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APAC is epicentre of the experience economy
The experience economy is emerging in the Asia-Pacific region, but to succeed, enterprises will need to understand both operational and experience data
With over four billion people and a technology savvy population, Asia-Pacific is at the epicentre of the experience economy, where consumers increasingly prefer a superior experience over a superior product.
That is the view of Scott Russell, president of SAP Asia-Pacific and Japan, who noted that more than 50% of internet users, and 60% of the world’s young people, live in the region.
Against this backdrop, Russell called for businesses to reach out to the majority of millennials and digital natives who are willing to pay for a superior experience – and to plug the experience gap.
Citing a Bain survey, Russell said at an SAP regional event in Bangkok that 80% of CEOs thought they were delivering a superior experience to customers, but just 8% of their customers agreed.
According to Forrester, even a minor improvement to a brand’s customer experience quality can add tens of millions of dollars of incremental revenue by reducing customer churn and increasing share of wallet.
Also, superior customer experience leads to reduced service costs and lowers the cost of acquiring customers through word of mouth.
But in SAP’s view, the experience economy is not just about delivering a good experience for consumers – employee experiences matter as well, said Russell.
“Was it a positive experience on the first day I got my first promotion? What about the performance review? And that time when I got feedback from my manager? Was it a great experience?”
For businesses to succeed in the experience economy, said Russell, they first need to understand their operational data, such as employee turnover rates, revenues, spending and receivables.
These data points will enable businesses to understand what, when and how things happen across the organisation, but they will not be able to understand why these things happened, he said.
“That’s where experience data is important,” said Russell. “Why is your employee engagement score dropping? You need to understand that for your business to go forward.”
Sensing the progressive rise of the experience economy, SAP has recently acquired Qualtrics, a company that develops “experience management” software.
Read more about IT in ASEAN
- The Malaysian government wants to tap telematics, IoT and other nascent technologies to improve road safety and ease traffic congestion.
- Microsoft is partnering SkillsFuture Singapore in a training programme that aims to build a ‘digitally confident’ population.
- Salesforce is tapping Alibaba’s footprint in e-commerce and cloud in an effort to expand its business in the Greater China region.
- From enabling consumers to track their energy consumption to improving business operations, businesses in ASEAN are starting to put their data to good use.
Claus Andresen, vice-president and managing director for SAP Southeast Asia, explained what experience management means by pointing to a 3D model of a rollercoaster track with its twists and turns, representing operational data such as height, speed and velocity.
With experience management, a theme park operator, for example, will be able to capture data about the emotions of someone riding a rollercoaster and improve the rider’s experience by correlating experience data with operational data, said Andresen.
SAP has since integrated Qualtrics’ experience management capabilities into its existing systems, such as SAP SuccessFactors in the case of human resources (HR) management.
These capabilities will enable managers to gather employee experience data throughout the employee lifecycle, gaining predictive and personal insights based on employee feedback, and empowering HR leaders and managers to act on those insights quickly.
Vanee Bijayendrayodhin, chief people officer at Thai property developer Ananda, said the company is using Qualtrics to improve staff retention, and to better understand the aspirations of its employees, who increasingly are not motivated by salaries.
“We’ve asked them to think about what they want, and they have initiated ideas to make their careers more satisfying with Ananda,” said Bijayendrayodhin.