SAP Releases Integrated Report 2018 and Files Annual Report 2018 on Form 20-F with the U.S. Securities and Exchange Commission
March 1, 2019
The Success of Your Intelligent Enterprise Depends on the Company You Keep
March 1, 2019
For as long as businesses have sold products, businesses have been accused of “creative exaggeration” to win customer hearts and minds. This is a fact of life and we’re all accustomed to it.
This partially explains why independent organizations like the Better Business Bureau or online entities like Yelp have become so engrained in our lives as individual consumers.
The question for any business, however, is how do you balance a healthy creative process with the candor to preserve credibility? This is no easy task, especially as competitive tactics are so much faster today than they have been historically. A business admitting any weakness or vulnerability in one minute can almost instantly bait its competitors to manipulate that transparency to woo away customers or prospects.
“Business A says they need to improve… Forget them. Try Business B.”
Notwithstanding this reality, businesses should still persevere with good-faith efforts to be transparent, so they tell an accurate story about what customers are actually experiencing. A study last year proved the point: 89 percent of consumers would give a transparent brand a second chance, even after a bad experience. That same study said 85 percent would stay with a transparent brand, even through a crisis.
My company, SAP, competes in an industry that is widely known for its challenged creativity-candor balance. Business technology is, at its heart, about the art of the possible, what businesses can achieve through innovation and next-generation best practices. As a result, it’s easy to understand how the “promise” can sometimes outweigh the “reality.”
On this note, I’m proud of SAP’s attempt to force greater balance on itself. We issue an integrated report each year that goes far beyond the financial results. We disclose a wide range of data intended to give any stakeholder a clear picture of our company’s performance.
One of the key metrics is a customer net-promoter score (NPS>). Few companies use this approach to measure customer sentiment, precisely because NPS is widely misunderstood. Even in a situation where the majority of customers express satisfaction, it’s possible to have a negative NPS. In our case, 68 percent of customers gave us a score of 7 or higher on a scale of 1-10, 10 being most satisfied. This means that a large majority of customers are satisfied or highly satisfied with SAP. However, because the percentage of customers who rated us 9 or 10 is slightly smaller than the percentage of customers who rated us 6 or below, our NPS for 2018 is –5.0.
What’s the takeaway? We are committed to transparency.
Industry watchers will tell you that SAP, like our competitors, pushes the envelope when it comes to marketing our success. That’s perfectly fair. What we hope to show with metrics like NPS is that we also hold ourselves to a higher standard than most when it comes to measuring customer sentiment. As explained above, our 2018 NPS isn’t good enough to meet our high expectations. Regardless of any noise, our only interest is to improve in 2019 by focusing even more intensely on the experience our customers have with our company, our people, and our products.
We’ll improve through a new engineering initiative, “Build Customers for Life,” designed to infuse more customer feedback into our product development cycles.
We’ll do so with a new customer-facing methodology, “Customer First,” designed to focus every engagement on product utilization and the achievement of measurable business value.
We’ll commit even more aggressively to innovation around industry pain points like pricing, audit, and unauthorized activity in our partner ecosystem.
Do we have exciting announcements to make too? We absolutely do. We think the combination of experience data from the Qualtrics platform with the operations of SAP’s intelligent enterprise (X+O) is a legitimately unique vision for the future of business technology.
But the bottom line is this: We believe customers shouldn’t have to choose between flash and substance. We’ll work to protect the balance.
Marty Mrugal is global head of Customer First at SAP.
