Senior business leaders often ask me what new technology they should be investing in to improve their customer experience and loyalty. The short answer is that technology may not always be the natural first step to take. Trust me, we’d love to sell you some technology. But before you make any major technology investment, first ask yourself this: will more CRM help differentiate you from your competitors? Will technology alone help you win new business, or retain your most profitable customers? Do you really understand what your end customers want?

Businesses clearly need happy customers to survive and thrive. But every day, we see companies that have forgotten who their customers are and what their real needs comprise. The fancier technology they install, the further they grow away from their customers. In fact, one study found that 80% of CEOs believed they were delivering a superior experience. Only 8% of their customers agreed.

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This may sound odd coming from a dyed-in-the-wool technology guy, but trust me on this. We need to put our end customers at the very heart of what we do. Undoubtedly you will need technology to be able to orchestrate the entire customer experience. But we do not want that to be your starting point. We first need to jointly understand your end users. And the first thing to understand is that 88% of customers expect a personalized experience.

Successful businesses that put their customers at the center of their business need to make 100% sure that anyone who interacts with customers has the right information and insight to help those customers get what they want. As we say at SAP, customers want songs, not CDs; they want sleep, not mattresses.

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Today’s customers are firmly in the driver’s seat and relationships with them can’t be ‘managed’, but instead evolved, developed and nurtured. And these relationships don’t end once a deal has closed, but are ongoing. Making connections with customers is easy. Turning those connections into lifelong relationships and partnerships is what makes businesses truly successful. Do it right, and the rewards are huge: 86% of customers are willing to pay more for a better customer experience.

To do this though, businesses first need to attain the almost-mythical single view of the customer. This means collating all their records and interactions from various sources and offline databases and knowing their history, passions, likes and preferences. Only then can we accurately start anticipating their needs, and providing the slickest possible experience for every customer: an experience that directly links sales and support, and has a connected supply chain that will help businesses keep their promises.

A great example of this is the automotive industry, which is fast becoming a leader in the experience economy. Why? Because car-makers have been quick to realize that actually driving the car is only one part of the experience. Passengers and drivers want to access the internet, consume digital content, even know where the closest fuel station and open parking spot is. They want to know if the mall or restaurant they’re driving past has a sale on. In response, car manufacturers are delivering previously unheard-of levels of customization. In some markets, customers can order – and customize – their car using an app. Google, Apple, Microsoft and other tech giants are jostling to be the dominant in-car connected system. The customer really is in the driver’s seat.

In the same vein, successful retail spaces have been completely reinvented and feel more like cozy lounges, where consumers can chill out and spend time browsing through books, artifacts and the like before they go on to actually making their purchases. This is all about understanding the need to deliver more than just a product and that the experience itself is elevating smart industry players way above their competitors.

Modern CRM is not about automation and efficiency. It’s about adding some intelligence to customer engagement, knowing when to talk to them, and what to say. It’s also about the insight into how the enterprise is fulfilling the promise. Is our supply chain efficient? Do we have the raw material or the engineers on stand-by? It’s about emphasising customer-centricity, a consistent experience, and trustworthy data. That’s why it’s so important that you understand the strategic importance and the implications of your technology choices. These are strategic considerations that often involve a complete transformation of a company’s business model, with huge effects on your business and its culture. You can’t simply apply technology to operational silos, or existing processes, and think you’re driving customer loyalty.

This kind of sublime experience with a product or a service can only be pulled off when businesses exactly understand their customer – and have the technology to back up their promises. That’s how you turn your customers into fans.

Steve Tzikakis is the President EMEA South, SAP

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry