What you need to know

• Experience management platform Qualtrics has delivered a wide set of new AI capabilities across its customer experience, employee experience, and research and strategy offerings.
• Ultimately, the goal is to help brands better understand their customers and to build richer more emotional connections that build loyalty and sales.
• Brands including Hilton, Porsche and Carsales revealed the impact of their experience programs at the vendor's global event.
• But experience gains are getting harder in a market where there is often little friction or cost for consumers to switch.
• There is a growing recognition CX and EX are two sides of one coin, but holistic approaches are hard to build and can come with unintended consequences.
• And while CMOs have been singing from the customer experience hymn sheet for years, connections between martech and CX remain immature, say analysts.

The generative AI wave was just starting to crest last year in March when Qualtrics held its annual user conference in Salt Lake City. By mid-year, CEO Zig Serafin announced a $500m multi-year investment to accelerate AI capabilities and infuse them across the platform for its customer experience, employee experience and research customers.

The evidence of how transformative that investment will likely prove was already on display less than a year later at this year's Qualtrics X4 event. At the heart of the Qualtrics story this year is Qualtrics AI, which the company describes as being trained on the world’s largest database of human sentiment. 

"With the largest database in the world of human sentiment, Qualtrics has a unique and powerful place in the world of AI,” said Gurdeep Singh Pall, Qualtrics President, AI Strategy. “In a world where experiences matter, Qualtrics AI and experience management – starting with these innovations – is poised to play a critical role across industries and around the globe.”

Qualtrics has over 20,000 customers globally who between them, generate 3.5 billion conversations every year in more than 20 languages. Not all that data is available for large language model training, however, as companies need to opt in to give permission for it to be used.

But even before all the AI changes are rolled out, the event showcased the power of experience management - a category Qualtrics claims to have invented - courtesy of a range of customers:

• Global hotel chain Hilton went live with Qualtrics in January this year after ditching a 20-year incumbent, believed to be Medalla. According to Becky Polebaum Vice President, Enterprise & Customer Analytics Hilton, the organisation is using Qualtrics AI-enabled capabilities to collect and synthesise feedback across the entire guest journey for its more than 7600 global properties.  "Individual hotels were good at closing the loop but corporate was not good across the common problems,"  she said. The implementation timetable was also incredibly truncated, from the decision to go with Qualtrics in the April quarter, a proof of concept in September and finally cut across to the new solution during December and January.
• Carsales, a long-term Qualtrics customer, has been able to drive significant improvements in NPS including in one instance, a 77 point turnaround on a key product offering. Deb Heaphy,  Carsales head of CX, described a long-running initiative to improve NPS on the Carsales Instant Offer service as one of the best case studies she has seen about embedding a listening program into a product.
• Porsche AG CMO Rob Ader outlined why customer experience is a critical aspect of the marketing approach. He told delegates, "Porsche customers expect a very unique ownership experience. This is what we focus on in marketing and sales every day. We have a very simple marketing strategy, it only has three missions and one of them is 'Be crazy about every customer touch point.' And this is what we try to fulfill every day. I think that's also one of the reasons why we have very high loyalty."

Emotional connections

During his keynote address, Serafin reminded delegates of his promise a year earlier to make business more human.

"It's the ability to understand people to understand their expectations, to understand their preferences, to understand their interests, their likes, their dislikes. And we'd like to talk about this as creating emotional connections between your organisation's customers and your employees," he said.

He referenced a Harvard Business Review study into the return on investment of a highly satisfied customer, which studied over 300 signals. The study ultimately found that real returns come from developing emotionally connected customer relationships.

"It turns out those emotionally connected customers spend 52 per cent more. And they will reward the brands who create these connections and who can do it at scale," Serafin said. "So we're convinced the business value of having emotionally connected customers and employees is huge."

Not so fast

But acting against that is the reality it has never been easier for customers to switch to new brands. Research from Qualtrics and ServiceNow revealed 80 per cent of customers have switched brands due to poor customer experience, and 43 per cent of respondents said they were likely to switch brands after a single negative customer service interaction.

"The days when we could reactively fix things when customers ask us to, and still think that you're going to retain their business, that's over," Serafin said. "The only solution is to truly get to know every single customer, and every employee, and to deliver what they expect at every touch point for every interaction, even as they move across a plethora of channels."

Serafin described this as  "an incredibly hard problem to solve."

Cue Qualtrics AI

Qualtrics' proposed answer is to make several key AI-powered upgrades across its suite including for customer experience, employee experience and research.

Customer experience: On the customer experience front, Qualtrics has developed AI and frontline location tools it said allow frontline teams to connect with every customer in every location, personalising the customer experience and removing points of friction across channels. To that end, it unveiled a suite of AI-powered innovations aimed at helping organisations better understand and connect with their customers. Powered by Qualtrics AI, the company says the platform offers a better understanding the sentiment, satisfaction, effort, expectations, and preferences of every customer.

A new insights hub called Frontline Assist is designed to analyse every piece of customer feedback to equip frontline managers with insights into customer behaviour as well as recommended steps to improve their customer experience. New AI-powered review and ticket response suggestions are designed to enable frontline teams to quickly resolve issues with automatically generated, personalised responses, the company said.

There is also new AI-powered Frontline Digital solutions to pinpoint, diagnose, and help prioritise broken digital experiences. New heatmap capabilities should help digital and UX teams quickly identify and resolve web technical, design, and product issues. New funnel analytics provide the opportunity to identify major drop-off points along the web customer journey and understand why customers are failing to complete their tasks. And finally, Qualtrics claims it can intercept 'frustrating" customer experiences by identifying customers experiencing challenges online in real-time and offer targeted support in the moment.

