With the pending acquisition of Qualtrics by SAP the stage is now set for what has been a long time in coming; the merger of CX, ERP, and CRM.  While I’m no Nostradamus, I have been talking about this for some time…and frankly I’m surprised it took so long.  For those of you who have no idea what I am talking about let me explain.

Qualtrics first cut their teeth in self-serve traditional market research software.  It was doing well by all accounts, but probably not growing as fast as they would have liked.  About 2-3 years ago Qualtrics made a hard right turn and starting skating straight for the EFM big guns like Medallia, InMoment, and MaritzCX to name just a few.  I think folks were kind of surprised. I know I was.  Why?  The world of CX is vastly different than traditional market research.

Image result for ryan smith
Qualtrics CEO Ryan Smith

First the level of analytical sophistication for the typical CX user is not as high as what is needed in MR. Most end users running a retail outlet want to know what their customers are saying and would rather endure a week long colonoscopy marathon than deal with discrete choice models using multivariate logit modeling.  After all, they just need to solve for a few pretty simple use cases:

  1. What’s my score (and will I get rewarded or punished)
  2. What customers need my help
  3. How do  I solve “outer loop” institutional issues.

That’s about 99% of all use cases in CX.  However, from there it gets more complicated.  There are some really unsexy issues that great CX providers have to be good at.  The ‘slop factor’ in traditional MR where we can remove one respondent here or there is no bueno in CX.  People are getting paid on those scores many times.  Every return is sacred.

However, the CX industry is big and once you lock in a client switching costs can be high.  That’s great for recurring revenue models which VC software folks are very keen on.  But there’s more.

With one little tweak to the traditional CX canon, the giant world of CRM opens up wide.  That tweak?  The inclusion of prospects as well as customers.

Rather than helping customers, you might be helping prospects find what they want. Rather than redesigning a service experience, you are tweaking the path to purchase to optimize conversion.  Super simple, on paper at least.

Beyond SAP being “kind of  big deal” in the Ron Burgundy sense, they also just happen to have a pretty good CRM and ERP systems already built. Well shucks!  All they need is a nifty snap-on of a CX solution and they are off to the races.  Look out SFDC and Dynamics 365!

The value proposition is great; why buy a bunch of unrelated systems when you can buy one whiz-bang integrated one?  Why are you talking to prospects with one system and customers with another.  Who is that cool guy wearing at flat rim hat?  Still reading?  Just checking.

Now anyone who has been in this business for more than a week knows that technology integration isn’t easy and  I can tell you first hand that cultural integration is harder still. The world will be watching this acquisition to see what they bring to the market. What does it mean to other EFMs?  What does it mean to CRM?  What about those research companies.  All very interesting!

Not withstanding countless prognostications (including my own), the future of the industry is far from certain.  However, two things are very clear to me; 1) I need to start wearing a hat more often and 2) the future of CX is clearly in the integration of CRM and EFM.

Grab some popcorn, it’s going to get more interesting.

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