Qualtrics CEO Ryan Smith on why customer experience is the new marketing, and BA's bad bank holiday weekend

It's been a heady few years for Ryan Smith, the thirtysomething CEO of software-as-a-service (SaaS) company Qualtrics. The Utah-native has seen the startup he founded in his basement back in 2002 expand globally, surpass 8,000 customers and be valued north of $1 billion, giving it 'unicorn status'.

So why did it take until 2017 to get here? The answer is customer experience, and just how much credence the world's biggest brands now attribute to something that was never that easy to attribute.

Speaking to Computerworld UK from the US, Smith said: "Look at how may organisations believe customer experience is a huge priority from five years ago. It has gone from not being top of a CEO's priorities to being in the top four or five."

Qualtrics, which counts 1,200 European customers, started life as a web-based research tool, but as companies started to value customer experience as a competitive differentiator Smith and his team saw its customers using the tool differently around the 2008 crash.

Instead of relying on their gut when it came to customer perception, brands started to collect data from customers (and employees) regarding their experiences, whether it was with the product, customer service or general sentiment.

Now, the Qualtrics experience management (XM) platform aims to blend this customer and employee experience data in a single system of record, analyse the needs and trends, report it back and drive continuous improvement, all in a simple web-based platform.

Smith gave the example of a boutique hotel they have been working with that was planning on investing in a full refurbishment and a new restaurant. Instead, "they ran this customer experience study and found that if they had a great check-in experience and the room was clean customers would tell a friend 100 percent of the time," he said. "So they doubled up staff and started doing pre-check in and doubled the cleaning staff. That hotel has never been more profitable."

Read next: How Qualtrics invaded the enterprise with its customer experience software platform

You only have to look back to this weekend to see the damage poor customer experience can have on a business, £360 million in value to be exact when it comes to British Airway's (BA) parent company IAG, following its disastrous IT outage over the May bank holiday weekend.

Never one to turn down the chance to make a sales pitch, Smith said: "First of all they should have Qualtrics, I mean that is what we do, we literally do this."

Read next: BA's May bank holiday IT outage: what went wrong?

Qualtrics already works with American budget airline JetBlue to help it meet customer needs better in a market where customer satisfaction tends to be a pretty low baseline. "In the airline industry everyone is going through this," Smith said. "It is not a BA problem, Delta and United have gone through it and if you haven't yet, you will."

So the answer for Smith is speed and quality of response when things do go bad, and this comes down to the staff on the ground. "Having employee morale high is just as important. If they aren't engaged, or lined up, or empathetic it makes the whole experience worse, and that is where you get into real trouble.

"So where we would be helpful is getting a quick pulse on every single person going through some mishap and BA can reach out to earn the loyalty of those customers...Customers are pretty empathetic if they give feedback and the organisation is seen to correct it."

Smith believes that it is important for companies to monitor customer and employee satisfaction side-by-side to guarantee that customer-centricity drips down the organisation. "Culture manifests itself to customers," he said.

Read next: How Adidas is bringing its customer experience approach to employee feedback


It seems that not a week goes by without Smith having to talk about the possibility of going public following a massive $180 million (£140 million) funding round from Silicon Valley big hitters like Insight Venture Partners, Accel and Sequoia Capital in April. This valued the company at $2.5 billion (£1.94 billion).

Read next: "There’s actually no reason to go public" for tech unicorns like Uber, according to InsideSales.com CEO Dave Elkington

Utah startups tend to raise less capital than those in Silicon Valley, which means they often grow at a slower, steadier pace.

"I think if you look at the DNA of Utah companies we have all taken a while to scale," he said. "So when you build something that long and have traction you definitely think about the world differently. We are going to be great public company but it is not the end goal. I have been doing this for fourteen years and want to do another fourteen years."

Copyright © 2017 IDG Communications, Inc.

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