Employee experience: Qualtrics released new solutions that utilise machine learning to identify employees at risk of attrition, summarise employee feedback, and recognise significant behavioural signals across the employee journey. New capabilities use generative AI with the aim of helping managers enhance workforce engagement, increase retention, and boost productivity. According to a company statement, innovations include the ability to identify attrition drivers in the workforce, anonymise and summarising employee comments from open-text survey responses, and provide deeper insights from EX results with Qualtrics Assist.

According to Brad Anderson, President of Product, UX and Engineering at Qualtrics, the new AI capabilities announced last week will enable companies to unlock even more value from the Qualtrics platform. The company said its AI-powered tools aim to provide a more comprehensive understanding of the employee experience, enabling managers to take personalised actions in response to employee feedback. 

"With Qualtrics AI it's easier and faster than ever for leaders and managers to identify and deliver the employee experience their teams need to do their best work, which will help lead to high-performing, highly engaged, productive, and loyal teams," he said.

Research and strategy: Research and surveys are Qualtrics' bread and butter so it's not surprising there were also a raft of AI-powered capabilities announced for the company's Strategy & Research Suite.

According to Qualtrics, its strategic research capabilities enable businesses to access what it described as 35 million unbiased panellists, conduct moderated online interviews, capture feedback from video recordings and consolidate all research and feedback into a single, searchable system. These features are designed to aim to help organisations identify key patterns, themes, and sentiments from customer and prospect feedback, informing future strategy while reducing effort in transcription and analysis.

Anderson said the AI-infused enhancement would enable Qualtrics customers to consolidate quantitative, qualitative , and even external research on a single platform.  

Among the key announcements are:

• A comprehensive repository of all research conducted by an organisation, including research conducted by agencies, publications, or reports outside of the Qualtrics platform.
• The ability to search a variety of insights to find relevant studies and summaries of findings.
• In the realm of video feedback, Qualtrics AI capabilities enable researchers to analyse hours of video submissions and generate key themes, top quotes, and insights.
• The platform's moderated user testing feature allows UX researchers to schedule and conduct live one-on-one, moderated interviews with respondents remotely.
• The new Online Panels solution taps into Qualtrics' network of more than 200-panel partners, allowing users to choose a target audience from the most popular sample profiles and launch panels in minutes.

Analyst views

Increasingly, Qualtrics wants to provide its customers with the opportunity to merge employee experience and customer experience and to understand and act upon how one impacts the other. It's a good idea, but there are limitations, say the analysts MI3 spoke with.

Take the view of Bain Partner, Rob Markey: "Functional organisation and functional expertise are valuable in large companies. But sometimes they create unintended consequences. It turns out there is a particular type of employee engagement that contributes to customer value - it's the employee engagement that comes from knowing the company's customer-oriented purpose, knowing how you contribute to that, feeling like you can and do contribute to it, and feeling like you're growing in your ability to do that." 

Markey also told Mi3, "There are other types of employee happiness. I get paid a lot. I have great breaks. I like my colleagues so much that I spend time talking to them instead of customers. Do you see that?"

"I did a lot of banking work in the UK, and that was one of the big issues. We had really happy employees in certain branches, and they had terrible customer feedback. While they were spending all their time talking to each other, they were ignoring customers."

The key point here is that all the various dimensions of employee engagement should not be the sole purview of HR.

"They are operational things. And the line managers need to take accountability for those," Markey added.

Tough nut to crack

Colleen Fazio, a senior Forrester Research analyst (and one of about half a dozen Forrester analysts at the event) was happy to see Qualtrics keeping up with the rest of the space that covers this.

"Conversational feedback has been a really hard nut to crack because there's a lot of risk. If you do it using generative AI, you're releasing generative AI into your customer experience. And that's risky. We've all seen the chatbots go wrong," she told Mi3.

To that end, Fazio said it was good to see Qualtrics taking sort of a staged approach. "They are doing it in small stages, and not just releasing a feature."

In particular, she highlighted the approach to conversational feedback, which she said could really shake up the survey industry. "If they do it right, if it all works out, it'll be life-changing."

A missing martech link

Given marketing's obsession with customer experience in recent years, one surprising feature of the current Qualtrics approach (and that of many other vendors in the competitive set), is the lack of deep architectural integration into martech. Forrester VP and principal analyst, Rusty Warner, said much of the current Qualtrics martech integration roadmap seemed to be focused on the customer data platform (CDP), which he considered to be more limited in value.

"Sure, you can integrate with Adobe Real-Time CDP or Salesforce customer data platform, but both of those vendors are really positioning those products as a replacement for the DMP advertising audiences," Warner commented. "Surely, where you want to integrate is at the Adobe Experience platform level, into the real-time profile, or the Salesforce Data Cloud versus the customer data cloud, because then that sits under the whole Salesforce platform."

That approach would make insights available for use by all of the Adobe applications or all of the Salesforce applications.

"That's a richer place and that's something I think Qualtrics wants to explore with these vendors," Warner said.

"I think what they are learning, and what the industry is learning is that because of its name, the CDP has often been seen as more than it is. People use the term generically when [what] they mean customer data management, when in fact a CDP will have very specific use cases that it performs and people will buy the CDP for that."