Qualtrics CEO Zig Serafin - ‘the new blueprint for operating a digital company is experience’
Whilst market watchers eye Silver Lake’s takeover bid of Qualtrics, CEO Zig Serafin is laser-focused on bringing the human touch to enterprise technology with the vendor’s experience management platform.
It has been an eventful week for Qualtrics, a leading vendor in the field of ‘experience management’ tooling for business (or XM, as it’s more commonly referred to). Not only has the company put on its first in-person conference in four years in Salt Lake City, the home of its headquarters, but it also had received a $12.4 billion buyout offer from private equity firm Silver Lake earlier in the week.
Qualtrics is currently majority owned by SAP, which has a 71% stake. Silver Lake already holds approximately 4.2% of the company. However, there was little talk on the ground about the takeover possibilities at the Qualtrics’ X4 Summit this week, where instead the executive leadership was keenly focused on emphasizing how XM is becoming as critical a platform to buyers in modern digital companies as the likes of Microsoft 365 and Google Workspace.
We got the chance to sit down with Qualtrics CEO Zig Serafin at the Summit to get an understanding of how experience management is evolving for buyers, as well as how Qualtrics sees its role developing in helping them achieve outcomes. The key takeaway is that Serafin is certain that ‘experience’ is the new blueprint for digital operations and that buyers need to be thinking about using experience data to iterate and react to customer needs in near real-time.
Serafin said that Qualtrics launched the XM category in 2017, when at the time the vendor had 7,000 customers. Now the platform, which is focused on helping customers take control of their brand, product, employee and customer experiences on one system, has over 19,000 customers around the world. Serafin added:
What's happening behind the scenes is people are redefining the way that they're running their companies and the operation of their company by infusing digital into everything that they do. But the blueprint for that is the customer experience.
And so we're at the epicenter of that. The idea that you start to understand your customer the moment that you generate interests, to how you engage them. If you are a physical product company it’s the way that people interact with that product, how you connect with getting feedback, how you listen to people.
Sometimes it’s not always having to ask them questions, but by tuning into what they're already telling you in social media and the call center environment. And then being able to quickly recover or learn from things that maybe aren't going so well.
It doesn't matter what industry you're in, the new blueprint for how you operate a digital company is the customer experience. And then what nicely interweaves with that is the way that your employees are engaged with that as well because that can’t be done separately.
We’ve heard from a number of customers this week that are using Qualtrics to better understand their customers - including KFC, EY, Stanford Health and American Express. The key thing that has come out from listening to Qualtrics customers is that using experience data, or having an XM strategy, requires a fundamental change in how you operate.
Processes need to be agile and companies need a culture whereby it is encouraged that you adapt to what your customers are telling you, so that even if someone has a bad experience, you can rectify it. Not only this, but experience data is being used to influence product decisions and service delivery. The approach places the customer - and the employee, for that matter - at the center of everything, which is much different from an ‘inside-out’ strategy, where the company pushes what it believes is right out to market.
Running your company on experience
Qualtrics has made a number of announcements this week for updates to its platform, which include:
A new set of purpose-built applications designed for the ‘frontline’ - every intersection between a customer and a company, digital or physical. The applications aim to put experience management tooling in the hands of the people that directly interact with customers the most: call center agents, digital teams, and all of the people managers in an organization.
New capabilities for Manager Assist, which bring employee behavior data and continuous listening onto a single platform, with the aim of giving managers real-time insights so that they can build more “engaged, inclusive and productive teams”.
A new real-time Brand Intelligence and Research Hub, which is set to help companies understand brand performance, grow market share, and react more smartly to the needs of customers.
New solutions to help boost frontline agent effectiveness, which collect data from “every human and digital touch point” on the front line, which then use AI to highlight points of friction and trigger real-time action.
The demos shown this week were wide ranging and impressive, showcasing everything from helping managers formulate ideas amongst team members to improve the experience of work, to understanding where customers are frustrated when using a company’s website, and using market intelligence research tools to better understand what customers might need.
Commenting on the impact of developments in XM, Serafin said that the data being collected via the Qualtrics platform is becoming critical to companies’ operations. He said:
Systems of record vendors have obviously curated a knowledge set of what sales have taken place and who they've been done with. But we're a system of action. What a system of action does is it activates the right decision making, the right automations, the right nudges, the right suggestions, in order to progress the customer journey and to create the best possible customer experience for a company at scale.
What we're seeing is an evolution of the use of the platform to be very much like the story of the Microsoft 365 suite, or the Google Workspace suite - where if you go back 25 years ago, there were pockets where the tools and those applications were relevant. If you fast forward to today, they are running companies.
