How experience management helps companies thrive in the ‘experience economy’

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“Poor experiences can demolish even the best strategy.”

That’s what Bruce Temkin, Head of Qualtrics XM Institute, told us during “Executive Masterclass: Building Your Experience Management (XM) Roadmap” at a global SAP meeting in Melbourne. I think he’s right…

Bruce’s presentation explained how doing experience management well ensures successful outcomes for us, our customers, and their customers. The institute’s approach to experience management dovetails nicely into our customer-first ICX practice strategy by acknowledging the reality of the “experience economy” in which we all find ourselves.

So, what is an experience? Simply put, it’s how we process and combine facts, interactions, and sensory inputs. Our experiences drive our perceptions, expectations, emotions, attitudes, and ultimately our behaviours.

The final outcome of experience – behaviours – is the difference between unhappy customers that churn and happy customers that stay loyal. That’s why experience management is so important. It influences the first step in the process: the experience itself.

What exactly is experience management?

Experience management is the discipline of using both experience data (X-data) and operational data (O-data) to measure and improve four core experiences of business:

1) Customer

2) Employee

3) Product

4) Brand

In experience management, everything is measurable and data-driven. Capturing and interpreting X + O data yields six categories of actionable insights:

  • X Why: Find something happening in O-data and look for an explanation in the experience data.
  • O Drivers: Find something happening in X-data and look for operational situations that are causing the situation.
  • X&O Predict: Adjust how you treat people based on a combination of X&O data.
  • X&O Personalize: Build segmentation models based on a combination of X&O data.
  • X&O Alert: Send alerts and other information to people across the ecosystem based on a combination of X&O data.
  • X Value: Measure the value of improving experiences by examining the impact that those changes have on business metrics.

Operating framework – what it takes to deliver change

Qualtrics maintains that to effectively manage experience, an organization needs to establish an operating framework with three pillars:

1. Competency

Six actions (supported by 20 skills) establish experience management as a discipline:

  • Lead: architect, align, and sustain successful XM efforts
  • Realize: track and ensure that XM efforts achieve business objectives
  • Activate: create the appropriate skills, support and motivation
  • Enlighten: provide actionable insights across an organization
  • Respond: prioritize and drive improvements based on insights
  • Disrupt: identify and create experiences that differentiate the organization

2. Culture

Four cultural mindsets and beliefs encourage and nurture XM-centric behaviours across an organization:

  • Purpose-led
  • Human-centric
  • Change-minded
  • Data-oriented

3. Technology

This is where the Qualtrics platform comes in. It empowers an organization to collect, understand, and take action on the combination of experience and operational data in order to facilitate experience management across the four core business experiences.

How to ramp up your experience management maturity level

How can we develop both our own and our customers’ experience management maturity? The maturity model below outlines the approach. It’s not about following rigid process phases, but instead focusing on achieving the outcomes across each phase. Remember, everything in experience management should be measurable.


Experience Management Maturity Model (click to enlarge)

Hopefully that’s given you a taste of why experience management matters and why you should care. Ultimately, it’s about being mindful of the core drivers to behaviour (good or bad experiences) and utilising the framework to influence better manage and improve those experiences.

If we can do more of this, we should be able to develop or enhance offerings and services that are more relevant, driven by better insights, and have a greater focus on customer experience.

Robert McColl is DXC’s Australia and New Zealand SAP Intelligent Customer Experience Offering Leader and is responsible for the development and introduction of Intelligent Customer Experience (ICX) offerings within the region.

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