CMO interview: How Qualtrics is tackling customer experience management

Chief marketing officer, Kylan Lundeen, shares how a non-traditional marketing background has helped him bring fresh thinking to the marketing function

Kylan Lundeen
Kylan Lundeen

Just how useful is a traditional marketing background in a non-traditional business? And if the answer is ‘not so much’, then what sort of background would be?

For US-based software company, Qualtrics, choosing a CMO from outside the traditional marketing discipline has helped the company focus on both the growth and creative elements of marketing, while also providing the discipline necessary as it repositions itself from its heritage in survey software to its future in experience management.

CMO, Kylan Lundeen, readily admits he never intended to be a marketer. In fact, he had started his working life in distressed asset real estate investing.

But while attending Stanford University’s Graduate School of Business a marketing subject caught his eye. And while he fully intended heading into the private equity industry in New York City (he had even rented an apartment), his marketing professor noted his affinity for the subject and introduced him to founder and CEO of Qualtrics, Ryan Smith.

“Fifteen minutes into the breakfast conversation I am shaking Ryan Smith’s hand over the table,” Lundeen says. “The guy totally closed me on the spot, and shortly after I was out at Qualtrics working for a technology company.”

Starting point as a CMO

Lundeen’s first role was to run a team to ‘metric’ the entire business for the first time, to better understand its financial levers and how they could be worked to grow the business.

“Every business grows, flatlines, declines and then dies, and you always hope that they spend a lot of time in the first two,” Lundeen says. “The best businesses are disciplined enough to understand the revenue levers before they start to plateau.

“I was in the minutiae of the data on the company, trying to understand what things we could do to grow revenue. Well, it turns out doing I was exposed to lots of other parts of the business, including some of the marketing stuff.”

That led him to work increasingly on marketing-related projects directly with the CEO.

“I sort of gravitated to those projects, and so I woke up one day and was running two thirds of marketing and wasn’t really on the marketing team,” he says.

Lundeen was asked to pitch himself to the board, and in December 2014 became the CMO. His experience led him to initially take an approach to marketing based on three tasks: finding high quality leads; passing them along to sales and tracking their progress; and creating assets, collateral and programs to help sales close deals.

“Over two years we got really, really good at creating demand,” Lundeen says. “But the cost was there was nobody home on some of the other parts of marketing that are tremendously valuable – things like pricing, packaging, positioning and message.

“Now we are catching up on that front. We built this engine, and we are learning about the other dimensions.”

Maintaining momentum

Lundeen says Qualtrics is profitable today, with revenue now growing at around 50 per cent year-on-year, and will hit US$250 million this year. But maintaining momentum will depend greatly on the success of a strategy to reposition the company beyond its heritage.

“When we started we set out to be number one in the world in market research,” Lundeen says. “But over time, because we built the most powerful data collection tool on the planet, our customers started to tweak and adjust the software in so many ways that that became the number three most common use case.

“Instead, the most common theme they were doing on the platform was an all-out, end-to-end customer experience solution. The second was managing the employee experience. And the third was the long tail of market research tool.

“We realised we were not in the survey business, we were in the business of helping people manage the experience they provide to their most important stakeholders.”

Based on the realisation, Smith held what Lundeen describes as a ‘boat burning ceremony’ and set a new direction in experience management (XM), with a deadline for delivery at the company’s March 2017 Insight Summit. The repositioning process involved regular communication among staff, starting with an announcement at Qualtrics’ sales kick-off and repeated several times up to the Insight Summit.

“Each time we refined the message so that by the time we did this on main stage, we had 100 pieces of mainstream media coverage on it,” Lundeen says. “There was a challenge that we needed to educate people on what that category means. But the good news is that it is resonating. But it came from putting ten coats of paint on this message and category before we went to market with it.”

Being focused on end-to-end customer experience

Lundeen says the heart of the strategy is realising that when many companies talk about customer experience, they are describing a reactive approach.

“What about bring predictive and understanding where the market is going, and solving problems?” he asks. “Whose customers are more valuable than yours, and what are you doing to attract them to your brand? Those are the kinds of things that an end-to-end customer experience program has.”

According to Lundeen, a true end-to-end solution also focuses on aspects such as employee engagement, product and brand, and this is what Qualtrics brings together.

“The engagement level of an employee matters, and it affects customers,” he says. “When we think about the category over the next 10 years, and we think it is about end-to-end experience measurement.”

Today, Qualtrics’ marketing team maintains its focus on revenue generation, but has been restructured to give room to other parts of the marketing discipline that are essential.

“We rebranded the team internally as the growth team,” Lundeen says. “It was to remind everybody that the goal of this organisation is to grow. And we spun out the creative team to sit independently, and report up to the CEO. So we have a creative team that can be leveraged by the entire organisation.

“Meanwhile, my team knows that when they run an event or turn up at a trade show, they show up for one reason, and that is to acquire new names and new business.”

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