128 PART 2 | Understanding the Marketplace and Consumer Value

Company Case Qualtrics: Managing the Complete Customer Experience

Over the past few decades, the practice of gathering customer from “A” to “F.” An early Qualtrics innovation was heat maps that
feedback data has been changing as new technologies allow let respondents click on a particular location in a retail facility,
marketers to dig deeper. Take customer satisfaction surveys, for indicating preferences for certain types of product or service
example. Today’s retail cashiers and hospitality staff commonly experiences, such as the preferred seating in a theater. Users
promote online surveys to customers, urging their participation could also choose from numerous types of graphs to summarize
with enticing incentives such as gift certificates. results.
In fact, everywhere customers turn, retailers and brands From the beginning, Qualtrics employed a cloud-only model,
are emailing, texting, and handing out links to online surveys in eliminating the need to install software on individual computers.
hopes that customers will provide them with valuable feedback. This innovation allowed customers to develop, tweak, and adapt
What most customers don’t know is that few if any of those their own custom surveys without asking Qualtrics to do it for
companies are managing their own surveys. Instead, many mar- them. Along the way, Qualtrics has added features that not only
keters turn to a handful of experts to manage their online surveys increase the flexibility of survey creation but make it easier to
and how such surveys fit into the bigger picture of their customer aggregate and analyze collected data. The online do-it-yourself
intelligence programs. Qualtrics approach not only saves users a great deal of time
For companies like Lowe’s, Ford, Verizon, 3M, and Disney, compared with more traditional methods, it’s also considerably
that expert is Qualtrics—the leader of the fast-growing online cheaper.
survey business. In fact, more than 8,500 of the world’s lead-
ing brands trust Qualtrics to power customer data collection, Experience Management—the Pioneering Continues
including 75 of the Fortune 100 and 99 of the top 100 busi- Today, the original basic Qualtrics survey engine has evolved
ness schools. But to characterize Qualtrics’ services as “online into what the company dubs the Experience Management (XM)
surveys” is an oversimplification. Ask anyone at Qualtrics what Platform—a suite of products that lets clients use a single inter-
business they’re in and they’ll say it’s all about “experience face to manage the four core business experiences: customer
management.” experience, brand experience, product experience, and em-
ployee experience. According to Mike Maughan, head of global
Pioneering the Online Survey insights at Qualtrics, the four core experiences used to be man-
Today, gathering survey data online seems like no-brainer. But aged separately by corporations, if at all. But the Qualtrics XM
to fully understand what Qualtrics is and does for its clients, you platform integrates them and manages them simultaneously,
have to go back more than 20 years when online surveys didn’t helping companies gain a holistic view of customers and de-
exist. The company’s beginnings are a classic example of a tech velop accurate customer profiles.
startup at the turn of the millennium. But instead of a garage in The four core experiences are evident in the pitch on the com-
Silicon Valley, Qualtrics started in the basement of a cul-de-sac pany website: “Software to help turn customers into fanatics,
home in Provo, Utah. products into obsessions, employees into ambassadors, and
The house belonged to BYU marketing professor Scott Smith. brands into religions.” Qualtrics’ XM Platform focuses on break-
In 1997 he came up with the idea to develop a digital survey en- ing down data silos to provide a holistic picture of customer ex-
gine that would facilitate his own research. Back then, the stan- perience across the four different factors. “We all know that how
dard process for collecting survey data was distributing a paper- employees act directly impacts the experience customers have,”
and-pencil questionnaire in person or through the mail. As such, Maughan says, referring to how one aspect of a customer’s ex-
it was a costly process in terms of both time and money to cre- perience can affect their entire perspective. “A common saying is
ate a survey, collect responses, and enter the data into a com- that disengaged employees are firing your customers.”
puter. But everything changed when Smith administered his first The single, integrated Qualtrics data analysis platform al-
online survey. “The first survey that we collected online—within lows organizations to “bridge the experience gap.” To illustrate,
48 hours, our data was in the computer,” says Smith, noting that consider a 2005 Bain and Company study that revealed that 80
the process would normally have taken months using traditional percent of CEOs believed their company was delivering a supe-
methods. “All of a sudden, the light clicks on and you’re like, this rior customer experience. However, “when their customers were
is something wonderful. It’s quick, it’s easy, it’s more accurate.” asked if they felt they were receiving a superior customer experi-
Smith enlisted his sons, Ryan and Jared, to help develop and ence, only eight percent agreed,” notes Maughan. Qualtrics XM
launch one of the first online survey services. What started as narrows this experience gap by measuring stakeholder experi-
SurveyPro became Qualtrics in 2002. Initially targeting the aca- ences to establish a baseline, predicting and prioritizing stake-
demic community, the team soon recognized the potential for holder needs, initiating a plan of action, and tracking progress
online surveys as a marketing research tool. Honing the software in narrowing the gap between the baseline and the need. If
over several years, Qualtrics expanded its client base in 2008 used correctly, the XM platform drives continuous experience
to include organizations of all kinds—business and academic, improvement.