That's what's happening with XM. We have tools that are actually giving people the ability to be able to have their hands on the wheel in a much more confident way in order to help and in order to be able to support that customer experience.
The interplay between XM and the system of record vendors is still important, however. As highlighted already, SAP bought Qualtrics to utilize the data to improve its approach to customer experience. Meanwhile, Qualtrics also has strong partnerships with ServiceNow and others, where integration to pull in experience data to take action in real-time is the focus. Serafin said:
The fact that we're creating and evolving the applications that are built on top of the platform to address the entirety of that customer journey, helps people to be able to execute on that blueprint more effectively. But what's going on in the background is the systems of record vendors are now able to connect to our platform in order to be able to get stronger results for that end customer experience.
So the information that you have in Salesforce, for instance, is now augmented with highly valuable human factor data that comes from our platform. And then we can run automations that can take place through Celonis, Signavio, SAP, ServiceNow, Zendesk for instance - we’re this nucleus of capability that enables that customer journey to be scaled. To be able to help customer experience across the entire customer journey as opposed to today where things are running in pockets.
Learning from buyers
The conversations with buyers we’ve had this week have been telling in terms of the amount of effort required to change organizational culture so that the shift to an operational model that utilizes experience data is possible. The rewards are there to be taken, but using XM is far from the status quo. Serafin acknowledged this and said:
One of the important keys to success is that companies that are doing well are not taking their current operational model, and then getting customers to accommodate to it. They're doing the reverse of that. They're quickly moving to a world where they're saying how do we best accommodate the expectations of the customer?
Serafin gave an example of a healthcare provider, where customers interact with it on a number of fronts: from finding the right medical practice, to getting in touch with someone for advice, scheduling an appointment, having a follow up, procuring the prescriptions or procedures, and then having after-care. Serafin said that XM can effectively be the glue that ties these touch points together. He explained:
By starting with digital first, you can actually accommodate the entire experience elegantly. And even though you might have things running in separate piece parts, that digital experience actually helps to accommodate the entire journey.
What our platform does is it sets the blueprint for what that customer journey looks like. So you can create the right automations, the right behaviors, the right information that should actually flow, as someone starts from discovering who they should go visit, all the way through to actually making the visit, to making sure that things are properly addressed, to what the follow up might be and checking in.
Another example used was UPS, a Qualtrics customer, which Serafin said is making important changes internally around culture and operation, because of its access to experience data. He said:
UPS is an organization of 600,000 employees. They operate in almost every country in the world, and they have a culture where they deeply care about their customers. But they also have a culture where they have a very strong operating discipline, and that operating discipline is about getting packages from point A to point B in a way where it arrives undamaged, and it's high quality and it's actually there in a timely manner.
But this idea of: how do you now scale feedback? How do you scale input? How does that become a part of some of the norms that exist on a daily, weekly level? That’s just as important as the operating discipline of routing a package from point A to point B.
And so the philosophy and value system that comes along with saying ‘I want to operate my company on the blueprint of the customer journey’ requires changing some of the habits and conversations.
One of the key themes from X4 Summit has been how the use of experience data can help companies better understand the stories of human beings (customers and employees) - and to bring a new level of empathy to how organizations do business. Serafin said:
This is not just looking at personas generically. We help to bring a story of a human being to life, where you can actually listen to what someone's saying.
You can pay attention to: what are they telling you that's beyond the surface of the words? What are their intentions? Where are they actually experiencing unnecessary friction?
And those stories become really important instruments to shaping the culture of an entire organization. So while there's that challenge, we actually also create a very different lens that people can work with. Who doesn't want to actually listen to great stories?
Serafin noted that this requires leadership to take a step back and recognize that they need their operating model to reflect the customer journey, as opposed to the traditional approach of mapping the customer journey to the way a company operates. But companies can’t continue to pretend that their operations exist in silos, he said:
There's a larger complexity than ever that an organization has to deal with, because you have to be able to orchestrate all of those things to work together and every one of those channels becomes an imprint of information that comes from what a customer has provided.
Those things were sitting in silos. And so part of the design point of our platform is you have to be able to create a connectedness that exists across that large dispersion of different channels, so you're smart about if something went wrong in the online billing experience and someone's calling the call center - those things are connected
It’s been a genuinely interesting week with Qualtrics here in Salt Lake City. My main requirement for a successful conference is that customer stories are placed front and center - and there’s been an abundance of that at X4 Summit. I will be writing up more user stories in the coming days, but what’s clear is that the organizations that are using this experience data to do things differently have a recognition that customers have more choice than ever when it comes to switching brands. And whilst the shift in operations to being experience-led comes with challenges, there appears to be an understanding amongst Qualtrics buyers that listening and adapting is more important than taking a rigid, dogmatic approach.