader of CX. But the truth is you have to really understand the responsibility of listening. And that responsibility sometimes devolves into just taking a survey. I’m all for sending a survey out to our customers, let’s do it. But that is the smallest part of a CX organization.
It’s really wrapped up in what the corporate strategy is going to be: A customer-centric, decision-making model. If we do that, are we prepared to have a governance structure that says we are going to fund and resource making experiences better? Are we going to acknowledge the feedback and act on it and make that a priority in business or not?
Oftentimes leaders get caught up in, “I just want to show I have a CX team and I am going to run a survey.” But they don’t realize the responsibility that gives them when now they have on paper all the things that they know they have an opportunity to make better for their customers.
Gardner: You have now had five years to make these changes. In theory this sounds very advantageous on a lot of levels and solves some larger strategic problems that you would have a hard time addressing otherwise.
So where’s the proof? Do you have qualitative, quantitative indicators? Maybe it’s one of those things that’s really hard to prove. But how do you rate customer advocacy and CX role? What does it get you when you do it well?
Feelings matter at all levels
Bianco: Really good point. We just came off of our five-year anniversary this week. We just had an NPS survey and we got some amazing trends. In five years, we have seen an even greater improvement in the last 18 months -- an 11-point increase in our customer feedback. And that not only translates into the survey, as I mentioned, but it also translates with influencers and analysts.
Gartner has noted the increase in our ability to address CX issues and make them better. We can see that in terms of the 11-point increase. We can see that in terms of our reputation within our analyst community.
And we also see it in the data. Customers are saying, “Look, you are much more responsive to me.” We see a 35-percent decrease in customers complaining in their open text fields about support. We see customers mentioning less the challenges they have seen in the area of integration, which is so incredibly important.
We see a 35-percent decrease in customers complaining in their open text fields about support. We see customers less challenged by integration, which is so incredibly important.
And we also hear less from our own SAP leaders who felt like NPS just exposed the fact that they might not be doing their job well, which was initially the experience we got from leaders who were like, “Oh my gosh. I don’t want you to talk about anything that makes it look like I am not doing my job.” We created a culture where we have been more open to feedback. We now relish in that insight, versus feeling defensive.
And that’s a culture shift that took us five years to get to. Now you have leaders chomping at the bit to get those insights, get that data, and make the changes because we have proof. And that proof did start with an organizational change right in the beginning. It started with new leadership in certain areas like support. Those things translated into the success we have today. But now we have to evolve beyond that. What’s the next step for us?
Gardner: Before we talk about your next steps, for those organizations that are intrigued by this -- that want to be more customer-centric and to understand why it’s important -- what lessons have you learned? What advice do you have for organizations that are maybe just beginning on the CX path?
Bianco: How long is this show?
Gardner: Ten more minutes, tops.
Bianco: Just kidding. I mean gosh, I have learned a lot. If I look back -- and I know some of my colleagues at IBM had a similar experience – the feedback is this. We started by deploying NPS. We just went out there and said we are going to do these NPS surveys and that’s going to shake the business into understanding how our customers are feeling.
We grew to understand that our customers came to SAP because of our products. And so I think I might have spent more time listening inside of the products. What does that mean? It certainly means embedding micro-moments, of aggregating feedback, in the product to help understand -- and allows our developers to understand what they need to do. But that need to be done in a very strategic way.
It’s also about making sure that any time anyone in the company wants to listen to customers, you ensure that you have the budget and the resources necessary to make that change -- because otherwise you will alienate your customers.
Another area is you have to have executive leadership. It has to be at the root of your corporate objectives. Anything less than that and you will struggle. It doesn’t mean you won’t have some success, but when you are looking at the root of making experience better, it’s about action. That action needs to be taken by the folks responsible for your products or services. Those folks have to be incented, or they have to be looped in and committed to the program. There has to be a governance model that measures the experience of the customer based on how the customer interprets it -- not how you interpret it.
If, as a company, you interpret success as net-new software sales, you have to shift that mindset. That’s not how your customers view their own success.
Gardner: That’s very important and powerful. Before we sign off, five years in, where do you go now? Is there an acceleration benefit, a virtuous adoption pattern of sorts when you do this? How do you take what you have done and bring it to a step-change improvement or to an even more strategic level?
Turn feedback into action
Bianco: The next step for us is to embed the experience program in every phase of the customer’s journey. That includes every phase of our engagement journey inside of our organization.
So from start to finish, what are the teams providing that experience, whether it’s a service or product? That would be one. And, again, that requires the governance that I mentioned. Because action is where it’s at -- regardless of the feedback you are getting and how many places you listen. Action is the most important piece to making their experience better.
This requires governance because action is where it's at -- regardless of the feedback. Taking action is the most important piece to making the customer experience better.
Another is to move beyond just NPS surveys. Again, it’s not that this is a new concept, but as I watched the impact of COVID-19 on accelerating digital feedback, social forums, and public forums, we measured that advocacy. It’s not just the, “Will you recommend this product to a friend or colleague?” In addition it’s about, “Will you promote this company or not?”
That is going to be more important than ever, because we are going to continue in a virtual environment next year. As much as we can help frame what that feedback might be -- and be proactive -- is where I see success for SAP in the future.
Gardner: I’m afraid we’ll have to leave it there. You have been listening to a sponsored BriefingsDirect discussion on how companies can better understand and respond to their markets -- one subscriber at a time.
And we have learned that by better listening inside of products businesses can remove the daylight between their digital deliverables and their customers’ impressions to best fulfill those customers’ wants and needs.
So a big thank you to our guest, Lisa Bianco, Global Vice President, Experience Management and Advocacy, at SAP Procurement Solutions. Thank you so much, Lisa.
Bianco: Thank you, Dana.
Gardner: And a big thank you as well to our audience for joining this BriefingsDirect digital business innovation discussion. I’m Dana Gardner, Principal Analyst at Interarbor Solutions, your host and moderator throughout this series of SAP-sponsored BriefingsDirect discussions.
Thanks again for listening. Please do come back next time, and feel free to share this information across your IT and business communities.
Listen to the podcast. Find it on iTunes. Download the transcript. Sponsor: SAP Ariba.
Transcript of a discussion on discerning customer preferences to best fulfill customer wants and needs and inform digital business imperatives. Copyright Interarbor Solutions, LLC, 2005-2020. All rights reserved.
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