for-profit and non-profit. Before long, the majority of Qualtrics’
business was coming from corporations. AI Comes to Experience Management
From the start, Qualtrics differentiated its offering by making A few years ago, the company introduced Qualtrics iQ as part of
it user-friendly. The goal was to help anyone with a non-tech the XM platform. This innovative new product uses artificial intel-
background quickly and easily create and manage an online sur- ligence (AI) to automatically identify trends, statistically validate
vey. With Qualtrics, clients could use simple question-generating key consumer drivers, and identify the appropriate statistical
tools to draw from various types of questions, including sliding tests that should be used to deliver results. “Qualtrics iQ hunts
scales with endpoints such as “happy” and “sad” or grades down experience gaps automatically, predicting what customers
 CHAPTER 4 | Managing Marketing Information to Gain Customer Insights 129
want and helping organizations find and address issues before and internal clients across the business, which will ultimately
they negatively impact the business,” says Webb Stevens, head shape and improve our overall performance as a firm.”
of product at Qualtrics. “Machine learning helps automate tasks Today, many companies are competing for a slice of the
that were previously time consuming or impossible to scale, like growing experience management industry. Not the least of these
analyzing open text feedback or finding key drivers buried in your is IBM, which applies its Watson artificial and predictive intel-
data.” ligence capabilities to experience analysis. But Qualtrics argues
With XM and innovations such as Qualtrics iQ, Qualtrics that IBM’s technology is too complex, insisting that its XM soft-
clients are seeing real results and strong return on marketing ware provides predictive intelligence that is more easily con-
investment. JetBlue chose Qualtrics because it offered total sumed by the customer experience masses.
control over all phases of customer experience management. Clients seem to agree. By making market research more
By combining relational data (brand purchase drivers) with comprehensive as well as more accessible, the company has
transactional data (experience and satisfaction) into a central- turned a profit and doubled its revenue each year since it made
ized hub, JetBlue was able to easily identify the biggest cus- its online survey software available to the public. For years,
tomer impact areas and immediately execute changes that Qualtrics resisted taking on debt and refused generous offers of
made a difference. investment capital and buyout. That decision proved farsighted.
For example, JetBlue found that the vast majority of pas- Recently, Qualtrics shocked the world when it was purchased
sengers didn’t care about free bags, instead preferring cheaper by German software giant SAP for a staggering $8 billion, the
ticket prices. Based on the data, JetBlue increased revenue goal being to enhance SAP’s expertise in operational data with
by rolling out different rate structures and pricing options. In Qualtrics’ experience data. In doing so, SAP intends to evolve
Philadelphia, JetBlue was able to trace dissatisfaction to the from a customer relationship management platform into the
lack of airport shops and amenities open in the early morning most powerful and complete experience management company
hours. The fix was simple—pass out water, juice, and coffee at on the planet, going so far as to suggest that its experience man-
the gate. And in another airport, negative customer comments agement competitors are now nonviable. If this mega-acquisition
and lower-than-normal satisfaction scores at a particular gate goes as planned, the new SAP/Qualtrics combination may just
were traced to a defective terminal speaker, making it impos- fulfill that prediction.46
sible for waiting passengers to hear gate agent announcements.
JetBlue immediately sent an automated alert to the airport main- Questions for Discussion
tenance crew. The problem was fixed the same day, and survey
responses returned to normal. 4-16 How does Qualtrics fit in with the big data trend?
Cases of client success using Qualtrics’ XM platform are 4-17 Discuss how Qualtrics’s services facilitate the discovery
abundant. Recently, Morgan Stanley bestowed its prestigious of customer insights.
CTO innovation award on Qualtrics. “We’re putting clients first 4-18 Which components of the marketing information sys-
in everything we do, and Qualtrics has become an integral tem do Qualtrics’s tools facilitate?
partner in our journey,” said Chris Kovel, managing director at
the global financial services firm. “Starting out as a satisfac- 4-19 Discuss Qualtrics’ tools in the context of research
tion scoring tool for our institutional clients, we are now lever- approaches.
aging their insights to gauge the perceptions of our external 4-20 What challenges does Qualtrics face in the future?